Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-38048 | |
Entity Registrant Name | Altus Midstream Company | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4675947 | |
Entity Address, Address Line One | One Post Oak Central, 2000 Post Oak Boulevard, Suite 100 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77056-4400 | |
City Area Code | 713 | |
Local Phone Number | 296-6000 | |
Title of 12(b) Security | Class A common stock, $0.0001 par value | |
Trading Symbol | ALTM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001692787 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 74,929,305 | |
Class C Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 250,000,000 |
STATEMENT OF CONSOLIDATED OPERA
STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
REVENUES: | |||||
Midstream services revenue — affiliate (Note 3) | $ 34,009 | $ 25,437 | $ 91,994 | $ 50,053 | |
Total revenues | 34,009 | 25,437 | 91,994 | 50,053 | |
COSTS AND EXPENSES: | |||||
Operations and maintenance | [1] | 13,063 | 16,579 | 43,466 | 38,798 |
General and administrative | [2] | 3,242 | 1,865 | 8,314 | 5,126 |
Depreciation and accretion | 11,710 | 5,483 | 28,468 | 14,404 | |
Impairments | 9,338 | 0 | 9,338 | 0 | |
Taxes other than income | 3,239 | 1,226 | 9,702 | 6,479 | |
Total costs and expenses | 40,592 | 25,153 | 99,288 | 64,807 | |
Operating income (loss) | (6,583) | 284 | (7,294) | (14,754) | |
Unrealized derivative instrument loss | (3,769) | 0 | (3,769) | 0 | |
Interest income | 617 | 0 | 3,584 | 0 | |
Income from equity method interests, net | 1,564 | 0 | 536 | 0 | |
Other | 0 | 0 | (17) | 0 | |
Total other income (loss) | (1,588) | 0 | 334 | 0 | |
Financing costs, net of capitalized interest | 522 | 0 | 1,508 | 0 | |
NET INCOME (LOSS) BEFORE INCOME TAXES | (8,693) | 284 | (8,468) | (14,754) | |
Deferred income tax benefit | (505) | (18,924) | (510) | (9,733) | |
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | (8,188) | 19,208 | (7,958) | (5,021) | |
Net income attributable to Preferred Unit limited partners | 17,480 | 0 | 21,623 | 0 | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | (25,668) | 19,208 | (29,581) | (5,021) | |
Net loss attributable to Apache limited partner | [3] | (20,804) | 0 | (23,524) | 0 |
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | [3] | $ (4,864) | $ 19,208 | $ (6,057) | $ (5,021) |
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS, PER SHARE | |||||
Basic (in USD per share) | [3] | $ (0.06) | $ 0.09 | $ (0.08) | $ (0.03) |
Diluted (in USD per share) | [3] | $ (0.07) | $ 0.09 | $ (0.09) | $ (0.03) |
WEIGHTED AVERAGE SHARES | |||||
Basic (in shares) | [3] | 74,929 | 218,470 | 74,929 | 179,493 |
Diluted (in shares) | [3] | 324,929 | 218,470 | 324,929 | 179,493 |
[1] | Includes amounts of $2.2 million and $2.3 million to related parties for the three months ended September 30, 2019 and 2018 , respectively, and $7.1 million and $6.6 million for the nine months ended September 30, 2019 and 2018 , respectively. Refer to Note 3 — Transactions with Affiliates. | ||||
[2] | Includes amounts of $2.1 million and $1.8 million to related parties for the three months ended September 30, 2019 and 2018 , respectively, and $4.7 million and $5.1 million for the nine months ended September 30, 2019 and 2018 , respectively. Refer to Note 3 — Transactions with Affiliates. | ||||
[3] | (3) For periods prior to the Business Combination (as defined below), the number of shares has been retroactively restated to reflect the number of shares received by Apache. For further detail of the Business Combination and associated financial statement presentation, please refer to Note 1 — Summary of Significant Accounting Policies and Note 2 — Recapitalization Transaction. |
STATEMENT OF CONSOLIDATED OPE_2
STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Gathering, processing, and transmission | [1] | $ 13,063 | $ 16,579 | $ 43,466 | $ 38,798 |
General and administrative | [2] | 3,242 | 1,865 | 8,314 | 5,126 |
Affiliated Entity | Apache | |||||
Gathering, processing, and transmission | 2,200 | 2,300 | 7,100 | 6,600 | |
Affiliated Entity | Service Agreements | Apache | |||||
General and administrative | $ 2,100 | $ 1,800 | $ 4,700 | $ 5,100 | |
[1] | Includes amounts of $2.2 million and $2.3 million to related parties for the three months ended September 30, 2019 and 2018 , respectively, and $7.1 million and $6.6 million for the nine months ended September 30, 2019 and 2018 , respectively. Refer to Note 3 — Transactions with Affiliates. | ||||
[2] | Includes amounts of $2.1 million and $1.8 million to related parties for the three months ended September 30, 2019 and 2018 , respectively, and $4.7 million and $5.1 million for the nine months ended September 30, 2019 and 2018 , respectively. Refer to Note 3 — Transactions with Affiliates. |
STATEMENT OF CONSOLIDATED COMPR
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | $ (8,188) | $ 19,208 | $ (7,958) | $ (5,021) |
OTHER COMPREHENSIVE LOSS, NET OF TAX: | ||||
Share of equity method interests other comprehensive loss | (591) | 0 | (1,634) | 0 |
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | (8,779) | 19,208 | (9,592) | (5,021) |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | (4,977) | 19,208 | (6,370) | (5,021) |
Preferred Unit limited partners | ||||
OTHER COMPREHENSIVE LOSS, NET OF TAX: | ||||
Comprehensive income (loss) attributable to noncontrolling interest | 17,480 | 0 | 21,623 | 0 |
Apache limited partner | ||||
OTHER COMPREHENSIVE LOSS, NET OF TAX: | ||||
Comprehensive income (loss) attributable to noncontrolling interest | $ (21,282) | $ 0 | $ (24,845) | $ 0 |
CONSOLIDATED BALANCE SHEET (Una
CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,594,000 | $ 449,935,000 |
Accounts receivable from Apache Corporation (Note 1) | 1,135,000 | 0 |
Revenue receivables (Note 3) | 11,726,000 | 10,914,000 |
Inventories and other | 15,181,000 | 5,802,000 |
Assets held for sale | 18,183,000 | 0 |
Prepaid assets and other | 1,153,000 | 1,379,000 |
Total current assets | 49,972,000 | 468,030,000 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Property, plant and equipment | 1,494,658,000 | 1,251,217,000 |
Less: Accumulated depreciation and amortization | (51,608,000) | (24,320,000) |
Total property, plant and equipment, net | 1,443,050,000 | 1,226,897,000 |
OTHER ASSETS: | ||
Equity method interests | 1,094,564,000 | 91,100,000 |
Deferred tax asset | 68,598,000 | 67,558,000 |
Deferred charges and other | 5,651,000 | 3,734,000 |
Other assets | 1,168,813,000 | 162,392,000 |
Total assets | 2,661,835,000 | 1,857,319,000 |
CURRENT LIABILITIES: | ||
Accounts payable to Apache Corporation (Note 1) | 0 | 13,595,000 |
Current debt (Note 6) | 17,562,000 | |
Other current liabilities (Note 7) | 38,816,000 | 84,926,000 |
Total current liabilities | 56,378,000 | 98,521,000 |
LONG-TERM DEBT | 235,000,000 | 0 |
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES: | ||
Asset retirement obligation | 33,950,000 | 29,369,000 |
Deferred tax liability | 3,089,000 | 2,643,000 |
Embedded derivative | 98,228,000 | 0 |
Other non-current liabilities | 1,206,000 | 0 |
Noncurrent liabilities | 136,473,000 | 32,012,000 |
Total liabilities | 427,851,000 | 130,533,000 |
COMMITMENTS AND CONTINGENCIES | ||
Redeemable noncontrolling interest — Apache limited partner | 1,251,370,000 | 1,940,500,000 |
Redeemable noncontrolling interest — Preferred Unit limited partners | 538,413,000 | 0 |
EQUITY: | ||
Additional paid-in capital | 473,502,000 | 0 |
Accumulated deficit | (29,020,000) | (213,746,000) |
Accumulated other comprehensive loss | (313,000) | 0 |
Total equity | 444,201,000 | (213,714,000) |
Total liabilities, noncontrolling interests, and equity | 2,661,835,000 | 1,857,319,000 |
Class A Common Stock | ||
EQUITY: | ||
Common stock | 7,000 | 7,000 |
Class C Common Stock | ||
EQUITY: | ||
Common stock | $ 25,000 | $ 25,000 |
CONSOLIDATED BALANCE SHEET (U_2
CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Class A Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 74,929,305 | 74,929,305 |
Common stock, shares outstanding (in shares) | 74,929,305 | 74,929,305 |
Class C Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares outstanding (in shares) | 250,000,000 | 250,000,000 |
STATEMENT OF CONSOLIDATED CASH
STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net loss including noncontrolling interests | $ (8,188) | $ 19,208 | $ (7,958) | $ (5,021) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Unrealized derivative instrument loss | 3,769 | 0 | 3,769 | 0 | |
Depreciation and accretion | 11,710 | 5,483 | 28,468 | 14,404 | |
Deferred income tax benefit | (505) | (18,924) | (510) | (9,733) | |
Income from equity method interests, net | (1,564) | 0 | (536) | 0 | |
Distributions from equity method interests | 3,391 | 0 | |||
Impairments | 9,338 | 0 | 9,338 | 0 | |
Adjustment for non-cash transactions with affiliate | [1] | 0 | (4,738) | ||
Other | 666 | 0 | |||
Changes in operating assets and liabilities: | |||||
Increase in inventories and other | (676) | (1,412) | |||
Decrease in prepaid and other | 237 | 0 | |||
Increase in revenue receivables (Note 3) | (798) | (3,119) | |||
Increase in accounts receivable from/payable to affiliate | (5,011) | 0 | |||
Increase in accrued expenses | 9,056 | 9,619 | |||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 39,436 | 0 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Capital expenditures | [2] | (307,010) | 0 | ||
Contributions to equity method interests | (337,412) | 0 | |||
Acquisition of equity method interests | (670,625) | 0 | |||
NET CASH USED IN INVESTING ACTIVITIES | (1,315,047) | 0 | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Redeemable noncontrolling interest - Preferred Unit limited partners, net | 611,249 | 0 | |||
Proceeds from revolving credit facility | 235,000 | 0 | |||
Finance lease | (17,187) | 0 | |||
Deferred facility fees | (792) | 0 | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 828,270 | 0 | |||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (447,341) | 0 | |||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 449,935 | 0 | |||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 2,594 | $ 0 | 2,594 | 0 | |
SUPPLEMENTAL CASH FLOW DATA: | |||||
Accrued capital expenditures | [3] | 24,306 | 67,031 | ||
Finance lease liability | [4] | 29,000 | |||
Interest paid, net of capitalized interest | $ 685 | $ 0 | |||
[1] | In all periods prior to the Business Combination, the Company had no banking or cash management activities. Transactions with Apache and asset transfers to and from the Company were not settled in cash and are therefore reflected as a component of equity and redeemable noncontrolling interests on the consolidated balance sheet. In addition, Apache contributed its investments in gas gathering, processing and transmission facilities of approximately $408.4 million that is included within equity and redeemable noncontrolling interests for the nine months ended September 30, 2018 . Refer to Note 3 — Transactions with Affiliates for more information. | ||||
[2] | Following the Business Combination, capital expenditure amounts represent the portion of the total settlements with Apache in the period that are capital in nature, pursuant to the terms of the Construction, Operations and Maintenance Agreement (COMA). Refer to Note 1 — Summary of Significant Accounting Policies and Note 3 — Transactions with Affiliates for more information. | ||||
[3] | Includes $0.6 million due from Apache pursuant to the terms of the COMA. Refer to Note 3 — Transactions with Affiliates for more information. | ||||
[4] | The Company entered into a finance lease in the first quarter of 2019. Refer to Note 1 — Summary of Significant Accounting Policies for more information. |
STATEMENT OF CONSOLIDATED CAS_2
STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
Accrued capital expenditures | [1] | $ 24,306 | $ 67,031 |
Affiliated Entity | Apache | |||
Proceeds from partnership contribution | $ 408,400 | ||
Accrued capital expenditures | $ 600 | ||
[1] | Includes $0.6 million due from Apache pursuant to the terms of the COMA. Refer to Note 3 — Transactions with Affiliates for more information. |
STATEMENT OF CONSOLIDATED CHANG
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS (Unaudited) - USD ($) $ in Thousands | Total | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Class A Common Stock | Class A Common StockCommon Stock | Class C Common Stock | Class C Common StockCommon Stock | Preferred Unit limited partners | Apache limited partner | |||
Beginning balance, shares (in shares) at Dec. 31, 2017 | 37,732,112 | 3,965,000 | [1] | 0 | 135,540,000 | [1] | |||||||
Beginning balance at Dec. 31, 2017 | $ 556,050 | $ 574,611 | $ (18,575) | $ 0 | $ 0 | [1] | $ 14 | [1] | |||||
Ending balance, shares (in shares) at Aug. 07, 2018 | 65,496,277 | 0 | |||||||||||
Beginning balance, shares (in shares) at Dec. 31, 2017 | 37,732,112 | 3,965,000 | [1] | 0 | 135,540,000 | [1] | |||||||
Beginning balance at Dec. 31, 2017 | 556,050 | 574,611 | (18,575) | 0 | $ 0 | [1] | $ 14 | [1] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Issuance of shares (in shares) | [1] | 3,348,000 | 114,460,000 | ||||||||||
Issuance of shares | 403,702 | 403,691 | $ 11 | [1] | |||||||||
Net income (loss) | (5,021) | (5,021) | |||||||||||
Ending balance, shares (in shares) at Sep. 30, 2018 | [1] | 7,313,000 | 250,000,000 | ||||||||||
Ending balance at Sep. 30, 2018 | 954,731 | 978,302 | (23,596) | 0 | $ 0 | [1] | $ 25 | [1] | |||||
Beginning balance, shares (in shares) at Jun. 30, 2018 | [1] | 6,197,000 | 211,847,000 | ||||||||||
Beginning balance at Jun. 30, 2018 | 814,344 | 857,127 | (42,804) | 0 | $ 0 | [1] | $ 21 | [1] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Issuance of shares (in shares) | [1] | 1,116,000 | 38,153,000 | ||||||||||
Issuance of shares | 121,179 | 121,175 | $ 4 | [1] | |||||||||
Net income (loss) | 19,208 | 19,208 | |||||||||||
Ending balance, shares (in shares) at Sep. 30, 2018 | [1] | 7,313,000 | 250,000,000 | ||||||||||
Ending balance at Sep. 30, 2018 | 954,731 | 978,302 | (23,596) | 0 | $ 0 | [1] | $ 25 | [1] | |||||
Beginning balance, shares (in shares) at Nov. 08, 2018 | 67,616,277 | 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Issuance of shares (in shares) | 7,313,028 | 250,000,000 | |||||||||||
Ending balance, shares (in shares) at Nov. 09, 2018 | 74,929,305 | 250,000,000 | |||||||||||
Beginning balance at Dec. 31, 2018 | $ 0 | $ 1,940,500 | |||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||
Redeemable noncontrolling interest, new issuance | [2] | 516,790 | |||||||||||
Net income (loss) | 21,623 | (23,524) | |||||||||||
Change in redemption value of noncontrolling interests | (664,285) | (473,502) | (190,783) | (664,285) | |||||||||
Accumulated other comprehensive loss | (313) | (313) | (1,321) | ||||||||||
Ending balance at Sep. 30, 2019 | 538,413 | 1,251,370 | |||||||||||
Beginning balance, shares (in shares) at Dec. 31, 2018 | 74,929,305 | 74,929,000 | [1] | 250,000,000 | 250,000,000 | [1] | |||||||
Beginning balance at Dec. 31, 2018 | (213,714) | 0 | (213,746) | 0 | $ 7 | [1] | $ 25 | [1] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income (loss) | (6,057) | (6,057) | |||||||||||
Change in redemption value of noncontrolling interests | 664,285 | 473,502 | 190,783 | 664,285 | |||||||||
Accumulated other comprehensive loss | (313) | (313) | (1,321) | ||||||||||
Ending balance, shares (in shares) at Sep. 30, 2019 | 74,929,305 | 74,929,000 | [1] | 250,000,000 | 250,000,000 | [1] | |||||||
Ending balance at Sep. 30, 2019 | 444,201 | 473,502 | (29,020) | (313) | $ 7 | [1] | $ 25 | [1] | |||||
Beginning balance at Jun. 30, 2019 | 520,933 | 1,272,652 | |||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||
Net income (loss) | 17,480 | (20,804) | |||||||||||
Accumulated other comprehensive loss | (113) | (113) | (478) | ||||||||||
Ending balance at Sep. 30, 2019 | $ 538,413 | 1,251,370 | |||||||||||
Beginning balance, shares (in shares) at Jun. 30, 2019 | [1] | 74,929,000 | 250,000,000 | ||||||||||
Beginning balance at Jun. 30, 2019 | 449,178 | 473,502 | (24,156) | (200) | $ 7 | [1] | $ 25 | [1] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income (loss) | (4,864) | (4,864) | |||||||||||
Accumulated other comprehensive loss | (113) | (113) | $ (478) | ||||||||||
Ending balance, shares (in shares) at Sep. 30, 2019 | 74,929,305 | 74,929,000 | [1] | 250,000,000 | 250,000,000 | [1] | |||||||
Ending balance at Sep. 30, 2019 | $ 444,201 | $ 473,502 | $ (29,020) | $ (313) | $ 7 | [1] | $ 25 | [1] | |||||
[1] | For periods prior to the Business Combination, the number of shares has been retroactively restated to reflect the number of shares received by Apache. For further detail of the Business Combination and associated financial statement presentation, please refer to Note 1 — Summary of Significant Accounting Policies and Note 2 — Recapitalization Transaction. | ||||||||||||
[2] | (2) Certain redemption features embedded within the Preferred Unit purchase agreement require bifurcation and measurement at fair value. For further detail, refer to Note 12 — Series A Cumulative Redeemable Preferred Units. |
NATURE OF OPERATIONS AND ORGANI
