Cover
Cover - shares | 9 Months Ended | ||
Sep. 30, 2019 | Nov. 01, 2019 | May 28, 2019 | |
Entity 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 | 001-38919 | ||
Entity Registrant Name | Rattler Midstream LP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-1404608 | ||
Entity Address, Address Line One | 500 West Texas | ||
Entity Address, Address Line Two | Suite 1200 | ||
Entity Address, City or Town | Midland, | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 79701 | ||
City Area Code | 432 | ||
Local Phone Number | 221-7400 | ||
Title of 12(b) Security | Common Units | ||
Trading Symbol | RTLR | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 43,700,000 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | Q3 | ||
Entity Central Index Key | 0001748773 | ||
Current Fiscal Year End Date | --12-31 | ||
Class B Units | |||
Entity Information [Line Items] | |||
Units outstanding (in shares) | 107,815,152 | 107,815,152 | 0 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash | $ 2,694 | $ 8,564 | [1] |
Accounts receivable—related party | 29,858 | 18,274 | [1] |
Accounts receivable—third party | 2,894 | 1,849 | [1] |
Fresh water inventory | 13,039 | 9,200 | [1] |
Other current assets | 615 | 4,209 | [1] |
Total current assets | 49,100 | 42,096 | [1] |
Property, plant and equipment: | |||
Land | 88,509 | 70,373 | [1] |
Property, plant and equipment | 883,724 | 415,888 | [1] |
Accumulated depreciation, amortization and accretion | (53,166) | (28,317) | [1] |
Total property, plant and equipment, net | 919,067 | 457,944 | [1] |
Right of use assets | 742 | ||
Equity method investments | 224,990 | 0 | [1] |
Real estate assets, net | 99,664 | 93,023 | [1] |
Intangible lease assets, net | 8,754 | 10,954 | [1] |
Other assets | 3,931 | 0 | [1] |
Total assets | 1,306,248 | 604,017 | [1] |
Current liabilities: | |||
Accounts payable—third party | 104 | 100 | [1] |
Other accrued liabilities | 73,066 | 51,804 | [1] |
Taxes payable | 108 | 11,514 | [1] |
Short-term lease liability | 742 | ||
Total current liabilities | 74,020 | 63,418 | [1] |
Long-term debt | 103,000 | 0 | [1] |
Asset retirement obligations | 9,520 | 561 | [1] |
Deferred income taxes | 4,560 | 12,912 | [1] |
Total liabilities | 191,100 | 76,891 | [1] |
Commitment and contingencies (Note 17) | |||
Unitholders' equity: | |||
Limited partners member's equity—Diamondback | 0 | 527,125 | [1] |
General partner—Diamondback | 1,000 | 0 | [1] |
Common units—public (43,700,000 units issued and outstanding as of September 30, 2019) | 738,699 | 0 | [1] |
Class B units—Diamondback (107,815,152 units issued and outstanding as of September 30, 2019) | 1,000 | 1 | [1] |
Total Rattler Midstream LP unitholders’ equity | 740,699 | 527,126 | [1] |
Non-controlling interest | 374,449 | 0 | [1] |
Total equity | 1,115,148 | 527,126 | [1] |
Total liabilities and unitholders’ equity | $ 1,306,248 | $ 604,017 | [1] |
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Nov. 01, 2019 | Sep. 30, 2019 | May 28, 2019 |
Common Units | |||
Common units issued (in shares) | 43,700,000 | ||
Units outstanding (in shares) | 43,700,000 | 0 | |
Class B Units | |||
Common units issued (in shares) | 107,815,152 | 107,815,152 | |
Units outstanding (in shares) | 107,815,152 | 107,815,152 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | [1] | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | [1] | |
Revenues: | |||||||
Total revenues | $ 115,415 | $ 49,301 | $ 322,365 | $ 132,964 | |||
Costs and expenses: | |||||||
Direct operating expenses | 29,789 | 8,458 | 76,381 | 24,656 | |||
Cost of goods sold (exclusive of depreciation and amortization) | 17,350 | 10,850 | 46,252 | 24,368 | |||
Real estate operating expenses | 742 | 553 | 1,963 | 1,371 | |||
Depreciation, amortization and accretion | 11,736 | 6,039 | 31,798 | 17,830 | |||
General and administrative expenses | 3,240 | 729 | 7,677 | 1,409 | |||
(Gain) loss on sale of property, plant and equipment | 0 | 0 | (4) | 2,568 | |||
Total costs and expenses | 62,857 | 26,629 | 164,067 | 72,202 | |||
Income from operations | 52,558 | 22,672 | 158,298 | 60,762 | |||
Other income (expense): | |||||||
Interest expense, net | (553) | 0 | (638) | 0 | |||
Expense from equity investments | (631) | 0 | (695) | 0 | |||
Total other income (expense) | (1,184) | 0 | (1,333) | 0 | |||
Net income before income taxes | 51,374 | 22,672 | 156,965 | 60,762 | |||
Provision for income taxes | 3,294 | 4,892 | $ 4,700 | 22,850 | 13,114 | ||
Net income | 48,080 | 17,780 | 68,120 | 134,115 | 47,648 | ||
Net income attributable to non-controlling interest subsequent to initial public offering | 36,549 | 51,786 | |||||
Net income attributable to Rattler Midstream LP | $ 11,531 | $ 16,334 | |||||
Net income attributable to common limited partners per unit - subsequent to initial public offering: | |||||||
Basic (in dollars per share) | $ 0.26 | $ 0.37 | |||||
Diluted (in dollars per share) | $ 0.26 | $ 0.37 | |||||
Weighted average number of limited partner units outstanding: | |||||||
Basic (in shares) | 43,700 | 43,564 | |||||
Diluted (in shares) | 44,836 | 44,710 | |||||
Revenues—related party | |||||||
Revenues: | |||||||
Total revenues | $ 104,866 | 46,369 | 296,508 | 124,170 | |||
Revenues—third party | |||||||
Revenues: | |||||||
Total revenues | 6,840 | (82) | 15,405 | 279 | |||
Rental income—related party | |||||||
Revenues: | |||||||
Total revenues | 1,399 | 672 | 3,370 | 1,683 | |||
Rental income—third party | |||||||
Revenues: | |||||||
Total revenues | 1,894 | 2,087 | 5,999 | 6,053 | |||
Other real estate income—related party | |||||||
Revenues: | |||||||
Total revenues | 111 | 707 | 265 | 779 | |||
Other real estate income—third party | |||||||
Revenues: | |||||||
Total revenues | $ 305 | $ (452) | $ 818 | $ 0 | |||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Unitholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | General Partner | Limited Partners Member's EquityLimited Partners | Common UnitsLimited Partners | Class B UnitsLimited Partners | Non-Controlling Interest | ||
Beginning balance at Dec. 31, 2017 | [1] | $ 292,608 | $ 0 | $ 292,608 | $ 0 | $ 0 | $ 0 | |
Beginning balance (in shares) at Dec. 31, 2017 | [1] | 0 | 0 | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Contributions from Diamondback | 175,100 | 175,100 | ||||||
Net income | 14,396 | 14,396 | ||||||
Ending balance at Mar. 31, 2018 | [1] | 482,104 | 0 | 482,104 | $ 0 | $ 0 | 0 | |
Ending balance (in shares) at Mar. 31, 2018 | [1] | 0 | 0 | |||||
Beginning balance at Dec. 31, 2017 | [1] | 292,608 | 0 | 292,608 | $ 0 | $ 0 | 0 | |
Beginning balance (in shares) at Dec. 31, 2017 | [1] | 0 | 0 | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | [1] | 47,648 | ||||||
Ending balance at Sep. 30, 2018 | [1] | 516,791 | 0 | 516,791 | $ 0 | $ 0 | 0 | |
Ending balance (in shares) at Sep. 30, 2018 | [1] | 0 | 0 | |||||
Beginning balance at Mar. 31, 2018 | [1] | 482,104 | 0 | 482,104 | $ 0 | $ 0 | 0 | |
Beginning balance (in shares) at Mar. 31, 2018 | [1] | 0 | 0 | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Contributions from Diamondback | 3,417 | 3,417 | ||||||
Net income | 15,472 | 15,472 | ||||||
Ending balance at Jun. 30, 2018 | [1] | 500,993 | 0 | 500,993 | $ 0 | $ 0 | 0 | |
Ending balance (in shares) at Jun. 30, 2018 | [1] | 0 | 0 | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Contributions from Diamondback | (1,982) | (1,982) | ||||||
Net income | 17,780 | [1] | 17,780 | |||||
Ending balance at Sep. 30, 2018 | [1] | 516,791 | 0 | 516,791 | $ 0 | $ 0 | 0 | |
Ending balance (in shares) at Sep. 30, 2018 | [1] | 0 | 0 | |||||
Beginning balance at Dec. 31, 2018 | [1] | 527,126 | 0 | 527,125 | $ 0 | $ 1 | 0 | |
Beginning balance (in shares) at Dec. 31, 2018 | [1] | 0 | 0 | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Contributions from Diamondback | 458,674 | 458,674 | ||||||
Net income | 39,356 | 39,356 | ||||||
Ending balance at Mar. 31, 2019 | 1,025,156 | 0 | 1,025,155 | $ 0 | $ 1 | 0 | ||
Ending balance (in shares) at Mar. 31, 2019 | 0 | 0 | ||||||
Beginning balance at Dec. 31, 2018 | [1] | 527,126 | 0 | 527,125 | $ 0 | $ 1 | 0 | |
Beginning balance (in shares) at Dec. 31, 2018 | [1] | 0 | 0 | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | 134,115 | |||||||
Ending balance at Sep. 30, 2019 | 1,115,148 | 1,000 | 0 | $ 738,699 | $ 1,000 | 374,449 | ||
Ending balance (in shares) at Sep. 30, 2019 | 43,700 | 107,815 | ||||||
Beginning balance at May. 28, 2019 | 1,018,083 | 0 | 1,018,082 | $ 0 | $ 1 | 0 | ||
Beginning balance (in shares) at May. 28, 2019 | 0 | 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | 20,040 | $ 4,803 | 15,237 | |||||
Distributions | (726,513) | (726,513) | ||||||
Net proceeds from the offering - public (in shares) | 43,700 | |||||||
Net proceeds from the offering - public | 719,627 | $ 719,627 | ||||||
Net proceeds from the offering - General Partner | 1,000 | 1,000 | ||||||
Net proceeds from the offering - Diamondback (in shares) | 107,815 | |||||||
Net proceeds from the offering - Diamondback | 999 | $ 999 | ||||||
Unit-based compensation | 831 | 831 | ||||||
Elimination of current and deferred tax liabilities | 31,094 | 31,094 | ||||||
Allocation of net investment to unitholder | 0 | (322,663) | 322,663 | |||||
Ending balance at Jun. 30, 2019 | 1,065,161 | 1,000 | 0 | $ 725,261 | $ 1,000 | 337,900 | ||
Ending balance (in shares) at Jun. 30, 2019 | 43,700 | 107,815 | ||||||
Beginning balance at May. 28, 2019 | 1,018,083 | 0 | 1,018,082 | $ 0 | $ 1 | 0 | ||
Beginning balance (in shares) at May. 28, 2019 | 0 | 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | 68,120 | |||||||
Ending balance at Sep. 30, 2019 | 1,115,148 | 1,000 | 0 | $ 738,699 | $ 1,000 | 374,449 | ||
Ending balance (in shares) at Sep. 30, 2019 | 43,700 | 107,815 | ||||||
Beginning balance at Jun. 30, 2019 | 1,065,161 | 1,000 | 0 | $ 725,261 | $ 1,000 | 337,900 | ||
Beginning balance (in shares) at Jun. 30, 2019 | 43,700 | 107,815 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | 48,080 | $ 11,531 | 36,549 | |||||
Net proceeds from the offering - public | (251) | (251) | ||||||
Unit-based compensation | 2,158 | 2,158 | ||||||
Ending balance at Sep. 30, 2019 | $ 1,115,148 | $ 1,000 | $ 0 | $ 738,699 | $ 1,000 | $ 374,449 | ||
Ending balance (in shares) at Sep. 30, 2019 | 43,700 | 107,815 | ||||||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | [1] | |
Cash flows from operating activities: | |||
Net income | $ 134,115 | $ 47,648 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for deferred income taxes | 22,850 | 13,114 | |
Depreciation, amortization and accretion | 31,798 | 17,830 | |
(Gain) loss on sale of property, plant and equipment | (4) | 2,568 | |
Unit-based compensation expense | 2,989 | 0 | |
Expense from equity method investment | 695 | 0 | |
Changes in operating assets and liabilities: | |||
Accounts receivable—related party | (45,297) | 16,911 | |
Accounts receivable—third party | (1,045) | (11) | |
Accounts payable, accrued liabilities and taxes payable | 30,791 | 16,945 | |
Other assets, including inventory | (13,028) | 420 | |
Net cash provided by operating activities | 163,864 | 115,425 | |
Cash flows from investing activities: | |||
Additions to property, plant and equipment | (187,544) | (108,959) | |
Contributions to equity method investments | (76,141) | 0 | |
Proceeds from the sale of fixed assets | 18 | 0 | |
Net cash used in investing activities | (263,667) | (108,959) | |
Cash flows from financing activities: | |||
Proceeds from borrowings from credit facility | 112,000 | 0 | |
Payments on credit facility | (9,000) | 0 | |
Debt issuance costs | (3,929) | 0 | |
Net proceeds from initial public offering—public | 719,376 | 0 | |
Net proceeds from initial public offering—General Partner | 1,000 | 0 | |
Net proceeds from initial public offering—Diamondback | 999 | 0 | |
Distribution to Diamondback (Note 1) | (726,513) | 0 | |
Net cash provided by financing activities | 93,933 | 0 | |
Net (decrease) increase in cash | (5,870) | 6,466 | |
Cash at beginning of period | 8,564 | 8 | |
Cash at end of period | 2,694 | 6,474 | |
Supplemental disclosure of non-cash financing activity: | |||
Contributions from Diamondback | 456,055 | 176,535 | |
Supplemental disclosure of non-cash investing activity: | |||
Increase in long term assets and inventory | 456,055 | 176,535 | |
Change in accrued liabilities related to property, plant and equipment | $ 4,083 | $ (7,253) | |
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Organization Rattler Midstream LP (the “Partnership”) is a publicly traded Delaware limited partnership, the common units of which are listed on the Nasdaq Global Select Market under the symbol “RTLR”. The Partnership was formed on July 27, 2018 by Diamondback to own, operate, develop and acquire midstream infrastructure assets in the Midland and Delaware Basins of the Permian Basin. Unless the context requires otherwise, references to “we,” “us,” “our” or “the Partnership” are intended to mean the business and operations of the Partnership and its consolidated subsidiary, Rattler Midstream Partners LLC (the “Operating Company” and, prior to May 28, 2019 for accounting purposes, the “Predecessor”). On January 31, 2018, Diamondback, through its wholly-owned subsidiary Tall City Towers LLC (“Tall Towers”), acquired from Fasken Midland LLC (“Fasken Midland”) certain real property and related assets in Midland, Texas (the “Fasken Center”). Tall Towers was contributed to the Predecessor effective January 31, 2018, see Note 4 — Acquisitions . The Predecessor’s assets, contributed from Diamondback, included (i) crude oil and natural gas gathering and transportation systems, (ii) saltwater gathering and disposal systems and (iii) fresh water sourcing and distribution systems. All of the Partnership’s businesses are located or operate in the Permian Basin in West Texas. On August 7, 2018 , a Registration Statement on Form S-1 (File No. 333-226645) was filed with the SEC relating to the proposed underwritten initial public offering (the “IPO”) of common units of the Partnership. Prior to the completion of the IPO, the Predecessor was a wholly-owned subsidiary of Diamondback. Prior to the closing on May 28, 2019 of the Partnership’s IPO of 38,000,000 common units representing limited partner interests, Diamondback owned all of the general and limited partner interests in the Partnership. On May 30, 2019, the underwriters purchased an additional 5,700,000 common units following the exercise in full of their over-allotment option on the same terms, at a price to the public of $17.50 per common unit. The Partnership received net proceeds of approximately $719.4 million from the sale of these common units after deducting offering expenses and underwriting discounts and commissions. In connection with the closing of the IPO, the Partnership (i) issued 107,815,152 Class B units representing an aggregate 71% voting limited partner interest in the Partnership in exchange for a $1.0 million cash contribution from Diamondback, (ii) issued a general partner interest in the Partnership to Rattler Midstream GP LLC (the “General Partner”) in exchange for a $1.0 million cash contribution from the General Partner, and (iii) caused the Operating Company to make a distribution of approximately $726.5 million to Diamondback. Diamondback, as the holder of the Class B units, and the General Partner, as the holder of the general partner interest, are entitled to receive cash preferred distributions equal to 8% per annum on the outstanding amount of their respective $1.0 million capital contributions, payable quarterly. As of September 30, 2019 , the General Partner held a 100% general partner interest in the Partnership. Diamondback owns all of the Partnership's 107,815,152 Class B units that provide a 71% voting interest. Diamondback owns and controls the General Partner. As of September 30, 2019 , the Partnership owned a 29% controlling membership interest in the Operating Company and Diamondback owned, through its ownership of the Operating Company units, a 71% economic, non-voting interest in the Operating Company. However, as required by GAAP, the Partnership consolidates 100% of the assets and operations of the Operating Company in its financial statements and reflects a non-controlling interest. Basis of Presentation Prior to May 28, 2019, the Partnership's services were performed by the Predecessor. The consolidated financial statements include the results of the Predecessor for the periods presented prior to the closing of the IPO on May 28, 2019. The Predecessor financial statements have been prepared from the separate records maintained by the Partnership and may not necessarily be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods