Cover
Cover - shares | 3 Months Ended | ||
Mar. 31, 2022 | Apr. 29, 2022 | Dec. 31, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Period End Date | Mar. 31, 2022 | ||
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 | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | 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 | 38,146,047 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | Q1 | ||
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 | 107,815,152 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 13,702 | $ 19,897 |
Accounts receivable—related-party | 49,885 | 58,154 |
Accounts receivable—third-party, net | 14,107 | 9,415 |
Sourced water inventory | 13,512 | 13,081 |
Other current assets | 1,008 | 1,181 |
Total current assets | 92,214 | 101,728 |
Property, plant and equipment: | ||
Land | 98,646 | 98,645 |
Property, plant and equipment | 1,119,113 | 1,075,405 |
Accumulated depreciation, amortization and accretion | (130,989) | (121,507) |
Property, plant and equipment, net | 1,086,770 | 1,052,543 |
Equity method investments | 643,205 | 612,541 |
Real estate assets, net | 84,563 | 84,609 |
Intangible lease assets, net | 3,544 | 3,650 |
Deferred tax asset | 59,548 | 62,356 |
Other assets | 6,160 | 3,708 |
Total assets | 1,976,004 | 1,921,135 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 58,480 | 48,267 |
Taxes payable | 603 | 603 |
Asset retirement obligations | 0 | 79 |
Total current liabilities | 59,083 | 48,949 |
Long-term debt | 723,460 | 687,956 |
Asset retirement obligations | 33,932 | 16,911 |
Total liabilities | 816,475 | 753,816 |
Commitments and contingencies (Note 16) | ||
Unitholders’ equity: | ||
General Partner—Diamondback | 799 | 819 |
Common units—public (38,146,047 units issued and outstanding as of March 31, 2022 and 38,356,771 units issued and outstanding as of December 31, 2021) | 347,628 | 350,230 |
Class B units—Diamondback (107,815,152 units issued and outstanding as of March 31, 2022 and as of December 31, 2021) | 799 | 819 |
Accumulated other comprehensive income (loss) | 11 | 10 |
Total Rattler Midstream LP unitholders’ equity | 349,237 | 351,878 |
Non-controlling interest | 810,292 | 815,441 |
Total equity | 1,159,529 | 1,167,319 |
Total liabilities and unitholders’ equity | $ 1,976,004 | $ 1,921,135 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Apr. 29, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Common Units | |||
Common units issued (in shares) | 38,146,047 | 38,356,771 | |
Units outstanding (in shares) | 38,146,047 | 38,356,771 | |
Class B Units | |||
Common units issued (in shares) | 107,815,152 | 107,815,152 | |
Units outstanding (in shares) | 107,815,152 | 107,815,152 | 107,815,152 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Revenues | $ 103,463 | $ 98,808 |
Costs and expenses: | ||
Direct operating expenses | 21,628 | 32,511 |
Cost of goods sold (exclusive of depreciation and amortization) | 15,180 | 8,811 |
Real estate operating expenses | 533 | 517 |
Depreciation, amortization and accretion | 20,687 | 11,246 |
Impairment and abandonments | 1,082 | 3,371 |
General and administrative expenses | 5,345 | 4,634 |
(Gain) loss on disposal of assets | (71) | 6 |
Total costs and expenses | 64,384 | 61,096 |
Income (loss) from operations | 39,079 | 37,712 |
Other income (expense): | ||
Interest income (expense), net | (8,684) | (7,310) |
Income (loss) from equity method investments | 9,080 | (2,823) |
Total other income (expense), net | 396 | (10,133) |
Net income (loss) before income taxes | 39,475 | 27,579 |
Provision for (benefit from) income taxes | 2,384 | 1,671 |
Net income (loss) | 37,091 | 25,908 |
Less: Net income (loss) attributable to non-controlling interest | 29,160 | 19,893 |
Net income (loss) attributable to Rattler Midstream LP | $ 7,931 | $ 6,015 |
Net income (loss) attributable to limited partners per common unit: | ||
Basic (in dollars per share) | $ 0.19 | $ 0.13 |
Diluted (in dollars per share) | $ 0.19 | $ 0.13 |
Weighted average number of limited partner common units outstanding: | ||
Basic (in shares) | 38,159 | 41,742 |
Diluted (in shares) | 38,376 | 41,742 |
Midstream revenues—related-party | ||
Revenues: | ||
Revenues | $ 90,302 | $ 87,078 |
Midstream revenues—third-party | ||
Revenues: | ||
Revenues | 10,446 | 8,121 |
Other revenues—related-party | ||
Revenues: | ||
Revenues | 1,751 | 2,540 |
Other revenues—third-party | ||
Revenues: | ||
Revenues | $ 964 | $ 1,069 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 37,091 | $ 25,908 |
Other comprehensive income (loss): | ||
Change in accumulated other comprehensive income (loss) of equity method investees attributable to non-controlling interest | 0 | 299 |
Change in accumulated other comprehensive income (loss) of equity method investees attributable to limited partner | 1 | 93 |
Total other comprehensive income (loss) | 1 | 392 |
Comprehensive income (loss) | $ 37,092 | $ 26,300 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Unitholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Limited Partners | General Partner | Common UnitsLimited Partners | Class B UnitsLimited Partners | Non-Controlling Interest | Accumulated Other Comprehensive Income | Non-Controlling Interest-Accumulated Other Comprehensive Income |
Beginning balance (in shares) at Dec. 31, 2020 | 42,357 | 107,815 | ||||||
Beginning balance at Dec. 31, 2020 | $ 1,180,100 | $ 899 | $ 385,189 | $ 899 | $ 793,638 | $ (123) | $ (402) | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Repurchased units as part of unit buyback (in shares) | (1,082) | |||||||
Repurchased units as part of unit buyback | (11,114) | $ (11,114) | ||||||
Unit-based compensation | 2,332 | $ 2,332 | ||||||
Issuance of common units (in shares) | 3 | |||||||
Other comprehensive income (loss) | 392 | 93 | 299 | |||||
Change in ownership of consolidated subsidiaries, net | (196) | $ 712 | $ 712 | (908) | ||||
Cash paid for tax withholding on vested common units | (21) | (21) | ||||||
Distribution equivalent rights payments | (418) | (418) | ||||||
Distributions | (29,866) | (20) | (8,263) | $ (20) | (21,563) | |||
Net income (loss) | 25,908 | $ 6,015 | 19,893 | |||||
Ending balance (in shares) at Mar. 31, 2021 | 41,278 | 107,815 | ||||||
Ending balance at Mar. 31, 2021 | 1,167,117 | 879 | $ 374,432 | $ 879 | 791,060 | (30) | (103) | |
Beginning balance (in shares) at Dec. 31, 2021 | 38,357 | 107,815 | ||||||
Beginning balance at Dec. 31, 2021 | 1,167,319 | 819 | $ 350,230 | $ 819 | 815,441 | 10 | 0 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Repurchased units as part of unit buyback (in shares) | (217) | |||||||
Repurchased units as part of unit buyback | (2,582) | $ (2,582) | ||||||
Unit-based compensation | 2,520 | $ 2,520 | ||||||
Issuance of common units (in shares) | 6 | |||||||
Other comprehensive income (loss) | 1 | 1 | ||||||
Change in ownership of consolidated subsidiaries, net | (424) | $ 1,540 | $ 1,540 | (1,964) | ||||
Cash paid for tax withholding on vested common units | (56) | (56) | ||||||
Distribution equivalent rights payments | (511) | (511) | ||||||
Distributions | (43,829) | (20) | (11,444) | $ (20) | (32,345) | |||
Net income (loss) | 37,091 | $ 7,931 | 29,160 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 38,146 | 107,815 | ||||||
Ending balance at Mar. 31, 2022 | $ 1,159,529 | $ 799 | $ 347,628 | $ 799 | $ 810,292 | $ 11 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 37,091 | $ 25,908 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Provision for deferred income taxes | 2,387 | 1,671 |
Depreciation, amortization and accretion | 20,687 | 11,246 |
Unit-based compensation expense | 2,520 | 2,332 |
Impairment and abandonments | 1,082 | 3,371 |
(Income) loss from equity method investments | (9,080) | 2,823 |
Distributions from equity method investments | 7,550 | 0 |
Other | 574 | 509 |
Changes in operating assets and liabilities: | ||
Accounts receivable—related-party | 5,740 | 11,209 |
Accounts receivable—third-party | (4,660) | (1,402) |
Accounts payable and accrued liabilities | (4,067) | (6,092) |
Other | 64 | 1,093 |
Net cash provided by (used in) operating activities | 59,888 | 52,668 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (17,888) | (5,860) |
Acquisitions of property, plant and equipment | (4,334) | 0 |
Contributions to equity method investments | (29,133) | (3,663) |
Distributions from equity method investments | 0 | 9,107 |
Other | (2,750) | 0 |
Net cash provided by (used in) investing activities | (54,105) | (416) |
Cash flows from financing activities: | ||
Proceeds from borrowings from Credit Agreement | 35,000 | 12,000 |
Payments on Credit Agreement | 0 | (37,000) |
Repurchased units as part of unit buyback | (2,582) | (11,114) |
Distribution to public | (11,444) | (8,263) |
Distribution to Diamondback | (32,365) | (21,583) |
Other | (587) | (459) |
Net cash provided by (used in) financing activities | (11,978) | (66,419) |
Net increase (decrease) in cash | (6,195) | (14,167) |
Cash at beginning of period | 19,897 | 23,927 |
Cash at end of period | 13,702 | 9,760 |