NATURE OF OPERATIONS AND ORGANIZATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND ORGANIZATION | Nature of Operations Through its consolidated subsidiaries, Altus Midstream Company owns gas gathering, processing and transmission assets in the Permian Basin of West Texas. Construction on the assets began in the fourth quarter of 2016, and operations commenced in the second quarter of 2017. Additionally, the Company owns, or has options to own, equity interests in a total of five Permian Basin pipelines. The Company’s operations consist of one reportable segment. Organization Altus originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp. (KAAC), for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company closed its initial public offering in the second quarter of 2017. On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of the Company. On August 8, 2018, KAAC and Altus Midstream LP entered into a contribution agreement (the Contribution Agreement) with certain wholly-owned subsidiaries of Apache Corporation (Apache), including the Altus Midstream Entities. The Altus Midstream Entities comprise four Delaware limited partnerships (collectively, Altus Midstream Operating) and their general partner (Altus Midstream Subsidiary GP LLC, a Delaware limited liability company), formed by Apache between May 2016 and January 2017 for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play (Alpine High). On November 9, 2018 (the Closing Date) and pursuant to the terms of that certain Contribution Agreement, KAAC acquired from Apache the entire equity interests of the Altus Midstream Entities and options to acquire equity interests in five separate third-party pipeline projects (the Pipeline Options). The acquisition of the entities and the Pipeline Options is referred to herein as the Business Combination. In exchange, the consideration provided to Apache included equity consideration, comprising economic voting and non-economic voting shares in KAAC, and common units representing limited partner interests in Altus Midstream (Common Units). Following the Closing Date and in connection with the completion of the Business Combination, KAAC changed its name to Altus Midstream Company. Refer to Note 2 — Recapitalization Transaction, for further discussion. Ownership of Altus Midstream LP Upon the closing of the Business Combination and as of September 30, 2019 , Altus’ wholly-owned subsidiary, Altus Midstream GP LLC (Altus Midstream GP), was the sole general partner of Altus Midstream. The Company held approximately 23.1 percent of the outstanding Common Units of Altus Midstream, while Apache held the remaining 76.9 percent . Additionally, as of the Closing Date and as of September 30, 2019 , Apache was the largest single holder of the Company’s voting common stock, comprising 100 percent of non-economic Class C Common Stock and approximately 9.8 percent of economic Class A Common Stock. On June 12, 2019, Altus Midstream issued and sold Series A Cumulative Redeemable Preferred Units (the Preferred Units) in a private offering. Concurrently, the Preferred Units were established as a new class of partnership unit representing limited partner interests in Altus Midstream pursuant to the terms of a Second Amended and Restated Agreement of Limited Partnership of Altus Midstream (the Amended LPA), and the purchasers were admitted as limited partners of Altus Midstream. For further details on the terms of the Preferred Units and the rights of the holders thereof, refer to Note 12 — Series A Cumulative Redeemable Preferred Units. The Amended LPA contains certain provisions intended to ensure that a one -to-one ratio is maintained, at all times and subject only to limited exceptions, between (i) the number of outstanding shares of Class A Common Stock and the number of Altus Midstream Common Units held by Altus and (ii) the number of outstanding shares of Class C Common Stock and the number of Altus Midstream Common Units held by Apache. |
SUMMARY OF SIGNIFCANT ACCOUNTIN
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). Principles of Consolidation The consolidated financial results of Altus Midstream are included in Altus Midstream Company’s consolidated financial statements due to Altus Midstream Company’s 100 percent ownership interest in Altus Midstream GP, and Altus Midstream GP’s control of Altus Midstream. Altus Midstream Company has no independent operations or material assets other than its partnership interests in Altus Midstream, which constitutes all of its business. Altus Midstream Company’s only material net assets separate from Altus Midstream relate to deferred taxes and the current and deferred income tax expense (benefit) associated with its investment in Altus Midstream. The deferred tax asset balance was $68.6 million and $67.6 million as of September 30, 2019 and December 31, 2018 , respectively. Additionally, Altus Midstream Company’s balance sheet reflects the presentation of noncontrolling interest ownership attributable to the limited partner interests in Altus Midstream held by Apache and the Preferred Unit holders. Refer to Note 13 — Income Taxes, Note 11 — Equity and Note 12 — Series A Cumulative Redeemable Preferred Units for further information. Variable Interest Entity Altus Midstream is a variable interest entity (VIE) because the partners in Altus Midstream with equity at risk lack the power, through voting or similar rights, to direct the activities that most significantly impact Altus Midstream’s economic performance. A reporting entity that concludes it has a variable interest in a VIE must evaluate whether it has a controlling financial interest in the VIE, such that it is the VIE’s primary beneficiary and should consolidate. Altus Midstream Company is the primary beneficiary of the VIE, and therefore should consolidate Altus Midstream because (i) Altus Midstream Company has the ability to direct the activities of Altus Midstream that most significantly affect its economic performance, and (ii) Altus Midstream Company has the right to receive benefits or the obligation to absorb losses that could be potentially significant to Altus Midstream. Financial Statement Presentation While Altus Midstream Company (formerly KAAC) was the surviving legal entity, the Business Combination was accounted for as a reverse recapitalization. As such, Altus Midstream Company was treated as the acquired company for financial reporting purposes. As a result of the Altus Midstream Entities being the accounting acquirer, the historical operations of the Altus Midstream Entities are deemed to be those of the Company. Thus, the financial statements included in this report reflect: (i) the historical operating results of the Altus Midstream Entities prior to the Business Combination; (ii) the net assets of the Altus Midstream Entities at their historical cost; (iii) the consolidated results of the Company and the Altus Midstream Entities following the closing of the Business Combination; and (iv) the Company’s equity structure for all periods presented. No step-up in basis of the contributed assets and no intangible assets or goodwill was recorded in the Business Combination. Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements, and changes in these estimates are recorded when known. Fair Value Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority. The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Embedded features identified within the Company’s agreements are bifurcated and measured at fair value at the end of each period on the Company’s consolidated balance sheet. Such recurring fair value measurements are presented in further detail in Note 15 — Fair Value Measurements. The Company also uses fair value measurements on a nonrecurring basis when certain qualitative assessments of its assets indicate a potential impairment. During the three and nine month periods ended September 30, 2019 , the Company recorded an impairment of $9.3 million on certain assets. Refer to Note 5 — Property, Plant and Equipment for further detail. Accounts Receivable From/Payable To Apache The accounts receivable from or payable to Apache represent the net result of Altus Midstream’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache as provided under the COMA. Generally, cash in this amount will be transferred to Apache in the month after the Company’s transactions are processed and the net results of operations are determined. However, from time to time, the Company may estimate and transfer the cash settlement amount in the month the transactions are processed, in order to minimize related-party working capital balances. See discussion and additional detail in Note 3 — Transactions with Affiliates. Leases On January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” which requires lessees to recognize separate right-of-use (ROU) assets and lease liabilities for most leases classified as operating leases under previous GAAP. Prior to adoption, the Financial Accounting Standards Board (FASB) issued transition guidance permitting an entity the option to not evaluate under ASU 2016-02 those existing or expired land easements that were not previously accounted for as leases, as well as an option to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the financial statements. The Company elected both transitional practical expedients. Under these transition options, comparative reporting was not required, and the provisions of the standard were applied prospectively to leases in effect at the date of adoption. As allowed under the standard, the Company also applied practical expedients to carry forward its historical assessments of whether existing agreements contain a lease, classification of existing lease agreements, and treatment of initial direct lease costs. The Company also elected to exclude short-term leases (those with terms of 12 months or less) from the balance sheet presentation and accounts for non-lease and lease components as a single lease component for all asset classes. Short-term lease expense was not material for the third quarter and first nine months of 2019. The Company determines if an arrangement is an operating or finance lease at the inception of each contract. If the contract is classified as an operating lease, Altus records an ROU asset and corresponding liability reflecting the total remaining present value of fixed lease payments over the expected term of the lease agreement. The expected term of the lease may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. In the normal course of business, the Company enters into various lease agreements for real estate and equipment related to its midstream activities which are typically classified as operating leases under the provisions of the standard. ROU assets are reflected within “Deferred charges and other” on the Company’s consolidated balance sheet, and the associated operating lease liabilities are reflected within “Other current liabilities” and “Other noncurrent liabilities,” as applicable. Operating lease expense associated with the ROU assets is recognized on a straight-line basis over the lease term. Lease expense is reflected on the statement of consolidated operations commensurate with the leased activities and nature of the services performed. Fixed operating lease expense was $0.2 million and $0.5 million for the three and nine months ended September 30, 2019 , respectively. In addition, the Company periodically enters into finance leases that are similar to those leases classified as capital leases under previous GAAP. The Company currently has one short-term finance lease, which is included in “Property, Plant and Equipment” on the consolidated balance sheet, and the associated finance lease liability is reflected within “Current debt.” The associated interest expense is reflected in the statement of consolidated operations within “Financing costs, net of capitalized interest.” Depreciation on the Company’s finance lease asset was $1.2 million and $3.7 million for the three and nine months ended September 30, 2019 , respectively. Interest on the Company’s finance lease asset was $0.2 million and $0.8 million for the three and nine months ended September 30, 2019 , respectively. The following table represents the Company’s weighted average lease term and discount rate as of September 30, 2019 : Operating Leases Finance Lease Weighted average remaining lease term 2.9 years 0.3 years Weighted average discount rate 4.2 % 4.2 % The undiscounted future minimum lease payments reconciled to the carrying value of the lease liabilities as of September 30, 2019 were as follows: Net Minimum Commitments Operating Leases (1) Finance Lease (2) (In thousands) 2019 $ 163 $ 7,954 2020 652 9,800 2021 622 — 2022 445 — 2023 — — Thereafter — — Total future minimum lease payments 1,882 17,754 Less: imputed interest (105 ) (192 ) Total lease liabilities 1,777 17,562 Current portion (596 ) (17,562 ) Non-current portion $ 1,181 $ — (1) Amounts are primarily associated with the Lease Agreement (as defined below) entered into with Apache relating to the use of certain office buildings, warehouse and storage facilities as described in Note 3 — Transactions with Affiliates. (2) Amounts represent the Company’s finance lease obligation entered into during the first quarter of 2019 related to physical power generators being leased on a one-year term with the right to purchase. The lease liability reflected in the table above represents the Company’s fixed minimum payments that are settled in accordance with the lease terms. Actual lease payments during the period may also include variable lease components such as common area maintenance, usage-based sales taxes and rate differentials, or other similar costs that are not determinable at the inception of the lease. Variable lease payments for the three and nine months ended September 30, 2019 were $0.1 million and $0.3 million , respectively. Recently Issued Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses.” The standard changes the impairment model for trade receivables, held-to-maturity debt securities, net investments in leases, loans, and other financial assets measured at amortized cost. The ASU requires the use of a new forward-looking “expected loss” model compared to the current “incurred loss” model; resulting in accelerated recognition of credit losses. This update is effective for Altus beginning in the first quarter of 2020, with early adoption permitted. The Company is in the process of finalizing its project plan for the implementation of the ASU and continues to evaluate and monitor standard setting activity. The Company does not believe the adoption and implementation of this ASU will have a material impact on its financial statements. In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement,” which changes the disclosure requirements for fair value measurements by removing, adding, and modifying certain disclosures. ASU 2018-13 is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures. |
RECAPITALIZATION TRANSACTION
RECAPITALIZATION TRANSACTION | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
RECAPITALIZATION TRANSACTION | RECAPITALIZATION TRANSACTION Background and Summary On August 8, 2018, KAAC and its then wholly-owned subsidiary, Altus Midstream LP, entered into the Contribution Agreement with certain wholly-owned subsidiaries of Apache, including the Altus Midstream Entities. The terms of the Contribution Agreement included that Altus Midstream would acquire from Apache, all of the outstanding equity interests in each of the Altus Midstream Entities and the Pipeline Options to acquire equity interests in certain third-party pipeline projects. The Company consummated the Business Combination and certain other transactions contemplated by the Contribution Agreement on the Closing Date. On the Closing Date: • Altus Midstream issued Common Units to Apache, and the Company issued to Apache an equivalent number of shares of a newly-created class of voting-only common stock (Class C Common Stock). • The Company issued to Apache (i) newly issued shares of Class A Common Stock, (ii) warrants exercisable for shares of Class A Common Stock, and (iii) the right to receive additional shares of Class A Common Stock, based upon the achievement of certain price and operational thresholds. • The Company contributed $628.2 million in cash to Altus Midstream and in return, Altus Midstream issued to the Company a number of Common Units equal to the total number of shares of the Company’s Class A Common Stock outstanding as of the Closing Date. For further discussion of Apache’s right to receive additional shares of Class A Common Stock, and other outstanding equity instruments that may impact ownership interests and the limited partnership interests of Altus Midstream in future periods, please see Note 11 — Equity. Number of Shares at the Closing Date The number of shares issued and outstanding immediately following the closing of the Business Combination is summarized in the table below. number of shares Class A Common Stock Class B Common Stock (1) Class C Common Stock Shares outstanding prior to the Business Combination 37,732,112 9,433,028 — Less: redemption of public shares (2) (29,469,858 ) — — Add: shares issued in private placement 57,234,023 — — Total shares outstanding prior to the Business Combination 65,496,277 9,433,028 — Shares, in connection with the Business Combination: Forfeited (3) — (7,313,028 ) — Converted (1) 2,120,000 (2,120,000 ) — Total shares outstanding immediately prior to the Closing Date 67,616,277 — — Issued as consideration to Apache (4) 7,313,028 — 250,000,000 Total shares outstanding at the Closing Date 74,929,305 — 250,000,000 (1) Shares of Class B Common Stock, $0.0001 par value (Class B Common Stock), were purchased by the Sponsor upon the Company’s incorporation in December 2016. Class B Common Stock is identical to Class A Common Stock except that they automatically converted to Class A Common Stock at the time of the Business Combination. (2) Pursuant to the terms of KAAC’s amended and restated certificate of incorporation, public stockholders had the opportunity, in connection with the Business Combination, to redeem shares of Class A Common Stock. A total of 29,469,858 shares were redeemed for an aggregate amount of approximately $298.8 million . (3) In connection with the Business Combination, the Sponsor agreed to forfeit shares of Class B Common Stock. As part of the consideration transferred in the Business Combination, 7,313,028 newly issued shares of Class A Common Stock were issued to Apache, equivalent to the number of shares of Class B Common Stock forfeited by the Sponsor. Additionally, the Sponsor forfeited a number of warrants originally issued simultaneously with the public offering. (4) The equity structure of the Altus Midstream Entities (the accounting acquirer) has been restated to reflect the number of shares of Altus Midstream Company (the accounting acquiree) issued in the recapitalization transaction. Please refer to the section below entitled “Basis of Presentation of Equity Structure” for further discussion. Basis of Presentation of Equity Structure As discussed in Note 1 — Summary of Significant Accounting Policies, the Business Combination was accounted for as a reverse recapitalization, with Altus Midstream Company treated as the acquired company, and the Altus Midstream Entities treated as the acquirer, for financial reporting purposes. Therefore, the equity structure in the consolidated financial statements is that of the Company restated for all periods presented. In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date, to reflect the number of shares issued to Apache in connection with the recapitalization transaction. The value allocated to the shares issued to Apache reflects the capital structure of the Altus Midstream Entities prior to the Business Combination, which solely comprised capital contributions from Apache. Accordingly, shares of common stock issued to Apache in exchange for its ownership interests in the Altus Midstream Entities are retroactively restated from May 26, 2016 (inception), proportionate to the capital contributions made by Apache to the Altus Midstream Entities up to the Closing Date. |