reported. The consolidated results of operations following the completion of the IPO are presented together with the results of operations pertaining to the Predecessor. The assets of the Predecessor consist of SWD wells and related gathering systems, office buildings, surface land, an oil gathering system and asset retirement obligations related to these assets, which were contributed effective January 1, 2019. See Note 4 — Acquisitions . The capital contribution of the net proceeds from the IPO to the Operating Company in exchange for 29% of the limited liability company units of the Operating Company was accounted for as a combination of entities under common control, with assets and liabilities transferred at their carrying amounts in a manner similar to a pooling of interests. The Partnership did not own any assets prior to May 28, 2019, the date of the equity contribution agreement by and between the Partnership and the Predecessor. Prior to the IPO, the Predecessor was a wholly owned subsidiary of Diamondback. For periods prior to May 28, 2019, the accompanying consolidated financial statements and related notes thereto represent the financial position, results of operations, cash flows and changes in members’ equity of the Predecessor and, for periods on and after May 28, 2019, the accompanying consolidated financial statements and related notes thereto represent the financial position, results of operations, cash flows and changes in partners’ equity of the Partnership and its partially owned subsidiary. The consolidated financial statements include the accounts of the Partnership and its subsidiaries after all significant intercompany balances and transactions have been eliminated upon consolidation. Prior to 2018, the Partnership's operations comprised a single operating business segment; however, with the contribution of Tall Towers, the Partnership's operations are now reported in two operating business segments: (i) midstream services and (ii) real estate operations. See Note 19 — Report of Operating Business Segments . These consolidated financial statements have been prepared by the Partnership without audit, pursuant to the rules and regulations of the SEC. They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations, although the Partnership believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Partnership’s final prospectus dated May 22, 2019 and filed with the SEC pursuant to Rule 424(b) under the Securities Act on May 24, 2019, which contains a summary of the Partnership’s significant accounting policies and other disclosures. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As of September 30, 2019 , the Partnership's significant accounting policies are consistent with those discussed in Note 2 — Summary of Significant Accounting Policies of its consolidated financial statements contained in the final prospectus dated May 22, 2019 and filed with the SEC pursuant to Rule 424(b) under the Securities Act on May 24, 2019 . Use of Estimates Certain amounts included in or affecting the Partnership’s financial statements and related notes must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts the Partnership reports for assets and liabilities and the Partnership’s disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods they consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from management’s estimates. Any effects on the Partnership’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include, but are not limited to, (i) revenue accruals, (ii) the fair value of long-lived assets and (iii) asset retirement obligations (“ARO”). Income Taxes The Partnership is treated as a corporation for U.S. federal income tax purposes as a result of its election to be treated as a corporation effective May 24, 2019. Subsequent to the effective date of the Partnership’s election, it is subject to U.S. federal and state income tax at corporate rates. The Partnership uses the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more likely than not the deferred tax assets will not be realized. The Partnership is subject to margin tax in the state of Texas pursuant to the Tax Sharing Agreement with Diamondback, as discussed further in Note 14 — Income Taxes . The Predecessor’s 2016 through 2018 tax years, the periods during which the Predecessor's sole owner, Diamondback, was responsible for federal income taxes on the Predecessor's taxable income, remain open to examination by tax authorities. As of September 30, 2019 , the Partnership had no unrecognized tax benefits that would have a material impact on the effective tax rate. The Partnership is continuing its practice of recognizing interest and penalties related to income tax matters as interest expense and general and administrative expenses, respectively. During the three and nine months ended September 30, 2019 , there was no interest or penalties associated with uncertain tax positions recognized in the Partnership’s consolidated financial statements. Capital Contributions A contribution of a set of assets and related liabilities (a “set”) to the Partnership from Diamondback is analyzed to determine whether the set meets the definition of a business in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations”. A contribution of a set of assets that does not constitute a business is recognized at the date of the transfer at its carrying amount in the accounts of Diamondback in accordance with the guidance regarding transactions between entities under common control in ASC 805-50. Management then evaluates whether the asset contribution results in a change in the reporting entity, as defined in ASC Topic 250, “Accounting Changes and Error Corrections”. An asset contribution that does not constitute a change in the reporting entity is accounted for prospectively from the date of the transfer, while an asset contribution that constitutes a change in the reporting entity would result in retrospective application of the transaction. For the nine months ended September 30, 2019 , the total capital contributions by Diamondback to the Predecessor were $456.1 million , of which $9.2 million related to an office building located in Midland Texas, $18.1 million related to land, $9.4 million related to fresh water assets, $228.3 million related to SWD assets, $35.8 million related to crude oil assets, $149.5 million related to the equity method investments in the EPIC and Gray Oak projects, $31.1 million related to elimination of current and deferred liabilities, and $(25.3) million in additional assets and liabilities, net, related to operations. Investments Equity investments in which the Partnership exercises significant influence but does not control are accounted for using the equity method. Under the equity method, generally the Partnership’s share of investees’ earnings or loss is recognized in the statement of operations. The Partnership reviews its investments to determine if a loss in value which is other than a temporary decline has occurred. If such loss has occurred, the Partnership recognizes an impairment provision. Recent Accounting Pronouncements Recently Adopted Pronouncements In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842)”. This update, codified in ASC Topic 842 "Leases" ("ASC Topic 842"), applies to any entity that enters into a lease, with some specified scope exemptions. Under this update, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. While there were no major changes to lessor accounting, changes were made to align key aspects with the revenue recognition guidance. This update was effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities were required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In the normal course of business, the Partnership enters into lease agreements and land easements to support its midstream operations. The Partnership adopted this update effective January 1, 2019. Upon adoption effective January 1, 2019, the Partnership recognized approximately $1.2 million of right-of-use assets, of which the total amount relates to the Partnership’s operating leases. See Note 16 — Leases . In January 2018, the FASB issued ASU 2018-01, “Leases - Land Easement Practical Expedient for Transition to Topic 842”. This update applies to any entity that holds land easements. The update allows entities to adopt a practical expedient to not evaluate existing or expired land easements under Topic 842 that were not previously accounted for as leases under the current leases guidance. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date that the entity adopts Topic 842. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”. This update provides clarification and corrects unintended application of certain sections in the new lease guidance. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2018, the FASB issued ASU 2018-11, “Lease (Topic 842): Targeted Improvements”. This update provides another transition method of allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In December 2018, the FASB issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors”. This update provides a practical expedient for lessors to elect not to evaluate whether sales taxes and other similar taxes are lessor costs. The update also requires a lessor to exclude from variable payments those costs paid directly by the lessee to third parties and include lessor costs paid by the lessor and reimbursed by the lessee. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In January 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements”. This update clarifies certain presentation and transition disclosures under Topic 842. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In June 2018, the FASB issued ASU 2018-07, “Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting”. This update applies the existing employee guidance to nonemployee share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements”. This update provides clarification and corrects unintended application of the guidance in various sections. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2019, the FASB issued ASU 2019-07, “Codification Updates to SEC Sections”. This update simplifies the guidance in various sections that was duplicative, redundant or outdated. The Partnership adopted this update effective July 2019. It did not have a material impact on its financial position, results of operations or liquidity. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses”. This update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Partnership does not believe the adoption of this standard will have an impact on its financial statements since it does not have a history of credit losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”. This update clarifies that receivables arising from operating leases are not in scope of this topic, but rather ASC Topic 842. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Partnership does not believe the adoption of this standard will have an impact on its financial statements since it does not have a history of credit losses. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”. This update clarifies guidance previously issued in ASU 2016-01, ASU 2016-13 and ASU 2017-12. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Partnership does not believe the updates to the referenced standards will have an impact on its financial position, results of operations or liquidity. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments-Credit Losses (Topic 326)”. This update allows a fair value option to be elected for certain financial assets, other than held-to-maturity debt securities, that were previously required to be measured at amortized cost basis. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Partnership does not believe the adoption of this standard will have an impact on its financial position, results of operations or liquidity. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the fair value measurement disclosure requirements specifically related to Level 3 fair value measurements and transfers between levels. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied prospectively. The Partnership does not believe the adoption of this standard will have an impact on its financial position, results of operations or liquidity. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS The Partnership generates revenues by charging fees on a per unit basis for gathering crude oil and natural gas, delivering and storing fresh water, and collecting, recycling and disposing of produced water. The Partnership adopted ASC Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”) on January 1, 2018, using the modified retrospective method. Under ASC Topic 606, performance obligations are the unit of account and generally represent distinct goods or services that are promised to customers. The adoption of ASC Topic 606 did not have a material impact on the recognition, measurement and presentation of the Partnership’s revenues and expenses. Performance Obligations : For gathering crude oil and natural gas, delivering fresh water, and collecting, recycling and disposing of produced water, the Partnership’s performance obligations are satisfied over time using volumes delivered to measure progress. The Partnership records revenue related to the volumes delivered at the contract price at the time of delivery. The Partnership began generating revenue from water sales during first quarter 2018 upon the contribution of fresh water assets from Diamondback. For its water sales, each unit sold is generally considered a distinct good and the related performance obligation is generally satisfied at a point in time (i.e. at the time control of the water is transferred to the customer). The Partnership recognizes revenue from the sale of water when its contracted performance obligation to deliver water is satisfied and control of the water is transferred to the customer. This usually occurs when the water is delivered to the location specified in the contract and the title and risks of rewards and ownership are transferred to the customer. Transaction Price Allocated to Remaining Performance Obligations : The majority of the Partnership’s revenue agreements have a term greater than one year and, as such, the Partnership has utilized the practical expedient in ASC Topic 606, which states that the Partnership is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under its revenue agreements, each delivery generally represents a separate performance obligation; therefore, future volumes delivered are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. The remainder of the Partnership’s revenue agreements, which relate to agreements with third parties, are short-term in nature with a term of one year or less. The Partnership has utilized an additional practical expedient in ASC Topic 606 which exempts it from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of an agreement that has an original expected duration of one year or less. Contract Balances : Under the Partnership’s revenue agreements, the Partnership invoices customers after our performance obligations have been satisfied, at which point payment is unconditional. As such, the Partnership’s revenue agreements do not give rise to contract assets or liabilities under ASC Topic 606. The following is a summary of the Partnership’s types of revenue agreements: • Crude Oil Gathering Agreement . Under the crude oil gathering agreement, the Partnership receives a volumetric fee per Bbl for gathering and delivering crude oil produced by Diamondback within the dedicated acreage. • Gas Gathering and Compression Agreement . Under the gas gathering and compression agreement, the Partnership receives a volumetric fee per MMBtu for gathering and processing all natural gas produced by Diamondback within the dedicated acreage. • Produced and Flowback Water Gathering and Disposal Agreement . Under the produced and flowback water gathering and disposal agreement, the Partnership receives a fee for gathering or disposing of water produced from operating crude oil and natural gas wells within the dedicated acreage. The fee is comprised of a volumetric fee per Bbl for the produced water services the Partnership provides. In addition, the Partnership retains the skim oil that is a part of the produced water. The skim oil is processed by a third party, which provides the Partnership a volumetric fee per Bbl. • Fresh water Purchase and Services Agreement . Under the fresh water purchase and services agreement, the Partnership receives a fee for sourcing, transporting and delivering all raw fresh water and recycled fresh water required by Diamondback to carry out its oil and natural gas activities within the dedicated acreage. The fee is comprised of a volumetric fee per Bbl for the type of fresh water services the Partnership provides. Real Estate Contracts: The Partnership recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. Rental income—related party is comprised of revenues earned from lease agreements with Diamondback and its affiliates. Other real estate revenue is derived from tenants’ use of parking, telecommunications and miscellaneous services. Parking and other miscellaneous service revenue is recognized when the related services are utilized by the tenants. Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance and other operating expenses are recognized as revenue in the period the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Partnership is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. It is noted that surface revenue, rental and real estate income and amortization of out of market leases is outside the scope of ASC Topic 606. Disaggregation of Revenue In the following table, revenue is disaggregated by type of service and type of fee. The table also identifies the reportable segment to which the disaggregated revenues relate. For more information on reportable segments, see Note 19 — Report of Operating Business Segments . Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Segment Type of Service: Fresh water services $ 26,485 $ 19,913 $ 83,966 $ 54,677 Midstream Saltwater services 73,928 19,235 198,344 53,419 Midstream Crude oil gathering 7,248 4,738 19,231 11,004 Midstream Natural gas gathering 3,871 2,081 9,908 4,535 Midstream Surface revenue (non ASC 606 revenues) 174 320 464 814 Midstream Real estate contracts (non ASC 606 revenues) 3,709 3,014 10,452 8,515 Real Estate Total revenues $ 115,415 $ 49,301 $ 322,365 $ 132,964 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Ajax and Energen Assets Effective January 1, 2019, Diamondback contributed to the Predecessor certain midstream assets (the “Ajax Assets”) within the Permian Basin that it acquired from Ajax Resources LLC ("Ajax") as part of an upstream acquisition in the fourth quarter of 2018. These assets included 17 water wells, four SWD wells and one related gathering system, a field office, surface land, five hydraulic fracturing pits and one related fresh water transportation system. Prior to their contribution, these assets were fully integrated into the upstream business acquired from Ajax. The carrying value of assets included in this contribution was $21.5 million . The contributed assets were recognized by the Predecessor at Diamondback’s historical basis due to the entities being under common control. Effective January 1, 2019, Diamondback contributed to the Predecessor certain midstream assets ("the Energen Assets”) within the Permian Basin that it acquired from Energen Corporation ("Energen") as part of an upstream acquisition in the fourth quarter of 2018. These assets included 56 SWD wells and related gathering systems, an office building located in Midland Texas, surface land and an oil gathering system and asset retirement obligations related to these assets. Prior to their contribution, these assets were fully integrated into the upstream business acquired from Energen. The carrying value of assets included in this contribution was $279.0 million , net of $3.0 million in associated asset retirement obligations. The contributed assets were recognized by the Predecessor at Diamondback’s historical basis due to the entities being under common control. The contribution of the Ajax and Energen Assets was an asset contribution that did not result in a change in the reporting entity at the Predecessor. As a result, the Ajax and Energen Assets were initially recognized at the date of the transfer at their carrying amounts in the accounts of Diamondback, and presented prospectively from that date. Fresh Water Assets In connection with its business operations, Diamondback constructed and/or acquired various fresh water assets, including certain freshwater wells, fresh water transportation lines and related assets (the “Fresh Water Assets”), located in the Delaware and Midland Basins of the Permian Basin. Effective January 1, 2018, Diamondback contributed the Fresh Water Assets to the Predecessor. The carrying value of assets included in this contribution was $32.8 million and $6.0 million of that amount related to fresh water inventory. The contributed assets were recognized by the Partnership at Diamondback’s historical basis due to the entities being under common control. The contribution of the Fresh Water Assets was an asset contribution that did not result in a change in the reporting entity at the Predecessor. As a result, the Fresh Water Assets were initially recognized at the date of the transfer at their carrying amounts in the accounts of Diamondback, and presented prospectively from that date. Tall Towers On January 31, 2018 , Diamondback, through Tall Towers, acquired from Fasken Midland certain real property and related assets in Midland, Texas for a purchase price of approximately $110.0 million . All of the membership interests in Tall Towers were contributed to the Predecessor effective January 31, 2018 . Diamondback allocated the purchase price between the tangible assets, consisting of land and two office towers, and to identified intangible lease assets. The contributed assets were recognized by the Predecessor at Diamondback’s historical basis due to the entities being under common control. Midstream Assets and Land In connection with its business operations, Diamondback constructed and/or acquired various midstream assets located in the Delaware and Midland Basins of the Permian Basin. Upon asset completion dates during 2018, Diamondback contributed the midstream assets to the Predecessor. Such midstream assets include SWD gathering assets and wells with a carrying value of $18.2 million , land valued at $1.5 million , and a field office valued at $1.3 million . The contributed assets were recognized by the Predecessor at Diamondback’s historical basis due to the entities being under common control. |
REAL ESTATE ASSETS
REAL ESTATE ASSETS | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
REAL ESTATE ASSETS | REAL ESTATE ASSETS In conjunction with Diamondback’s contribution of Tall Towers, the Predecessor allocated the $110.0 million purchase price between real estate assets and intangible lease assets related to in-place and above-market leases. During the year ended December 31, 2018, Diamondback also contributed a field office with a fair value of $1.3 million to the Operating Company. During the three months ended March 31, 2019, as part of the Energen contribution, Diamondback contributed an office building located in Midland Texas with a value of $9.2 million . The following schedules present the cost and related accumulated depreciation or amortization (as applicable) of the Partnership’s real estate assets and intangible lease assets: As of Estimated Useful Lives September 30, 2019 December 31, 2018 (Years) (In thousands) Buildings 30 $ 102,247 $ 92,349 Tenant improvements 15 4,446 4,160 Land improvements 15 484 484 Total real estate assets 107,177 96,993 Less: accumulated depreciation (7,513 ) (3,970 ) Total investment in real estate, net $ 99,664 $ 93,023 As of Weighted Average Useful Lives September 30, 2019 December 31, 2018 (Months) (In thousands) In-place lease intangibles 45 $ 11,301 $ 10,866 Less: accumulated amortization (5,304 ) (3,076 ) In-place lease intangibles, net 5,997 7,790 Above-market lease intangibles 45 3,623 3,623 Less: accumulated amortization (866 ) (459 ) Above-market lease intangibles, net 2,757 3,164 Total intangible lease assets, net $ 8,754 $ 10,954 |
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 The following table sets forth the Partnership’s property, plant and equipment: As of Estimated September 30, December 31, Useful Lives 2019 2018 (Years) (In thousands) SWD systems 10-30 $ 560,514 $ 220,084 Crude oil gathering systems (1) 30 128,302 66,760 Natural gas gathering and compression systems (1) 10-30 95,573 60,350 Fresh water gathering systems (1) 30 99,335 68,694 Total property, plant and equipment 883,724 415,888 Land N/A 88,509 70,373 Less: accumulated depreciation, amortization and accretion (53,166 ) (28,317 ) Total property, plant and equipment, net $ 919,067 $ 457,944 (1) Included in gathering systems are $100.9 million and $55.2 million of assets at September 30, 2019 and December 31, 2018 , respectively, that are not subject to depreciation, amortization and accretion as the systems were under construction and had not yet been put into service. The Partnership purchased an additional SWD system for $1.5 million during the quarter ended September 30, 2019 . Internal costs capitalized to property, plant and equipment represent management's estimate of costs incurred directly related to construction activities. Capitalized internal costs were approximately $1.4 million for the three and nine months ended September 30, 2019 . There were no capitalized internal costs for the three and nine months ended September 30, 2018 . At September 30, 2019 , there was $0.3 million |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS Asset retirement obligations consist primarily of estimated costs of dismantlement, removal, site reclamation, plugging and abandonment and similar activities associated with the Partnership’s infrastructure assets. The following table reflects the changes in the Partnership’s asset retirement obligation for the following periods: Nine Months Ended September 30, 2019 2018 (In thousands) Asset retirement obligation, beginning of period $ 561 $ 383 Liabilities incurred 7,798 136 Liabilities settled (21 ) — Estimates revised 5 — Accretion expense during period 1,177 25 Asset retirement obligation, end of period $ 9,520 $ 544 |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS In October 2014, Diamondback obtained a 25% interest in HMW Fluid Management LLC (“HMW LLC”), which was formed to develop, own and operate an integrated water management system to gather, store, process, treat, distribute and dispose of water to exploration and production companies operating in Midland, Martin and Andrews Counties, Texas. On June 30, 2018, HMW LLC’s operating agreement was amended. As a result of the amendment, the Partnership no longer recognizes an equity investment in HMW LLC but instead consolidates its undivided interest in the salt water disposal assets owned by HMW LLC. In exchange for the Partnership’s 25% investment, the Partnership received a 50% undivided ownership interest in two of the four SWD wells and associated assets previously owned by HMW LLC. The Partnership’s basis in the assets is equivalent to its basis in the equity investment in HMW LLC. On February 1, 2019, Diamondback funded and the Predecessor acquired a 10% equity interest in EPIC Crude Holdings, LP (“EPIC”), which is building a pipeline (the “EPIC project”) that, once fully operational, will transport crude and natural gas liquids across Texas for delivery into the Corpus Christi market. As of September 30, 2019 , the Partnership's total investment in the EPIC project was $89.2 million . During the nine months ended September 30, 2019 , the Partnership recorded net expenses of $0.5 million related to the EPIC project. The EPIC project began initial operations during the third quarter of 2019. On February 15, 2019, Diamondback funded and the Predecessor acquired a 10% equity interest in Gray Oak Pipeline, LLC (“Gray Oak”), which is building a pipeline (the “Gray Oak project”) that, once operational, will transport crude from the Permian to Corpus Christi on the Texas Gulf Coast. As of September 30, 2019 , the Partnership's total investment in the Gray Oak project was $114.5 million . During the nine months ended September 30, 2019 , the Partnership recorded net expenses of $0.2 million related to the Gray Oak project. The Gray Oak project is anticipated to be operational in the fourth quarter of 2019. On March 29, 2019, the Predecessor executed a short-term promissory note to Gray Oak. The note allows for borrowing by Gray Oak of up to $123.0 million at 2.52% interest rate with a maturity date of March 31, 2022. During the three months ended September 30, 2019 , there were no borrowings or repayments under this note. There were no outstanding loans at September 30, 2019 . On July 30, 2019, the Operating Company joined Wink to Webster Pipeline LLC as a 4% member, together with affiliates of ExxonMobil, Plains All American Pipeline, Delek US, MPLX LP, and Lotus Midstream. The joint venture is developing a crude oil pipeline with origin points at Wink and Midland in the Permian Basin for delivery to multiple Houston area locations (the "Wink to Webster project"). As of September 30, 2019 , the Partnership's total investment in the Wink to Webster project was $21.2 million . During the nine months ended September 30, 2019 , the Partnership recorded net income of less than $0.1 million related to interest. The Wink to Webster project is expected to begin service in the first half of 2021. No impairments were recorded for the Partnership’s equity method investments for the nine months ended September 30, 2019 or 2018 . At September 30, 2019 , there was $0.1 million |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt consisted of the following as of the dates indicated: September 30, 2019 December 31, 2018 (in thousands) Rattler revolving credit facility $ 103,000 $ — Total long-term debt $ 103,000 $ — Credit Agreement—Wells Fargo The Partnership, as parent, and the Operating Company, as borrower, entered into a credit agreement, dated May 28, 2019, (the "Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of banks, including Wells Fargo Bank, National Association, as lenders party thereto. The Credit Agreement provides for a revolving credit facility in the maximum amount of $600.0 million . Loan principal may be optionally repaid from time to time without premium or penalty (other than customary LIBOR breakage), and is required to be paid at the maturity date of May 28, 2024. The loan is guaranteed by the Partnership and Tall City, and is secured by substantially all of the assets of the Partnership, the Operating Company and Tall City. As of September 30, 2019 , the Operating Company had $103.0 million of outstanding borrowings and $497.0 million available for future borrowings under the Credit Agreement. The outstanding borrowings under the Credit Agreement bear interest at a per annum rate elected by the Operating Company that is based on the prime rate or LIBOR, in each case plus an applicable margin. The applicable margin ranges from 0.250% to 1.250% per annum for prime-based loans and 1.250% to 2.250% per annum for LIBOR loans, in each case depending on the Consolidated Total Leverage Ratio (as defined in the Credit Agreement). The Operating Company is obligated to pay a quarterly commitment fee ranging from 0.250% to 0.375% per annum on the unused portion of the commitment, which fee is also dependent on the Consolidated Total Leverage Ratio. The Credit Agreement contains various affirmative and negative covenants. These covenants, among other things, limit additional indebtedness, additional liens, sales of assets, mergers and consolidations, distributions and other restricted payments, transactions with affiliates, and entering into certain swap agreements, in each case of the Partnership, the Operating Company and their restricted subsidiaries. The covenants are subject to exceptions set forth in the Credit Agreement, including an exception allowing the Partnership or the Operating Company to issue unsecured debt securities and an exception allowing payment of distributions if no default exists. The Credit Agreement may be used to fund capital expenditures, to finance working capital, for general company purposes, to pay fees and expenses related to the Credit Agreement, and to make distributions permitted under the Credit Agreement. The Credit Agreement also contains financial maintenance covenants that require the maintenance of the financial ratios described below: Financial Covenant Required Ratio Consolidated Total Leverage Ratio commencing with the fiscal quarter ending September 30, 2019 Not greater than 5.00 to 1.00 (or not greater than 5.50 to 1.00 for 3 fiscal quarters following certain acquisitions), but if the Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement) is applicable, then not greater than 5.25 to 1.00) Consolidated Senior Secured Leverage Ratio commencing with the last day of any fiscal quarter in which the Financial Covenant Election (as defined in the Credit Agreement) is made Not greater than 3.50 to 1.00 Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) commencing with the fiscal quarter ending September 30, 2019 Not less than 2.50 to 1.00 For purposes of calculating the financial maintenance covenants prior to the fiscal quarter ending June 30, 2020, EBITDA (as defined in the Credit Agreement) will be annualized based on the actual EBITDA for the preceding fiscal quarters starting with the fiscal quarter ending September 30, 2019. As of September 30, 2019 , each of the Partnership and the Operating Company was in compliance with all financial covenants under the Credit Agreement. The lenders may accelerate all of the indebtedness under the Credit Agreement upon the occurrence and during the continuance of any event of default. The Credit Agreement contains customary events of default, including non-payment, breach of covenants, materially incorrect representations, cross-default, bankruptcy and change in control. There are no cure periods for events of default due to non-payment of principal and breaches of negative and financial maintenance covenants, but non-payment of interest and breaches of certain affirmative covenants are subject to customary cure periods. With certain specified exceptions, the terms and provisions of the Credit Agreement generally may be amended with the consent of the lenders holding a majority of the outstanding loans or commitments to lend. |