Supplemental disclosure of non-cash investing activity: | ||
Accrued liabilities related to capital expenditures | $ 23,180 | $ 8,725 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Organization The Partnership is a publicly traded Delaware limited partnership focused on owning, operating, developing and acquiring midstream and energy-related infrastructure assets in the Midland and Delaware Basins of the Permian Basin. As of March 31, 2022, the General Partner held a 100% general partner interest in the Partnership. Diamondback beneficially owned all of the Partnership’s 107,815,152 outstanding Class B units, representing approximately 74% of the Partnership’s total units outstanding. Diamondback owns and controls the General Partner. As of March 31, 2022, the Holding Company owned a 26% membership interest and 100% of the sole managing membership interest in the Operating Company, and Diamondback owned, through its ownership of the Operating Company units, a 74% economic, non-voting interest in the Operating Company. As required by GAAP, the Partnership consolidates 100% of the assets and operations of the Holding Company and the Operating Company in its financial statements and reflects a non-controlling interest attributable to Diamondback. In addition to the Holding Company and the Operating Company, other consolidated subsidiaries of the Partnership include Tall City Towers LLC (“Tall Towers”), Rattler Ajax Processing LLC, Rattler BANGL LLC, Rattler WTG LLC and Rattler OMOG LLC. As of March 31, 2022, the Partnership also owns indirect interests in OMOG JV LLC (“OMOG”), EPIC Crude Holdings, LP (“EPIC”), EPIC Crude Holdings GP, LLC, Wink to Webster Pipeline LLC (“Wink to Webster”), Gray Oak Pipeline, LLC (“Gray Oak”), Remuda Midstream Holdings LLC (the “WTG joint venture”) and BANGL LLC (“BANGL”), which are accounted for as equity method investments as discussed further in Note 8— Equity Method Investments. Basis of Presentation The accompanying condensed consolidated financial statements and related notes thereto were prepared in accordance with GAAP. All significant intercompany balances and transactions have been eliminated upon consolidation. The Partnership reports its operations in one reportable segment. These condensed 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 most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which contains a summary of the Partnership’s significant accounting policies and other disclosures. Reclassifications Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had no effect on the previously reported total assets, total liabilities, unitholders’ equity, results of operations or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 as of the date of the financial statements. Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, in response to the effects of COVID-19 and actions by OPEC members and other exporting nations on the supply and demand in global oil and natural gas markets, many companies in the oil and natural gas industry, including Diamondback, changed their business plans in response to changing market conditions. Such circumstances generally increase the uncertainty in the Partnership’s accounting estimates, particularly those involving financial forecasts. The Partnership evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods it considers reasonable in each particular circumstance. Nevertheless, actual results may differ significantly from the Partnership’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 equity method investments and (iii) income taxes. Accrued Liabilities and Accounts Payable Accrued liabilities and accounts payable consist of the following as of the dates indicated: March 31, 2022 December 31, 2021 (In thousands) Direct operating expenses accrued $ 11,213 $ 12,978 Interest expense accrued 5,859 12,911 Capital expenditures accrued 16,079 5,509 Sourced water purchases accrued 7,759 7,040 Accounts payable 16,688 8,452 Other 882 1,377 Accounts payable and accrued liabilities $ 58,480 $ 48,267 Accumulated Other Comprehensive Income The following table provides changes in the components of accumulated other comprehensive income, net of related income tax effects (in thousands): Balance as of December 31, 2021 $ 10 Other comprehensive income (loss) 1 Balance as of March 31, 2022 $ 11 Recent Accounting Pronouncements Recently Adopted Pronouncements There are no recently adopted pronouncements. Accounting Pronouncements Not Yet Adopted There are no recent accounting pronouncements not yet adopted. The Partnership considers the applicability and impact of all ASUs. ASUs not discussed above were assessed and determined to be either not applicable or clarifications of ASUs previously disclosed. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2022 | |
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 sourced water, and collecting, recycling and disposing of produced water. Surface revenue, rental and real estate income and amortization of out of market leases are outside the scope of ASC Topic 606, “Revenue from Contracts with Customers.” Disaggregation of Revenue In the following table, revenue from contracts with customers is disaggregated by type of service and fee: Three Months Ended March 31, 2022 2021 (In thousands) Type of Service: Produced water gathering and disposal $ 71,047 $ 66,328 Sourced water gathering 23,019 16,577 Crude oil gathering 6,209 6,791 Natural gas gathering — 5,400 Caliche 365 — Real estate contracts (non ASC 606 revenues) 2,714 3,609 Surface revenue (non ASC 606 revenues) 109 103 Total revenues $ 103,463 $ 98,808 |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations And Divestitures [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES 2022 Activity Acquisition BANGL Joint Venture Acquisition On January 19, 2022, a wholly owned subsidiary of the Operating Company invested approximately $22.2 million in cash to acquire a 10% interest in the BANGL joint venture. The BANGL pipeline, which began full commercial service in the fourth quarter of 2021, provides NGL takeaway capacity from the MPLX and WTG gas processing plants in the Permian Basin to the NGL fractionation hub in Sweeny, Texas and has expansion capacity of up to 300,000 Bbl/d. 2021 Activity Acquisitions WTG Joint Venture Acquisition On October 5, 2021, the Partnership and a private affiliate of an investment fund formed the WTG joint venture. The Operating Company invested approximately $104.0 million in cash to acquire a 25% interest in the WTG joint venture, which then completed an acquisition of a majority interest in WTG Midstream LLC (“WTG Midstream”) from West Texas Gas, Inc. and its affiliates. WTG Midstream’s assets primarily consist of an interconnected gas gathering system and six major gas processing plants servicing the Midland Basin with 925 MMcf/d of total processing capacity with additional gas gathering and processing expansions planned. Drop Down Transaction On December 1, 2021, the Partnership acquired certain water midstream assets (the “Drop Down assets”) from Diamondback and certain of its subsidiaries (the “Seller”) for $164.4 million, including post-closing adjustments, in cash in a drop down transaction (the “Drop Down”). The Partnership and the Seller also amended their commercial agreements covering produced water gathering and disposal and sourced water gathering services to add certain Diamondback leasehold acreage to the Partnership’s dedication. The Drop Down was accounted for as a transaction between entities under common control with assets recognized at Diamondback’s historical carrying value of $163.9 million in the consolidated balance sheet. The Drop Down assets include nine active saltwater disposal injection wells with 330 MBbl/d of capacity, seven produced water recycling and storage facilities, 20 fresh water pits and approximately 4,000 acres of fee surface. Also included are 55 miles of produced water gathering pipeline and 18 miles of sourced water gathering pipeline. The Partnership funded the transaction with borrowings under the Credit Agreement (as defined below). Divestitures Amarillo Rattler Divestiture On April 30, 2021, each of the Partnership and its joint venture partner, Amarillo Midstream, LLC, sold its 50% interest in Amarillo Rattler, LLC (“Amarillo Rattler”) to EnLink Midstream Operating, LP for aggregate total gross potential consideration of $75.0 million, consisting of $50.0 million at closing, $10.0 million upon the first anniversary of closing and up to $15.0 million in contingent earn-out payments over a three-year span based upon Diamondback's development activity. The earn-out payments are contingent on connected wells drilled in Diamondback’s leasehold acreage in the specified earn-out area during each year between 2023 and 2025. Net of transaction expenses and working capital adjustments, the Partnership received $23.5 million at closing, with an incremental $5.0 million due in April 2022, which resulted in a gain on sale of equity method investments of $23.0 million. The Partnership’s share