Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 12, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-33147 | |
Entity Registrant Name | Evolve Transition Infrastructure LP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 11-3742489 | |
Entity Address, Address Line One | 1360 Post Oak Blvd, Suite 2400 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77056 | |
City Area Code | 713 | |
Local Phone Number | 783-8000 | |
Title of 12(b) Security | Common Units | |
Trading Symbol | SNMP | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 231,032,052 | |
Entity Central Index Key | 0001362705 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | ||
Gathering and transportation lease revenues | $ 6,372 | $ 15,100 |
Total revenues | 6,372 | 15,100 |
Operating expenses | ||
Transportation operating expenses | 2,518 | 2,107 |
General and administrative expenses | 2,384 | 2,835 |
General and administrative expense (benefit) - related entities | 1,897 | (455) |
Unit-based compensation expense | 11 | 53 |
Loss on sale of assets | 0 | 2,208 |
Depreciation and amortization | 4,444 | 5,139 |
Accretion expense | 111 | 102 |
Total operating expenses | 11,365 | 11,989 |
Other (income) expense | ||
Loss (earnings) from equity investment | (145) | (3,391) |
Other (income) expense | (2) | 657 |
Total other expenses | 17,207 | 12,777 |
Total expenses | 28,572 | 24,766 |
Loss before income taxes | (22,200) | (9,666) |
Income tax expense (benefit) | 19 | 66 |
Net loss | $ (22,219) | $ (9,732) |
Net loss per unit | ||
Common units - Basic (in dollars per share) | $ (0.11) | $ (0.08) |
Common units - Diluted (in dollars per share) | $ (0.11) | $ (0.08) |
Weighted Average Units Outstanding | ||
Common Units - Basic (in units) | 211,167,439 | 116,440,129 |
Common Units - Diluted (in units) | 211,167,439 | 116,440,129 |
Related Party | ||
Other (income) expense | ||
Interest expense, net | $ 16,838 | $ 14,975 |
Nonrelated Party | ||
Other (income) expense | ||
Interest expense, net | $ 516 | $ 536 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Current assets | |||
Cash and cash equivalents | $ 1,681,000 | $ 2,785,000 | |
Accounts receivable | 2,257,000 | 2,415,000 | |
Prepaid expenses | 604,000 | 371,000 | |
Deferred lease incentive | 1,122,000 | 1,122,000 | |
Total current assets | 5,664,000 | 6,693,000 | |
Gathering and transportation assets, net | 87,028,000 | 87,478,000 | |
Intangible assets, net | 104,015,000 | 106,752,000 | |
Equity investments | 15,109,000 | 14,964,000 | |
Deferred lease incentive, net | 9,532,000 | 9,813,000 | |
Right of use assets, net | 5,250,000 | 5,899,000 | |
Other non-current assets | 50,000 | 75,000 | |
Total assets | 226,648,000 | 231,674,000 | |
Current liabilities | |||
Accounts payable and accrued liabilities | 2,894,000 | 4,675,000 | |
Other current liabilities | 438,000 | 438,000 | |
Short-term debt, net of debt issuance costs | 2,500,000 | 19,793,000 | |
Short-term lease liabilities | 2,231,000 | 2,204,000 | |
Total current liabilities | 434,780,000 | 438,910,000 | |
Other liabilities | |||
Asset retirement obligation | 5,232,000 | 5,121,000 | |
Long-term debt, net of discount and debt issuance costs | 16,927,000 | 0 | |
Long-term lease liabilities | 2,205,000 | 2,773,000 | |
Other liabilities | 291,000 | 287,000 | |
Total other liabilities | 35,164,000 | 14,873,000 | |
Total liabilities | 469,944,000 | 453,783,000 | |
Commitments and contingencies (See Note 12) | |||
Partners’ deficit | |||
Common units, 231,032,052 and 225,307,052 units issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | (243,296,000) | (222,109,000) | |
Total partners’ deficit | (243,296,000) | (222,109,000) | $ (221,907,000) |
Total liabilities and partners’ deficit | 226,648,000 | 231,674,000 | |
Affiliated Entity | |||
Current liabilities | |||
Class C preferred units distribution payable - related entities | 14,917,000 | 0 | |
Class C preferred units - related entities | 411,800,000 | 411,800,000 | |
Other liabilities | |||
Accrued shared services fees - related entities | 5,737,000 | $ 3,839,000 | |
Stonepeak warrant - related entities | $ 4,772,000 | $ 2,853,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Units, issued (in units) | 231,032,052 | 225,307,052 |
Units, outstanding (in units) | 231,032,052 | 225,307,052 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (22,219) | $ (9,732) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depreciation, depletion and amortization | 1,707 | 1,774 |
Amortization of debt issuance costs | 134 | 123 |
Accretion expense | 111 | 102 |
Distributions from equity investments | 0 | 1,263 |
Equity (earnings) loss in affiliate | (145) | (3,391) |
Loss on sale of assets | 0 | 2,208 |
Mark-to-market on Stonepeak Warrant - related entities | 1,919 | 563 |
(Gain) loss on Nuvve Holding Warrants | 0 | 664 |
Unit-based compensation | 1,032 | 76 |
Amortization of deferred lease incentive | 281 | 0 |
Amortization of intangible assets | 2,737 | 3,365 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 158 | (8,429) |
Prepaid expenses | (233) | (332) |