UNIT-BASED COMPENSATION
UNIT-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
UNIT-BASED COMPENSATION | UNIT-BASED COMPENSATION On May 22, 2019, the board of directors of the General Partner adopted the Rattler Midstream LP Long Term Incentive Plan (“LTIP”), for employees, consultants and directors of the General Partner and any of its affiliates, including Diamondback, who perform services for the Partnership. The LTIP provides for the grant of unit options, unit appreciation rights, restricted units, unit awards, phantom units, distribution equivalent rights, cash awards, performance awards, other unit-based awards and substitute awards. As of September 30, 2019 , a total of 15,151,515 common units had been reserved for issuance pursuant to the LTIP. Common units that are cancelled, forfeited or withheld to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards. The LTIP is administered by the board of directors of the General Partner or a committee thereof. For the three and nine months ended September 30, 2019 , the Partnership incurred $2.2 million and $3.0 million , respectively, of unit–based compensation. Phantom Units Under the LTIP, the board of directors of the General Partner is authorized to issue phantom units to eligible employees and non-employee directors. The Partnership estimates the fair value of phantom units as the closing price of the Partnership’s common units on the grant date of the award, which is expensed over the applicable vesting period. Upon vesting, the phantom units entitle the recipient to one common unit of the Partnership for each phantom unit. The recipients are also entitled to distribution equivalent rights, which represent the right to receive a cash payment equal to the value of the distributions paid on one phantom unit between the grant date and the vesting date. The following table presents the phantom unit activity under the LTIP for the nine months ended September 30, 2019 : Phantom Weighted Average Unvested at May 28, 2019 — $ — Granted 2,248,572 $ 19.20 Forfeited (57,143 ) $ 19.21 Unvested at September 30, 2019 2,191,429 $ 19.20 As of September 30, 2019 , the unrecognized compensation cost related to unvested phantom units was $39.1 million . Such cost is expected to be recognized over a weighted-average period of 2.65 years . |
UNITHOLDERS_ EQUITY AND PARTNER
UNITHOLDERS’ EQUITY AND PARTNERSHIP DISTRIBUTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
UNITHOLDERS’ EQUITY AND PARTNERSHIP DISTRIBUTIONS | UNITHOLDERS’ EQUITY AND PARTNERSHIP DISTRIBUTIONS The Partnership has general partner and limited partner units. At September 30, 2019 , the Partnership had a total of 43,700,000 common units issued and outstanding and 107,815,152 Class B units issued and outstanding, of which no common units and 107,815,152 Class B units were owned by Diamondback, representing approximately 71% of the Partnership’s total units outstanding. The Operating Company units and the Partnership’s Class B units owned by Diamondback are exchangeable from time to time for the Partnership’s common units (that is, one Operating Company unit and one Partnership Class B unit, together, will be exchangeable for one Partnership common unit). The following table summarizes changes in the number of the Partnership’s common units: Common Units Balance at May 28, 2019 — Common units issued in public offerings 43,700,000 Balance at September 30, 2019 43,700,000 The following table summarizes changes in the number of the Partnership’s class B units: Class B Units Balance at May 28, 2019 — Units related to tax conversion 107,815,152 Balance at September 30, 2019 107,815,152 In connection with the closing of the Partnership's IPO, the board of directors of the General Partner adopted a policy pursuant to which the Partnership will pay, to the extent legally available, cash distributions of $0.25 per common unit to common unitholders of record on the applicable record date within 60 days after the end of each quarter beginning with the quarter ending September 30, 2019. The Partnership's first distribution will be prorated for the period from the closing of the IPO through September 30, 2019 and will total $0.34 per common unit. The board of directors of the General Partner may change the Partnership's distribution policy at any time and from time to time. The Partnership Agreement (discussed below) does not require the Partnership to pay cash distributions on the Partnership's common units on a quarterly or other basis. |
EARNINGS PER UNIT
EARNINGS PER UNIT | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER UNIT | EARNINGS PER UNIT The net income per common unit on the consolidated statements of operations is based on the net income of the Partnership for the three months ended September 30, 2019 and the period after the closing of the IPO on May 28, 2019 through September 30, 2019 , since this is the amount of net income that is attributable to the Partnership’s common units. The Partnership’s net income is allocated wholly to the common units, as the General Partner does not have an economic interest. Basic and diluted net income per common unit is calculated by dividing net income by the weighted-average number of common units outstanding during the period. Three Months Ended September 30, 2019 May 28, 2019 to September 30, 2019 (In thousands, except per unit amounts) Net income attributable to Rattler Midstream LP $ 11,531 $ 16,334 Weighted average common units outstanding: Basic weighted average common units outstanding 43,700 43,564 Effect of dilutive securities: Potential common units issuable 1,136 1,146 Diluted weighted average common units outstanding 44,836 44,710 Net income per common unit, basic $ 0.26 $ 0.37 Net income per common unit, diluted $ 0.26 $ 0.37 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Partnership Agreement In connection with the closing of the IPO, the General Partner and Energen Resources Corporation, a subsidiary of Energen, entered into the first amended and restated agreement of limited partnership of Rattler Midstream LP, dated May 28, 2019 (the “Partnership Agreement”). The Partnership Agreement requires the Partnership to reimburse the General Partner for all direct and indirect expenses incurred or paid on the Partnership’s behalf and all other expenses allocable to the Partnership or otherwise incurred by the General Partner in connection with operating the Partnership’s business. The Partnership Agreement does not set a limit on the amount of expenses for which its General Partner and its affiliates may be reimbursed. These expenses include salary, bonus, incentive compensation and other amounts paid to persons who perform services for the Partnership or on its behalf and expenses allocated to the General Partner by its affiliates. The General Partner is entitled to determine the expenses that are allocable to the Partnership. For the three and nine months ended September 30, 2019 , the General Partner allocated $0.2 million and $0.3 million , respectively, of such expenses to the Partnership. Services and Secondment Agreement In connection with the closing of the IPO, the Partnership entered into a services and secondment agreement with Diamondback, Diamondback E&P LLC, the General Partner and the Operating Company, dated as of May 28, 2019 (the “Services and Secondment Agreement”). Pursuant to the Services and Secondment Agreement, Diamondback and its subsidiaries second certain operational, construction, design and management employees and contractors of Diamondback to the General Partner, the Partnership and its subsidiaries, providing management, maintenance and operational functions with respect to the Partnership’s assets. The Services and Secondment Agreement requires the General Partner and the Partnership to reimburse Diamondback for the cost of the seconded employees and contractors, including their wages and benefits. For the three and nine months ended September 30, 2019 , the General Partner and the Partnership paid Diamondback $1.0 million and $3.1 million under the Services and Secondment Agreement, respectively. Tax Sharing Agreement In connection with the closing of the IPO, the Operating Company entered into a tax sharing agreement with Diamondback (the “Tax Sharing Agreement”). Pursuant to the Tax Sharing Agreement, the Operating Company reimburses Diamondback for its share of state and local income and other taxes borne by Diamondback as a result of the Operating Company's results being included in a combined or consolidated tax return filed by Diamondback with respect to taxable periods including or beginning on May 28, 2019. The amount of any such reimbursement is limited to the tax the Operating Company would have paid had it not been included in a combined group with Diamondback. Diamondback may use its tax attributes to cause its combined or consolidated group, of which the Operating Company may be a member for this purpose, to owe less or no tax. In such a situation, the Operating Company agreed to reimburse Diamondback for the tax the Operating Company would have owed had the tax attributes not been available or used for the Operating Company’s benefit, even though Diamondback had no cash tax expense for that period. For the three and nine months ended September 30, 2019 , the Partnership accrued state income tax expense of approximately $0.1 million for its share of Texas margin tax for which the Partnership's share of the Operating Company results are included in a combined tax return filed by Diamondback. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Prior to the Partnership’s IPO, all of the membership interests of the Predecessor were owned by a single member. Under applicable federal income tax provisions, the Predecessor’s legal existence as an entity separate from its sole owner was disregarded for U.S. federal income tax purposes. As a result, the Predecessor’s owner, Diamondback, was responsible for federal income taxes on its share of the Predecessor’s taxable income. Similarly, the Predecessor had no tax attributes such as net operating loss carryforwards because such tax attributes are treated for federal income tax purposes as attributable to the Predecessor’s owner. In certain circumstances, GAAP requires or permits entities such as the Predecessor to account for income taxes under the principles of ASC Topic 740, "Income Taxes" ("ASC Topic 740"), notwithstanding the fact that the separate legal entity’s activity is attributed to its owner for income tax purposes. Accordingly, the Predecessor has applied the principles of ASC Topic 740 to its financial statements herein, for periods prior to the Partnership’s IPO, as if the Predecessor had been subject to taxation as a corporation. Consistent with the overall basis of presentation as described in Note 1 — Organization and Basis of Presentation , for the nine months ended September 30, 2019 and the three and nine months ended September 30, 2018 , net income for the period prior to the Partnership’s IPO reflects income taxes based on federal and state income tax rates, net of federal benefit, applicable to the Predecessor as if it had been subject to taxation as a corporation. In connection with the completion of the IPO, an adjustment of $31.1 million to equity of the Predecessor was recorded for the elimination of current and deferred tax liabilities related to the period prior to the IPO. For the nine months ended September 30, 2019 , net income for the period prior to the IPO reflects income tax expense of $18.2 million and for the three and nine months ended September 30, 2019 , net income for the period subsequent to the IPO reflects income tax expense of $3.3 million and $4.7 million , respectively. For the three and nine months ended September 30, 2018 , net income of the Predecessor reflects income tax expense of $4.9 million and $13.1 million , respectively. Total income tax expense for these periods differed from applying the U.S. statutory corporate income tax rate to pre-tax income primarily due to state income taxes, net of federal benefit, and due to net income attributable to the noncontrolling interest for the period subsequent to the IPO. The effective income tax rates for the three and nine months ended September 30, 2019 , were 6.4% and 14.6% , respectively. The effective income tax rate for the three and nine months ended September 30, 2018 was 21.6% . The decrease in the effective income tax rates for the three and nine months ended September 30, 2019 , as compared to the three and nine months ended September 30, 2018 , is primarily due to net income attributable to the noncontrolling interest in 2019 periods subsequent to the Partnership’s IPO. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Partnership’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Partnership uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities. Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Partnership estimates asset retirement obligations pursuant to the provisions of FASB ASC Topic 410, “Asset Retirement and Environmental Obligations.” The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with SWD wells. Given the unobservable nature of the inputs, including plugging costs and useful lives, the initial measurement of the ARO liability is deemed to use Level 3 inputs. See Note 7 — Asset Retirement Obligations |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Partnership leases certain compression assets and other equipment. As discussed in Note 2 — Summary of Significant Accounting Policies , the Partnership adopted ASC Topic 842 on January 1, 2019 using the optional transition method of adoption. The Partnership elected a package of practical expedients that together allows an entity to not reassess (i) whether a contract is or contains a lease, (ii) lease classification and (iii) initial direct costs. In addition, the Partnership elected the following practical expedients: (i) to not reassess certain land easements; (ii) to not apply the recognition requirements under the standard to short-term leases; (iii) to not reassess lease terms for lease terms on leases entered into prior to the effective date of adoption and (iv) lessor accounting policy election to exclude lessor costs paid directly by the lessee. For leases where the Partnership is the lessee, the Partnership recorded a total of $1.2 million in right-of-use assets and corresponding new lease liabilities on its Consolidated Balance Sheet representing the present value of its future operating lease payments. Adoption of the standard did not require an adjustment to the opening balance of retained earnings. The discount rate used to determine present value was based on the rate of interest that the Partnership estimated it would have to pay to borrow (on a collateralized-basis over a similar term) an amount equal to the lease payments in a similar economic environment as of January 1, 2019. The Partnership is required to reassess the discount rate for any new and modified lease contracts as of the lease effective date. The right-of-use assets and lease liabilities recognized upon adoption of ASC Topic 842 were based on the lease classifications, lease commitment amounts and terms recognized under the prior lease accounting guidance. Leases with an initial term of twelve months or less are considered short-term leases and are not recorded on the balance sheet. The following table summarizes operating lease costs for the three and nine months ended September 30, 2019 : Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (in thousands) Operating lease costs $ 460 $ 1,570 For the nine months ended September 30, 2019 , cash paid for operating lease liabilities, and reported in cash flows provided by operating activities on the Partnership’s Statement of Consolidated Cash Flows, was $1.5 million . During the nine months ended September 30, 2019 , the Partnership recorded an additional $0.9 million of right-of-use assets in exchange for new lease liabilities. The operating lease right-of-use assets were reported on the Consolidated Balance Sheet. As of September 30, 2019 , the operating right-of-use assets were $0.7 million and the operating lease liabilities were $0.7 million , of which $0.7 million was classified as current. As of September 30, 2019 , the weighted average remaining lease term was 0.7 years and the weighted average discount rate was 8.5% . Schedule of Operating Lease Liability Maturities The following table summarizes undiscounted cash flows owed by the Partnership to lessors pursuant to contractual agreements in effect as of September 30, 2019 : As of September 30, 2019 (In thousands) 2019 (October - December) $ 335 2020 426 Total lease payments 761 Less: interest 19 Present value of lease liabilities $ 742 For leases in which the Partnership is the lessor, the Partnership (i) retained classification of its historical leases as the Partnership is not required to reassess classification upon adoption of the new standard, (ii) expensed indirect leasing costs in connection with new or extended tenant leases, the recognition of which would have been deferred under prior accounting guidance and (iii) aggregated revenue from its lease components and non-lease components (comprised of tenant expense reimbursements) into revenue from rental properties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Partnership is a party to various legal proceedings, disputes and claims from time to time arising in the course of its business, including those that arise from interpretation of federal and state laws and regulations regarding air and water quality, hazardous and solid waste disposal and other environmental matters. While the ultimate outcome of the pending proceedings, disputes or claims, and any resulting impact on the Partnership, cannot be predicted with certainty, the Partnership believes that none of these matters, if ultimately decided adversely, will have a material adverse effect on the Partnership’s financial condition, cash flows or results of operations. The Partnership’s assessment is based on information known about the pending matters and its experience in contesting, litigating and settling similar matters. Actual outcomes could differ materially from the Partnership’s assessment. The Partnership records reserves for contingencies related to outstanding legal proceedings, disputes or claims when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated. As of September 30, 2019 , the Partnership's anticipated future capital commitments for its equity investments include $42.8 million for the remainder of 2019 and total $141.9 million |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Cash Distribution On October 31, 2019 , the board of directors of the General Partner approved a cash distribution for the third quarter of 2019 of $0.25 per common unit, totaling $0.34 per common unit as prorated for the period from the closing of the IPO through September 30, 2019, payable on November 22, 2019 , to unitholders of record at the close of business on November 15, 2019 . Recent Acquisitions Reliance Acquisition On October 3, 2019, the Partnership and Oryx Midstream, a portfolio company of Stonepeak Infrastructure Partners (“Oryx”), announced that OMOG JV LLC, their newly-formed joint venture entity (the “Joint Venture”), had entered into a definitive purchase and sale agreement with Reliance Midstream, LLC and other third-party sellers to acquire 100% of Reliance Gathering, LLC (“Reliance Gathering”) for $355 million in cash, subject to certain adjustments under the purchase and sale agreement (the “Pending Acquisition”). In accordance with their membership interests in the Joint Venture, the Partnership and Oryx will pay 60% and 40% of the purchase price, respectively. Reliance Gathering operates a crude oil gathering system with over 230 miles of gathering and regional transportation pipelines and approximately 200,000 barrels of crude oil storage in Midland, Martin, Andrews, and Ector Counties, Texas. The system has current throughput of over 110,000 Bbl/d primarily from six oil and gas operators, including Diamondback. The top three producers, who had contributed over 85% of the throughput through July 2019, have, on average, over ten years of dedication remaining. Over 160,000 gross acres in Northern Midland Basin are dedicated to the system under long-term, fixed-fee agreements, some of which benefit from minimum volume commitments. Diamondback operates approximately 38% of the dedicated acreage and produced approximately 35% of the throughput through July 2019. Pursuant to the limited liability company agreement entered into in connection with the formation of the Joint Venture, the Joint Venture will be managed by a board of managers consisting of designees of the Partnership and Oryx. Oryx will be the operator of the gathering system under an operating and management services agreement entered into with the Joint Venture. The Pending Acquisition is anticipated to close in the fourth quarter of 2019, subject to certain closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The Partnership intends to fund its portion of the purchase price for the Pending Acquisition with cash on hand and borrowings under its credit facility. The Partnership will account for the Joint Venture as an equity method investment. Other Acquisitions In October 2019, the Partnership acquired from third party sellers two SWD wells and two approved permits with an aggregate of 110,000 Bbl/d of additional disposal capacity and 12.7 miles of SWD gathering lines for a total of $15.3 million . One of these wells is in the Delaware Basin. The other well and both approved permits are in the Midland Basin. Amendment to Credit Agreement On October 23, 2019, the Partnership entered into a first amendment (the “First Amendment”) to the Credit Agreement, with the Operating Company, Wells Fargo Bank, National Association, as the administrative agent, and certain lenders from time to time party thereto. The First Amendment, among other things, provides the Operating Company with additional flexibility to make investments in joint ventures and other third parties, including investments in the Wink to Webster project and the Joint Venture. Pursuant to the First Amendment, the Joint Venture is designated as an unrestricted subsidiary under the Credit Agreement. |
REPORT OF OPERATING BUSINESS SE
REPORT OF OPERATING BUSINESS SEGMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
REPORT OF OPERATING BUSINESS SEGMENTS | REPORT OF OPERATING BUSINESS SEGMENTS The Partnership's operations are reported in two operating business segments: (i) midstream services and (ii) real estate operations. The following tables summarize the results of the Partnership's operating business segments during the periods presented: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 (In thousands) Midstream Services Real Estate Operations Total Midstream Services Real Estate Operations Total Revenues—related party $ 104,866 $ — $ 104,866 $ 46,369 $ — $ 46,369 Revenues—third party 6,840 — 6,840 (82 ) — (82 ) Rental income—related party — 1,399 1,399 — 672 672 Rental income—third party — 1,894 1,894 — 2,087 2,087 Other real estate income—related party — 111 111 — 707 707 Other real estate income—third party — 305 305 — (452 ) (452 ) Total revenues 111,706 3,709 115,415 46,287 3,014 49,301 Direct operating expenses 29,789 — 29,789 8,458 — 8,458 Cost of goods sold (exclusive of depreciation and amortization) 17,350 — 17,350 10,850 — 10,850 Real estate operating expenses — 742 742 — 553 553 Depreciation, amortization and accretion 9,835 1,901 11,736 4,134 1,905 6,039 Segment profit 54,732 1,066 55,798 22,845 556 23,401 General and administrative expenses (3,240 ) (729 ) Interest expense, net (553 ) — Expense from equity investments (631 ) — Net income before income taxes 54,732 1,066 51,374 22,845 556 22,672 Provision for income taxes 3,294 4,892 Net income $ 54,732 $ 1,066 $ 48,080 $ 22,845 $ 556 $ 17,780 Segment assets $ 917,577 $ 109,908 $ 1,027,485 $ 401,887 $ 106,832 $ 508,719 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 (In thousands) Midstream Services Real Estate Operations Total Midstream Services Real Estate Operations Total Revenues—related party $ 296,508 $ — $ 296,508 $ 124,170 $ — $ 124,170 Revenues—third party 15,405 — 15,405 279 — 279 Rental income—related party — 3,370 3,370 — 1,683 1,683 Rental income—third party — 5,999 5,999 — 6,053 6,053 Other real estate income—related party — 265 265 — 779 779 Other real estate income—third party — 818 818 — — — Total revenues 311,913 10,452 322,365 124,449 8,515 132,964 Direct operating expenses 76,381 — 76,381 24,656 — 24,656 Cost of goods sold (exclusive of depreciation and amortization) 46,252 — 46,252 24,368 — 24,368 Real estate operating expenses — 1,963 1,963 — 1,371 1,371 (Gain) loss on sale of property, plant and equipment (4 ) — (4 ) 2,568 — 2,568 Depreciation, amortization and accretion 26,028 5,770 31,798 12,722 5,108 17,830 Segment profit 163,256 2,719 165,975 60,135 2,036 62,171 General and administrative expenses (7,677 ) (1,409 ) Interest expense, net (638 ) — Expense from equity investments (695 ) — Net income before income taxes 163,256 2,719 156,965 60,135 2,036 60,762 Provision for income taxes 22,850 13,114 Net income $ 163,256 $ 2,719 $ 134,115 $ 60,135 $ 2,036 $ 47,648 Segment assets $ 917,577 $ 109,908 $ 1,027,485 $ 401,887 $ 106,832 $ 508,719 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Prior to May 28, 2019, the Partnership's services were performed by the Predecessor. The consolidated financial statements include the results of the Predecessor for the periods presented prior to the closing of the IPO on May 28, 2019. The Predecessor financial statements have been prepared from the separate records maintained by the Partnership and may not necessarily be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods reported. The consolidated results of operations following the completion of the IPO are presented together with the results of operations pertaining to the Predecessor. The assets of the Predecessor consist of SWD wells and related gathering systems, office buildings, surface land, an oil gathering system and asset retirement obligations related to these assets, which were contributed effective January 1, 2019. See Note 4 — Acquisitions . The capital contribution of the net proceeds from the IPO to the Operating Company in exchange for 29% of the limited liability company units of the Operating Company was accounted for as a combination of entities under common control, with assets and liabilities transferred at their carrying amounts in a manner similar to a pooling of interests. The Partnership did not own any assets prior to May 28, 2019, the date of the equity contribution agreement by and between the Partnership and the Predecessor. Prior to the IPO, the Predecessor was a wholly owned subsidiary of Diamondback. For periods prior to May 28, 2019, the accompanying consolidated financial statements and related notes thereto represent the financial position, results of operations, cash flows and changes in members’ equity of the Predecessor and, for periods on and after May 28, 2019, the accompanying consolidated financial statements and related notes thereto represent the financial position, results of operations, cash flows and changes in partners’ equity of the Partnership and its partially owned subsidiary. The consolidated financial statements include the accounts of the Partnership and its subsidiaries after all significant intercompany balances and transactions have been eliminated upon consolidation. Prior to 2018, the Partnership's operations comprised a single operating business segment; however, with the contribution of Tall Towers, the Partnership's operations are now reported in two operating business segments: (i) midstream services and (ii) real estate operations. See Note 19 — Report of Operating Business Segments . These consolidated financial statements have been prepared by the Partnership without audit, pursuant to the rules and regulations of the SEC. They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations, although the Partnership believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Partnership’s final prospectus dated May 22, 2019 and filed with the SEC pursuant to Rule 424(b) under the Securities Act on May 24, 2019, which contains a summary of the Partnership’s significant accounting policies and other disclosures. |
Use of Estimates | Use of Estimates Certain amounts included in or affecting the Partnership’s financial statements and related notes must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts the Partnership reports for assets and liabilities and the Partnership’s disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods they consider reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from management’s estimates. Any effects on the Partnership’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include, but are not limited to, (i) revenue accruals, (ii) the fair value of long-lived assets and (iii) asset retirement obligations (“ARO”). |
Income Taxes | Income Taxes The Partnership is treated as a corporation for U.S. federal income tax purposes as a result of its election to be treated as a corporation effective May 24, 2019. Subsequent to the effective date of the Partnership’s election, it is subject to U.S. federal and state income tax at corporate rates. The Partnership uses the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. A valuation allowance is provided for deferred tax assets when it is more likely than not the deferred tax assets will not be realized. The Partnership is subject to margin tax in the state of Texas pursuant to the Tax Sharing Agreement with Diamondback, as discussed further in Note 14 — Income Taxes . The Predecessor’s 2016 through 2018 tax years, the periods during which the Predecessor's sole owner, Diamondback, was responsible for federal income taxes on the Predecessor's taxable income, remain open to examination by tax authorities. As of September 30, 2019 , the Partnership had no unrecognized tax benefits that would have a material impact on the effective tax rate. The Partnership is continuing its practice of recognizing interest and penalties related to income tax matters as interest expense and general and administrative expenses, respectively. During the three and nine months ended September 30, 2019 , there was no interest or penalties associated with uncertain tax positions recognized in the Partnership’s consolidated financial statements. |
Capital Contributions | Capital Contributions A contribution of a set of assets and related liabilities (a “set”) to the Partnership from Diamondback is analyzed to determine whether the set meets the definition of a business in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations”. A contribution of a set of assets that does not constitute a business is recognized at the date of the transfer at its carrying amount in the accounts of Diamondback in accordance with the guidance regarding transactions between entities under common control in ASC 805-50. Management then evaluates whether the asset contribution results in a change in the reporting entity, as defined in ASC Topic 250, “Accounting Changes and Error Corrections”. An asset contribution that does not constitute a change in the reporting entity is accounted for prospectively from the date of the transfer, while an asset contribution that constitutes a change in the reporting entity would result in retrospective application of the transaction. |