of the contingent earn-out payments, which cannot exceed $7.5 million in total over the three-year span, will be recorded if and when the contingent payments become realizable. In the first quarter of 2022, the Partnership acquired Amarillo Midstream, LLC’s share of the contingent consideration earn-out payments from the sale of Amarillo Rattler for $2.8 million. The Partnership will record the contingent earn-out payments if and when they become realizable. Real Estate Divestiture On June 28, 2021, the Partnership completed the sale of one of its real estate properties located in Midland, Texas for proceeds of $9.1 million, including closing adjustments. The sale resulted in a loss on disposal of assets of $0.4 million. Pecos County Gas Gathering Divestiture On November 1, 2021, the Partnership completed the sale of its gas gathering assets to Brazos Delaware Gas, LLC, an affiliate of Brazos Midstream, for aggregate total gross potential consideration of $93.0 million, consisting of (i) $83.0 million due at closing, subject to customary closing adjustments, (ii) a $5.0 million contingent payment due in 2023 if the aggregate actual deliveries of gas volumes into the gas gathering system by and/or on behalf of Diamondback and its affiliates exceed certain specified thresholds during 2022, and (iii) a $5.0 million contingent payment due in 2024 if the aggregate actual deliveries of gas volumes into the gas gathering system by and/or on behalf of Diamondback and its affiliates exceed certain specified thresholds during 2022 and 2023. The contingent payments will be recorded if and when they become realizable. |
REAL ESTATE ASSETS
REAL ESTATE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
REAL ESTATE ASSETS | REAL ESTATE 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 March 31, 2022 December 31, 2021 (Years) (In thousands) Buildings 20-30 $ 95,611 $ 94,825 Tenant improvements 5-15 4,527 4,506 Land N/A 964 964 Land improvements 5-15 531 531 Total real estate assets 101,633 100,826 Less: accumulated depreciation (17,070) (16,217) Total investment in real estate, net $ 84,563 $ 84,609 As of Weighted Average Useful Lives March 31, 2022 December 31, 2021 (Months) (In thousands) In-place lease intangibles 45 $ 11,710 $ 11,645 Less: accumulated amortization (9,603) (9,520) In-place lease intangibles, net 2,107 2,125 Above-market lease intangibles 45 3,623 3,623 Less: accumulated amortization (2,186) (2,098) Above-market lease intangibles, net 1,437 1,525 Total intangible lease assets, net $ 3,544 $ 3,650 Depreciation and amortization expense for real estate assets was $0.9 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively. The following table presents the Partnership’s estimated amortization expense related to lease intangibles for the periods indicated (in thousands): Remainder of 2022 2023 2024 2025 2026 Thereafter $ 621 $ 777 $ 952 $ 978 $ 206 $ 10 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
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 Useful Lives March 31, 2022 December 31, 2021 (Years) (In thousands) Produced water disposal systems 10-30 $ 788,269 $ 766,052 Crude oil gathering systems (1) 30 135,614 135,869 Natural gas gathering and compression systems (1) 10-30 6,216 6,192 Sourced water gathering systems (1) 30 188,091 166,549 Other 3 923 743 Total property, plant and equipment 1,119,113 1,075,405 Less: accumulated depreciation, amortization and accretion (130,989) (121,507) Land N/A 98,646 98,645 Total property, plant and equipment, net $ 1,086,770 $ 1,052,543 (1) Included in gathering systems are $27.5 million and $13.1 million of assets at March 31, 2022 and December 31, 2021, respectively, that are not subject to depreciation, amortization and accretion as the systems were under construction and had not yet been put into service. Depreciation expense related to property, plant and equipment was $19.1 million and $9.8 million for the three months ended March 31, 2022 and 2021, respectively. Depreciation expense included a write-off of $8.0 million related to early plugging and abandonment during the three months ended March 31, 2022. Depreciation expense in 2021 included a write-off of $3.4 million related to in-service projects that were abandoned during the three months ended March 31, 2021. Capitalized internal costs and capitalized interest related to property, plant and equipment were immaterial for the three months ended March 31, 2022 and 2021. The Partnership evaluates its long-lived assets for potential impairment whenever events or circumstances indicate it is more likely than not that the carrying amount of the asset, or set of assets, is greater than the fair value. An impairment involves comparing the estimated future undiscounted cash flows of an asset with the carrying amount. If the carrying amount of the asset exceeds the estimated future undiscounted cash flows, then an impairment charge is recorded for the difference between the estimated fair value of the asset and its carrying value. It is possible that circumstances requiring additional impairment testing will occur in future interim periods, which could result in potentially material impairment charges being recorded. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2022 | |
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: Three Months Ended March 31, 2022 2021 (In thousands) Asset retirement obligations, beginning of period $ 16,990 $ 15,128 Liabilities incurred (1) 17,173 258 Liabilities settled and divested (899) 6 Revisions 109 — Accretion expense during period 559 264 Asset retirement obligations, end of period 33,932 15,656 Less current portion of asset retirement obligations — 35 Asset retirement obligations, long term $ 33,932 $ 15,621 (1) Includes asset retirement obligations recorded for assets acquired in the Drop Down transaction and placed in service during the three months ended March 31, 2022. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS The following table presents the carrying values of the Partnership’s equity method investments as of the dates indicated: Ownership Interest March 31, 2022 December 31, 2021 (In thousands) EPIC Crude Holdings, LP 10 % $ 105,739 $ 107,210 Gray Oak Pipeline, LLC 10 % 119,851 121,105 Wink to Webster Pipeline LLC (1) 4 % 86,145 86,207 OMOG JV LLC 60 % 188,699 187,809 WTG joint venture 25 % 117,490 110,143 BANGL, LLC 10 % 25,281 67 Total $ 643,205 $ 612,541 (1) The Wink to Webster joint venture is developing a crude oil pipeline (the “Wink to Webster pipeline”). The Wink to Webster pipeline’s main segment began interim service operation in the fourth quarter of 2020, and the joint venture began full commercial operations in the first quarter of 2022. Currently, the Partnership receives distributions from Gray Oak and OMOG, which are classified either within the operating or investing sections of the consolidated statements of cash flows by determining the nature of each distribution. The following table presents total distributions received from the Partnership’s equity method investments for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands) Gray Oak Pipeline, LLC $ 5,998 $ 5,758 OMOG JV LLC 1,552 3,349 Total $ 7,550 $ 9,107 The following table summarizes the income (loss) of equity method investees reflected in the condensed consolidated statement of operations for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands) EPIC Crude Holdings, LP $ (2,771) $ (5,436) Gray Oak Pipeline, LLC 4,744 2,298 Wink to Webster Pipeline LLC (663) (563) OMOG JV LLC 2,428 1,115 Amarillo Rattler, LLC — (237) WTG joint venture 5,325 — BANGL, LLC 17 — Total $ 9,080 $ (2,823) The Partnership reviews its equity method investments to determine if a loss in value which is other than temporary has occurred. If such a loss has occurred, the Partnership recognizes an impairment provision. Based on indicators present at December 31, 2021 and March 31, 2022, the Partnership reviewed its equity method investment in EPIC and determined the carrying value of the investment was less than its estimated fair value due to a reduction in expected future cash flow. However, based on the Partnership’s review of various factors leading to the decline in the fair value of the investment, it was determined that the carrying value of the EPIC investment will recover in the near term and, therefore, an other than temporary impairment in the carrying value of the EPIC investment does not exist at March 31, 2022. However, should the conclusions on certain factors included in the Partnership’s analysis, including estimates of EPIC’s future cash flows change, the Partnership may recognize an impairment that could materially impact its consolidated financial statements. The entities in which the Partnership is invested all serve customers in the oil and natural gas industry, which has recently experienced economic challenges due to the Russian-Ukrainian military conflict, COVID-19 pandemic and other macroeconomic factors. If similar economic challenges occur in future interim periods, it could result in circumstances requiring the Partnership to record potentially material impairment charges on its equity method investments. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt consisted of the following as of the dates indicated: March 31, 2022 December 31, 2021 (In thousands) 5.625% unsecured Senior Notes due 2025 (1) $ 500,000 $ 500,000 Credit Agreement 230,000 195,000 Unamortized debt issuance costs (6,540) (7,044) Total long-term debt $ 723,460 $ 687,956 (1) Interest on the Notes is payable on January 15 and July 15 of each year. The Notes mature on July 15, 2025. The Operating Company’s Credit Agreement The Operating Company’s credit agreement (the “Credit Agreement”) provides for a revolving credit facility in the maximum amount of $600.0 million, which is expandable to $1.0 billion upon the Partnership’s election, subject to obtaining additional lender commitments and satisfaction of customary conditions. The Credit Agreement will mature on May 28, 2024. As of March 31, 2022, the Operating Company had $230.0 million outstanding borrowings and $370.0 million available for future borrowings under the Credit Agreement. During the three months ended March 31, 2022 and 2021, the weighted average interest rate on borrowings under the Credit Agreement was 1.40%. |