Other assets | 25 | 0 |
Accounts payable and accrued liabilities | (1,644) | 213 |
Net cash provided by operating activities | 682 | 1,812 |
Cash flows from investing activities: | ||
Initial direct costs of right of use assets | 0 | (764) |
Proceeds from sale of gathering and transportation assets | 0 | 250 |
Construction of gathering and transportation assets | (1,286) | (74) |
Net cash used in investing activities | (1,286) | (588) |
Cash flows from financing activities: | ||
Repayment of debt | (2,000) | (4,500) |
Draw on revolving loan | 1,500 | 3,000 |
Debt issuance costs | 0 | (3) |
Net cash used in financing activities | (500) | (1,503) |
Net decrease in cash and cash equivalents | (1,104) | (279) |
Cash and cash equivalents, beginning of period | 2,785 | 1,675 |
Cash and cash equivalents, end of period | 1,681 | 1,396 |
Non-cash investing and financing activities: | ||
Change in accrued capital expenditures | (137) | 68 |
Right of use assets and operating lease obligations recognized including adjustments | 0 | 2,634 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for income tax | 0 | 3 |
Cash paid during the period for interest | 382 | 418 |
Related Party | ||
Changes in operating assets and liabilities: | ||
Other long-term liabilities | 16,815 | 13,359 |
Nonrelated Party | ||
Changes in operating assets and liabilities: | ||
Other long-term liabilities | $ 4 | $ (14) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Partners' Deficit - USD ($) $ in Thousands | Total | Common Units |
Partner's Deficit (in shares) at Dec. 31, 2021 | 124,448,646 | |
Partner's Deficit at Dec. 31, 2021 | $ (225,120) | $ (225,120) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Unit-based compensation programs | 76 | $ 76 |
Common units issued as Class C Preferred distributions (in shares) | 24,502,356 | |
Common units issued as Class C Preferred distributions | 12,869 | $ 12,869 |
Net loss | (9,732) | $ (9,732) |
Partner's Deficit (in shares) at Mar. 31, 2022 | 148,951,002 | |
Partner's Deficit at Mar. 31, 2022 | (221,907) | $ (221,907) |
Partner's Deficit (in shares) at Dec. 31, 2022 | 225,307,052 | |
Partner's Deficit at Dec. 31, 2022 | (222,109) | $ (222,109) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Unit-based compensation programs (in shares) | 5,725,000 | |
Unit-based compensation programs | 1,032 | $ 1,032 |
Net loss | (22,219) | $ (22,219) |
Partner's Deficit (in shares) at Mar. 31, 2023 | 231,032,052 | |
Partner's Deficit at Mar. 31, 2023 | $ (243,296) | $ (243,296) |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | ORGANIZATION AND BUSINESS Organization We are a publicly-traded limited partnership formed in 2005 focused on the acquisition, development, ownership and operation of infrastructure critical to the transition of energy supply to lower carbon sources. We own natural gas gathering systems, pipelines, and processing facilities in South Texas and continue to pursue energy transition infrastructure opportunities. Our common units are currently listed on the NYSE American under the symbol “SNMP.” |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Accounting policies used by us conform to GAAP. The accompanying financial statements include the accounts of us and our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to those rules and regulations. We believe that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. Certain amounts from the prior period have been reclassified to confirm to current period presentation. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 27, 2023. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), which are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not effective, will not have a material impact on our condensed consolidated financial statements upon adoption. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. Additionally, in November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” which changed the effective date for certain issuers to annual and interim periods in fiscal years beginning after December 15, 2022, and earlier adoption is permitted. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Partnership’s financial position, results of operations and cash flows. Use of Estimates The condensed consolidated financial statements are prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. The estimates that are |
Divestitures