TRANSACTIONS WITH AFFILIATES
TRANSACTIONS WITH AFFILIATES | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH AFFILIATES | TRANSACTIONS WITH AFFILIATES Revenues The Company has contracted to provide services including gas gathering, compression, processing, transportation, and NGL transportation, pursuant to acreage dedications provided by Apache, comprising the entire Alpine High acreage. In accordance with the terms of these agreements, the Company receives prescribed fees based on the type and volume of product for which the services are provided. For all of the periods presented, the Company’s only customer was Apache, although Altus Midstream is pursuing contracts with third parties that could be accommodated by existing capacity. Revenues generated under these agreements are presented on the Company’s statement of consolidated operations as “Midstream services revenue — affiliate.” Revenues earned that have not yet been invoiced to Apache are presented on the Company’s consolidated balance sheet as “Revenue receivables.” Refer to Note 4 — Revenue Recognition for further discussion. Cost and Expenses The Company has no employees, and prior to the Business Combination, the Company had no banking or cash management facilities. As such, the Company has contracted with Apache to receive certain operational, maintenance, and management services. In accordance with the terms of these agreements, the Company incurred operations and maintenance expenses of $2.2 million and $2.3 million for the three months ended September 30, 2019 and 2018 , respectively, and $7.1 million and $6.6 million for the nine months ended September 30, 2019 and 2018 , respectively. The Company incurred general and administrative (G&A) expenses of $2.1 million and $1.8 million for the three months ended September 30, 2019 and 2018 , respectively, and $4.7 million and $5.1 million for the nine months ended September 30, 2019 and 2018 , respectively, including expenses related to the operational services agreement and COMA as further described below. Further information on the related-party agreements in place during the period is provided below. Operational Services Agreement Prior to the Business Combination, Apache provided operations, maintenance and management services to Altus Midstream Operating, pursuant to a service agreement (the Services Agreement). In accordance with the terms of the Services Agreement, Apache received a fixed fee per month for its overhead and indirect costs incurred on behalf of Altus Midstream Operating. All costs incurred by Altus Midstream Operating were paid by Apache. Construction, Operations and Maintenance Agreement At the closing of the Business Combination, the Company entered into the COMA with Apache, which superseded the Services Agreement. Under the terms of the COMA, Apache provides certain services related to the design, development, construction, operation, management and maintenance of certain gathering, processing and other midstream assets, on behalf of the Company. In return, the Company will pay fees to Apache of: (i) $3.0 million for the period beginning on the execution of the COMA at the closing of the Business Combination through December 31, 2019; (ii) $5.0 million for the period of January 1, 2020 through December 31, 2020; (iii) $7.0 million for the period of January 1, 2021 through December 31, 2021; and (iv) $9.0 million annually thereafter, as may be adjusted upwards based on actual incurred costs, until terminated. The annual fee was negotiated as part of the Business Combination to reimburse Apache for indirect costs incurred in performing administrative corporate functions for the Company, including services for information technology, risk management, corporate planning, accounting, cash management, and others. In addition, Apache may be reimbursed for certain internal costs and third-party costs directly incurred in connection with its role as service provider under the COMA. Apache records costs directly associated with midstream activity, where substantially all the services are rendered for Altus Midstream, to unique midstream cost centers that are subsequently charged to Altus Midstream on a monthly basis. Lease Agreement Concurrent with the closing of the Business Combination, Altus Midstream entered into an operating lease agreement with Apache (the Lease Agreement) relating to the use of certain office buildings, warehouse and storage facilities located in Reeves County, Texas. Under the terms of the Lease Agreement, Altus Midstream shall pay to Apache on a monthly basis the sum of (i) a base rental charge of $44,500 and (ii) an amount based on Apache’s estimate of the annual costs it expects to incur in connection with the ownership, operation, repair, and/or maintenance of the facilities. The Company incurred total expenses of $0.3 million and $0.8 million for the three and nine months ended September 30, 2019 , respectively, in relation to the Lease Agreement, which are included within operations and maintenance expenses. Unpaid amounts accrue interest until settled. The initial term of the Lease Agreement is for four years and may be extended by Altus Midstream for three additional, consecutive periods of twenty-four months . Capitalized Interest Prior to the Business Combination, the Company’s operations were funded entirely by contributions from Apache. Accordingly, Apache allocated a portion of interest on its corporate debt in determining capitalized interest associated with the development of Altus Midstream Operating. Commensurate with Apache’s calculation, interest is capitalized as part of the historical cost of developing and constructing assets. Significant midstream development assets that have not commenced operations qualify for interest capitalization. The associated capitalized interest was determined by multiplying Apache’s weighted-average borrowing cost of debt by the average amount of qualifying midstream assets. The amount of interest allocated and capitalized was $2.5 million and $7.1 million for the three and nine months ended September 30, 2018 , respectively. Following the closing of the Business Combination, capitalized interest is determined based on interest expense incurred by Altus Midstream. Refer to Note 6 — Debt and Financing Costs for further information. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue Recognition The following table presents a disaggregation of the Company’s midstream services revenue by service type. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (In thousands) MIDSTREAM SERVICES REVENUE — AFFILIATE: Gas gathering $ 4,604 $ 2,563 $ 10,914 $ 4,578 Gas processing 25,315 18,150 68,994 33,657 Transmission 3,388 4,671 11,219 11,756 NGL transmission 702 53 867 62 $ 34,009 $ 25,437 $ 91,994 $ 50,053 The Company currently recognizes revenue pursuant to separate midstream service agreements entered into with Apache for the midstream services presented above. These midstream service agreements have no minimum volume commitments or firm transportation commitments, instead they are underpinned by acreage dedications covering Alpine High. Pursuant to these agreements, Altus Midstream is obligated to perform services on all volumes produced from the dedicated acreage, so long as Apache has the right to market the production. In exchange for the above services and in accordance with the terms of the midstream service agreements, the Company charges a fixed fee on a per-unit basis. Altus Midstream does not own or take title to the volumes that it handles. These performance obligations are satisfied over time as Apache simultaneously receives and consumes the benefits of the services performed. Service revenues are recognized when the right to invoice has been met, since the amount that the Company has the right to invoice (based upon the fixed fee and throughput volumes) corresponds directly with the value received by Apache. Pursuant to the terms of the Contribution Agreement, all accounts receivable from Apache (including revenue receivables) on or prior to September 30, 2018, are for the account of Apache. No cash settlement of such balances was contemplated prior to September 30, 2018 and as such, revenue receivables generated prior to this date were treated as a reduction to additional paid-in capital within equity. Following the Business Combination, service revenue invoices are provided to Apache on a monthly basis, pursuant to the terms of the COMA. Amounts owing to Apache under the terms of the COMA are reduced by the amounts of these invoices. Net cash settlement is performed on a monthly basis. The Company recognized services revenue earned but not yet invoiced to Apache of $11.7 million as of September 30, 2019 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, at carrying value, is as follows: September 30, December 31, 2019 2018 (In thousands) Gathering, processing and transmission systems and facilities $ 1,304,175 $ 729,585 Construction in progress (1) 152,551 521,609 Finance lease asset 34,749 — Other property and equipment 3,183 23 Total property, plant and equipment 1,494,658 1,251,217 Less: accumulated depreciation and amortization (51,608 ) (24,320 ) Total property, plant and equipment, net $ 1,443,050 $ 1,226,897 (1) Included in the Company’s construction in progress is capitalized interest of $2.7 million and $6.9 million at September 30, 2019 and December 31, 2018 , respectively. The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective balance sheet date. During the third quarter of 2019, the Company elected to cancel construction on a compressor station given the deferral of previous processing expansion plans. Certain of the components were then marketed by the Company, and it was determined that these components met the criteria to be classified as held for sale. Accordingly, management reclassified these components to current assets and they were initially measured at fair value less costs to sell. The fair value was determined using the market approach and Level 1 inputs. As a result, the assets were written down to their estimated fair value of $18.1 million , and the Company recorded an impairment of $9.3 million for the three and nine months ended September 30, 2019. The impairment is recorded within “Impairments” on the Company’s statement of consolidated operations. Subsequent to September 30, 2019, the Company received cash proceeds of approximately $13 million in relation to the sale of certain of the assets classified as held for sale. Other components of the compressor station totaling $8.7 million |
DEBT AND FINANCING COSTS
DEBT AND FINANCING COSTS | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING COSTS | DEBT AND FINANCING COSTS In November 2018, Altus Midstream entered into a revolving credit facility for general corporate purposes that matures in November 2023 (subject to Altus Midstream’s two , one year extension options). The agreement for this revolving credit facility, as amended (the Amended Credit Agreement), provides aggregate commitments from a syndicate of banks of $650.0 million until the consolidated net income of Altus Midstream and its restricted subsidiaries, as adjusted pursuant to the agreement (EBITDA), for the immediately preceding fiscal quarter equals or exceeds $ 175.0 million on an annualized basis (such period, the Initial Period). Upon achieving such EBITDA, the Initial Period ends and the aggregate commitments increase to $800.0 million . All aggregate commitments include a letter of credit subfacility of up to $100.0 million and a swingline loan subfacility of up to $100.0 million . After the Initial Period, Altus Midstream may increase commitments up to an aggregate $1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. As of September 30, 2019 , total outstanding borrowings were $ 235.0 million and no letters of credit were outstanding under this facility. There were no outstanding borrowings or letters of credit as of December 31, 2018. Altus Midstream’s revolving credit facility is unsecured and is not guaranteed by the Company, Apache, or any of their respective subsidiaries. At Altus Midstream’s option, the interest rate per annum for borrowings under this facility is either a base rate, as defined, plus a margin, or the London Inter-bank Offered Rate (LIBOR), plus a margin; in each case, the margin during the Initial Period is 0.05 percent greater than the margin after the Initial Period. Altus Midstream also pays quarterly a facility fee at a rate per annum on total commitments. The margins and the facility fee vary based upon (i) the Leverage Ratio until Altus Midstream has a senior long-term debt rating and (ii) such senior long-term debt rating once it exists. The Leverage Ratio is the ratio of (1) the consolidated indebtedness of Altus Midstream and its restricted subsidiaries to (2) EBITDA (as defined in the Amended Credit Agreement) of Altus Midstream and its restricted subsidiaries for the 12-month period ending immediately before the determination date. At September 30, 2019 , the base rate margin was 0.10 percent , the LIBOR margin was 1.10 percent , and the facility fee was 0.20 percent . In addition, a commission is payable quarterly to the lenders on the face amount of each outstanding letter of credit at a per annum rate equal to the LIBOR margin then in effect. Customary letter of credit fronting fees and other charges are payable to issuing banks. The Amended Credit Agreement contains restrictive covenants that may limit the ability of Altus Midstream and its restricted subsidiaries to, among other things, incur additional indebtedness or guaranty indebtedness, sell assets, make investments in unrestricted subsidiaries, enter into mergers, make certain payments and distributions, incur liens on certain property securing indebtedness, and engage in certain other transactions without the prior consent of the lenders. Altus Midstream also is subject to a financial covenant under the Amended Credit Agreement, which requires it to maintain one of the following financial ratios: • during the Initial Period, a debt-to-capital ratio of not greater than 30.0 percent at the end of any fiscal quarter, determined by reference to (i) the consolidated indebtedness of Altus Midstream and its restricted subsidiaries to (ii) (A) the consolidated partners’ equity of Altus Midstream and its restricted subsidiaries plus (B) the consolidated indebtedness of Altus Midstream and its restricted subsidiaries; and • beginning with the quarter ending on the earlier of (i) March 31, 2020 or (ii) the last day of the fiscal quarter during which the Initial Period ends, a Leverage Ratio not exceeding 5.00 : 1.00 at the end of any fiscal quarter, except that during the period of up to one year following a qualified acquisition, the Leverage Ratio cannot exceed 5.50 : 1.00 at the end of any fiscal quarter. There are no clauses in the Amended Credit Agreement that permit the lenders to accelerate payments or refuse to lend based on unspecified material adverse changes. The Amended Credit Agreement has no drawdown restrictions or prepayment obligations in the event of a decline in credit ratings. However, the agreement allows the lenders to accelerate payment maturity and terminate lending and issuance commitments for nonpayment and other breaches, and if Altus Midstream or any of its restricted subsidiaries defaults on other indebtedness in excess of the stated threshold, is insolvent, or has any unpaid, non-appealable judgment against it for payment of money in excess of the stated threshold. Lenders may also accelerate payment maturity and terminate lending and issuance commitments if Altus Midstream undergoes a specified change in control or has specified pension plan liabilities in excess of the stated threshold. Altus Midstream was in compliance with the terms of the Amended Credit Agreement as of September 30, 2019 . As of September 30, 2019 , the Company had debt outstanding totaling $252.6 million , of which $17.6 million is related to a finance lease obligation. As a result of the debt outstanding and giving effect to the debt-to-capital ratio requirements under the credit agreement, the maximum amount of net assets available to be transferred from Altus Midstream to Altus Midstream Company was $0.9 billion . This amount of net assets available to be transferred does not include the proportionate share of net assets of entities in which Altus Midstream has an interest accounted for by the equity method. Additionally, the amount of any cash distributions that may be transferred from these entities to Altus Midstream is subject to compliance with the terms of any debt or similar agreements held by the entities, as applicable. The terms of Altus Midstream’s Preferred Units also contain certain restrictions on distributions on Altus Midstream’s Common Units, including the Common Units held by the Company, and any other units that rank junior to the Preferred Units with respect to distributions or distributions upon liquidation. Refer to Note 12 — Series A Cumulative Redeemable Preferred Units for further information. Interest Income and Financing Costs, Net of Capitalized Interest The following table presents the components of Altus Midstream’s interest income and financing costs, net of capitalized interest: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 (1) 2019 2018 (1) (In thousands) Interest income $ 617 $ — $ 3,584 $ — Interest income $ 617 $ — $ 3,584 $ — Interest expense $ 1,496 $ 2,504 $ 3,234 $ 7,054 Amortization of deferred facility fees 237 — 652 — Capitalized interest (1,211 ) (2,504 ) (2,378 ) (7,054 ) Financing costs, net of capitalized interest $ 522 $ — $ 1,508 $ — (1) Prior to the Business Combination, the Company’s operations were funded entirely by contributions from Apache. Accordingly, Apache allocated a portion of interest on its corporate debt in determining capitalized interest associated with the development of Alpine High infrastructure. Refer to Note 3 — Transactions with Affiliates for further information. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES The following table provides detail of the Company’s other current liabilities at September 30, 2019 and December 31, 2018 : September 30, December 31, 2019 2018 (In thousands) Accrued capital costs $ 24,931 $ 80,696 Accrued taxes other than income 9,408 69 Accrued operations and maintenance expense 1,864 2,863 Accrued incentive compensation 1,362 468 Operating lease liability - current 596 — Accrued interest 463 232 Other 192 598 Total other current liabilities $ 38,816 $ 84,926 |