UNIT-BASED COMPENSATION
UNIT-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
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. Excluding unvested phantom units, as of March 31, 2022, the Partnership had 12,488,231 common units remaining for issuance under its LTIP of the 15,151,515 common units initially authorized. 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 months ended March 31, 2022 and 2021, the Partnership incurred $2.5 million and $2.3 million, respectively, of unit–based compensation expense. 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 based on the closing price of the Partnership’s common units on the grant date of the award, and expenses this value 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 three months ended March 31, 2022: Phantom Weighted Average Unvested at December 31, 2021 1,737,525 $ 16.64 Granted 213,917 $ 13.08 Vested (10,294) $ 11.87 Forfeited (1,950) $ 8.34 Unvested at March 31, 2022 1,939,198 $ 16.28 The aggregate fair value of phantom units that vested during the three months ended March 31, 2022 was $0.1 million. As of March 31, 2022, the unrecognized compensation cost related to unvested phantom units was $23.3 million, and is expected to be recognized over a weighted-average period of 2.23 years. |
UNITHOLDERS_ EQUITY AND DISTRIB
UNITHOLDERS’ EQUITY AND DISTRIBUTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
UNITHOLDERS’ EQUITY AND DISTRIBUTIONS | UNITHOLDERS’ EQUITY AND DISTRIBUTIONSThe Partnership has General Partner and limited partner units. At March 31, 2022, the Partnership had a total of 38,146,047 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, representing approximately 74% of the Partnership’s total units outstanding, were beneficially owned by Diamondback. At March 31, 2022, Diamondback also beneficially owned 107,815,152 Operating Company units, representing an overall 74% economic, non-voting interest in the Operating Company. The Operating Company units and the Partnership’s Class B units beneficially 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). Common Unit Repurchase Program The board of directors of the General Partner has approved a common unit repurchase program to acquire up to $150.0 million of the Partnership’s outstanding common units over an indefinite period of time. The Partnership may purchase common units under the repurchase program opportunistically with cash on hand, free cash flow from operations and proceeds from potential liquidity events such as the sale of assets. The repurchase program may be suspended from time to time, modified, extended or discontinued by the board of directors of the General Partner at any time. Purchases under the repurchase program may be made from time to time in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and will be subject to market conditions, applicable legal requirements, contractual obligations and other factors. Any common units purchased as part of this program will be retired. During the three months ended March 31, 2022, the Partnership repurchased approximately $2.6 million of common units under the repurchase program. As of March 31, 2022, $85.1 million remained available for future repurchases of common units under the Partnership’s common unit repurchase program. Changes in Ownership of Consolidated Subsidiaries Non-controlling interest in the accompanying condensed consolidated financial statements represents Diamondback’s ownership in the net assets of the Operating Company. Diamondback’s relative ownership interest in the Operating Company can change due to the Partnership’s public offerings, issuance of units for acquisitions, issuance of unit-based compensation, repurchases of common units and distribution equivalent rights paid on the Partnership’s units. These changes in ownership percentage and the disproportionate allocation of net income to Diamondback discussed below result in adjustments to non-controlling interest and common unitholder equity, tax effected. The following table summarizes changes in the ownership interest in consolidated subsidiaries during the period: Three Months Ended March 31, 2022 2021 (In thousands) Net income (loss) attributable to the Partnership $ 7,931 $ 6,015 Change in ownership of consolidated subsidiaries 1,540 712 Change from net income (loss) attributable to the Partnership's unitholders and transfers to non-controlling interest $ 9,471 $ 6,727 Cash Distributions on Common Units The board of directors of the General Partner sets and administers the cash distribution policies for the Partnership and the Operating Company. Cash distributions paid by the Operating Company to Diamondback and the Partnership as the holders o f the Operating Company’s common units are determined by the board of directors of the General Partner on a quarterly basis. The partnership agreement does not require the Partnership to pay minimum distributions to its common unitholders on a quarterly or other basis, and the Partnership does not employ structures intended to consistently maintain or increase distributions over time. The following table presents information regarding cash distributions approved by the board of directors of the General Partner and paid during the three months ended March 31, 2022: Distributions (in thousands) Period Amount per Unit Operating Company Distributions to Diamondback Common Unitholders Declaration Date Unitholder Record Date Payment Date Q4 2021 $ 0.30 $ 32,345 $ 11,444 February 16, 2022 March 7, 2022 March 14, 2022 |
EARNINGS PER COMMON UNIT
EARNINGS PER COMMON UNIT | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON UNIT | EARNINGS PER COMMON UNIT Earnings per common unit on the condensed consolidated statements of operations is based on the net income of the Partnership for the three months ended March 31, 2022 and 2021, which 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 earnings per common unit is calculated using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common units and participating securities. Basic earnings per common unit is calculated by dividing net income by the weighted-average number of common units outstanding during the period. Diluted earnings per common unit also considers the dilutive effect of unvested common units granted under the LTIP, calculated using the treasury stock method. A reconciliation of the components of basic and diluted earnings per common unit is presented in the table below: Three Months Ended March 31, 2022 2021 (In thousands, except per unit amounts) Net income (loss) attributable to Rattler Midstream LP $ 7,931 $ 6,015 Less: net (income) loss allocated to participating securities (1) (511) (418) Net income (loss) attributable to common unitholders $ 7,420 $ 5,597 Weighted average common units outstanding: Basic weighted average common units outstanding 38,159 41,742 Effect of dilutive securities: Potential common units issuable (2) 217 — Diluted weighted average common units outstanding 38,376 41,742 Net income per common unit, basic $ 0.19 $ 0.13 Net income per common unit, diluted $ 0.19 $ 0.13 (1) Distribution equivalent rights granted to employees are considered participating securities. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Related-party transactions include transactions with Diamondback. The Partnership has entered into certain agreements that govern these transactions, the most significant of which are commercial agreements for the provision of midstream services to Diamondback. The Partnership derives substantially all of its revenue from these commercial agreements, which consist of the following amounts for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands) Produced water gathering and disposal $ 68,196 $ 64,306 Sourced water gathering 20,276 15,243 Natural gas gathering — 5,400 Crude oil gathering 1,830 2,030 Surface revenue — 99 Total $ 90,302 $ 87,078 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table provides the Partnership’s provision for (benefit from) income taxes and the effective income tax rate for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands, except for tax rate) Provision for (benefit from) income taxes $ 2,384 $ 1,671 Effective tax rate 6.0 % 6.1 % The Partnership’s effective income tax rates for the three months ended March 31, 2022 and 2021 differed from amounts computed by applying the United States federal statutory tax rate to pre-tax income for the period, primarily due to net income attributable to the non-controlling interest and to state taxes, net of federal benefit. For the three months ended March 31, 2022 and 2021 the Partnership recorded immaterial discrete income tax expense primarily related to unit-based compensation. The Partnership’s total net deferred tax assets consist primarily of the tax basis over the financial statement carrying value of its investment in the Operating Company and of net operating loss carryforwards. As a result of management’s assessment each period, including consideration of all available positive and negative evidence, management continued to determine that it is more likely than not that the Partnership will realize its deferred tax assets as of March 31, 2022 and 2021. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2022 | |
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. Assets and Liabilities Not Recorded at Fair Value The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets: March 31, 2022 December 31, 2021 Carrying Value (1) Fair Value Carrying Value (1) Fair Value (In thousands) Debt: 5.625% unsecured Senior Notes due 2025 $ 493,460 $ 508,000 $ 492,956 $ 521,250 Credit Agreement $ 230,000 $ 230,000 $ 195,000 $ 195,000 (1) The carrying value includes associated deferred loan costs and any remaining discount or premium, if any. The fair value of the Credit Agreement approximates its carrying value based on borrowing rates available to the Partnership for bank loans with similar terms and maturities and is classified as Level 2 in the fair value hierarchy. The fair value of the Notes was determined using the quoted market price at the respective period ends, and is considered a Level 1 classification in the fair value hierarchy. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include inventory, midstream assets and other long-lived assets that are written down to fair value when they are impaired or held for sale. Refer to Note 6— Property, Plant and Equipment for additional discussion of nonrecurring fair value adjustments. Fair Value of Financial Assets The Partnership has other financial instruments consisting of cash, accounts receivable, other current assets, accounts payable, accrued liabilities and various other current liabilities. The carrying value of these instruments approximates fair value because of the short-term nature of the instruments. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Partnership may be a party to various routine legal proceedings, disputes and claims from time to time arising in the ordinary 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. The Partnership’s management believes there are currently no such matters that, if decided adversely, will have a material adverse effect on the Partnership’s financial condition, results of operations or cash flows. Commitments As of March 31, 2022, the Partnership’s anticipated future capital commitments of $12.8 million for its equity method investments consist of $5.3 million due in the remainder of 2022 and $7.5 million due in 2023. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Cash Distribution On April 27, 2022, the board of directors of the General Partner approved a cash distribution for the first quarter of 2022 of $0.30 per common unit, payable on May 20, 2022, to unitholders of record at the close of business on May 13, 2022. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements and related notes thereto were prepared in accordance with GAAP. All significant intercompany balances and transactions have been eliminated upon consolidation. The Partnership reports its operations in one reportable segment. These condensed 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 most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which contains a summary of the Partnership’s significant accounting policies and other disclosures. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had no effect on the previously reported total assets, total liabilities, unitholders’ equity, results of operations or cash flows. |
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 as of the date of the financial statements. Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, in response to the effects of COVID-19 and actions by OPEC members and other exporting nations on the supply and demand in global oil and natural gas markets, many companies in the oil and natural gas industry, including Diamondback, changed their business plans in response to changing market conditions. Such circumstances generally increase the uncertainty in the Partnership’s accounting estimates, particularly those involving financial forecasts. The Partnership evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods it considers reasonable in each particular circumstance. Nevertheless, actual results may differ significantly from the Partnership’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 equity method investments and (iii) income taxes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements There are no recently adopted pronouncements. Accounting Pronouncements Not Yet Adopted There are no recent accounting pronouncements not yet adopted. The Partnership considers the applicability and impact of all ASUs. ASUs not discussed above were assessed and determined to be either not applicable or clarifications of ASUs previously disclosed. |
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 sourced water, and collecting, recycling and disposing of produced water. Surface revenue, rental and real estate income and amortization of out of market leases are outside the scope of ASC Topic 606, “Revenue from Contracts with Customers.” |
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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Accrued Liabilities and Accounts Payable | Accrued liabilities and accounts payable consist of the following as of the dates indicated: March 31, 2022 December 31, 2021 (In thousands) Direct operating expenses accrued $ 11,213 $ 12,978 Interest expense accrued 5,859 12,911 Capital expenditures accrued 16,079 5,509 Sourced water purchases accrued 7,759 7,040 Accounts payable 16,688 8,452 Other 882 1,377 Accounts payable and accrued liabilities $ 58,480 $ 48,267 |
Schedule of Accumulated Other Comprehensive Income | The following table provides changes in the components of accumulated other comprehensive income, net of related income tax effects (in thousands): Balance as of December 31, 2021 $ 10 Other comprehensive income (loss) 1 Balance as of March 31, 2022 $ 11 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Disaggregation of Revenue From Contracts With Customers | In the following table, revenue from contracts with customers is disaggregated by type of service and fee: Three Months Ended March 31, 2022 2021 (In thousands) Type of Service: Produced water gathering and disposal $ 71,047 $ 66,328 Sourced water gathering 23,019 16,577 Crude oil gathering 6,209 6,791 Natural gas gathering — 5,400 Caliche 365 — Real estate contracts (non ASC 606 revenues) 2,714 3,609 Surface revenue (non ASC 606 revenues) 109 103 Total revenues $ 103,463 $ 98,808 |
REAL ESTATE ASSETS (Tables)
REAL ESTATE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 (Years) (In thousands) Buildings 20-30 $ 95,611 $ 94,825 Tenant improvements 5-15 4,527 4,506 Land N/A 964 964 Land improvements 5-15 531 531 Total real estate assets 101,633 100,826 Less: accumulated depreciation (17,070) (16,217) Total investment in real estate, net $ 84,563 $ 84,609 As of Weighted Average Useful Lives March 31, 2022 December 31, 2021 (Months) (In thousands) In-place lease intangibles 45 $ 11,710 $ 11,645 Less: accumulated amortization (9,603) (9,520) In-place lease intangibles, net 2,107 2,125 Above-market lease intangibles 45 3,623 3,623 Less: accumulated amortization (2,186) (2,098) Above-market lease intangibles, net 1,437 1,525 Total intangible lease assets, net $ 3,544 $ 3,650 |