Divestitures | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | DIVESTITURES Kodiak Sale On March 11, 2022, we entered into a purchase and sale agreement with Kodiak, pursuant to which we sold to Kodiak natural gas compression equipment for a purchase price of $250 thousand. We recorded a loss of approximately $2.2 million on the sale. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Revenue from Contracts with Customers The unit of account in ASC 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided over a period of time. ASC 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied. Disaggregation of Revenue The Gathering Agreement is classified as an operating lease and is accounted for under ASC 842, “Leases” and is reported as gathering and transportation lease revenues in our condensed consolidated statements of operations. During the three months ended March 31, 2023 and 2022, we recognized revenue of approximately $6.4 million and $15.1 million, respectively, under ASC 842. Mesquite accounted for 100% of total revenue for the three months ended March 31, 2023 and 2022. We are highly dependent upon Mesquite as our only customer. During the three months ended March 31, 2023 and 2022, we did not record any revenue under ASC 606. We disaggregate revenue based on revenue and product type. In selecting the disaggregation categories, we considered a number of factors, including disclosures presented outside the financial statements, such as in our earnings release and investor presentations, information reviewed internally for evaluating performance, and other factors used by the Partnership or the users of its financial statements to evaluate performance or allocate resources. We have concluded that disaggregating revenue by revenue and product type appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. We account for income from our unconsolidated equity method investments as earnings from equity investments in our condensed consolidated statements of operations. Earnings from these equity method investments are further discussed in Note 11 “Investments.” Contract Balances At March 31, 2023 and December 31, 2022, our gathering and transportation accounts receivable were approximately $2.2 million and $2.3 million, respectively, under ASC 842. On May 27, 2022, but effective as of April 1, 2022, we entered into the A&R Gathering Agreement, a related side letter agreement and the 2022 Settlement Agreement (collectively the “Settlement Documents”). We accounted for the Settlement Documents as a single contract modification of the Original Gathering Agreement under the contract combination guidance in ASC 842. Prior to the execution of the A&R Gathering Agreement, Mesquite disputed the tariff rate for interruptible throughput volumes from Eastern Catarina (as defined below) billed from July 1, 2021 forward, which resulted in a disputed receivable balance of approximately $26.7 million. Under the terms of the A&R Gathering Agreement and other agreements concurrently entered into, approximately $15.1 million of the disputed receivable balance was paid in cash. In addition, the A&R Gathering Agreement amended key provisions of the Original Gathering Agreement in a manner favorable to us. Principally, it provides for, among other things, a new dedication of the eastern portion of Mesquite’s acreage position in Dimmit, La Salle and Webb counties, Texas (“Eastern Catarina”), whereas only Western Catarina (as defined in Note 10 “Intangible Assets”) was dedicated under the Original Gathering Agreement. The A&R Gathering Agreement also established gathering and processing fee rates for both Western Catarina and Eastern Catarina as well as rates for new production from the Dedicated Acreage (as defined in the A&R Gathering Agreement) and from the Subject Wells (as defined in the A&R Gathering Agreement). In accordance with ASC 842, the portion of the disputed receivable balance of approximately $11.6 million we did not collect in cash was reclassified as a deferred lease incentive, reflective of the non-distinct nature of the contractual concessions received from Mesquite in the A&R Gathering Agreement. The deferred lease incentive is being amortized over the remaining term of the A&R Gathering Agreement. Amortization of the deferred A&R Gathering Agreement lease incentive for the three months ended March 31, 2023, was approximately $0.3 million. This amortization is recorded as a reduction to gathering and transportation lease revenues in our condensed consolidated statements of operations. Under our sales contracts, we invoice customers after our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. At March 31, 2023 and December 31, 2022, our accounts receivables from contracts with customers was zero. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Measurements of fair value of derivative instruments are classified according to the fair value hierarchy, which prioritizes the inputs to the valuation techniques used to measure fair value. Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level 1: Measured based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Measured based on quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Substantially all of these inputs are observable in the marketplace throughout the term of the instrument, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2023 (in thousands): Fair Value Measurements at March 31, 2023 Active Markets for Observable Unobservable Inputs Fair Value Fair value of warrants Nuvve Holding Warrants $ — $ — $ — $ — Other liabilities Stonepeak Warrant — (4,772) — (4,772) Total $ — $ (4,772) $ — $ (4,772) The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2022 (in thousands): Fair Value Measurements at December 31, 2022 Active Markets for Observable Unobservable Inputs Fair Value Fair value of warrants Nuvve Holding Warrants $ — $ — $ — $ — Other liabilities Stonepeak Warrant — (2,853) — (2,853) Total $ — $ (2,853) $ — $ (2,853) As of March 31, 2023 and December 31, 2022, the estimated fair value of cash and cash equivalents, accounts receivable, other current assets and current liabilities approximated their carrying value due to their short-term nature. Fair Value on a Non-Recurring Basis The Partnership follows the provisions of Topic 820-10, “Fair Value Measurement,” for non-financial assets and liabilities measured at fair value on a non-recurring basis. The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs under the fair value hierarchy. We periodically review gathering and transportation assets for impairment when facts and circumstances indicate that their carrying values may not be recoverable. A reconciliation of the beginning and ending balances of the Partnership’s asset retirement obligations is presented in Note 9 “Asset Retirement Obligation.” Fair Value of Financial Instruments The estimated fair value amounts of financial instruments have been determined using available market information and valuation methodologies described below. We prioritize the use of the highest level inputs available in determining fair value such that fair value measurements are determined using the highest and best use as determined by market participants and the assumptions that they would use in determining fair value. Credit Agreement – We believe that the carrying value of our Credit Agreement (as defined in Note 7 “Debt”) approximates its fair value because the interest rates on the debt approximate market interest rates for debt with similar terms. The debt is classified as a Level 2 input in the fair value hierarchy and represents the amount at which the instrument could be valued in an exchange during a current transaction between willing parties. The Credit Agreement is discussed further in Note 7 “Debt.” Nuvve Holding Warrants – The Nuvve Holding Warrants (as defined in Note 6 “Derivative and Financial Instruments”) are valued using the value of Nuvve’s common stock and the Nuvve Holding Warrants exercise price. We have therefore classified the fair value measurement of the Nuvve Holding Warrants as Level 2 and is presented within fair value of warrants on the condensed consolidated balance sheets. As of March 31, 2023, the Nuvve Holding Warrants fair value was determined to be zero. Stonepeak Warrant – As part of the Exchange (as defined in Note 15 “Partners’ Deficit”), the Partnership issued to Stonepeak Catarina the Stonepeak Warrant which entitles the holder to receive junior securities of the Partnership representing ten percent of junior securities deemed outstanding when exercised. The Stonepeak Warrant is valued using ten percent of the Partnership’s junior securities deemed outstanding and the common unit price as of the balance sheet date. We have therefore classified the fair value measurement of the Stonepeak Warrant as Level 2 and is presented within Stonepeak warrant - related entities on the condensed consolidated balance sheets. Earnout Derivative – As part of the Carnero Gathering Transaction (as defined in Note 11 “Investments”), we are required to pay Mesquite an earnout based on natural gas received above a threshold volume and tariff at designated delivery points from Mesquite and other producers. The earnout derivative was valued through the use of a Monte Carlo simulation model which utilized observable inputs such as the earnout price and volume commitment, as well as unobservable inputs related to the weighted probabilities of various throughput scenarios. We have therefore classified the fair value measurements of the earnout derivative as Level 3 inputs. As of March 31, 2023 and December 31, 2022, the fair value of the earnout was determined to be zero. |
Derivative and Financial Instru
Derivative and Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Financial Instruments | DERIVATIVE AND FINANCIAL INSTRUMENTS On May 17, 2021, the Partnership entered into a letter agreement (the “Levo Letter Agreement”) with Nuvve Holding Corp. (“Nuvve Holding”) and Stonepeak Rocket Holdings LP, relating to the proposed formation of a joint venture, Levo Mobility LLC (“Levo” and such proposed joint venture, the “Levo JV”). In connection with the Levo Letter Agreement, on May 17, 2021, Nuvve Holding issued ten-year warrants to the Partnership as follows: (i) Series B Warrants to purchase 200,000 shares of Nuvve Holding’s common stock, at an exercise price of $10.00 per share, which are fully vested upon issuance; (ii) Series C warrants to purchase 100,000 shares of Nuvve Holding’s common stock, at an exercise price of $15.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $125 million in aggregate capital expenditures; (iii) Series D warrants to purchase 100,000 shares of Nuvve Holding’s common stock, at an exercise price of $20.