Investments | Investments Equity investments in which the Partnership exercises significant influence but does not control are accounted for using the equity method. Under the equity method, generally the Partnership’s share of investees’ earnings or loss is recognized in the statement of operations. The Partnership reviews its investments to determine if a loss in value which is other than a temporary decline has occurred. If such loss has occurred, the Partnership recognizes an impairment provision. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, “Leases (Topic 842)”. This update, codified in ASC Topic 842 "Leases" ("ASC Topic 842"), applies to any entity that enters into a lease, with some specified scope exemptions. Under this update, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. While there were no major changes to lessor accounting, changes were made to align key aspects with the revenue recognition guidance. This update was effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities were required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In the normal course of business, the Partnership enters into lease agreements and land easements to support its midstream operations. The Partnership adopted this update effective January 1, 2019. Upon adoption effective January 1, 2019, the Partnership recognized approximately $1.2 million of right-of-use assets, of which the total amount relates to the Partnership’s operating leases. See Note 16 — Leases . In January 2018, the FASB issued ASU 2018-01, “Leases - Land Easement Practical Expedient for Transition to Topic 842”. This update applies to any entity that holds land easements. The update allows entities to adopt a practical expedient to not evaluate existing or expired land easements under Topic 842 that were not previously accounted for as leases under the current leases guidance. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date that the entity adopts Topic 842. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases”. This update provides clarification and corrects unintended application of certain sections in the new lease guidance. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2018, the FASB issued ASU 2018-11, “Lease (Topic 842): Targeted Improvements”. This update provides another transition method of allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In December 2018, the FASB issued ASU 2018-20, “Leases (Topic 842) - Narrow-Scope Improvements for Lessors”. This update provides a practical expedient for lessors to elect not to evaluate whether sales taxes and other similar taxes are lessor costs. The update also requires a lessor to exclude from variable payments those costs paid directly by the lessee to third parties and include lessor costs paid by the lessor and reimbursed by the lessee. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In January 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements”. This update clarifies certain presentation and transition disclosures under Topic 842. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In June 2018, the FASB issued ASU 2018-07, “Stock Compensation - Improvements to Nonemployee Share-Based Payment Accounting”. This update applies the existing employee guidance to nonemployee share-based transactions, with the exception of specific guidance related to the attribution of compensation cost. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2018, the FASB issued ASU 2018-09, “Codification Improvements”. This update provides clarification and corrects unintended application of the guidance in various sections. This update was effective for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Partnership adopted this update effective January 1, 2019. It did not have a material impact on its financial position, results of operations or liquidity. In July 2019, the FASB issued ASU 2019-07, “Codification Updates to SEC Sections”. This update simplifies the guidance in various sections that was duplicative, redundant or outdated. The Partnership adopted this update effective July 2019. It did not have a material impact on its financial position, results of operations or liquidity. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses”. This update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Partnership does not believe the adoption of this standard will have an impact on its financial statements since it does not have a history of credit losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”. This update clarifies that receivables arising from operating leases are not in scope of this topic, but rather ASC Topic 842. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Partnership does not believe the adoption of this standard will have an impact on its financial statements since it does not have a history of credit losses. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”. This update clarifies guidance previously issued in ASU 2016-01, ASU 2016-13 and ASU 2017-12. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Partnership does not believe the updates to the referenced standards will have an impact on its financial position, results of operations or liquidity. In May 2019, the FASB issued ASU 2019-05, “Financial Instruments-Credit Losses (Topic 326)”. This update allows a fair value option to be elected for certain financial assets, other than held-to-maturity debt securities, that were previously required to be measured at amortized cost basis. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Partnership does not believe the adoption of this standard will have an impact on its financial position, results of operations or liquidity. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”. This update modifies the fair value measurement disclosure requirements specifically related to Level 3 fair value measurements and transfers between levels. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update will be applied prospectively. The Partnership does not believe the adoption of this standard will have an impact on its financial position, results of operations or liquidity. |
Revenue from contract with customers | The Partnership generates revenues by charging fees on a per unit basis for gathering crude oil and natural gas, delivering and storing fresh water, and collecting, recycling and disposing of produced water. The Partnership adopted ASC Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”) on January 1, 2018, using the modified retrospective method. Under ASC Topic 606, performance obligations are the unit of account and generally represent distinct goods or services that are promised to customers. The adoption of ASC Topic 606 did not have a material impact on the recognition, measurement and presentation of the Partnership’s revenues and expenses. Performance Obligations : For gathering crude oil and natural gas, delivering fresh water, and collecting, recycling and disposing of produced water, the Partnership’s performance obligations are satisfied over time using volumes delivered to measure progress. The Partnership records revenue related to the volumes delivered at the contract price at the time of delivery. The Partnership began generating revenue from water sales during first quarter 2018 upon the contribution of fresh water assets from Diamondback. For its water sales, each unit sold is generally considered a distinct good and the related performance obligation is generally satisfied at a point in time (i.e. at the time control of the water is transferred to the customer). The Partnership recognizes revenue from the sale of water when its contracted performance obligation to deliver water is satisfied and control of the water is transferred to the customer. This usually occurs when the water is delivered to the location specified in the contract and the title and risks of rewards and ownership are transferred to the customer. Transaction Price Allocated to Remaining Performance Obligations : The majority of the Partnership’s revenue agreements have a term greater than one year and, as such, the Partnership has utilized the practical expedient in ASC Topic 606, which states that the Partnership is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under its revenue agreements, each delivery generally represents a separate performance obligation; therefore, future volumes delivered are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. The remainder of the Partnership’s revenue agreements, which relate to agreements with third parties, are short-term in nature with a term of one year or less. The Partnership has utilized an additional practical expedient in ASC Topic 606 which exempts it from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of an agreement that has an original expected duration of one year or less. Contract Balances : Under the Partnership’s revenue agreements, the Partnership invoices customers after our performance obligations have been satisfied, at which point payment is unconditional. As such, the Partnership’s revenue agreements do not give rise to contract assets or liabilities under ASC Topic 606. The following is a summary of the Partnership’s types of revenue agreements: • Crude Oil Gathering Agreement . Under the crude oil gathering agreement, the Partnership receives a volumetric fee per Bbl for gathering and delivering crude oil produced by Diamondback within the dedicated acreage. • Gas Gathering and Compression Agreement . Under the gas gathering and compression agreement, the Partnership receives a volumetric fee per MMBtu for gathering and processing all natural gas produced by Diamondback within the dedicated acreage. • Produced and Flowback Water Gathering and Disposal Agreement . Under the produced and flowback water gathering and disposal agreement, the Partnership receives a fee for gathering or disposing of water produced from operating crude oil and natural gas wells within the dedicated acreage. The fee is comprised of a volumetric fee per Bbl for the produced water services the Partnership provides. In addition, the Partnership retains the skim oil that is a part of the produced water. The skim oil is processed by a third party, which provides the Partnership a volumetric fee per Bbl. • Fresh water Purchase and Services Agreement . Under the fresh water purchase and services agreement, the Partnership receives a fee for sourcing, transporting and delivering all raw fresh water and recycled fresh water required by Diamondback to carry out its oil and natural gas activities within the dedicated acreage. The fee is comprised of a volumetric fee per Bbl for the type of fresh water services the Partnership provides. Real Estate Contracts: The Partnership recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. Rental income—related party is comprised of revenues earned from lease agreements with Diamondback and its affiliates. Other real estate revenue is derived from tenants’ use of parking, telecommunications and miscellaneous services. Parking and other miscellaneous service revenue is recognized when the related services are utilized by the tenants. Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance and other operating expenses are recognized as revenue in the period the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Partnership is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. It is noted that surface revenue, rental and real estate income and amortization of out of market leases is outside the scope of ASC Topic 606. |
Fair Value Measurements | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Partnership’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Partnership uses appropriate valuation techniques based on available inputs to measure the fair values of its assets and liabilities. Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Disaggregation of revenue | In the following table, revenue is disaggregated by type of service and type of fee. The table also identifies the reportable segment to which the disaggregated revenues relate. For more information on reportable segments, see Note 19 — Report of Operating Business Segments . Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Segment Type of Service: Fresh water services $ 26,485 $ 19,913 $ 83,966 $ 54,677 Midstream Saltwater services 73,928 19,235 198,344 53,419 Midstream Crude oil gathering 7,248 4,738 19,231 11,004 Midstream Natural gas gathering 3,871 2,081 9,908 4,535 Midstream Surface revenue (non ASC 606 revenues) 174 320 464 814 Midstream Real estate contracts (non ASC 606 revenues) 3,709 3,014 10,452 8,515 Real Estate Total revenues $ 115,415 $ 49,301 $ 322,365 $ 132,964 |
REAL ESTATE ASSETS (Tables)
REAL ESTATE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Schedule of real estate assets and intangible lease assets | The following schedules present the cost and related accumulated depreciation or amortization (as applicable) of the Partnership’s real estate assets and intangible lease assets: As of Estimated Useful Lives September 30, 2019 December 31, 2018 (Years) (In thousands) Buildings 30 $ 102,247 $ 92,349 Tenant improvements 15 4,446 4,160 Land improvements 15 484 484 Total real estate assets 107,177 96,993 Less: accumulated depreciation (7,513 ) (3,970 ) Total investment in real estate, net $ 99,664 $ 93,023 As of Weighted Average Useful Lives September 30, 2019 December 31, 2018 (Months) (In thousands) In-place lease intangibles 45 $ 11,301 $ 10,866 Less: accumulated amortization (5,304 ) (3,076 ) In-place lease intangibles, net 5,997 7,790 Above-market lease intangibles 45 3,623 3,623 Less: accumulated amortization (866 ) (459 ) Above-market lease intangibles, net 2,757 3,164 Total intangible lease assets, net $ 8,754 $ 10,954 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | The following table sets forth the Partnership’s property, plant and equipment: As of Estimated September 30, December 31, Useful Lives 2019 2018 (Years) (In thousands) SWD systems 10-30 $ 560,514 $ 220,084 Crude oil gathering systems (1) 30 128,302 66,760 Natural gas gathering and compression systems (1) 10-30 95,573 60,350 Fresh water gathering systems (1) 30 99,335 68,694 Total property, plant and equipment 883,724 415,888 Land N/A 88,509 70,373 Less: accumulated depreciation, amortization and accretion (53,166 ) (28,317 ) Total property, plant and equipment, net $ 919,067 $ 457,944 (1) Included in gathering systems are $100.9 million and $55.2 million of assets at September 30, 2019 and December 31, 2018 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Asset Retirement Obligation [Abstract] | |
Schedule of asset retirement obligation | The following table reflects the changes in the Partnership’s asset retirement obligation for the following periods: Nine Months Ended September 30, 2019 2018 (In thousands) Asset retirement obligation, beginning of period $ 561 $ 383 Liabilities incurred 7,798 136 Liabilities settled (21 ) — Estimates revised 5 — Accretion expense during period 1,177 25 Asset retirement obligation, end of period $ 9,520 $ 544 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following as of the dates indicated: September 30, 2019 December 31, 2018 (in thousands) Rattler revolving credit facility $ 103,000 $ — Total long-term debt $ 103,000 $ — |
Schedule of financial covenants | The Credit Agreement also contains financial maintenance covenants that require the maintenance of the financial ratios described below: Financial Covenant Required Ratio Consolidated Total Leverage Ratio commencing with the fiscal quarter ending September 30, 2019 Not greater than 5.00 to 1.00 (or not greater than 5.50 to 1.00 for 3 fiscal quarters following certain acquisitions), but if the Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement) is applicable, then not greater than 5.25 to 1.00) Consolidated Senior Secured Leverage Ratio commencing with the last day of any fiscal quarter in which the Financial Covenant Election (as defined in the Credit Agreement) is made Not greater than 3.50 to 1.00 Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) commencing with the fiscal quarter ending September 30, 2019 Not less than 2.50 to 1.00 |
UNIT-BASED COMPENSATION (Tables
UNIT-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of nonvested share activity | The following table presents the phantom unit activity under the LTIP for the nine months ended September 30, 2019 : Phantom Weighted Average Unvested at May 28, 2019 — $ — Granted 2,248,572 $ 19.20 Forfeited (57,143 ) $ 19.21 Unvested at September 30, 2019 2,191,429 $ 19.20 |
UNITHOLDERS_ EQUITY AND PARTN_2
UNITHOLDERS’ EQUITY AND PARTNERSHIP DISTRIBUTIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of partnership’s common units | The following table summarizes changes in the number of the Partnership’s common units: Common Units Balance at May 28, 2019 — Common units issued in public offerings 43,700,000 Balance at September 30, 2019 43,700,000 The following table summarizes changes in the number of the Partnership’s class B units: Class B Units Balance at May 28, 2019 — Units related to tax conversion 107,815,152 Balance at September 30, 2019 107,815,152 |