Schedule of Amortization Expense | The following table presents the Partnership’s estimated amortization expense related to lease intangibles for the periods indicated (in thousands): Remainder of 2022 2023 2024 2025 2026 Thereafter $ 621 $ 777 $ 952 $ 978 $ 206 $ 10 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 Useful Lives March 31, 2022 December 31, 2021 (Years) (In thousands) Produced water disposal systems 10-30 $ 788,269 $ 766,052 Crude oil gathering systems (1) 30 135,614 135,869 Natural gas gathering and compression systems (1) 10-30 6,216 6,192 Sourced water gathering systems (1) 30 188,091 166,549 Other 3 923 743 Total property, plant and equipment 1,119,113 1,075,405 Less: accumulated depreciation, amortization and accretion (130,989) (121,507) Land N/A 98,646 98,645 Total property, plant and equipment, net $ 1,086,770 $ 1,052,543 (1) Included in gathering systems are $27.5 million and $13.1 million of assets at March 31, 2022 and December 31, 2021, respectively, that are not subject to depreciation, amortization and accretion as the systems were under construction and had not yet been put into service. |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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: Three Months Ended March 31, 2022 2021 (In thousands) Asset retirement obligations, beginning of period $ 16,990 $ 15,128 Liabilities incurred (1) 17,173 258 Liabilities settled and divested (899) 6 Revisions 109 — Accretion expense during period 559 264 Asset retirement obligations, end of period 33,932 15,656 Less current portion of asset retirement obligations — 35 Asset retirement obligations, long term $ 33,932 $ 15,621 (1) Includes asset retirement obligations recorded for assets acquired in the Drop Down transaction and placed in service during the three months ended March 31, 2022. |
EQUITY METHOD INVESTMENTS (Tabl
EQUITY METHOD INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | The following table presents the carrying values of the Partnership’s equity method investments as of the dates indicated: Ownership Interest March 31, 2022 December 31, 2021 (In thousands) EPIC Crude Holdings, LP 10 % $ 105,739 $ 107,210 Gray Oak Pipeline, LLC 10 % 119,851 121,105 Wink to Webster Pipeline LLC (1) 4 % 86,145 86,207 OMOG JV LLC 60 % 188,699 187,809 WTG joint venture 25 % 117,490 110,143 BANGL, LLC 10 % 25,281 67 Total $ 643,205 $ 612,541 (1) The Wink to Webster joint venture is developing a crude oil pipeline (the “Wink to Webster pipeline”). The Wink to Webster pipeline’s main segment began interim service operation in the fourth quarter of 2020, and the joint venture began full commercial operations in the first quarter of 2022. Currently, the Partnership receives distributions from Gray Oak and OMOG, which are classified either within the operating or investing sections of the consolidated statements of cash flows by determining the nature of each distribution. The following table presents total distributions received from the Partnership’s equity method investments for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands) Gray Oak Pipeline, LLC $ 5,998 $ 5,758 OMOG JV LLC 1,552 3,349 Total $ 7,550 $ 9,107 The following table summarizes the income (loss) of equity method investees reflected in the condensed consolidated statement of operations for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands) EPIC Crude Holdings, LP $ (2,771) $ (5,436) Gray Oak Pipeline, LLC 4,744 2,298 Wink to Webster Pipeline LLC (663) (563) OMOG JV LLC 2,428 1,115 Amarillo Rattler, LLC — (237) WTG joint venture 5,325 — BANGL, LLC 17 — Total $ 9,080 $ (2,823) |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following as of the dates indicated: March 31, 2022 December 31, 2021 (In thousands) 5.625% unsecured Senior Notes due 2025 (1) $ 500,000 $ 500,000 Credit Agreement 230,000 195,000 Unamortized debt issuance costs (6,540) (7,044) Total long-term debt $ 723,460 $ 687,956 (1) Interest on the Notes is payable on January 15 and July 15 of each year. The Notes mature on July 15, 2025. |
UNIT-BASED COMPENSATION (Tables
UNIT-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Non vested Share Activity | The following table presents the phantom unit activity under the LTIP for the three months ended March 31, 2022: Phantom Weighted Average Unvested at December 31, 2021 1,737,525 $ 16.64 Granted 213,917 $ 13.08 Vested (10,294) $ 11.87 Forfeited (1,950) $ 8.34 Unvested at March 31, 2022 1,939,198 $ 16.28 |
UNITHOLDERS_ EQUITY AND DISTR_2
UNITHOLDERS’ EQUITY AND DISTRIBUTIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Change in Ownership Interest | The following table summarizes changes in the ownership interest in consolidated subsidiaries during the period: Three Months Ended March 31, 2022 2021 (In thousands) Net income (loss) attributable to the Partnership $ 7,931 $ 6,015 Change in ownership of consolidated subsidiaries 1,540 712 Change from net income (loss) attributable to the Partnership's unitholders and transfers to non-controlling interest $ 9,471 $ 6,727 |
Schedule of Cash Distributions | The following table presents information regarding cash distributions approved by the board of directors of the General Partner and paid during the three months ended March 31, 2022: Distributions (in thousands) Period Amount per Unit Operating Company Distributions to Diamondback Common Unitholders Declaration Date Unitholder Record Date Payment Date Q4 2021 $ 0.30 $ 32,345 $ 11,444 February 16, 2022 March 7, 2022 March 14, 2022 |
EARNINGS PER COMMON UNIT (Table
EARNINGS PER COMMON UNIT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income per Common Unit | A reconciliation of the components of basic and diluted earnings per common unit is presented in the table below: Three Months Ended March 31, 2022 2021 (In thousands, except per unit amounts) Net income (loss) attributable to Rattler Midstream LP $ 7,931 $ 6,015 Less: net (income) loss allocated to participating securities (1) (511) (418) Net income (loss) attributable to common unitholders $ 7,420 $ 5,597 Weighted average common units outstanding: Basic weighted average common units outstanding 38,159 41,742 Effect of dilutive securities: Potential common units issuable (2) 217 — Diluted weighted average common units outstanding 38,376 41,742 Net income per common unit, basic $ 0.19 $ 0.13 Net income per common unit, diluted $ 0.19 $ 0.13 (1) Distribution equivalent rights granted to employees are considered participating securities. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The Partnership derives substantially all of its revenue from these commercial agreements, which consist of the following amounts for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands) Produced water gathering and disposal $ 68,196 $ 64,306 Sourced water gathering 20,276 15,243 Natural gas gathering — 5,400 Crude oil gathering 1,830 2,030 Surface revenue — 99 Total $ 90,302 $ 87,078 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The following table provides the Partnership’s provision for (benefit from) income taxes and the effective income tax rate for the periods indicated: Three Months Ended March 31, 2022 2021 (In thousands, except for tax rate) Provision for (benefit from) income taxes $ 2,384 $ 1,671 Effective tax rate 6.0 % 6.1 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement Information for Financial Instruments Measured on a Nonrecurring Basis | The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets: March 31, 2022 December 31, 2021 Carrying Value (1) Fair Value Carrying Value (1) Fair Value (In thousands) Debt: 5.625% unsecured Senior Notes due 2025 $ 493,460 $ 508,000 $ 492,956 $ 521,250 Credit Agreement $ 230,000 $ 230,000 $ 195,000 $ 195,000 (1) The carrying value includes associated deferred loan costs and any remaining discount or premium, if any. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details) | 3 Months Ended | ||
Mar. 31, 2022segmentshares | Apr. 29, 2022shares | Dec. 31, 2021shares | |
Limited Partners' Capital Account [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Class B Units | |||
Limited Partners' Capital Account [Line Items] | |||
Units outstanding (in shares) | 107,815,152 | 107,815,152 | 107,815,152 |
Class B Units | Diamondback Energy, Inc. | |||
Limited Partners' Capital Account [Line Items] | |||
Units outstanding (in shares) | 107,815,152 | ||
Rattler MIdstream LP | |||
Limited Partners' Capital Account [Line Items] | |||
General partners, ownership interest | 100.00% | ||
Rattler Midstream Partners LLC | |||
Limited Partners' Capital Account [Line Items] | |||
General partners, ownership interest | 26.00% | ||
Rattler Midstream Partners LLC | Managing | |||
Limited Partners' Capital Account [Line Items] | |||
General partners, ownership interest | 100.00% | ||
Rattler Midstream Partners LLC | Diamondback Energy, Inc. | |||
Limited Partners' Capital Account [Line Items] | |||
Limited partners, ownership interest | 74.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Direct operating expenses accrued | $ 11,213 | $ 12,978 |
Interest expense accrued | 5,859 | 12,911 |
Capital expenditures accrued | 16,079 | 5,509 |
Sourced water purchases accrued | 7,759 | 7,040 |
Accounts payable | 16,688 | 8,452 |
Other | 882 | 1,377 |
Accounts payable and accrued liabilities | $ 58,480 | $ 48,267 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accumulated Other Comprehensive Income (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
AOCI | |
Beginning balance | $ 1,167,319 |