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION | 9 Months Ended |
Sep. 30, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATION | ASSET RETIREMENT OBLIGATION The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the nine months ended September 30, 2019 : (In thousands) Asset retirement obligation at December 31, 2018 $ 29,369 Liabilities incurred during the period 3,406 Accretion expense 1,175 Asset retirement obligation at September 30, 2019 $ 33,950 ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company’s infrastructure assets which include central processing facilities, gathering systems and pipelines. Management utilizes independent valuation reports and estimates of current costs to project expected cash outflows for retirement obligations. Management estimates the ultimate productive life of the properties, a risk-adjusted discount rate, and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of existing ARO, a corresponding adjustment is made to the property, plant and equipment balance. |
COMMIMENTS AND CONTINGENCIES
COMMIMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMIMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Accruals for loss contingencies arising from claims, assessments, litigation, environmental and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of September 30, 2019 and December 31, 2018 , there were no accruals for loss contingencies. Litigation The Company is subject to governmental and regulatory controls arising in the ordinary course of business. It is the opinion of management that any claims and litigation involving the Company are not likely to have a material adverse effect on the Company’s reported position or results of operations. Environmental Matters As an owner of the infrastructure assets and with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject us to liability for pollution damages. In some instances, Altus Midstream may be directed to suspend or cease operations. The Company maintains insurance coverage, which management believes is customary in the industry, although insurance does not fully cover against all environmental risks. Additionally, there can be no assurance that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered. Contractual Obligations Altus Midstream’s existing fee-based midstream services agreements, which have no minimum volume commitments or firm transportation commitments, are underpinned by acreage dedications covering Alpine High. Pursuant to these agreements, Altus Midstream is obligated to perform low and high pressure gathering, processing, dehydration, compression, treating, conditioning, and transportation on all volumes produced from the dedicated acreage, so long as Apache has the right to market such gas. Pursuant to the COMA with Apache, Altus Midstream will indirectly receive G&A support services including information technology, risk management, corporate planning, accounting, cash management, human resources, and other general corporate services. The COMA established a fixed annual support services fee to Apache of $3.0 million for the period from the execution of the COMA at the closing of the Business Combination through December 31, 2019 , $5.0 million in 2020, and $7.0 million in 2021. Beginning in 2022 through the term of the COMA, the associated fee will be $9.0 million annually and may be adjusted upwards based on actual incurred costs. Concurrent with the closing of the Business Combination, Altus Midstream entered into the Lease Agreement with Apache, relating to the use of certain office buildings, warehouse and storage facilities located in Reeves County, Texas. Under the terms of the Lease Agreement, Altus Midstream shall pay to Apache on a monthly basis the sum of (i) a base rental charge of $44,500 and (ii) an amount based on Apache’s estimate of the annual costs it expects to incur in connection with the ownership, operation, repair, and/or maintenance of the facilities. The initial term of the Lease Agreement is for four years and may be extended by Altus Midstream for three additional, consecutive periods of twenty-four months . In the second quarter of 2019, Altus Midstream issued and sold the Preferred Units. Under the terms of the Amended LPA, the Preferred Unit holders are entitled to receive quarterly distributions until such time as the Preferred Units are redeemed or exchanged. Refer to Note 12 — Series A Cumulative Redeemable Preferred Units for further discussion regarding the terms of the Preferred Units and the rights of the holders thereof. At September 30, 2019 and December 31, 2018 , there were no other material contractual obligations related to the entities included in the consolidated financial statements other than the performance of asset retirement obligations as referenced in Note 8 — Asset Retirement Obligation and required credit facility fees discussed in Note 6 — Debt and Financing Costs. Following the exercise of each Pipeline Option, the Company will be required to fund its pro-rata portion of any future capital expenditures for the development of the respective pipeline projects as referenced in Note 10 |
EQUITY METHOD INTERESTS
EQUITY METHOD INTERESTS | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INTERESTS | EQUITY METHOD INTERESTS As of September 30, 2019 , the Company had exercised four of its five Pipeline Options and, as a result, owns the following equity method interests in Permian Basin long-haul pipeline entities. For each of the equity method interests, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the equity method interests. September 30, 2019 December 31, 2018 In thousands, unless stated Ownership Amount Ownership Amount Gulf Coast Express Pipeline LLC 16.0 % $ 274,727 15.0 % $ 91,100 EPIC Crude Holdings, LP 15.0 % 127,742 — % — Permian Highway Pipeline LLC 26.7 % 224,152 — % — Breviloba, LLC 33.0 % 467,943 — % — $ 1,094,564 $ 91,100 As of September 30, 2019 and December 31, 2018 , unamortized basis differences included in the equity method interest balances were $25.7 million and $5.8 million , respectively. These amounts represent differences in the Company’s contributions to date and Altus’ underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into net income over the useful lives of the underlying pipeline assets when they are placed into service. The following table presents the activity in the Company’s equity method interests for the nine months ended September 30, 2019 : Gulf Coast Express Pipeline LLC EPIC Crude Holdings, LP Permian Highway Pipeline LLC Breviloba, LLC Total (In thousands) Balance at December 31, 2018 $ 91,100 $ — $ — $ — $ 91,100 Acquisitions 15,274 51,810 161,081 442,460 670,625 Contributions 169,131 82,499 62,895 22,887 337,412 Distributions (3,391 ) — — — (3,391 ) Equity income (loss), net 2,613 (4,849 ) 176 2,596 536 Accumulated other comprehensive loss — (1,718 ) — — (1,718 ) Balance at September 30, 2019 $ 274,727 $ 127,742 $ 224,152 $ 467,943 $ 1,094,564 Summarized Financial Information The following table represents aggregated selected income statement data for the Company’s equity method interests (on a 100 percent basis): Three Months Ended September 30, 2019 (1) Nine Months Ended September 30, 2019 (1) Gulf Coast Express Pipeline LLC EPIC Crude Holdings, LP Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC EPIC Crude Holdings, LP Permian Highway Pipeline LLC Breviloba, LLC (In thousands) Revenues $ 12,039 $ 8,015 $ — $ 41,765 $ 16,476 $ 8,015 $ — $ 78,749 Operating expenses 1,033 27,679 21 12,857 1,218 33,610 41 27,189 Operating income (loss) 11,006 (19,664 ) (21 ) 28,908 15,258 (25,595 ) (41 ) 51,560 Net income (loss) 11,776 (20,890 ) 554 28,908 17,090 (35,620 ) 785 51,560 Other comprehensive loss — (4,145 ) — — — (11,450 ) — — (1) |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
EQUITY | EQUITY Common Stock and Warrants The Company’s second amended and restated certificate of incorporation authorizes the issuance of 1,500,000,000 shares of Class A Common Stock, $0.0001 par value, and 1,500,000,000 shares of Class C Common Stock, $0.0001 par value. The Company’s shares of Class A Common Stock are listed on the NASDAQ Global Select Market under the symbol “ALTM.” As of September 30, 2019 , there were 74,929,305 and 250,000,000 issued and outstanding shares of Class A Common Stock and Class C Common Stock, respectively. Holders of each of the Class A Common Stock and Class C Common Stock vote together as a single class on all matters submitted to a vote of our stockholders, except as required by law. Only holders of Class A Common Stock are entitled to dividends or other liquidating distributions made by the Company. Shares of Class A Common Stock and certain warrants were originally issued in connection with the Company’s public offering, while shares of Class C Common Stock were newly issued in connection with the Business Combination. Public Warrants As of September 30, 2019 , there were 12,577,350 Public Warrants outstanding. Each whole Public Warrant entitles the holder to purchase one share of Class A Common Stock at a price of $11.50 per share. The Public Warrants will expire five years after closing of the Business Combination or earlier upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days ’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 -trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders. Following the closing of the Business Combination, the Public Warrants continued trading under the symbol “ALTMW.” On December 11, 2018, the Company received notice from the Staff of the NASDAQ of a delisting determination with respect to our Public Warrants for failure to satisfy the NASDAQ’s minimum round lot holder listing requirement. The Public Warrants ceased trading on the NASDAQ at the opening of business on December 20, 2018. The delisting of the Public Warrants did not impact the listing or trading of the Company’s Class A Common Stock. Private Placement Warrants As of September 30, 2019 , there were 6,364,281 Private Placement Warrants, of which Apache holds 3,182,140 . The Private Placement Warrants are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis. Redeemable Noncontrolling Interest - Apache Limited Partner In conjunction with the issuance of the Class C Common Stock, Apache received 250,000,000 Altus Midstream Common Units, representing approximately 76.9 percent of the total Common Units issued and outstanding. The financial results of Altus Midstream and its subsidiaries are included in the Company’s consolidated financial statements as detailed in Note 1 — Summary of Significant Accounting Policies, under the section titled “Principles of Consolidation.” Apache has the right, at any time, to cause Altus Midstream to redeem all or a portion of the Common Units issued to Apache, in exchange for shares of the Company’s Class A Common Stock on a one -for-one basis or, at Altus Midstream’s option, an equivalent amount of cash; provided that the Company may, at its option, effect a direct exchange of cash or Class A Common Stock for such Common Units in lieu of such a redemption by Altus Midstream. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock held by Apache will be cancelled. Apache’s limited partner interest associated with the Common Units issued with the Class C Common Stock is reflected as a redeemable noncontrolling interest in the Company. The redeemable noncontrolling interest is recognized at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value is determined based on a 5 -day volume weighted average closing price of the Class A Common Stock ( 5 -day VWAP) as defined in the Amended LPA, a Level 1 non-recurring fair value measurement. At September 30, 2019 , the redeemable noncontrolling interest was recorded based on the initial fair value plus accumulated earnings and losses to date. The maximum redemption value at September 30, 2019 based on the 5 -day VWAP was $713.1 million . At December 31, 2018, the redeemable noncontrolling interest was recorded at the maximum redemption value based on the 5 -day VWAP. For further discussion of Apache’s right to receive additional shares of Class A Common Stock, and other outstanding equity instruments that may impact ownership interests and the limited partner interests of Altus Midstream in future periods, see Note 14 — Net Income (Loss) Per Share. Redeemable Noncontrolling Interest - Preferred Unit Limited Partners On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing (as defined below) or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. Refer to Note 12 — Series A Cumulative Redeemable Preferred Units for further discussion. SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the Closing). The Closing occurred pursuant to a Preferred Unit Purchase Agreement among Altus Midstream, the Company, and the purchasers party thereto, dated as of May 8, 2019. A total of 625,000 Preferred Units were sold at a price of $1,000 per Preferred Unit, for an aggregate issue price of $625.0 million . Altus Midstream received approximately $611.2 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers. At the Closing, the partners of Altus Midstream entered into the Amended LPA. The Amended LPA provides the terms of the Preferred Units, including the distribution rate, redemption rights, and rights to exchange the Preferred Units for shares of the Company’s Class A Common Stock, as well as rights of holders of the Preferred Units to approve certain partnership business, financial, and governance-related matters. The Preferred Units have a perpetual term, unless redeemed or exchanged as described below. Pursuant to the Amended LPA: • The Preferred Units entitle the holders thereof to receive quarterly distributions at a rate of 7 percent per annum, commencing with the quarter ended June 30, 2019. The rate increases to 10 percent per annum after the fifth anniversary of Closing and upon the occurrence of specified events. For any quarter ending on or prior to December 31, 2020, Altus Midstream may pay distributions in-kind. • The Preferred Units are redeemable at Altus Midstream’s option at any time in cash at a redemption price (the Redemption Price) equal to (a) the greater of (i) an 11.5 percent internal rate of return (increasing to 13.75 percent after the fifth anniversary of Closing), and (ii) a 1.3 x multiple of invested capital plus (b) if applicable, the value of any accrued and unpaid distributions. The Preferred Units will be redeemable at the holder’s option upon a change of control or liquidation of Altus Midstream and certain other events, including certain asset dispositions. Subject to compliance with minimum ownership requirements and redemption restrictions of the Amended LPA, Apache’s election to cause its Common Units in Altus Midstream to be redeemed for shares of the Company’s Class A Common Stock or cash (as further discussed in Note 11 — Equity) would not be a change of control. • The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing or upon the occurrence of specified events. Each Preferred Unit will be exchangeable for a number of shares of Class A Common Stock equal to the Redemption Price divided by the volume-weighted average trading price of the Class A Common Stock on the NASDAQ Global Select Market for the 20 trading days immediately preceding the second trading day prior to the applicable exchange date, less a 6 percent discount. • Each outstanding Preferred Unit has a liquidation preference equal to the Redemption Price payable before any amounts are paid in respect of Altus Midstream’s Common Units and any other units that rank junior to the Preferred Units with respect to distributions or distributions upon liquidation. • Altus Midstream is restricted from declaring or making cash distributions on its Common Units until all required distributions on the Preferred Units have been paid. In addition, before the fifth anniversary of Closing, aggregate cash distributions on, and redemptions of, Common Units are limited to $650 million of cash from ordinary course of operations if permitted under the Amended Credit Agreement. Cash distributions on, and redemptions of, Common Units also are subject to satisfaction of leverage ratio requirements specified in the Amended LPA. Since the Preferred Units could be exchanged for a number of shares of Class A Common Stock equal to 20 percent or more of the Company’s outstanding voting power, the Company has agreed to submit the potential issuance of such shares for approval of its stockholders (the Stockholder Approval) at its annual stockholder meeting in 2020. In connection with the Closing, Apache, the Company, and certain purchasers of Preferred Units entered into a voting agreement pursuant to which Apache has agreed to vote all shares of common stock of the Company over which Apache has beneficial ownership in favor of the Stockholder Approval. The Amended LPA provides that the Preferred Units will not be exchangeable into more than 19.5 percent of the outstanding voting power of the Company unless the Stockholder Approval is obtained. Accounting for the Preferred Units Classification The Preferred Units are accounted for on the Company’s consolidated balance sheets as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units, including the redemption rights with respect thereto. Initial Measurement T he net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs. June 12, 2019 (In thousands) Transaction price, gross $ 625,000 Issue discount (3,675 ) Transaction costs to other third parties (10,076 ) Transaction price, net $ 611,249 Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows: June 12, 2019 (In thousands) Redeemable noncontrolling interest - Preferred Units $ 516,790 Long-term liability: Embedded derivative (1) 94,459 $ 611,249 (1) See Note 15 — Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative. Subsequent Measurement The Company applies a two-step approach to subsequently measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the net income of Altus Midstream in accordance with the terms of the Amended LPA described above. After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Redemption Price calculated at the seventh anniversary of Closing. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a)(i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability or (b) the accreted value of the net transaction price. Activity related to the Preferred Units during the nine months ended September 30, 2019 is as follows: Nine Months Ended September 30, 2019 Units Outstanding Financial Position (3) (In thousands, except for unit data) Redeemable noncontrolling interest - Preferred Units: beginning of period — $ — Issuance of Preferred Units, net 625,000 516,790 Distribution of in-kind additional Preferred Units (1) 2,188 — Allocation of Altus Midstream net income N/A 20,844 Accreted value adjustment N/A 779 Redeemable noncontrolling interest - Preferred Units: end of period 627,188 $ 538,413 Embedded derivative liability (2) 98,228 $ 636,641 (1) Subsequent to the balance sheet date, Altus Midstream provided notice to the Preferred Unit holders of record at September 30, 2019 of the amount of the distribution on the Preferred Units for the quarter ended September 30, 2019 . The holders also were notified that Altus Midstream elected to pay the entire amount of the approximate $11.0 million distribution in-kind in additional Preferred Units (PIK Units) on November 14, 2019. In total, 10,975.8 PIK Units will be issued in satisfaction of the required distribution. (2) See Note 15 — Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. (3) As of September 30, 2019 , the aggregate Redemption Price was $645.8 million , based on an internal rate of return of 11.5 percent . N/A - not applicable. |
SERIES A CUMULATIVE REDEEMABLE
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | EQUITY Common Stock and Warrants The Company’s second amended and restated certificate of incorporation authorizes the issuance of 1,500,000,000 shares of Class A Common Stock, $0.0001 par value, and 1,500,000,000 shares of Class C Common Stock, $0.0001 par value. The Company’s shares of Class A Common Stock are listed on the NASDAQ Global Select Market under the symbol “ALTM.” As of September 30, 2019 , there were 74,929,305 and 250,000,000 issued and outstanding shares of Class A Common Stock and Class C Common Stock, respectively. Holders of each of the Class A Common Stock and Class C Common Stock vote together as a single class on all matters submitted to a vote of our stockholders, except as required by law. Only holders of Class A Common Stock are entitled to dividends or other liquidating distributions made by the Company. Shares of Class A Common Stock and certain warrants were originally issued in connection with the Company’s public offering, while shares of Class C Common Stock were newly issued in connection with the Business Combination. Public Warrants As of September 30, 2019 , there were 12,577,350 Public Warrants outstanding. Each whole Public Warrant entitles the holder to purchase one share of Class A Common Stock at a price of $11.50 per share. The Public Warrants will expire five years after closing of the Business Combination or earlier upon redemption or liquidation. The Company may call the Public Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant with not less than 30 days ’ notice provided to the Public Warrant holders. However, this redemption right can only be exercised if the reported last sale price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 -trading day period ending three business days prior to sending the notice of redemption to the Public Warrant holders. Following the closing of the Business Combination, the Public Warrants continued trading under the symbol “ALTMW.” On December 11, 2018, the Company received notice from the Staff of the NASDAQ of a delisting determination with respect to our Public Warrants for failure to satisfy the NASDAQ’s minimum round lot holder listing requirement. The Public Warrants ceased trading on the NASDAQ at the opening of business on December 20, 2018. The delisting of the Public Warrants did not impact the listing or trading of the Company’s Class A Common Stock. Private Placement Warrants As of September 30, 2019 , there were 6,364,281 Private Placement Warrants, of which Apache holds 3,182,140 . The Private Placement Warrants are identical to the Public Warrants discussed above, except (i) they will not be redeemable by the Company so long as they are held by the initial holders or their respective permitted transferees and (ii) they may be exercised by the holders on a cashless basis. Redeemable Noncontrolling Interest - Apache Limited Partner In conjunction with the issuance of the Class C Common Stock, Apache received 250,000,000 Altus Midstream Common Units, representing approximately 76.9 percent of the total Common Units issued and outstanding. The financial results of Altus Midstream and its subsidiaries are included in the Company’s consolidated financial statements as detailed in Note 1 — Summary of Significant Accounting Policies, under the section titled “Principles of Consolidation.” Apache has the right, at any time, to cause Altus Midstream to redeem all or a portion of the Common Units issued to Apache, in exchange for shares of the Company’s Class A Common Stock on a one -for-one basis or, at Altus Midstream’s option, an equivalent amount of cash; provided that the Company may, at its option, effect a direct exchange of cash or Class A Common Stock for such Common Units in lieu of such a redemption by Altus Midstream. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock held by Apache will be cancelled. Apache’s limited partner interest associated with the Common Units issued with the Class C Common Stock is reflected as a redeemable noncontrolling interest in the Company. The redeemable noncontrolling interest is recognized at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the maximum redemption value as of the balance sheet date. The redemption value is determined based on a 5 -day volume weighted average closing price of the Class A Common Stock ( 5 -day VWAP) as defined in the Amended LPA, a Level 1 non-recurring fair value measurement. At September 30, 2019 , the redeemable noncontrolling interest was recorded based on the initial fair value plus accumulated earnings and losses to date. The maximum redemption value at September 30, 2019 based on the 5 -day VWAP was $713.1 million . At December 31, 2018, the redeemable noncontrolling interest was recorded at the maximum redemption value based on the 5 -day VWAP. For further discussion of Apache’s right to receive additional shares of Class A Common Stock, and other outstanding equity instruments that may impact ownership interests and the limited partner interests of Altus Midstream in future periods, see Note 14 — Net Income (Loss) Per Share. Redeemable Noncontrolling Interest - Preferred Unit Limited Partners On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing (as defined below) or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. Refer to Note 12 — Series A Cumulative Redeemable Preferred Units for further discussion. SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the Closing). The Closing occurred pursuant to a Preferred Unit Purchase Agreement among Altus Midstream, the Company, and the purchasers party thereto, dated as of May 8, 2019. A total of 625,000 Preferred Units were sold at a price of $1,000 per Preferred Unit, for an aggregate issue price of $625.0 million . Altus Midstream received approximately $611.2 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers. At the Closing, the partners of Altus Midstream entered into the Amended LPA. The Amended LPA provides the terms of the Preferred Units, including the distribution rate, redemption rights, and rights to exchange the Preferred Units for shares of the Company’s Class A Common Stock, as well as rights of holders of the Preferred Units to approve certain partnership business, financial, and governance-related matters. The Preferred Units have a perpetual term, unless redeemed or exchanged as described below. Pursuant to the Amended LPA: • The Preferred Units entitle the holders thereof to receive quarterly distributions at a rate of 7 percent per annum, commencing with the quarter ended June 30, 2019. The rate increases to 10 percent per annum after the fifth anniversary of Closing and upon the occurrence of specified events. For any quarter ending on or prior to December 31, 2020, Altus Midstream may pay distributions in-kind. • The Preferred Units are redeemable at Altus Midstream’s option at any time in cash at a redemption price (the Redemption Price) equal to (a) the greater of (i) an 11.5 percent internal rate of return (increasing to 13.75 percent after the fifth anniversary of Closing), and (ii) a 1.3 x multiple of invested capital plus (b) if applicable, the value of any accrued and unpaid distributions. The Preferred Units will be redeemable at the holder’s option upon a change of control or liquidation of Altus Midstream and certain other events, including certain asset dispositions. Subject to compliance with minimum ownership requirements and redemption restrictions of the Amended LPA, Apache’s election to cause its Common Units in Altus Midstream to be redeemed for shares of the Company’s Class A Common Stock or cash (as further discussed in Note 11 — Equity) would not be a change of control. • The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing or upon the occurrence of specified events. Each Preferred Unit will be exchangeable for a number of shares of Class A Common Stock equal to the Redemption Price divided by the volume-weighted average trading price of the Class A Common Stock on the NASDAQ Global Select Market for the 20 trading days immediately preceding the second trading day prior to the applicable exchange date, less a 6 percent discount. • Each outstanding Preferred Unit has a liquidation preference equal to the Redemption Price payable before any amounts are paid in respect of Altus Midstream’s Common Units and any other units that rank junior to the Preferred Units with respect to distributions or distributions upon liquidation. • Altus Midstream is restricted from declaring or making cash distributions on its Common Units until all required distributions on the Preferred Units have been paid. In addition, before the fifth anniversary of Closing, aggregate cash distributions on, and redemptions of, Common Units are limited to $650 million of cash from ordinary course of operations if permitted under the Amended Credit Agreement. Cash distributions on, and redemptions of, Common Units also are subject to satisfaction of leverage ratio requirements specified in the Amended LPA. Since the Preferred Units could be exchanged for a number of shares of Class A Common Stock equal to 20 percent or more of the Company’s outstanding voting power, the Company has agreed to submit the potential issuance of such shares for approval of its stockholders (the Stockholder Approval) at its annual stockholder meeting in 2020. In connection with the Closing, Apache, the Company, and certain purchasers of Preferred Units entered into a voting agreement pursuant to which Apache has agreed to vote all shares of common stock of the Company over which Apache has beneficial ownership in favor of the Stockholder Approval. The Amended LPA provides that the Preferred Units will not be exchangeable into more than 19.5 percent of the outstanding voting power of the Company unless the Stockholder Approval is obtained. Accounting for the Preferred Units Classification The Preferred Units are accounted for on the Company’s consolidated balance sheets as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units, including the redemption rights with respect thereto. Initial Measurement T he net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs. June 12, 2019 (In thousands) Transaction price, gross $ 625,000 Issue discount (3,675 ) Transaction costs to other third parties (10,076 ) Transaction price, net $ 611,249 Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows: June 12, 2019 (In thousands) Redeemable noncontrolling interest - Preferred Units $ 516,790 Long-term liability: Embedded derivative (1) 94,459 $ 611,249 (1) See Note 15 — Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative. Subsequent Measurement The Company applies a two-step approach to subsequently measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the net income of Altus Midstream in accordance with the terms of the Amended LPA described above. After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Redemption Price calculated at the seventh anniversary of Closing. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a)(i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability or (b) the accreted value of the net transaction price. Activity related to the Preferred Units during the nine months ended September 30, 2019 is as follows: Nine Months Ended September 30, 2019 Units Outstanding Financial Position (3) (In thousands, except for unit data) Redeemable noncontrolling interest - Preferred Units: beginning of period — $ — Issuance of Preferred Units, net 625,000 516,790 Distribution of in-kind additional Preferred Units (1) 2,188 — Allocation of Altus Midstream net income N/A 20,844 Accreted value adjustment N/A 779 Redeemable noncontrolling interest - Preferred Units: end of period 627,188 $ 538,413 Embedded derivative liability (2) 98,228 $ 636,641 (1) Subsequent to the balance sheet date, Altus Midstream provided notice to the Preferred Unit holders of record at September 30, 2019 of the amount of the distribution on the Preferred Units for the quarter ended September 30, 2019 . The holders also were notified that Altus Midstream elected to pay the entire amount of the approximate $11.0 million distribution in-kind in additional Preferred Units (PIK Units) on November 14, 2019. In total, 10,975.8 PIK Units will be issued in satisfaction of the required distribution. (2) See Note 15 — Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. (3) As of September 30, 2019 , the aggregate Redemption Price was $645.8 million , based on an internal rate of return of 11.5 percent . N/A - not applicable. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Altus Midstream Company is subject to U.S. federal income tax and Texas Margin tax. At September 30, 2019 , Altus Midstream Company had a net deferred tax asset of $68.6 million , primarily related to its net operating loss carryforward and its investment in Altus Midstream LP. Altus Midstream LP is a partnership for federal income tax purposes and passes through its taxable income to its partners. Thus, Altus Midstream LP does not record a federal income tax provision. Altus Midstream LP is subject to the Texas Margin tax and as such, records a state income tax provision. At September 30, 2019 , Altus Midstream LP had a net deferred state income tax liability of $3.1 million . On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering that admitted additional limited partners with separate rights for the Preferred Unit holders. The Preferred Units are accounted for on the Company’s consolidated balance sheet as a redeemable noncontrolling interest classified as temporary equity. For financial statement reporting purposes, the Company applies a two-step approach to subsequent measurement of the Preferred Units. Under this approach, net income is first allocated to the Preferred Unit holders in accordance with the terms of the Amended LPA. An additional adjustment may be made to increase the carrying amount after the attribution of net income, as further described in Note 12 — Series A Cumulative Redeemable Preferred Units. Both the allocation of net income and any subsequent adjustment based upon accretion of the net transaction price (if applicable) reflect income that will be taxable to the Preferred Unit holders. Accordingly, Altus Midstream Company’s federal income tax provision reflects this income allocation as a reduction in the Company’s effective tax rate. During the three and nine months ended September 30, 2019 , the Company’s effective income tax rate was primarily impacted by the net loss attributable to Apache limited partner, subsequent measurement of the Preferred Units as described above, and the impact of state income taxes. During the three and nine months ended September 30, 2018, the Company’s effective income tax rate was primarily impacted by the release of the valuation allowance. The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes,” which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Each quarter, the Company assesses the recognition amount and, as a result, may increase (expense) or reduce (benefit) the amount of interest and penalties. Interest and penalties are recorded as a component of income tax expense. The contributor of Altus Midstream’s operating assets, Apache, is currently under IRS audit for the 2014-2017 tax years as part of its normal course of business. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is calculated by dividing net income (loss) available to Class A common shareholders by the weighted average numbers of shares outstanding during the period. Class C Common Stock is excluded from the weighted average shares outstanding immediately following the Closing Date for the calculation of basic net income per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. The Company uses the “if-converted method” to determine the potential dilutive effect of (i) exchanges of outstanding Common Units of Altus Midstream and corresponding shares of its outstanding Class C Common Stock (ii) earn-out consideration and (iii) assumed exchange of the outstanding Preferred Units of Altus Midstream for shares of Class A Common Stock. The treasury stock method is used to determine the potential dilutive effect of its outstanding warrants. The computation of basic and diluted net income (loss) per share for the periods presented in the consolidated financial statements is shown in the table below. Three Months Ended September 30, 2019 2018 (1) Loss Shares Per Share Income Shares Per Share (In thousands, except per share data) Basic: Net income (loss) attributable to Class A common shareholders $ (4,864 ) 74,929 $ (0.06 ) $ 19,208 218,470 $ 0.09 Effective of dilutive securities: Redeemable noncontrolling interest — Apache limited partner $ (19,222 ) 250,000 $ — — Diluted: Net income (loss) attributable to Class A common shareholders $ (24,086 ) 324,929 $ (0.07 ) $ 19,208 218,470 $ 0.09 Nine Months Ended September 30, 2019 2018 (1) Loss Shares Per Share Loss Shares Per Share (In thousands, except per share data) Basic: Net loss attributable to Class A common shareholders $ (6,057 ) 74,929 $ (0.08 ) $ (5,021 ) 179,493 $ (0.03 ) Effective of dilutive securities: Redeemable noncontrolling interest — Apache limited partner $ (21,919 ) 250,000 $ — — Diluted: Net loss attributable to Class A common shareholders $ (27,976 ) 324,929 $ (0.09 ) $ (5,021 ) 179,493 $ (0.03 ) (1) Shares of Class A Common Stock and Class C Common Stock issued to Apache in exchange for its ownership interests in the Altus Midstream Entities were retroactively restated from May 26, 2016 (inception) to the Closing Date, based on the proportionate value of the capital contributions made by Apache to the Altus Midstream Entities. The calculation of the weighted average shares outstanding from inception up to the Closing Date includes all shares issued to Apache, in order to reflect Apache’s 100 percent economic interest in the Altus Midstream Entities until that time. For further detail of the Business Combination and associated financial statement presentation, see Note 1 — Summary of Significant Accounting Policies and Note 2 — Recapitalization Transaction. The diluted earnings per share calculation excludes the effect of an assumed exchange of the Preferred Units for shares of Class A Common Stock and the effect of the outstanding warrants of the Company to purchase an aggregate 18,941,631 shares of Class A Common Stock, since the associated impacts would have been anti-dilutive for all relevant periods presented. Further discussion of the Company’s outstanding common stock, warrants and earn-out consideration as well as any applicable redemption rights is provided in Note 11 — Equity. Further discussion of the Preferred Units and associated embedded features can be found in Note 12 — Series A Cumulative Redeemable Preferred Units and Note 15 — Fair Value Measurements, respectively. Earn-out consideration granting Apache the right to receive up to 37,500,000 shares of Class A Common Stock is not included in the earnings per share calculation above, as the conditions for issuance were not satisfied as of the quarter ended September 30, 2019 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of: cash and cash equivalents; revenue receivables; accounts receivable from, or payable to, Apache and an embedded derivative liability related to the issuance of Preferred Units (as further described above). This embedded derivative liability is recorded on the Company’s consolidated balance sheet at fair value. The carrying amount of Altus Midstream’s revolving credit facility approximates fair value because the interest rate is variable and reflective of market rates. The carrying amounts reported on the consolidated balance sheet for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the quarter ended September 30, 2019 or September 30, 2018 . The Company bifurcated and recognized the embedded derivative associated with the Preferred Units related to the exchange option provided to the Preferred Unit holders under the terms of the Amended LPA. The valuation of the embedded derivative (using an income approach) was based on a range of factors including: expected future interest rates using the Black-Karasinski model; the Company’s imputed interest rate; the timing of periodic cash distributions and dividend yields of the Preferred Units. The embedded derivative liability had an initial fair value of $94.5 million at Closing. During the three and nine months ended September 30, 2019, the Company recorded an unrealized loss related to this derivative liability totaling $3.8 million , which is recorded in “unrealized derivative instrument loss” in the statement of consolidated operations. The Company has additional embedded derivatives in the Preferred Units related to the exchange option and redemption features that are accounted for separately from the Preferred Units. Level 3 valuation of the embedded derivatives are based on a range of factors including the likelihood of the event occurring, and these factors are assessed quarterly. There was no value associated with these additional identified embedded derivatives for any applicable period presented. |
SUMMARY OF SIGNIFCANT ACCOUNT_2
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial results of Altus Midstream are included in Altus Midstream Company’s consolidated financial statements due to Altus Midstream Company’s 100 percent ownership interest in Altus Midstream GP, and Altus Midstream GP’s control of Altus Midstream. Altus Midstream Company has no independent operations or material assets other than its partnership interests in Altus Midstream, which constitutes all of its business. Altus Midstream Company’s only material net assets separate from Altus Midstream relate to deferred taxes and the current and deferred income tax expense (benefit) associated with its investment in Altus Midstream. The deferred tax asset balance was $68.6 million and $67.6 million as of September 30, 2019 and December 31, 2018 , respectively. Additionally, Altus Midstream Company’s balance sheet reflects the presentation of noncontrolling interest ownership attributable to the limited partner interests in Altus Midstream held by Apache and the Preferred Unit holders. Refer to Note 13 — Income Taxes, Note 11 — Equity and Note 12 — Series A Cumulative Redeemable Preferred Units for further information. |
Variable Interest Entity | Variable Interest Entity Altus Midstream is a variable interest entity (VIE) because the partners in Altus Midstream with equity at risk lack the power, through voting or similar rights, to direct the activities that most significantly impact Altus Midstream’s economic performance. A reporting entity that concludes it has a variable interest in a VIE must evaluate whether it has a controlling financial interest in the VIE, such that it is the VIE’s primary beneficiary and should consolidate. Altus Midstream Company is the primary beneficiary of the VIE, and therefore should consolidate Altus Midstream because (i) Altus Midstream Company has the ability to direct the activities of Altus Midstream that most significantly affect its economic performance, and (ii) Altus Midstream Company has the right to receive benefits or the obligation to absorb losses that could be potentially significant to Altus Midstream. |
Financial Statement Presentation | Financial Statement Presentation While Altus Midstream Company (formerly KAAC) was the surviving legal entity, the Business Combination was accounted for as a reverse recapitalization. As such, Altus Midstream Company was treated as the acquired company for financial reporting purposes. As a result of the Altus Midstream Entities being the accounting acquirer, the historical operations of the Altus Midstream Entities are deemed to be those of the Company. Thus, the financial statements included in this report reflect: (i) the historical operating results of the Altus Midstream Entities prior to the Business Combination; (ii) the net assets of the Altus Midstream Entities at their historical cost; (iii) the consolidated results of the Company and the Altus Midstream Entities following the closing of the Business Combination; and (iv) the Company’s equity structure for all periods presented. No step-up in basis of the contributed assets and no intangible assets or goodwill was recorded in the Business Combination. |
Use of Estimates | Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements, and changes in these estimates are recorded when known. |
Fair Value | Fair Value Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority. The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). |
Accounts Receivable From/Payable To Apache | Accounts Receivable From/Payable To Apache |
Leases | Leases On January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” which requires lessees to recognize separate right-of-use (ROU) assets and lease liabilities for most leases classified as operating leases under previous GAAP. Prior to adoption, the Financial Accounting Standards Board (FASB) issued transition guidance permitting an entity the option to not evaluate under ASU 2016-02 those existing or expired land easements that were not previously accounted for as leases, as well as an option to apply the provisions of the new standard at its adoption date instead of the earliest comparative period presented in the financial statements. The Company elected both transitional practical expedients. Under these transition options, comparative reporting was not required, and the provisions of the standard were applied prospectively to leases in effect at the date of adoption. As allowed under the standard, the Company also applied practical expedients to carry forward its historical assessments of whether existing agreements contain a lease, classification of existing lease agreements, and treatment of initial direct lease costs. The Company also elected to exclude short-term leases (those with terms of 12 months or less) from the balance sheet presentation and accounts for non-lease and lease components as a single lease component for all asset classes. Short-term lease expense was not material for the third quarter and first nine months of 2019. The Company determines if an arrangement is an operating or finance lease at the inception of each contract. If the contract is classified as an operating lease, Altus records an ROU asset and corresponding liability reflecting the total remaining present value of fixed lease payments over the expected term of the lease agreement. The expected term of the lease may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. In the normal course of business, the Company enters into various lease agreements for real estate and equipment related to its midstream activities which are typically classified as operating leases under the provisions of the standard. ROU assets are reflected within “Deferred charges and other” on the Company’s consolidated balance sheet, and the associated operating lease liabilities are reflected within “Other current liabilities” and “Other noncurrent liabilities,” as applicable. Operating lease expense associated with the ROU assets is recognized on a straight-line basis over the lease term. Lease expense is reflected on the statement of consolidated operations commensurate with the leased activities and nature of the services performed. Fixed operating lease expense was $0.2 million and $0.5 million for the three and nine months ended September 30, 2019 , respectively. In addition, the Company periodically enters into finance leases that are similar to those leases classified as capital leases under previous GAAP. The Company currently has one |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses.” The standard changes the impairment model for trade receivables, held-to-maturity debt securities, net investments in leases, loans, and other financial assets measured at amortized cost. The ASU requires the use of a new forward-looking “expected loss” model compared to the current “incurred loss” model; resulting in accelerated recognition of credit losses. This update is effective for Altus beginning in the first quarter of 2020, with early adoption permitted. The Company is in the process of finalizing its project plan for the implementation of the ASU and continues to evaluate and monitor standard setting activity. The Company does not believe the adoption and implementation of this ASU will have a material impact on its financial statements. In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement,” which changes the disclosure requirements for fair value measurements by removing, adding, and modifying certain disclosures. ASU 2018-13 is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its related disclosures. |
Revenue recognition | The Company currently recognizes revenue pursuant to separate midstream service agreements entered into with Apache for the midstream services presented above. These midstream service agreements have no minimum volume commitments or firm transportation commitments, instead they are underpinned by acreage dedications covering Alpine High. Pursuant to these agreements, Altus Midstream is obligated to perform services on all volumes produced from the dedicated acreage, so long as Apache has the right to market the production. In exchange for the above services and in accordance with the terms of the midstream service agreements, the Company charges a fixed fee on a per-unit basis. Altus Midstream does not own or take title to the volumes that it handles. These performance obligations are satisfied over time as Apache simultaneously receives and consumes the benefits of the services performed. Service revenues are recognized when the right to invoice has been met, since the amount that the Company has the right to invoice (based upon the fixed fee and throughput volumes) corresponds directly with the value received by Apache. Pursuant to the terms of the Contribution Agreement, all accounts receivable from Apache (including revenue receivables) on or prior to September 30, 2018, are for the account of Apache. No cash settlement of such balances was contemplated prior to September 30, 2018 and as such, revenue receivables generated prior to this date were treated as a reduction to additional paid-in capital within equity. Following the Business Combination, service revenue invoices are provided to Apache on a monthly basis, pursuant to the terms of the COMA. Amounts owing to Apache under the terms of the COMA are reduced by the amounts of these invoices. Net cash settlement is performed on a monthly basis. The Company recognized services revenue earned but not yet invoiced to Apache of $11.7 million as of September 30, 2019 . |
SUMMARY OF SIGNIFCANT ACCOUNT_3
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Weighted Average Lease Term and Discount Rate Related to Leases | The following table represents the Company’s weighted average lease term and discount rate as of September 30, 2019 : Operating Leases Finance Lease Weighted average remaining lease term 2.9 years 0.3 years Weighted average discount rate 4.2 % 4.2 % |
Lessee, Operating Lease, Liability, Maturity | The undiscounted future minimum lease payments reconciled to the carrying value of the lease liabilities as of September 30, 2019 were as follows: Net Minimum Commitments Operating Leases (1) Finance Lease (2) (In thousands) 2019 $ 163 $ 7,954 2020 652 9,800 2021 622 — 2022 445 — 2023 — — Thereafter — — Total future minimum lease payments 1,882 17,754 Less: imputed interest (105 ) (192 ) Total lease liabilities 1,777 17,562 Current portion (596 ) (17,562 ) Non-current portion $ 1,181 $ — (1) Amounts are primarily associated with the Lease Agreement (as defined below) entered into with Apache relating to the use of certain office buildings, warehouse and storage facilities as described in Note 3 — Transactions with Affiliates. (2) Amounts represent the Company’s finance lease obligation entered into during the first quarter of 2019 related to physical power generators being leased on a one-year term with the right to purchase. |
Finance Lease, Liability, Maturity | The undiscounted future minimum lease payments reconciled to the carrying value of the lease liabilities as of September 30, 2019 were as follows: Net Minimum Commitments Operating Leases (1) Finance Lease (2) (In thousands) 2019 $ 163 $ 7,954 2020 652 9,800 2021 622 — 2022 445 — 2023 — — Thereafter — — Total future minimum lease payments 1,882 17,754 Less: imputed interest (105 ) (192 ) Total lease liabilities 1,777 17,562 Current portion (596 ) (17,562 ) Non-current portion $ 1,181 $ — (1) Amounts are primarily associated with the Lease Agreement (as defined below) entered into with Apache relating to the use of certain office buildings, warehouse and storage facilities as described in Note 3 — Transactions with Affiliates. (2) Amounts represent the Company’s finance lease obligation entered into during the first quarter of 2019 related to physical power generators being leased on a one-year term with the right to purchase. |
RECAPITALIZATION TRANSACTION (T