EARNINGS PER UNIT (Tables)
EARNINGS PER UNIT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income per common unit | Basic and diluted net income per common unit is calculated by dividing net income by the weighted-average number of common units outstanding during the period. Three Months Ended September 30, 2019 May 28, 2019 to September 30, 2019 (In thousands, except per unit amounts) Net income attributable to Rattler Midstream LP $ 11,531 $ 16,334 Weighted average common units outstanding: Basic weighted average common units outstanding 43,700 43,564 Effect of dilutive securities: Potential common units issuable 1,136 1,146 Diluted weighted average common units outstanding 44,836 44,710 Net income per common unit, basic $ 0.26 $ 0.37 Net income per common unit, diluted $ 0.26 $ 0.37 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost | The following table summarizes operating lease costs for the three and nine months ended September 30, 2019 : Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (in thousands) Operating lease costs $ 460 $ 1,570 |
Lessee, Operating Lease, Liability, Maturity | The following table summarizes undiscounted cash flows owed by the Partnership to lessors pursuant to contractual agreements in effect as of September 30, 2019 : As of September 30, 2019 (In thousands) 2019 (October - December) $ 335 2020 426 Total lease payments 761 Less: interest 19 Present value of lease liabilities $ 742 |
REPORT OF OPERATING BUSINESS _2
REPORT OF OPERATING BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of operating business segments | The following tables summarize the results of the Partnership's operating business segments during the periods presented: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 (In thousands) Midstream Services Real Estate Operations Total Midstream Services Real Estate Operations Total Revenues—related party $ 104,866 $ — $ 104,866 $ 46,369 $ — $ 46,369 Revenues—third party 6,840 — 6,840 (82 ) — (82 ) Rental income—related party — 1,399 1,399 — 672 672 Rental income—third party — 1,894 1,894 — 2,087 2,087 Other real estate income—related party — 111 111 — 707 707 Other real estate income—third party — 305 305 — (452 ) (452 ) Total revenues 111,706 3,709 115,415 46,287 3,014 49,301 Direct operating expenses 29,789 — 29,789 8,458 — 8,458 Cost of goods sold (exclusive of depreciation and amortization) 17,350 — 17,350 10,850 — 10,850 Real estate operating expenses — 742 742 — 553 553 Depreciation, amortization and accretion 9,835 1,901 11,736 4,134 1,905 6,039 Segment profit 54,732 1,066 55,798 22,845 556 23,401 General and administrative expenses (3,240 ) (729 ) Interest expense, net (553 ) — Expense from equity investments (631 ) — Net income before income taxes 54,732 1,066 51,374 22,845 556 22,672 Provision for income taxes 3,294 4,892 Net income $ 54,732 $ 1,066 $ 48,080 $ 22,845 $ 556 $ 17,780 Segment assets $ 917,577 $ 109,908 $ 1,027,485 $ 401,887 $ 106,832 $ 508,719 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 (In thousands) Midstream Services Real Estate Operations Total Midstream Services Real Estate Operations Total Revenues—related party $ 296,508 $ — $ 296,508 $ 124,170 $ — $ 124,170 Revenues—third party 15,405 — 15,405 279 — 279 Rental income—related party — 3,370 3,370 — 1,683 1,683 Rental income—third party — 5,999 5,999 — 6,053 6,053 Other real estate income—related party — 265 265 — 779 779 Other real estate income—third party — 818 818 — — — Total revenues 311,913 10,452 322,365 124,449 8,515 132,964 Direct operating expenses 76,381 — 76,381 24,656 — 24,656 Cost of goods sold (exclusive of depreciation and amortization) 46,252 — 46,252 24,368 — 24,368 Real estate operating expenses — 1,963 1,963 — 1,371 1,371 (Gain) loss on sale of property, plant and equipment (4 ) — (4 ) 2,568 — 2,568 Depreciation, amortization and accretion 26,028 5,770 31,798 12,722 5,108 17,830 Segment profit 163,256 2,719 165,975 60,135 2,036 62,171 General and administrative expenses (7,677 ) (1,409 ) Interest expense, net (638 ) — Expense from equity investments (695 ) — Net income before income taxes 163,256 2,719 156,965 60,135 2,036 60,762 Provision for income taxes 22,850 13,114 Net income $ 163,256 $ 2,719 $ 134,115 $ 60,135 $ 2,036 $ 47,648 Segment assets $ 917,577 $ 109,908 $ 1,027,485 $ 401,887 $ 106,832 $ 508,719 |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Millions | Sep. 30, 2019shares | May 30, 2019shares | May 28, 2019USD ($)$ / sharesshares | May 27, 2019shares | Sep. 30, 2019segmentshares | Nov. 01, 2019shares |
Limited Partners' Capital Account [Line Items] | ||||||
Cash contribution from Diamondback | $ | $ 1 | |||||
Cash contribution from the general partner | $ | 1 | |||||
Payments of distributions to affiliates | $ | $ 726.5 | |||||
General partners capital account, percentage of preferred cash distribution received | 8.00% | |||||
Number of operating segments | segment | 2 | |||||
Over-Allotment Option | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Number of shares issued (in shares) | 5,700,000 | |||||
IPO | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Number of shares issued (in shares) | 38,000,000 | |||||
Shares price (in dollars per share) | $ / shares | $ 17.50 | |||||
Net proceeds received from sale of common units | $ | $ 719.4 | |||||
Class B Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Common units issued (in shares) | 107,815,152 | 107,815,152 | 107,815,152 | |||
Units outstanding (in shares) | 107,815,152 | 0 | 107,815,152 | 107,815,152 | ||
Diamondback Energy, Inc. | Class B Units | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Units outstanding (in shares) | 107,815,152 | 107,815,152 | ||||
Rattler MIdstream LP | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Limited partners, ownership interest | 71.00% | |||||
General partners, ownership interest | 100.00% | |||||
Rattler MIdstream LP | Diamondback Energy, Inc. | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Limited partners, ownership interest | 71.00% | |||||
Rattler Midstream Partners LLC | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
General partners, ownership interest | 29.00% | |||||
Rattler Midstream Partners LLC | Diamondback Energy, Inc. | ||||||
Limited Partners' Capital Account [Line Items] | ||||||
Limited partners, ownership interest | 71.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | |
Contributed Assets [Line Items] | |||
Unrecognized tax benefits material impact on the effective tax rate | $ 0 | $ 0 | |
Unrecognized tax benefits, income tax penalties and interest expense | 0 | 0 | |
Contribution of property | 456,100,000 | ||
Capital contribution related to equity method investments | 149,500,000 | ||
Capital contribution related to elimination of current and deferred liabilities | 31,100,000 | ||
Capital contribution in additional assets and liabilities, net, related to operations | (25,300,000) | ||
Right of use assets | $ 742,000 | 742,000 | |
Office building | |||
Contributed Assets [Line Items] | |||
Contribution of property | 9,200,000 | ||
Land | |||
Contributed Assets [Line Items] | |||
Contribution of property | 18,100,000 | ||
Fresh water asset | |||
Contributed Assets [Line Items] | |||
Contribution of property | 9,400,000 | ||
SWD assets | |||
Contributed Assets [Line Items] | |||
Contribution of property | 228,300,000 | ||
Crude oil assets | |||
Contributed Assets [Line Items] | |||
Contribution of property | $ 35,800,000 | ||
Accounting Standards Update 2016-02 | |||
Contributed Assets [Line Items] | |||
Right of use assets | $ 1,200,000 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (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] | ||||||
Surface revenue (non ASC 606 revenues) | $ 174 | $ 320 | $ 464 | $ 814 | ||
Real estate contracts (non ASC 606 revenues) | 3,709 | 3,014 | 10,452 | 8,515 | ||
Total revenues | 115,415 | 49,301 | [1] | 322,365 | 132,964 | [1] |
Fresh water services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
ASC 606 revenues | 26,485 | 19,913 | 83,966 | 54,677 | ||
Saltwater services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
ASC 606 revenues | 73,928 | 19,235 | 198,344 | 53,419 | ||
Crude oil gathering | ||||||
Disaggregation of Revenue [Line Items] | ||||||
ASC 606 revenues | 7,248 | 4,738 | 19,231 | 11,004 | ||
Natural gas gathering | ||||||
Disaggregation of Revenue [Line Items] | ||||||
ASC 606 revenues | $ 3,871 | $ 2,081 | $ 9,908 | $ 4,535 | ||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Millions | Jan. 01, 2019USD ($)SWDpitwellsystem | Jan. 31, 2018USD ($)tower | Jan. 01, 2018USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 456.1 | ||||
Fresh Water Asset Contribution | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 32.8 | ||||
Fresh Water Inventory Contribution | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 6 | ||||
Tall Tower | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 110 | $ 110 | |||
Office Towers | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties acquired | tower | 2 | ||||
Midstream Assets | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 18.2 | ||||
Midstream Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | 1.5 | ||||
Field office | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 1.3 | ||||
Ajax | Water Wells | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties | well | 17 | ||||
Ajax | SWD Wells | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties | SWD | 4 | ||||
Ajax | Gathering system | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties | system | 1 | ||||
Ajax | Hydraulic Fracturing Pits | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties | pit | 5 | ||||
Ajax | Fresh Water Transportation System | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties | system | 1 | ||||
Ajax | Ajax Contribution | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 21.5 | ||||
Energen | |||||
Property, Plant and Equipment [Line Items] | |||||
Asset retirement obligations, associated with assets contribution | $ 3 | ||||
Energen | SWD Wells | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of oil and gas properties | SWD | 56 | ||||
Energen | Energen Contribution | |||||
Property, Plant and Equipment [Line Items] | |||||
Contribution of property | $ 279 |
REAL ESTATE ASSETS (Details)
REAL ESTATE ASSETS (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Mar. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Real Estate [Line Items] | ||||
Payments to acquire real estate and real estate joint ventures | $ 456,100 | |||
Buildings, Gross | 102,247 | $ 92,349 | ||
Tenant improvements | 4,446 | 4,160 | ||
Land improvements | 484 | 484 | ||
Total real estate assets | 107,177 | 96,993 | ||
Less: accumulated depreciation | (7,513) | (3,970) | ||
Total investment in real estate, net | 99,664 | 93,023 | ||
Finite-lived intangibles assets, net | $ 8,754 | 10,954 | ||
In-place lease intangibles | ||||
Real Estate [Line Items] | ||||
Intangible assets, weighted average useful lives (in years) | 45 months | |||
Finite-lived intangible assets, gross | $ 11,301 | 10,866 | ||
Less: accumulated amortization | (5,304) | (3,076) | ||
Finite-lived intangibles assets, net | $ 5,997 | 7,790 | ||
Above-market lease intangibles | ||||
Real Estate [Line Items] | ||||
Intangible assets, weighted average useful lives (in years) | 45 months | |||
Finite-lived intangible assets, gross | $ 3,623 | 3,623 | ||
Less: accumulated amortization | (866) | (459) | ||
Finite-lived intangibles assets, net | 2,757 | 3,164 | ||
Tall Tower | ||||
Real Estate [Line Items] | ||||
Payments to acquire real estate and real estate joint ventures | $ 110,000 | $ 110,000 | ||
Field office | ||||
Real Estate [Line Items] | ||||
Payments to acquire real estate and real estate joint ventures | $ 1,300 | |||
A-Street Building | ||||
Real Estate [Line Items] | ||||
Payments to acquire real estate and real estate joint ventures | $ 9,200 | |||
Buildings | ||||
Real Estate [Line Items] | ||||
Property and equipment estimated useful lives (in years) | 30 years | |||
Tenant improvements | ||||
Real Estate [Line Items] | ||||
Property and equipment estimated useful lives (in years) | 15 years | |||
Land improvements | ||||
Real Estate [Line Items] | ||||
Property and equipment estimated useful lives (in years) | 15 years |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | $ 883,724,000 | $ 883,724,000 | $ 415,888,000 | [1] | ||
Land | 88,509,000 | 88,509,000 | 70,373,000 | [1] | ||
Less: accumulated depreciation, amortization and accretion | (53,166,000) | (53,166,000) | (28,317,000) | [1] | ||
Total property, plant and equipment, net | 919,067,000 | 919,067,000 | 457,944,000 | [1] | ||
Property, plant and equipment, assets | 100,900,000 | 100,900,000 | 55,200,000 | |||
Capitalized internal costs | 1,400,000 | $ 0 | 1,400,000 | $ 0 | ||
Capitalized interest related to property, plant and equipment | 300,000 | 300,000 | ||||
SWD systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 560,514,000 | $ 560,514,000 | 220,084,000 | |||
Payment to acquired property, plant and equipment | 1,500,000 | |||||
Crude oil gathering systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives (in years) | 30 years | |||||
Property, plant and equipment, gross | 128,302,000 | $ 128,302,000 | 66,760,000 | |||
Natural gas gathering and compression systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 95,573,000 | $ 95,573,000 | 60,350,000 | |||
Fresh water gathering systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives (in years) | 30 years | |||||
Property, plant and equipment, gross | $ 99,335,000 | $ 99,335,000 | $ 68,694,000 | |||
Minimum | SWD systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives (in years) | 10 years | |||||
Minimum | Natural gas gathering and compression systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives (in years) | 10 years | |||||
Maximum | SWD systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives (in years) | 30 years | |||||
Maximum | Natural gas gathering and compression systems | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment estimated useful lives (in years) | 30 years | |||||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Asset retirement obligation, beginning of period | $ 561 | $ 383 |
Liabilities incurred | 7,798 | 136 |
Liabilities settled | (21) | 0 |
Estimates revised | 5 | 0 |
Accretion expense during period | 1,177 | 25 |
Asset retirement obligation, end of period | $ 9,520 | $ 544 |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details) | Jun. 30, 2018SWD | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | [1] | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Jul. 30, 2019 | Mar. 29, 2019USD ($) | Feb. 15, 2019 | Feb. 01, 2019 | Dec. 31, 2018USD ($) | [1] | Oct. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity method investments | $ 224,990,000 | $ 224,990,000 | $ 0 | |||||||||||
Income (expense) from equity method investment | (631,000) | $ 0 | (695,000) | $ 0 | [1] | |||||||||
Equity method investment, other than temporary impairment | 0 | $ 0 | ||||||||||||
Equity method investment, capitalized interest | 100,000 | 100,000 | ||||||||||||
HMW Fluid Management LLC | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity ownership percentage | 25.00% | |||||||||||||
Epic Pipeline | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity ownership percentage | 10.00% | |||||||||||||
Equity method investments | 89,200,000 | 89,200,000 | ||||||||||||
Income (expense) from equity method investment | (500,000) | |||||||||||||
Gray Oak Pipeline | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity ownership percentage | 10.00% | |||||||||||||
Equity method investments | 114,500,000 | 114,500,000 | ||||||||||||
Income (expense) from equity method investment | (200,000) | |||||||||||||
Wink to Webster Project | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Equity method investments | 21,200,000 | 21,200,000 | ||||||||||||
2.52% Short-Term Promissory Note | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Outstanding loans | 0 | 0 | ||||||||||||
SWD Wells | HMW Fluid Management LLC | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Ownership percentage of oil and gas property | 50.00% | |||||||||||||
Number of oil and gas properties | SWD | 2 | |||||||||||||
Gray Oak Pipeline | 2.52% Short-Term Promissory Note | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Borrowing amount | $ 123,000,000 | |||||||||||||
Promissory note stated interest rate | 2.52% | |||||||||||||
Amount of debt repayments | $ 0 | |||||||||||||
HMW Fluid Management LLC | SWD Wells | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Number of oil and gas properties | SWD | 4 | |||||||||||||