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $250 million in aggregate capital expenditures; (iv) Series E warrants to purchase 100,000 shares of Nuvve Holding’s common stock, at an exercise price of $30.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $375 million in aggregate capital expenditures; and (v) Series F warrants to purchase 100,000 shares of Nuvve Holding’s common stock, at an exercise price of $40.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $500 million in aggregate capital expenditures (collectively, the “Nuvve Holding Warrants”). The Nuvve Holding Warrants are accounted for in accordance with Topic 815, “Derivatives and Hedging,” and are recorded on the condensed consolidated balance sheets at fair value. Changes in the Nuvve Holding Warrants’ fair value are recognized in earnings and included in “Other (income) expense” on the condensed consolidated statements of operations. The following table sets forth a reconciliation of the changes in fair value of the Partnership’s Nuvve Holding Warrants for the periods indicated (in thousands): Three Months Ended Year Ended Beginning fair value of warrants $ — $ 664 Net gain (loss) on warrants — (664) Ending fair value of warrants $ — $ — Under Topic 815, “Derivatives and Hedging,” all derivative instruments are recorded on the condensed consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. Changes in the derivatives’ fair values are recognized in earnings. Earnout Derivative See Note 5 “Fair Value Measurements” for disclosure regarding the earnout derivative. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Credit Agreement We have entered into a credit agreement with Royal Bank of Canada, as administrative agent and collateral agent, and the lenders party thereto, as amended through the date of the Thirteenth Amendment to Third Amended and Restated Credit Agreement, dated as of April 10, 2023 (the “Credit Agreement”). The Credit Agreement provides a quarterly amortizing term loan of $20.0 million (the “Term Loan”) and a maximum revolving credit amount of $5.0 million (the “Revolving Loan”). The Credit Agreement matures on September 30, 2025. Borrowings under the Credit Agreement are secured by various mortgages of midstream properties that we own as well as various security and pledge agreements among us, certain of our subsidiaries and the administrative agent. Borrowings under the Credit Agreement are available for limited direct investment in midstream properties, acquisitions, and working capital and general business purposes. The Credit Agreement has a sub-limit of up to $2.5 million which may be used for the issuance of letters of credit. As of March 31, 2023, we had approximately $19.7 million of debt outstanding, consisting of approximately $18.2 million under the Term Loan and approximately $1.5 million under the Revolving Loan. We are required to make mandatory amortizing payments of outstanding principal on the Term Loan, which were, prior to the effectiveness of the Thirteenth Amendment, $3.0 million for the quarter ended December 31, 2021, and $2.0 million per fiscal quarter thereafter commencing with the quarter ended March 31, 2023. As of March 31, 2023, we have met our mandatory amortizing payments of outstanding principal on the Term Loan through June 2023. Following the effectiveness of the Thirteenth Amendment, the Credit Agreement requires a single amortizing payment of outstanding principal on the Term Loan of $2.5 million on each of December 31, 2023, December 31, 2024 and June 30, 2025. We have approximately $3.5 million in unused borrowing capacity under the Revolving Loan. There were no letters of credit outstanding under our Credit Agreement as of March 31, 2023. At our election, interest for borrowings under the Credit Agreement are determined by reference to (i) the secured overnight financing rate published by the Federal Reserve Bank of New York (“SOFR”) plus an applicable margin between 2.75% and 3.50% per annum based on net debt to EBITDA or (ii) a domestic bank rate (“ABR”) plus an applicable margin between 1.75% and 2.50% per annum based on net debt to EBITDA plus (iii) a commitment fee of 0.50% per annum based on the unutilized portion of the Revolving Loan. Interest on the borrowings for ABR loans and the commitment fee are generally payable quarterly. Interest on the borrowings for SOFR loans are generally payable at the applicable maturity date. Prior to the effective date of the Thirteenth Amendment, interest for borrowings under the Credit Agreement was determined by reference to the London Interbank Offered Rate (“LIBOR”). Upon the effectiveness of the Thirteenth Amendment, interest for borrowings under the Credit Agreement are determined by reference to SOFR. The Credit Agreement contains various covenants that limit, among other things, our ability to incur certain indebtedness, grant certain liens, merge or consolidate, sell all or substantially all of our assets, make certain loans, acquisitions, capital expenditures and investments, and pay distributions to unitholders. In