RECAPITALIZATION TRANSACTION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Summary of Shares Issued and Outstanding by Class of Common Stock | The number of shares issued and outstanding immediately following the closing of the Business Combination is summarized in the table below. number of shares Class A Common Stock Class B Common Stock (1) Class C Common Stock Shares outstanding prior to the Business Combination 37,732,112 9,433,028 — Less: redemption of public shares (2) (29,469,858 ) — — Add: shares issued in private placement 57,234,023 — — Total shares outstanding prior to the Business Combination 65,496,277 9,433,028 — Shares, in connection with the Business Combination: Forfeited (3) — (7,313,028 ) — Converted (1) 2,120,000 (2,120,000 ) — Total shares outstanding immediately prior to the Closing Date 67,616,277 — — Issued as consideration to Apache (4) 7,313,028 — 250,000,000 Total shares outstanding at the Closing Date 74,929,305 — 250,000,000 (1) Shares of Class B Common Stock, $0.0001 par value (Class B Common Stock), were purchased by the Sponsor upon the Company’s incorporation in December 2016. Class B Common Stock is identical to Class A Common Stock except that they automatically converted to Class A Common Stock at the time of the Business Combination. (2) Pursuant to the terms of KAAC’s amended and restated certificate of incorporation, public stockholders had the opportunity, in connection with the Business Combination, to redeem shares of Class A Common Stock. A total of 29,469,858 shares were redeemed for an aggregate amount of approximately $298.8 million . (3) In connection with the Business Combination, the Sponsor agreed to forfeit shares of Class B Common Stock. As part of the consideration transferred in the Business Combination, 7,313,028 newly issued shares of Class A Common Stock were issued to Apache, equivalent to the number of shares of Class B Common Stock forfeited by the Sponsor. Additionally, the Sponsor forfeited a number of warrants originally issued simultaneously with the public offering. (4) The equity structure of the Altus Midstream Entities (the accounting acquirer) has been restated to reflect the number of shares of Altus Midstream Company (the accounting acquiree) issued in the recapitalization transaction. Please refer to the section below entitled “Basis of Presentation of Equity Structure” for further discussion. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents a disaggregation of the Company’s midstream services revenue by service type. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (In thousands) MIDSTREAM SERVICES REVENUE — AFFILIATE: Gas gathering $ 4,604 $ 2,563 $ 10,914 $ 4,578 Gas processing 25,315 18,150 68,994 33,657 Transmission 3,388 4,671 11,219 11,756 NGL transmission 702 53 867 62 $ 34,009 $ 25,437 $ 91,994 $ 50,053 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment, at Cost | Property, plant and equipment, at carrying value, is as follows: September 30, December 31, 2019 2018 (In thousands) Gathering, processing and transmission systems and facilities $ 1,304,175 $ 729,585 Construction in progress (1) 152,551 521,609 Finance lease asset 34,749 — Other property and equipment 3,183 23 Total property, plant and equipment 1,494,658 1,251,217 Less: accumulated depreciation and amortization (51,608 ) (24,320 ) Total property, plant and equipment, net $ 1,443,050 $ 1,226,897 (1) Included in the Company’s construction in progress is capitalized interest of $2.7 million and $6.9 million at September 30, 2019 and December 31, 2018 , respectively. |
DEBT AND FINANCING COSTS (Table
DEBT AND FINANCING COSTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Financing Costs, Net | The following table presents the components of Altus Midstream’s interest income and financing costs, net of capitalized interest: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 (1) 2019 2018 (1) (In thousands) Interest income $ 617 $ — $ 3,584 $ — Interest income $ 617 $ — $ 3,584 $ — Interest expense $ 1,496 $ 2,504 $ 3,234 $ 7,054 Amortization of deferred facility fees 237 — 652 — Capitalized interest (1,211 ) (2,504 ) (2,378 ) (7,054 ) Financing costs, net of capitalized interest $ 522 $ — $ 1,508 $ — (1) Prior to the Business Combination, the Company’s operations were funded entirely by contributions from Apache. Accordingly, Apache allocated a portion of interest on its corporate debt in determining capitalized interest associated with the development of Alpine High infrastructure. Refer to Note 3 — Transactions with Affiliates for further information. |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Current Liabilities | The following table provides detail of the Company’s other current liabilities at September 30, 2019 and December 31, 2018 : September 30, December 31, 2019 2018 (In thousands) Accrued capital costs $ 24,931 $ 80,696 Accrued taxes other than income 9,408 69 Accrued operations and maintenance expense 1,864 2,863 Accrued incentive compensation 1,362 468 Operating lease liability - current 596 — Accrued interest 463 232 Other 192 598 Total other current liabilities $ 38,816 $ 84,926 |
ASSET RETIREMENT OBLIGATION (Ta
ASSET RETIREMENT OBLIGATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Changes in Asset Retirement Obligation | The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the nine months ended September 30, 2019 : (In thousands) Asset retirement obligation at December 31, 2018 $ 29,369 Liabilities incurred during the period 3,406 Accretion expense 1,175 Asset retirement obligation at September 30, 2019 $ 33,950 |
EQUITY METHOD INTERESTS (Tables
EQUITY METHOD INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | September 30, 2019 December 31, 2018 In thousands, unless stated Ownership Amount Ownership Amount Gulf Coast Express Pipeline LLC 16.0 % $ 274,727 15.0 % $ 91,100 EPIC Crude Holdings, LP 15.0 % 127,742 — % — Permian Highway Pipeline LLC 26.7 % 224,152 — % — Breviloba, LLC 33.0 % 467,943 — % — $ 1,094,564 $ 91,100 The following table presents the activity in the Company’s equity method interests for the nine months ended September 30, 2019 : Gulf Coast Express Pipeline LLC EPIC Crude Holdings, LP Permian Highway Pipeline LLC Breviloba, LLC Total (In thousands) Balance at December 31, 2018 $ 91,100 $ — $ — $ — $ 91,100 Acquisitions 15,274 51,810 161,081 442,460 670,625 Contributions 169,131 82,499 62,895 22,887 337,412 Distributions (3,391 ) — — — (3,391 ) Equity income (loss), net 2,613 (4,849 ) 176 2,596 536 Accumulated other comprehensive loss — (1,718 ) — — (1,718 ) Balance at September 30, 2019 $ 274,727 $ 127,742 $ 224,152 $ 467,943 $ 1,094,564 |
Equity Method Investment, Summarized Financial Information | The following table represents aggregated selected income statement data for the Company’s equity method interests (on a 100 percent basis): Three Months Ended September 30, 2019 (1) Nine Months Ended September 30, 2019 (1) Gulf Coast Express Pipeline LLC EPIC Crude Holdings, LP Permian Highway Pipeline LLC Breviloba, LLC Gulf Coast Express Pipeline LLC EPIC Crude Holdings, LP Permian Highway Pipeline LLC Breviloba, LLC (In thousands) Revenues $ 12,039 $ 8,015 $ — $ 41,765 $ 16,476 $ 8,015 $ — $ 78,749 Operating expenses 1,033 27,679 21 12,857 1,218 33,610 41 27,189 Operating income (loss) 11,006 (19,664 ) (21 ) 28,908 15,258 (25,595 ) (41 ) 51,560 Net income (loss) 11,776 (20,890 ) 554 28,908 17,090 (35,620 ) 785 51,560 Other comprehensive loss — (4,145 ) — — — (11,450 ) — — (1) Although our interests in EPIC Crude Holdings, LP, Permian Highway Pipeline LLC, and Breviloba, LLC were acquired on February 4, 2019, May 17, 2019, and July 31, 2019, respectively, the financial results are presented for the entire three and nine month periods for comparability. Due to the timing for availability of financial statement information, summarized income statement data is presented on a one month delay for all equity interests. |
SERIES A CUMULATIVE REDEEMABL_2
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Preferred Units | Activity related to the Preferred Units during the nine months ended September 30, 2019 is as follows: Nine Months Ended September 30, 2019 Units Outstanding Financial Position (3) (In thousands, except for unit data) Redeemable noncontrolling interest - Preferred Units: beginning of period — $ — Issuance of Preferred Units, net 625,000 516,790 Distribution of in-kind additional Preferred Units (1) 2,188 — Allocation of Altus Midstream net income N/A 20,844 Accreted value adjustment N/A 779 Redeemable noncontrolling interest - Preferred Units: end of period 627,188 $ 538,413 Embedded derivative liability (2) 98,228 $ 636,641 (1) Subsequent to the balance sheet date, Altus Midstream provided notice to the Preferred Unit holders of record at September 30, 2019 of the amount of the distribution on the Preferred Units for the quarter ended September 30, 2019 . The holders also were notified that Altus Midstream elected to pay the entire amount of the approximate $11.0 million distribution in-kind in additional Preferred Units (PIK Units) on November 14, 2019. In total, 10,975.8 PIK Units will be issued in satisfaction of the required distribution. (2) See Note 15 — Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. (3) As of September 30, 2019 , the aggregate Redemption Price was $645.8 million , based on an internal rate of return of 11.5 percent . N/A - not applicable. T he net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs. June 12, 2019 (In thousands) Transaction price, gross $ 625,000 Issue discount (3,675 ) Transaction costs to other third parties (10,076 ) Transaction price, net $ 611,249 Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows: June 12, 2019 (In thousands) Redeemable noncontrolling interest - Preferred Units $ 516,790 Long-term liability: Embedded derivative (1) 94,459 $ 611,249 (1) See Note 15 — Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Net Income (Loss) Per Share | The computation of basic and diluted net income (loss) per share for the periods presented in the consolidated financial statements is shown in the table below. Three Months Ended September 30, 2019 2018 (1) Loss Shares Per Share Income Shares Per Share (In thousands, except per share data) Basic: Net income (loss) attributable to Class A common shareholders $ (4,864 ) 74,929 $ (0.06 ) $ 19,208 218,470 $ 0.09 Effective of dilutive securities: Redeemable noncontrolling interest — Apache limited partner $ (19,222 ) 250,000 $ — — Diluted: Net income (loss) attributable to Class A common shareholders $ (24,086 ) 324,929 $ (0.07 ) $ 19,208 218,470 $ 0.09 Nine Months Ended September 30, 2019 2018 (1) Loss Shares Per Share Loss Shares Per Share (In thousands, except per share data) Basic: Net loss attributable to Class A common shareholders $ (6,057 ) 74,929 $ (0.08 ) $ (5,021 ) 179,493 $ (0.03 ) Effective of dilutive securities: Redeemable noncontrolling interest — Apache limited partner $ (21,919 ) 250,000 $ — — Diluted: Net loss attributable to Class A common shareholders $ (27,976 ) 324,929 $ (0.09 ) $ (5,021 ) 179,493 $ (0.03 ) (1) Shares of Class A Common Stock and Class C Common Stock issued to Apache in exchange for its ownership interests in the Altus Midstream Entities were retroactively restated from May 26, 2016 (inception) to the Closing Date, based on the proportionate value of the capital contributions made by Apache to the Altus Midstream Entities. The calculation of the weighted average shares outstanding from inception up to the Closing Date includes all shares issued to Apache, in order to reflect Apache’s 100 percent economic interest in the Altus Midstream Entities until that time. For further detail of the Business Combination and associated financial statement presentation, see Note 1 — Summary of Significant Accounting Policies and Note 2 — Recapitalization Transaction. |
NATURE OF OPERATIONS AND ORGA_2
NATURE OF OPERATIONS AND ORGANIZATION (Details) | Nov. 09, 2018 | Sep. 30, 2019Segmentpipelinepartnership |
Schedule Of Organization [Line Items] | ||
Number of pipeline | pipeline | 5 | |
Number of reportable segments | Segment | 1 | |
Number of limited partnerships | partnership | 4 | |
Altus Midstream LP | ||
Schedule Of Organization [Line Items] | ||
General partner, ownership interest | 23.10% | |
Apache | Altus Midstream LP | ||
Schedule Of Organization [Line Items] | ||
Limited partners, ownership interest | 76.90% | 76.90% |
Class C Common Stock | Apache | ||
Schedule Of Organization [Line Items] | ||
Common stock, ownership percentage | 100.00% | |
Class A Common Stock | ||
Schedule Of Organization [Line Items] | ||
Common stock, redemption ratio | 1 | |
Class A Common Stock | Apache | ||
Schedule Of Organization [Line Items] | ||
Common stock, ownership percentage | 9.80% |
SUMMARY OF SIGNIFCANT ACCOUNT_4
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)Lease | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Lease | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||||
Deferred tax asset | $ 68,598 | $ 68,598 | $ 67,558 | ||
Impairments | 9,338 | $ 0 | 9,338 | $ 0 | |
Operating lease expense | 200 | 500 | |||
Property, Plant and Equipment [Line Items] | |||||
Financing costs, net of capitalized interest | $ 522 | $ 0 | $ 1,508 | $ 0 | |
Finance Lease, Number | Lease | 1 | 1 | |||
Variable lease payment | $ 100 | $ 300 | |||
Finance lease asset | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 1,200 | 3,700 | |||
Financing costs, net of capitalized interest | $ 200 | $ 800 |
SUMMARY OF SIGNIFCANT ACCOUNT_5
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES - Schedule of Weighted Average Lease Term and Discount Rate Related to Leases (Details) | Sep. 30, 2019 |
Accounting Policies [Abstract] | |
Operating lease, weighted average remaining lease term | 2 years 10 months 24 days |
Operating lease, weighted average discount rate | 4.20% |
Finance lease, weighted average remaining lease term | 3 months 18 days |
Finance lease, weighted average discount rate | 4.20% |
SUMMARY OF SIGNIFCANT ACCOUNT_6
SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES - Schedule of Future Minimum Payments Related to Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 163 |
2020 | 652 |
2021 | 622 |
2022 | 445 |
2023 | 0 |
Thereafter | 0 |
Total future minimum lease payments | 1,882 |
Less: imputed interest | (105) |
Total lease liabilities | 1,777 |
Current portion | (596) |
Non-current portion | 1,181 |
Finance Leases | |
2019 | 7,954 |
2020 | 9,800 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total future minimum lease payments | 17,754 |
Less: imputed interest | (192) |
Total lease liabilities | 17,562 |
Current portion | (17,562) |
Non-current portion | $ 0 |
RECAPITALIZATION TRANSACTION (D
RECAPITALIZATION TRANSACTION (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 09, 2018 | Nov. 08, 2018 | Aug. 07, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||||||
Capital contributed | $ 628,200 | $ 611,249 | $ 0 | ||||
Class A Common Stock | |||||||
Movement In Common Stock Outstanding [Roll Forward] | |||||||
Beginning balance, shares (in shares) | 67,616,277 | 65,496,277 | 37,732,112 | 74,929,305 | 37,732,112 | ||
Redeemed (in shares) | (29,469,858) | ||||||
Issued (in shares) | 7,313,028 | ||||||
Converted (in shares) | 2,120,000 | ||||||
Ending balance, shares (in shares) | 74,929,305 | 67,616,277 | 65,496,277 | 74,929,305 | |||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | |||||
Stock redeemed value | $ 298,800 | ||||||
Stock issued during period related to contribution agreement | 7,313,028 | ||||||
Class B Common Stock | |||||||
Movement In Common Stock Outstanding [Roll Forward] | |||||||
Beginning balance, shares (in shares) | 0 | 9,433,028 | 9,433,028 | 9,433,028 | |||
Issued (in shares) | 0 | ||||||
Forfeited (in shares) | (7,313,028) | ||||||
Converted (in shares) | (2,120,000) | ||||||
Ending balance, shares (in shares) | 0 | 0 | 9,433,028 | ||||
Common stock, par value (in USD per share) | $ 0.0001 | ||||||
Class C Common Stock | |||||||
Movement In Common Stock Outstanding [Roll Forward] | |||||||
Beginning balance, shares (in shares) | 0 | 0 | 0 | 250,000,000 | 0 | ||
Issued (in shares) | 250,000,000 | ||||||
Converted (in shares) | 0 | ||||||
Ending balance, shares (in shares) | 250,000,000 | 0 | 0 | 250,000,000 | |||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | |||||
Private Placement | Class A Common Stock | |||||||
Movement In Common Stock Outstanding [Roll Forward] | |||||||
Issued (in shares) | 57,234,023 |
TRANSACTIONS WITH AFFILIATES (D
TRANSACTIONS WITH AFFILIATES (Details) | Jan. 01, 2022USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 09, 2018contract | |
Related Party Transaction [Line Items] | ||||||||||
Gathering, processing, and transmission | [1] | $ 13,063,000 | $ 16,579,000 | $ 43,466,000 | $ 38,798,000 | |||||
General and administrative | [2] | 3,242,000 | 1,865,000 | 8,314,000 | 5,126,000 | |||||
Operating lease expense | 200,000 | 500,000 | ||||||||
Interest expense | 1,496,000 | 2,504,000 | 3,234,000 | 7,054,000 | ||||||
Affiliated Entity | Apache | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Gathering, processing, and transmission | 2,200,000 | 2,300,000 | 7,100,000 | 6,600,000 | ||||||
Affiliated Entity | Apache | Service Agreements | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
General and administrative | 2,100,000 | $ 1,800,000 | 4,700,000 | $ 5,100,000 | ||||||
Affiliated Entity | Apache | Construction, Operations and Maintenance Agreement | Forecast | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses from transactions with related party | $ 9,000,000 | $ 7,000,000 | $ 5,000,000 | $ 3,000,000 | ||||||
Affiliated Entity | Apache | Lease Agreements | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Base rental charge | 44,500 | |||||||||
Operating lease expense | $ 300,000 | $ 800,000 | ||||||||
Initial term of lease agreement | 4 years | |||||||||
Number of lease renewal term | contract | 3 | |||||||||
Lessee renewal term | 24 months | |||||||||
[1] | Includes amounts of $2.2 million and $2.3 million to related parties for the three months ended September 30, 2019 and 2018 , respectively, and $7.1 million and $6.6 million for the nine months ended September 30, 2019 and 2018 , respectively. Refer to Note 3 — Transactions with Affiliates. | |||||||||