Other comprehensive income (loss) | 1 |
Ending balance | 1,159,529 |
AOCI | |
AOCI | |
Beginning balance | 10 |
Ending balance | $ 11 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Real estate contracts (non ASC 606 revenues) | $ 2,714 | $ 3,609 |
Surface revenue (non ASC 606 revenues) | 109 | 103 |
Total revenues | 103,463 | 98,808 |
Produced water gathering and disposal | ||
Disaggregation of Revenue [Line Items] | ||
ASC 606 revenues | 71,047 | 66,328 |
Sourced water gathering | ||
Disaggregation of Revenue [Line Items] | ||
ASC 606 revenues | 23,019 | 16,577 |
Crude oil gathering | ||
Disaggregation of Revenue [Line Items] | ||
ASC 606 revenues | 6,209 | 6,791 |
Natural gas gathering | ||
Disaggregation of Revenue [Line Items] | ||
ASC 606 revenues | 0 | 5,400 |
Caliche | ||
Disaggregation of Revenue [Line Items] | ||
ASC 606 revenues | $ 365 | $ 0 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Details) a in Thousands, $ in Thousands | Jan. 19, 2022USD ($)bbl | Dec. 01, 2021USD ($)apropertypipelinewellfacilityMMBbls | Nov. 01, 2021USD ($) | Oct. 05, 2021USD ($)MMcf / dproperty | Jun. 28, 2021USD ($)property | Apr. 30, 2021USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) |
Business Combinations And Divestitures [Line Items] | ||||||||
Loss on disposition of assets | $ (71) | $ 6 | ||||||
Amarillo Rattler, LLC | Disposed of by Sale | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Ownership interest | 50.00% | |||||||
Contingent consideration earn-out payments | 2,800 | |||||||
Pecos County Gas Gathering | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Gross potential consideration | $ 93,000 | |||||||
Consideration due at closing | 83,000 | |||||||
Pecos County Gas Gathering | Contingent Payment Due in 2023 | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Consideration payment | 5,000 | |||||||
Pecos County Gas Gathering | Contingent Payment Due in 2024 | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Consideration payment | $ 5,000 | |||||||
Midland, Texas | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Number of properties sold | property | 1 | |||||||
Proceeds from divestiture | $ 9,100 | |||||||
Loss on disposition of assets | $ 400 | |||||||
Rattler LLC and Amarillo Midstream | Amarillo Rattler, LLC | Disposed of by Sale | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Potential consideration | $ 75,000 | |||||||
Consideration at closing | 50,000 | |||||||
Consideration upon first anniversary of closing | 10,000 | |||||||
Consideration over three years | $ 15,000 | |||||||
Consideration period | 3 years | |||||||
Rattler LLC | Amarillo Rattler, LLC | Disposed of by Sale | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Potential consideration | $ 7,500 | |||||||
Consideration at closing | $ 23,500 | |||||||
Consideration period | 3 years | |||||||
Gain on sale of equity method investments | $ 23,000 | |||||||
Rattler LLC | Amarillo Rattler, LLC | Disposed of by Sale | Contingent Payment Due In April 2022 | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Potential consideration | $ 5,000 | |||||||
Dropdown Transaction | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Price of acquisition | $ 164,400 | |||||||
Asset acquisition, property acquired | $ 163,900 | |||||||
Active saltwater disposal injection wells | well | 9 | |||||||
Well water capacity volume | MMBbls | 330 | |||||||
Water recycling and storage facilities | facility | 7 | |||||||
Fresh water pit | property | 20 | |||||||
Produced water gathering pipeline | pipeline | 55 | |||||||
Area of land | a | 4 | |||||||
Sourced water gathering | pipeline | 18 | |||||||
BANGL, LLC | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Cash payment to acquire business | $ 22,200 | |||||||
Percentage of interests acquired | 10.00% | |||||||
Expansion capacity | bbl | 300,000 | |||||||
WTG joint venture | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Cash payment to acquire business | $ 104,000 | |||||||
Percentage of interests acquired | 25.00% | |||||||
WTG joint venture | Midland Basin | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Gas processing capacity | MMcf / d | 925 | |||||||
WTG joint venture | Midland Basin | WTG Midstream LLC | ||||||||
Business Combinations And Divestitures [Line Items] | ||||||||
Gas processing plants | property | 6 |
REAL ESTATE ASSETS (Details)
REAL ESTATE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Real Estate [Line Items] | |||
Buildings | $ 95,611 | $ 94,825 | |
Tenant improvements | 4,527 | 4,506 | |
Land | 964 | 964 | |
Land improvements | 531 | 531 | |
Total real estate assets | 101,633 | 100,826 | |
Less: accumulated depreciation | (17,070) | (16,217) | |
Total investment in real estate, net | 84,563 | 84,609 | |
Finite-lived intangibles assets, net | 3,544 | 3,650 | |
Depreciation and amortization expense for real estate assets | $ 900 | $ 1,200 | |
In-place lease intangibles | |||
Real Estate [Line Items] | |||
Weighted Average Useful Lives | 45 months | ||
Finite-lived intangible assets, gross | $ 11,710 | 11,645 | |
Less: accumulated amortization | (9,603) | (9,520) | |
Finite-lived intangibles assets, net | $ 2,107 | 2,125 | |
Above-market lease intangibles | |||
Real Estate [Line Items] | |||
Weighted Average Useful Lives | 45 months | ||
Finite-lived intangible assets, gross | $ 3,623 | 3,623 | |
Less: accumulated amortization | (2,186) | (2,098) | |
Finite-lived intangibles assets, net | $ 1,437 | $ 1,525 | |
Buildings | Minimum | |||
Real Estate [Line Items] | |||
Estimated Useful Lives | 20 years | ||
Buildings | Maximum | |||
Real Estate [Line Items] | |||
Estimated Useful Lives | 30 years | ||
Tenant improvements | Minimum | |||
Real Estate [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Tenant improvements | Maximum | |||
Real Estate [Line Items] | |||
Estimated Useful Lives | 15 years | ||
Land improvements | Minimum | |||
Real Estate [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Land improvements | Maximum | |||
Real Estate [Line Items] | |||
Estimated Useful Lives | 15 years |
REAL ESTATE ASSETS - Estimated
REAL ESTATE ASSETS - Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Real Estate [Abstract] | |
Remainder of 2022 | $ 621 |
2023 | 777 |
2024 | 952 |
2025 | 978 |
2026 | 206 |
Thereafter | $ 10 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 1,119,113 | $ 1,075,405 |
Less: accumulated depreciation, amortization and accretion | (130,989) | (121,507) |
Land | 98,646 | 98,645 |
Total property, plant and equipment, net | 1,086,770 | 1,052,543 |
Property, plant and equipment, assets | 27,500 | 13,100 |
Produced water disposal systems | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 788,269 | 766,052 |
Crude oil gathering systems | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 30 years | |
Property, plant and equipment | $ 135,614 | 135,869 |
Natural gas gathering and compression systems | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 6,216 | 6,192 |
Sourced water gathering systems | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 30 years | |
Property, plant and equipment | $ 188,091 | 166,549 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Property, plant and equipment | $ 923 | $ 743 |
Minimum | Produced water disposal systems | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10 years | |
Minimum | Natural gas gathering and compression systems | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10 years | |
Maximum | Produced water disposal systems | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 30 years | |
Maximum | Natural gas gathering and compression systems | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 30 years |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 19.1 | $ 9.8 |
Abandonment charges | $ 8 | $ 3.4 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of period | $ 16,990 | $ 15,128 | |
Liabilities incurred | 17,173 | 258 | |
Liabilities settled and divested | (899) | 6 | |
Revisions | 109 | 0 | |
Accretion expense during period | 559 | 264 | |
Asset retirement obligations, end of period | 33,932 | 15,656 | |
Less current portion of asset retirement obligations | 0 | 35 | $ 79 |
Asset retirement obligations, long term | $ 33,932 | $ 15,621 | $ 16,911 |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 643,205 | $ 612,541 | |
Distributions from equity method investments | 7,550 | $ 9,107 | |
Income (expense) from equity method investment | $ 9,080 | (2,823) | |
EPIC Crude Holdings, LP | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Interest | 10.00% | ||
Equity method investments | $ 105,739 | 107,210 | |
Income (expense) from equity method investment | $ (2,771) | (5,436) | |
Gray Oak Pipeline, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Interest | 10.00% | ||
Equity method investments | $ 119,851 | 121,105 | |
Distributions from equity method investments | 5,998 | 5,758 | |
Income (expense) from equity method investment | $ 4,744 | 2,298 | |
Wink to Webster Pipeline LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Interest | 4.00% | ||