Joint Venture of Wink to Webster Project | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Member ownership percentage | 4.00% | |||||||||||||
Maximum | Wink to Webster Project | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||
Income (expense) from equity method investment | $ 100,000 | |||||||||||||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
DEBT (Details)
DEBT (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | ||
Line of Credit Facility [Line Items] | |||
Total long-term debt | $ 103,000,000 | $ 0 | [1] |
Rattler Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Rattler revolving credit facility | 103,000,000 | $ 0 | |
Revolving credit facility maximum borrowing capacity | 600,000,000 | ||
Available borrowings capacity | $ 497,000,000 | ||
Rattler Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Commitment fee on the unused portion of the borrowing base | 0.25% | ||
Rattler Credit Facility | Minimum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.25% | ||
Rattler Credit Facility | Minimum | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Rattler Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Commitment fee on the unused portion of the borrowing base | 0.375% | ||
Rattler Credit Facility | Maximum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Rattler Credit Facility | Maximum | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
DEBT Financial Covenants (Detai
DEBT Financial Covenants (Details) - Rattler Credit Facility | 9 Months Ended |
Sep. 30, 2019 | |
Maximum | |
Line of Credit Facility [Line Items] | |
Consolidated Total Leverage Ratio | 5 |
Line Of Credit, Covenant Terms, Consolidated Total Leverage Ratio, For Three Fiscal Quarters Following Certain Acquisitions | 5.50 |
Line Of Credit, Covenant Terms, Consolidated Total Leverage Ratio When Consolidated Senior Secured Leverage Ration Is Applicable | 5.25 |
Consolidated Senior Secured Leverage, not greater than 3.50 | 3.5 |
Minimum | |
Line of Credit Facility [Line Items] | |
Consolidated Interest Coverage Ratio, not less than 2.50 | 2.5 |
UNIT-BASED COMPENSATION - Addit
UNIT-BASED COMPENSATION - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($)shares | Sep. 30, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of common units reserved for issuance (in shares) | shares | 15,151,515 | 15,151,515 |
Unit-based compensation expenses | $ 2.2 | $ 3 |
Phantom Share Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to unvested phantom units | $ 39.1 | $ 39.1 |
Unrecognized compensation cost related to unvested phantom units, period for recognition | 2 years 7 months 24 days |
UNIT-BASED COMPENSATION - Phant
UNIT-BASED COMPENSATION - Phantom Units (Details) - Phantom Share Units (PSUs) - $ / shares | 4 Months Ended | |
Sep. 30, 2019 | May 28, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested at May 28, 2019 (in shares) | 0 | |
Granted (in shares) | 2,248,572 | |
Forfeited (in shares) | (57,143) | |
Unvested at September 30, 2019 (in shares) | 2,191,429 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Unvested at May 28, 2019 (in USD Per share) | $ 19.20 | $ 0 |
Granted (in USD Per share) | 19.20 | |
Forfeited (in USD Per share) | 19.21 | |
Unvested at September 30, 2019 (in USD Per share) | $ 19.20 | $ 0 |
UNITHOLDERS_ EQUITY AND PARTN_3
UNITHOLDERS’ EQUITY AND PARTNERSHIP DISTRIBUTIONS (Details) - $ / shares | Sep. 30, 2019 | May 28, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Oct. 31, 2019 |
Common Units | |||||
Limited Partners' Capital Account [Line Items] | |||||
Common units issued (in shares) | 43,700,000 | 43,700,000 | 43,700,000 | ||
Conversion of stock, shares issued | 1 | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Units outstanding, begging balance (in shares) | 0 | ||||
Units issued in public offerings (in shares) | 43,700,000 | ||||
Units outstanding, ending balance (in shares) | 43,700,000 | 0 | 43,700,000 | 43,700,000 | |
Partners' capital, cash distribution, period of record date after quarter end | 60 days | ||||
Class B Units | |||||
Limited Partners' Capital Account [Line Items] | |||||
Common units issued (in shares) | 107,815,152 | 107,815,152 | 107,815,152 | 107,815,152 | |
Conversion of stock, shares converted | 1 | ||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Units outstanding, begging balance (in shares) | 0 | ||||
Units related to tax conversion (in shares) | 107,815,152 | ||||
Units outstanding, ending balance (in shares) | 107,815,152 | 0 | 107,815,152 | 107,815,152 | |
Diamondback Energy, Inc. | Common Units | |||||
Limited Partners' Capital Account [Line Items] | |||||
Common units issued (in shares) | 0 | 0 | 0 | ||
Diamondback Energy, Inc. | Class B Units | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Units outstanding, ending balance (in shares) | 107,815,152 | 107,815,152 | 107,815,152 | ||
Rattler Midstream Partners LLC | |||||
Limited Partners' Capital Account [Line Items] | |||||
Conversion of stock, shares converted | 1 | ||||
Rattler Midstream Partners LLC | Diamondback Energy, Inc. | |||||
Limited Partners' Capital Account [Line Items] | |||||
Limited partners, ownership interest | 71.00% | ||||
Subsequent Event | Common Units | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Partners' capital, cash distribution (in USD per common unit) | $ 0.25 | ||||
Partners' capital, cash distribution, prorated (in USD per common unit) | $ 0.34 |
EARNINGS PER UNIT (Details)
EARNINGS PER UNIT (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 4 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Earnings Per Share, Basic [Abstract] | ||
Net income attributable to Rattler Midstream LP | $ 11,531 | $ 16,334 |
Basic weighted average common units outstanding (in shares) | 43,700 | 43,564 |
Effect of dilutive securities: | ||
Effect of dilutive securities: Potential common units issuable (in shares) | 1,136 | 1,146 |
Diluted weighted average common units outstanding (in shares) | 44,836 | 44,710 |
Net income per common unit, basic (in USD per share) | $ 0.26 | $ 0.37 |
Net income per common unit, diluted (in USD per share) | $ 0.26 | $ 0.37 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Related Party Transaction [Line Items] | ||
Partnership accrued state income tax expense | $ 0.1 | $ 0.1 |
General Partner | Partnership Agreement | ||
Related Party Transaction [Line Items] | ||
Payment under Services and Secondment Agreement | 0.2 | 0.3 |
General Partner | Services and Secondment Agreement | ||
Related Party Transaction [Line Items] | ||
Payment under Services and Secondment Agreement | $ 1 | $ 3.1 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | 5 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | May 27, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Income Tax Disclosure [Abstract] | ||||||||
Elimination of current and deferred tax liabilities | $ 31,100 | $ 31,100 | $ 31,100 | |||||
Income tax expense | $ 3,294 | $ 4,892 | [1] | $ 4,700 | $ 18,200 | $ 22,850 | $ 13,114 | [1] |
Effective income tax rates | 6.40% | 21.60% | 14.60% | 21.60% | ||||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Right of use assets | $ 742 | $ 742 | |
Operating lease liabilities | 742 | 742 | |
Operating lease costs | 460 | 1,570 | |
Cash paid for operating lease liabilities | 1,500 | ||
Additional amount of operating lease right of use asset recorded | 900 | ||
Short-term lease liability | $ 742 | $ 742 | |
Weighted average remaining lease term | 8 months 12 days | 8 months 12 days | |
Weighted average discount rate | 8.50% | 8.50% | |
Schedule of Operating Lease Liability Maturities: | |||
2019 (October - December) | $ 335 | $ 335 | |
2020 | 426 | 426 | |
Total lease payments | 761 | 761 | |
Less: interest | 19 | 19 | |
Operating lease liabilities | $ 742 | $ 742 | |
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Right of use assets | $ 1,200 | ||
Operating lease liabilities | 1,200 | ||
Schedule of Operating Lease Liability Maturities: | |||
Operating lease liabilities | $ 1,200 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Future capital commitments for investments includes for the remainder of 2019 | $ 42.8 |
Contractual obligation | $ 141.9 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event $ / shares in Units, bbl in Thousands, a in Thousands, $ in Millions | Oct. 03, 2019USD ($)abbl / doperatormibbl | Oct. 31, 2019USD ($)bbl / dSWDpermitmi$ / shares |
Subsequent Event [Line Items] | ||
Distance of gathering and regional transportation pipelines (in miles) | mi | 12.7 | |
Number of additional disposal capacity | bbl / d | 110,000 | |
Business Combination, Consideration Transferred | $ | $ 15.3 | |
Reliance Acquisition | ||
Subsequent Event [Line Items] | ||
Percentage acquired | 1 | |
Purchase price | $ | $ 355 | |
Purchase price, percentage | 60.00% | |
Common Unit | ||
Subsequent Event [Line Items] | ||
Partners' capital, cash distribution (in USD per common unit) | $ / shares | $ 0.25 | |
Partners' capital, cash distribution, prorated (in USD per common unit) | $ / shares | $ 0.34 | |
Oryx | Reliance Acquisition | ||
Subsequent Event [Line Items] | ||
Purchase price, percentage | 40.00% | |
Reliance Gathering | ||
Subsequent Event [Line Items] | ||
Distance of gathering and regional transportation pipelines (in miles) | mi | 230 | |
Number of crude oil storage (in bbl) | bbl | 200 | |
Number of system throughput (in Bbl/d) | bbl / d | 110,000 | |
Number of oil and gas operators | operator | 6 | |
Percentage of throughput contributed by the top three producers | 85.00% | |
Dedication period remaining (over) | 10 years | |
Diamondback Energy, Inc. | ||
Subsequent Event [Line Items] | ||
Percentage of dedicated acreage operating | 38.00% | |
Percentage of throughput produced | 35.00% | |
Northern Midland Basin | Reliance Gathering | ||
Subsequent Event [Line Items] | ||
Area of land | a | 160 | |
SWD Wells | ||
Subsequent Event [Line Items] | ||
Number of oil and gas properties acquired | SWD | 2 | |
Approved Permits | ||
Subsequent Event [Line Items] | ||
Number of oil and gas properties acquired | permit | 2 |
REPORT OF OPERATING BUSINESS _3
REPORT OF OPERATING BUSINESS SEGMENTS (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 4 Months Ended | 5 Months Ended | 9 Months Ended | |||||||||
Jun. 30, 2019USD ($) | May 27, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($) | May 27, 2019USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | [1] | |||
Segment Reporting Information [Line Items] | |||||||||||||||
Number of operating segments | segment | 2 | ||||||||||||||
Total revenues | $ 115,415 | $ 49,301 | [1] | $ 322,365 | $ 132,964 | [1] | |||||||||
Direct operating expenses | 29,789 | 8,458 | [1] | 76,381 | 24,656 | [1] | |||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 17,350 | 10,850 | [1] | 46,252 | 24,368 | [1] | |||||||||
Real estate operating expenses | 742 | 553 | [1] | 1,963 | 1,371 | [1] | |||||||||
(Gain) loss on sale of property, plant and equipment | 0 | 0 | [1] | (4) | 2,568 | [1] | |||||||||
Depreciation, amortization and accretion | 11,736 | 6,039 | [1] | 31,798 | 17,830 | [1] | |||||||||
General and administrative expenses | (3,240) | (729) | [1] | (7,677) | (1,409) | [1] | |||||||||
Interest expense, net | (553) | 0 | [1] | (638) | 0 | [1] | |||||||||
Expense from equity investments | (631) | 0 | [1] | (695) | 0 | [1] | |||||||||
Net income before income taxes | 51,374 | 22,672 | [1] | 156,965 | 60,762 | [1] | |||||||||
Provision for income taxes | 3,294 | 4,892 | [1] | $ 4,700 | $ 18,200 | 22,850 | 13,114 | [1] | |||||||
Net income | $ 20,040 | $ 26,639 | 48,080 | $ 39,356 | 17,780 | [1] | $ 15,472 | $ 14,396 | 68,120 | $ 65,995 | 134,115 | 47,648 | [1] | ||
Segment assets | 1,306,248 | 1,306,248 | 1,306,248 | $ 604,017 | |||||||||||
Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 111,706 | 46,287 | 311,913 | 124,449 | |||||||||||
Direct operating expenses | 29,789 | 8,458 | 76,381 | 24,656 | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 17,350 | 10,850 | 46,252 | 24,368 | |||||||||||
Real estate operating expenses | 0 | 0 | 0 | 0 | |||||||||||
(Gain) loss on sale of property, plant and equipment | (4) | 2,568 | |||||||||||||
Depreciation, amortization and accretion | 9,835 | 4,134 | 26,028 | 12,722 | |||||||||||
Net income before income taxes | 54,732 | 22,845 | 163,256 | 60,135 | |||||||||||
Net income | 54,732 | 22,845 | 163,256 | 60,135 | |||||||||||
Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 3,709 | 3,014 | 10,452 | 8,515 | |||||||||||
Direct operating expenses | 0 | 0 | 0 | 0 | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 0 | 0 | 0 | 0 | |||||||||||
Real estate operating expenses | 742 | 553 | 1,963 | 1,371 | |||||||||||
(Gain) loss on sale of property, plant and equipment | 0 | 0 | |||||||||||||
Depreciation, amortization and accretion | 1,901 | 1,905 | 5,770 | 5,108 | |||||||||||
Net income before income taxes | 1,066 | 556 | 2,719 | 2,036 | |||||||||||
Net income | 1,066 | 556 | 2,719 | 2,036 | |||||||||||
Revenues—related party | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 104,866 | 46,369 | [1] | 296,508 | 124,170 | [1] | |||||||||
Revenues—related party | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 104,866 | 46,369 | 296,508 | 124,170 | |||||||||||
Revenues—related party | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||||||
Revenues—third party | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 6,840 | (82) | [1] | 15,405 | 279 | [1] | |||||||||
Revenues—third party | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 6,840 | (82) | 15,405 | 279 | |||||||||||
Revenues—third party | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||||||
Rental income—related party | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 1,399 | 672 | [1] | 3,370 | 1,683 | [1] | |||||||||
Rental income—related party | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||||||
Rental income—related party | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 1,399 | 672 | 3,370 | 1,683 | |||||||||||
Rental income—third party | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 1,894 | 2,087 | [1] | 5,999 | 6,053 | [1] | |||||||||
Rental income—third party | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||||||
Rental income—third party | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 1,894 | 2,087 | 5,999 | 6,053 | |||||||||||
Other real estate income—related party | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 111 | 707 | [1] | 265 | 779 | [1] | |||||||||
Other real estate income—related party | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||||||
Other real estate income—related party | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 111 | 707 | 265 | 779 | |||||||||||
Other real estate income—third party | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 305 | (452) | [1] | 818 | 0 | [1] | |||||||||
Other real estate income—third party | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 0 | 0 | 0 | 0 | |||||||||||
Other real estate income—third party | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Total revenues | 305 | (452) | 818 | 0 | |||||||||||
Operating Segments | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net income before income taxes | 55,798 | 23,401 | 165,975 | 62,171 | |||||||||||
Segment assets | 1,027,485 | 508,719 | 1,027,485 | 1,027,485 | 508,719 | ||||||||||
Operating Segments | Midstream Services | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net income before income taxes | 54,732 | 22,845 | 163,256 | 60,135 | |||||||||||
Segment assets | 917,577 | 401,887 | 917,577 | 917,577 | 401,887 | ||||||||||
Operating Segments | Real Estate Operations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Net income before income taxes | 1,066 | 556 | 2,719 | 2,036 | |||||||||||
Segment assets | 109,908 | 106,832 | $ 109,908 | 109,908 | 106,832 | ||||||||||
Segment Reconciling Items | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
General and administrative expenses | (3,240) | (729) | (7,677) | (1,409) | |||||||||||
Interest expense, net | (553) | 0 | (638) | 0 | |||||||||||
Expense from equity investments | $ (631) | $ 0 | $ (695) | $ 0 | |||||||||||
[1] | See Note 1 for information regarding the basis of financial statement presentation. |
Uncategorized Items - q32019rat
Label | Element | Value |
vnom_LimitedPartnersCapitalAccountDistributionAmount-RelatedParty | fang_Vnom_LimitedPartnersCapitalAccountDistributionAmountRelatedParty | $ 33,712,000 |
Member Units [Member] | Limited Partner [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 26,639,000 |
vnom_LimitedPartnersCapitalAccountDistributionAmount-RelatedParty | fang_Vnom_LimitedPartnersCapitalAccountDistributionAmountRelatedParty | $ 33,712,000 |