[2] | Includes amounts of $2.1 million and $1.8 million to related parties for the three months ended September 30, 2019 and 2018 , respectively, and $4.7 million and $5.1 million for the nine months ended September 30, 2019 and 2018 , respectively. Refer to Note 3 — Transactions with Affiliates. |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Midstream services revenue - affiliate | $ 34,009 | $ 25,437 | $ 91,994 | $ 50,053 |
Gas gathering | ||||
Disaggregation of Revenue [Line Items] | ||||
Midstream services revenue - affiliate | 4,604 | 2,563 | 10,914 | 4,578 |
Gas processing | ||||
Disaggregation of Revenue [Line Items] | ||||
Midstream services revenue - affiliate | 25,315 | 18,150 | 68,994 | 33,657 |
Transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Midstream services revenue - affiliate | 3,388 | 4,671 | 11,219 | 11,756 |
NGL transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Midstream services revenue - affiliate | $ 702 | $ 53 | $ 867 | $ 62 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Revenue receivables (Note 3) | $ 11,726 | $ 10,914 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | $ 1,494,658 | $ 1,494,658 | $ 1,251,217 | |||
Less: accumulated depreciation and amortization | (51,608) | (51,608) | (24,320) | |||
Total property, plant and equipment, net | 1,443,050 | 1,443,050 | 1,226,897 | |||
Assets held for sale | 18,183 | 18,183 | 0 | |||
Impairments | 9,338 | $ 0 | 9,338 | $ 0 | ||
Fair value inputs, level 1 | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Assets held for sale | 18,100 | 18,100 | ||||
Gathering, processing and transmission systems and facilities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 1,304,175 | 1,304,175 | 729,585 | |||
Construction in progress | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 152,551 | 152,551 | 521,609 | |||
Capitalized interest | 2,700 | 2,700 | 6,900 | |||
Finance lease asset | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 34,749 | 34,749 | ||||
Other property and equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property, plant and equipment | 3,183 | 3,183 | $ 23 | |||
Subsequent Event | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Proceeds from sale of assets classified as held for sale | $ 13,000 | |||||
Inventory | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Other components of the compressor station | $ 8,700 | $ 8,700 |
DEBT AND FINANCING COSTS - Narr
DEBT AND FINANCING COSTS - Narrative (Details) | 1 Months Ended | 9 Months Ended | ||
Nov. 30, 2018USD ($)contract | Sep. 30, 2019USD ($) | Feb. 28, 2019USD ($) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||||
LONG-TERM DEBT | $ 235,000,000 | $ 0 | ||
Letters of credit outstanding | 0 | $ 0 | ||
Debt outstanding, including lease obligation | 252,600,000 | |||
Finance lease obligation | 17,562,000 | |||
Maximum net assets of ALTM | 900,000,000 | |||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Number of extension options | contract | 2 | |||
Extended financing agreement term | 1 year | |||
Debt maximum borrowing capacity | $ 650,000,000 | $ 1,500,000,000 | $ 800,000,000 | |
Debt covenant, minimum consolidated net income for three consecutive calendar months | $ 175,000,000 | |||
Debt instrument, basis spread on variable rate, decrease after the Initial Period | 0.05% | |||
Debt facility fee percentage | 0.20% | |||
Debt covenant, maximum debt-to-capital ratio | 30.00% | |||
Debt covenant, maximum leverage ratio | 5 | |||
Debt covenant, maximum leverage ratio for up to one year following qualified acquisition | 5.50 | |||
Revolving Credit Facility | Line of Credit | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.10% | |||
Revolving Credit Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.10% | |||
Letter of Credit | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Debt maximum borrowing capacity | 100,000,000 | |||
Swingline Loan Subfacility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Debt maximum borrowing capacity | $ 100,000,000 |
DEBT AND FINANCING COSTS - Sche
DEBT AND FINANCING COSTS - Schedule of Financing Costs, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Disclosure [Abstract] | ||||
Interest income | $ 617 | $ 0 | $ 3,584 | $ 0 |
Interest expense | 1,496 | 2,504 | 3,234 | 7,054 |
Amortization of deferred facility fees | 237 | 0 | 652 | 0 |
Capitalized interest | (1,211) | (2,504) | (2,378) | (7,054) |
Financing costs, net of capitalized interest | $ 522 | $ 0 | $ 1,508 | $ 0 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Accrued capital costs | $ 24,931 | $ 80,696 |
Accrued taxes other than income | 9,408 | 69 |
Accrued operations and maintenance expense | 1,864 | 2,863 |
Accrued incentive compensation | 1,362 | 468 |
Operating lease liability - current | 596 | |
Accrued interest | 463 | 232 |
Other | 192 | 598 |
Total other current liabilities | $ 38,816 | $ 84,926 |
ASSET RETIREMENT OBLIGATION (De
ASSET RETIREMENT OBLIGATION (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |
Asset retirement obligation at December 31, 2018 | $ 29,369 |
Liabilities incurred during the period | 3,406 |
Accretion expense | 1,175 |
Asset retirement obligation at September 30, 2019 | $ 33,950 |
COMMIMENTS AND CONTINGENCIES (D
COMMIMENTS AND CONTINGENCIES (Details) | Jan. 01, 2022USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 09, 2018contract |
Loss Contingencies [Line Items] | |||||||
Loss contingency accrual | $ 0 | $ 0 | |||||
Construction, Operations and Maintenance Agreement | Affiliated Entity | Apache | Forecast | |||||||
Loss Contingencies [Line Items] | |||||||
Expenses from transactions with related party | $ 9,000,000 | $ 7,000,000 | $ 5,000,000 | $ 3,000,000 | |||
Lease Agreements | Affiliated Entity | Apache | |||||||
Loss Contingencies [Line Items] | |||||||
Base rental charge | $ 44,500 | ||||||
Initial term of lease agreement | 4 years | ||||||
Number of lease renewal term | contract | 3 | ||||||
Lessee renewal term | 24 months |
EQUITY METHOD INTERESTS - Infor
EQUITY METHOD INTERESTS - Information of Equity Method Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)pipeline | Dec. 31, 2018USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of pipeline options exercised | pipeline | 4 | |||||
Number of pipeline | pipeline | 5 | |||||
Equity method interests | $ 1,094,564 | $ 1,094,564 | $ 1,094,564 | $ 91,100 | ||
Difference between carrying amount and underlying equity | $ 25,700 | $ 5,800 | ||||
Movement In Equity Method Interests [Roll Forward] | ||||||
Balance at December 31, 2018 | 91,100 | |||||
Acquisitions | 670,625 | $ 0 | ||||
Contributions | 337,412 | 0 | ||||
Distributions | (3,391) | 0 | ||||
Income from equity method interests, net | 1,564 | $ 0 | 536 | $ 0 | ||
Accumulated other comprehensive loss | (1,718) | |||||
Balance at September 30, 2019 | 1,094,564 | 1,094,564 | ||||
Gulf Coast Express Pipeline LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 16.00% | 15.00% | ||||
Equity method interests | 274,727 | 91,100 | $ 274,727 | $ 91,100 | ||
Movement In Equity Method Interests [Roll Forward] | ||||||
Balance at December 31, 2018 | 91,100 | |||||
Acquisitions | 15,274 | |||||
Contributions | 169,131 | |||||
Distributions | (3,391) | |||||
Income from equity method interests, net | 2,613 | |||||
Accumulated other comprehensive loss | 0 | |||||
Balance at September 30, 2019 | 274,727 | 274,727 | ||||
EPIC Crude Holdings, LP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 15.00% | 0.00% | ||||
Equity method interests | 127,742 | 127,742 | $ 127,742 | $ 0 | ||
Movement In Equity Method Interests [Roll Forward] | ||||||
Balance at December 31, 2018 | 0 | |||||
Acquisitions | 51,810 | |||||
Contributions | 82,499 | |||||
Distributions | 0 | |||||
Income from equity method interests, net | (4,849) | |||||
Accumulated other comprehensive loss | (1,718) | |||||
Balance at September 30, 2019 | 127,742 | 127,742 | ||||
Permian Highway Pipeline LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 26.70% | 0.00% | ||||
Equity method interests | 224,152 | 224,152 | $ 224,152 | $ 0 | ||
Movement In Equity Method Interests [Roll Forward] | ||||||
Balance at December 31, 2018 | 0 | |||||
Acquisitions | 161,081 | |||||
Contributions | 62,895 | |||||
Distributions | 0 | |||||
Income from equity method interests, net | 176 | |||||
Accumulated other comprehensive loss | 0 | |||||
Balance at September 30, 2019 | 224,152 | 224,152 | ||||
Breviloba, LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 33.00% | 0.00% | ||||
Equity method interests | 467,943 | 0 | $ 467,943 | $ 0 | ||
Movement In Equity Method Interests [Roll Forward] | ||||||
Balance at December 31, 2018 | 0 | |||||
Acquisitions | 442,460 | |||||
Contributions | 22,887 | |||||
Distributions | 0 | |||||
Income from equity method interests, net | 2,596 | |||||
Accumulated other comprehensive loss | 0 | |||||
Balance at September 30, 2019 | $ 467,943 | $ 467,943 |
EQUITY METHOD INTERESTS - Summa
EQUITY METHOD INTERESTS - Summarized Financial Information of Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||
Revenues | $ 78,749 | |
Operating expenses | 27,189 | |
Operating income (loss) | 51,560 | |
Net income (loss) | 51,560 | |
Other comprehensive loss | 0 | |
Gulf Coast Express Pipeline LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | $ 12,039 | 16,476 |
Operating expenses | 1,033 | 1,218 |
Operating income (loss) | 11,006 | 15,258 |
Net income (loss) | 11,776 | 17,090 |
Other comprehensive loss | 0 | 0 |
EPIC Crude Holdings, LP | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 8,015 | 8,015 |
Operating expenses | 27,679 | 33,610 |
Operating income (loss) | (19,664) | (25,595) |
Net income (loss) | (20,890) | (35,620) |
Other comprehensive loss | (4,145) | (11,450) |
Permian Highway Pipeline LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 0 | 0 |
Operating expenses | 21 | 41 |
Operating income (loss) | (21) | (41) |
Net income (loss) | 554 | 785 |
Other comprehensive loss | 0 | $ 0 |
Breviloba, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenues | 41,765 | |
Operating expenses | 12,857 | |
Operating income (loss) | 28,908 | |
Net income (loss) | 28,908 | |
Other comprehensive loss | $ 0 |
EQUITY - Common Stock and Warra
EQUITY - Common Stock and Warrants (Details) - $ / shares | 9 Months Ended | |||||
Sep. 30, 2019 | Dec. 31, 2018 | Nov. 09, 2018 | Nov. 08, 2018 | Aug. 07, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | ||||||
Number of warrant outstanding | 12,577,350 | |||||
Warrant expiration period | 5 years | |||||
Warrant redemption price | $ 0.01 | |||||
Period of notice prior to warrant redemption | 30 days | |||||
Warrant redemption stock price trigger | $ 18 | |||||
Warrant redemption threshold trading period | 20 days | |||||
Warrant redemption threshold consecutive trading period | 30 days | |||||
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares outstanding (in shares) | 74,929,305 | 74,929,305 | 74,929,305 | 67,616,277 | 65,496,277 | 37,732,112 |
Warrant exercise price (in USD per share) | $ 11.50 | |||||
Class C Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares outstanding (in shares) | 250,000,000 | 250,000,000 | 250,000,000 | 0 | 0 | 0 |
Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Number of warrant outstanding | 6,364,281 | |||||
Apache | ||||||
Class of Stock [Line Items] | ||||||
Number of warrant outstanding | 3,182,140 |
EQUITY - Redeemable Noncontroll
EQUITY - Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions | Nov. 09, 2018 | Dec. 31, 2018 | Sep. 30, 2019 |
Class of Stock [Line Items] | |||
Redemption value measurement period | 5 days | 5 days | |
Redeemable noncontrolling interest, redemption value | $ 713.1 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, redemption ratio | 1 | ||
Altus Midstream LP | Apache | |||
Class of Stock [Line Items] | |||
Number of common units received | 250,000,000 | ||
Limited partners, ownership interest | 76.90% | 76.90% |
SERIES A CUMULATIVE REDEEMABL_3
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 12, 2019 | Nov. 09, 2018 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Class of Stock [Line Items] | |||||
Redeemable noncontrolling interest - Preferred Unit limited partners, net | $ 628,200 | $ 611,249 | $ 0 | ||
Preferred Units, redemption terms, internal rate of return | 11.50% | 11.50% | |||
Preferred Unit limited partners | |||||
Class of Stock [Line Items] | |||||
Number of Preferred Units sold (in shares) | 625,000 | ||||
Preferred Units sold, price per share (in USD per share) | $ 1,000 | ||||
Aggregate issue price of Preferred Units | $ 625,000 | ||||
Redeemable noncontrolling interest - Preferred Unit limited partners, net | 611,249 | ||||
Preferred Units, quarterly distribution rate per annum | 7.00% | ||||
Increase in preferred unit distribution rate, after fifth anniversary | 10.00% | ||||
Preferred Units, redemption terms, internal rate of return | 11.50% | 11.50% | |||
Preferred Units, redemption terms, internal rate of return after fifth anniversary of closing | 13.75% | 13.75% | |||
Preferred Units, redemption terms, multiple of invested capital | 1.3 | 1.3 | |||
Preferred Units, exchangeable, number of preceding trading days | 20 days | ||||
Preferred Units, exchangeable, discount percentage | 6.00% | 6.00% | |||
Maximum amount of distributions to common unit holders | $ 650,000 | ||||
Preferred Units, exchangeable, minimum percentage of Company's outstanding voting power | 20.00% | 20.00% | |||
Preferred Units, exchangeable, minimum percentage of Company's outstanding voting power required approval | 19.50% | 19.50% |
SERIES A CUMULATIVE REDEEMABL_4
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Schedule of Preferred Units (Details) - USD ($) $ in Thousands | Jun. 12, 2019 | Nov. 09, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||
Transaction price, net | $ 628,200 | $ 611,249 | $ 0 | ||
Redeemable noncontrolling interest — Preferred Unit limited partners | $ 516,790 | 538,413 | $ 0 | ||
Embedded derivative | 94,459 | $ 98,228 | $ 0 | ||
Transaction price, net | 611,249 | ||||
Preferred Unit limited partners | |||||
Class of Stock [Line Items] | |||||
Transaction price, gross | 625,000 | ||||
Issue discount | (3,675) | ||||
Transaction costs to other third parties | (10,076) | ||||
Transaction price, net | $ 611,249 |
SERIES A CUMULATIVE REDEEMABL_5
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Activity Related to Preferred Units (Details) - USD ($) $ in Thousands | Nov. 14, 2019 | Sep. 30, 2019 | Jun. 12, 2019 | Dec. 31, 2018 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Embedded derivative liability | $ 98,228 | $ 94,459 | $ 0 | ||
Redeemable Noncontrolling Interest, Net Of Embedded Derivative Liability | 636,641 | ||||
Preferred Units, Redemption Price | $ 645,800 | ||||
Preferred Units, redemption terms, internal rate of return | 11.50% | ||||
Preferred Unit limited partners | |||||
Movement In Preferred Units [Roll Forward] | |||||
Redeemable noncontrolling interest - Preferred Units: beginning of period (in shares) | 0 | ||||
Issuance of Preferred Units, net (in shares) | 625,000 | ||||
Distribution of in-kind additional Preferred Units (in shares) | 2,188 | ||||
Redeemable noncontrolling interest - Preferred Units: end of period (in shares) | 627,188 | ||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Beginning balance | $ 0 | ||||
Issuance of Preferred Units, net | [1] | 516,790 | |||
Allocation of Altus Midstream net income | 20,844 | ||||
Accreted value adjustment | 779 | ||||
Ending balance | $ 538,413 | ||||
Preferred Units, redemption terms, internal rate of return | 11.50% | ||||
Forecast | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||
Preferred Units, distribution in-kind | $ 11,000 | ||||
Preferred Units, distribution, PIK units | 10,975.8 | ||||
[1] | (2) Certain redemption features embedded within the Preferred Unit purchase agreement require bifurcation and measurement at fair value. For further detail, refer to Note 12 — Series A Cumulative Redeemable Preferred Units. |
INCOME TAXES (Detail)
INCOME TAXES (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Income Tax [Line Items] | ||
Net deferred tax asset | $ 68,598 | $ 67,558 |
Net deferred tax liabilities | 3,089 | $ 2,643 |
Federal | ||
Income Tax [Line Items] | ||
Net deferred tax asset | 68,600 | |
Altus Midstream LP | State | ||
Income Tax [Line Items] | ||
Net deferred tax liabilities | $ 3,100 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 09, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic: | ||||||
Net income (loss) attributable to Class A common shareholders | [1] | $ (4,864) | $ 19,208 | $ (6,057) | $ (5,021) | |
Net income (loss) attributable to Class A common shareholders (in shares) | [1] | 74,929,000 | 218,470,000 | 74,929,000 | 179,493,000 | |
Net income (loss) attributable to Class A common shareholders (in USD per share) | [1] | $ (0.06) | $ 0.09 | $ (0.08) | $ (0.03) | |
Effective of dilutive securities: | ||||||
Redeemable noncontrolling interest — Apache limited partner | $ (19,222) | $ 0 | $ (21,919) | $ 0 | ||
Redeemable noncontrolling interest — Apache limited partner (in shares) | 250,000,000 | 0 | 250,000,000 | 0 | ||
Diluted: | ||||||
Net income (loss) attributable to Class A common shareholders | $ (24,086) | $ 19,208 | $ (27,976) | $ (5,021) | ||
Net income (loss) attributable to Class A common shareholders (in shares) | [1] | 324,929,000 | 218,470,000 | 324,929,000 | 179,493,000 | |
Net loss attributable to Class A common shareholders (in USD per share) | [1] | $ (0.07) | $ 0.09 | $ (0.09) | $ (0.03) | |
Warrant | ||||||
Diluted: | ||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 18,941,631 | 18,941,631 | 18,941,631 | 18,941,631 | ||
Class A Common Stock | ||||||
Diluted: | ||||||
Earn-out consideration of equity interest (in Shares) | 37,500,000 | |||||
[1] | (3) For periods prior to the Business Combination (as defined below), the number of shares has been retroactively restated to reflect the number of shares received by Apache. For further detail of the Business Combination and associated financial statement presentation, please refer to Note 1 — Summary of Significant Accounting Policies and Note 2 — Recapitalization Transaction. |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Fair value of embedded derivative liability | $ 94,500 | $ 94,500 | ||
Unrealized derivative instrument loss | $ (3,769) | $ 0 | $ (3,769) | $ 0 |