Equity method investments | $ 86,145 | 86,207 | |
Income (expense) from equity method investment | $ (663) | (563) | |
OMOG JV LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Interest | 60.00% | ||
Equity method investments | $ 188,699 | 187,809 | |
Distributions from equity method investments | 1,552 | 3,349 | |
Income (expense) from equity method investment | 2,428 | 1,115 | |
Amarillo Rattler, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Income (expense) from equity method investment | $ 0 | (237) | |
WTG joint venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Interest | 25.00% | ||
Equity method investments | $ 117,490 | 110,143 | |
Income (expense) from equity method investment | $ 5,325 | 0 | |
BANGL, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Interest | 10.00% | ||
Equity method investments | $ 25,281 | $ 67 | |
Income (expense) from equity method investment | $ 17 | $ 0 |
DEBT (Details)
DEBT (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||
Interest rate | 5.625% | 5.625% | |
Unamortized debt issuance costs | $ (6,540,000) | $ (7,044,000) | |
Total long-term debt | $ 723,460,000 | 687,956,000 | |
5.625% unsecured Senior Notes due 2025 | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 5.625% | ||
Long-term debt, gross | $ 500,000,000 | 500,000,000 | |
Credit Agreement | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Long-term debt, gross | 230,000,000 | $ 195,000,000 | |
Credit Agreement | Line of Credit | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility maximum borrowing capacity | 600,000,000 | ||
Revolving credit facility maximum borrowing capacity, subject to commitments | 1,000,000,000 | ||
Available borrowings capacity | $ 370,000,000 | ||
Weighted average interest rate | 1.40% | 1.40% |
UNIT-BASED COMPENSATION - Addit
UNIT-BASED COMPENSATION - Additional Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)distributionRightshares | Mar. 31, 2021USD ($) | May 22, 2019shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common units reserved for issuance (in shares) | shares | 12,488,231 | 15,151,515 | |
Unit-based compensation expenses | $ 2.5 | $ 2.3 | |
Distribution right for each phantom unit | distributionRight | 1 | ||
Partnership Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion of stock, shares converted (in shares) | shares | 1 | ||
Phantom Share Units (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value | $ 0.1 | ||
Unrecognized compensation cost related to unvested phantom units | $ 23.3 | ||
Unrecognized compensation cost related to unvested phantom units, period for recognition | 2 years 2 months 23 days |
UNIT-BASED COMPENSATION - Phant
UNIT-BASED COMPENSATION - Phantom Units (Details) - Phantom Share Units (PSUs) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Phantom Units | ||
Unvested beginning balance (in shares) | 1,737,525 | |
Granted (in shares) | 213,917 | |
Vested (in shares) | (10,294) | |
Forfeited (in shares) | (1,950) | |
Unvested ending balance (in shares) | 1,939,198 | |
Weighted Average Grant-Date Fair Value | ||
Unvested beginning balance (in USD Per share) | $ 16.28 | $ 16.64 |
Granted (in USD Per share) | 13.08 | |
Vested (in USD Per share) | 11.87 | |
Forfeited (in USD Per share) | 8.34 | |
Unvested ending balance (in USD Per share) | $ 16.28 | $ 16.64 |
UNITHOLDERS_ EQUITY AND DISTR_3
UNITHOLDERS’ EQUITY AND DISTRIBUTIONS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Apr. 29, 2022 | Dec. 31, 2021 | |
Limited Partners' Capital Account [Line Items] | ||||
Stock repurchase program, authorized amount | $ 150,000 | |||
Amount of shares repurchased | $ 2,582 | $ 11,114 | ||
Diamondback Energy, Inc. | Rattler Midstream Partners LLC | ||||
Limited Partners' Capital Account [Line Items] | ||||
Percent of limited partnership interest | 74.00% | |||
Rattler Midstream Partners LLC | ||||
Limited Partners' Capital Account [Line Items] | ||||
Conversion of stock, shares converted (in shares) | 1 | |||
Common Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Limited partners' capital account, units issued (in shares) | 38,146,047 | 38,356,771 | ||
Units outstanding (in shares) | 38,146,047 | 38,356,771 | ||
Conversion of stock, shares issued | 1 | |||
Amount of shares repurchased | $ 2,600 | |||
Remaining authorized repurchase amount | $ 85,100 | |||
Common Units | Diamondback Energy, Inc. | ||||
Limited Partners' Capital Account [Line Items] | ||||
Limited partners' capital account, units issued (in shares) | 0 | |||
Units outstanding (in shares) | 0 | |||
Class B Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Limited partners' capital account, units issued (in shares) | 107,815,152 | 107,815,152 | ||
Units outstanding (in shares) | 107,815,152 | 107,815,152 | 107,815,152 | |
Conversion of stock, shares converted (in shares) | 1 | |||
Class B Units | Diamondback Energy, Inc. | ||||
Limited Partners' Capital Account [Line Items] | ||||
Limited partners' capital account, units issued (in shares) | 107,815,152 | |||
Units outstanding (in shares) | 107,815,152 |
UNITHOLDERS_ EQUITY AND DISTR_4
UNITHOLDERS’ EQUITY AND DISTRIBUTIONS - Ownership Interest in Subsidiary Changes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Net income (loss) attributable to the Partnership | $ 7,931 | $ 6,015 |
Change in ownership of consolidated subsidiaries | (424) | (196) |
Limited Partners | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Net income (loss) attributable to the Partnership | 7,931 | 6,015 |
Change in ownership of consolidated subsidiaries | 1,540 | 712 |
Change from net income (loss) attributable to the Partnership's unitholders and transfers to non-controlling interest | $ 9,471 | $ 6,727 |
UNITHOLDERS_ EQUITY AND DISTR_5
UNITHOLDERS’ EQUITY AND DISTRIBUTIONS - Schedule of Partnership Cash Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 16, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Distribution Made to Limited Partner [Line Items] | |||
Distributions | $ 43,829 | $ 29,866 | |
Common Units | Cash Distribution | |||
Distribution Made to Limited Partner [Line Items] | |||
Partners' capital, cash distribution (in USD per share) | $ 0.30 | ||
Distributions | $ 11,444 | ||
Common Units | Cash Distribution | Diamondback Energy, Inc. | |||
Distribution Made to Limited Partner [Line Items] | |||
Distributions | $ 32,345 |
EARNINGS PER COMMON UNIT (Detai
EARNINGS PER COMMON UNIT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Rattler Midstream LP | $ 7,931 | $ 6,015 |
Less: net income allocated to participating securities | (511) | (418) |
Net income (loss) attributable to common unitholders | $ 7,420 | $ 5,597 |
Basic weighted average common units outstanding (in shares) | 38,159,000 | 41,742,000 |
Potential common units issuable (in shares) | 217,000 | 0 |
Diluted weighted average common units outstanding (in shares) | 38,376,000 | 41,742,000 |
Net income per common unit, basic (in USD per share) | $ 0.19 | $ 0.13 |
Net income per common unit, diluted (in USD per share) | $ 0.19 | $ 0.13 |
Phantom units (in shares) | 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 90,302 | $ 87,078 |
Produced water gathering and disposal | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 68,196 | 64,306 |
Sourced water gathering | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 20,276 | 15,243 |
Natural gas gathering | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 0 | 5,400 |
Crude oil gathering | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 1,830 | 2,030 |
Surface revenue | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 0 | $ 99 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Provision for (benefit from) income taxes | $ 2,384 | $ 1,671 |
Effective tax rate | 6.00% | 6.10% |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Not Recorded at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Interest rate | 5.625% | 5.625% |
5.625% unsecured Senior Notes due 2025 | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Interest rate | 5.625% | |
Carrying Value | 5.625% unsecured Senior Notes due 2025 | Nonrecurring | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Senior notes due | $ 493,460 | $ 492,956 |
Carrying Value | Credit Agreement | Nonrecurring | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Revolving credit facility | 230,000 | 195,000 |
Fair Value | 5.625% unsecured Senior Notes due 2025 | Nonrecurring | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Senior notes due | 508,000 | 521,250 |
Fair Value | Credit Agreement | Nonrecurring | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Revolving credit facility | $ 230,000 | $ 195,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation | $ 12.8 |
Future capital commitments for investments includes for the remainder of 2022 | 5.3 |
Future capital commitments for investments includes for 2023 | $ 7.5 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 27, 2022$ / shares |
Subsequent Event | Cash Distribution | |
Subsequent Event [Line Items] | |
Partners' capital, cash distribution (in USD per share) | $ 0.30 |