addition, we are required to maintain the following financial covenants: • current assets to current liabilities, excluding any current maturities of debt, of at least 1.0 to 1.0 at all times; and • senior secured net debt to consolidated adjusted EBITDA for the last twelve months, as of the last day of any fiscal quarter, of not greater than 3.25 to 1.00. The Credit Agreement also includes customary events of default, including events of default relating to non-payment of principal, interest or fees, inaccuracy of representations and warranties when made or when deemed made, violation of covenants, cross-defaults, bankruptcy and insolvency events, certain unsatisfied judgments, loan documents not being valid and a change in control. A change in control is generally defined as the occurrence of one of the following events: (i) our existing general partner ceases to be our sole general partner or (ii) certain specified persons shall cease to own more than 50% of the equity interests of our general partner or shall cease to control our general partner. If an event of default occurs, the lenders will be able to accelerate the maturity of the Credit Agreement and exercise other rights and remedies. At March 31, 2023, we were in compliance with the financial covenants contained in the Credit Agreement. We monitor compliance on an ongoing basis. If we are unable to remain in compliance with the financial covenants contained in our Credit Agreement or maintain the required ratios discussed above, the lenders could call an event of default and accelerate the outstanding debt under the terms of the Credit Agreement, such that our outstanding debt could become then due and payable. We may request waivers of compliance from the violated financial covenants from the lenders, but there is no assurance that such waivers would be granted. We are required to make mandatory amortizing payments of the outstanding principal on the Term Loan and we expect these amortizing payments will be made from our operating cash flows and other capital resources. However, there can be no assurance that operations and other capital resources will provide cash in sufficient amounts to make these mandatory amortizing payments. Debt Issuance Costs As of March 31, 2023 and December 31, 2022, our unamortized debt issuance costs were approximately $0.3 million and $0.4 million, respectively. These costs are amortized to interest expense in our condensed consolidated statements of operations over the life of our Credit Agreement. Amortization of debt issuance costs recorded during the three months ended March 31, 2023 and 2022 was approximately $0.1 million and $0.1 million, respectively. |
Gathering and Transportation As
Gathering and Transportation Assets | 3 Months Ended |
Mar. 31, 2023 | |
Extractive Industries [Abstract] | |
Gathering and Transportation Assets | GATHERING AND TRANSPORTATION ASSETS Gathering and transportation assets consisted of the following (in thousands): March 31, December 31, Gathering and transportation assets Midstream assets $ 183,129 $ 181,981 Less: Accumulated depreciation and impairment (96,101) (94,503) Total gathering and transportation assets, net $ 87,028 $ 87,478 Depreciation and Amortization . Gathering and transportation assets, are stated at historical acquisition cost, net of any impairments, and are depreciated using the straight-line method over the useful lives of the assets, which range from 3 to 15 years for furniture and equipment, up to 36 years for gathering facilities, and up to 40 years for transportation assets. Depreciation and amortization consisted of the following (in thousands): Three Months Ended 2023 2022 Depreciation and amortization of gathering and transportation assets $ 1,707 $ 1,774 Amortization of intangible assets 2,737 3,365 Total depreciation and amortization $ 4,444 $ 5,139 Impairment of Gathering and Transportation Assets. We perform a periodic review of gathering and transportation assets to identify facts and circumstances, or triggering events, that indicate the carrying value may not be recoverable. Asset recoverability is measured by comparing the carrying value of the asset or asset group with its expected future pre-tax undiscounted cash flows. These cash flow estimates require us to make projections and assumptions for many years into the future for pricing, demand, competition, operating cost and other factors. If the carrying amount exceeds the expected future undiscounted cash flows, we recognize an impairment equal to the excess of net book value over fair value. The determination of the fair value using present value techniques requires us to make projections and assumptions regarding the probability of a range of outcomes and the rates of interest used in the present value calculations. Any changes we make to these projections and assumptions could result in significant revisions to our evaluation of |
Asset Retirement Obligation
Asset Retirement Obligation | 3 Months Ended |
Mar. 31, 2023 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation | ASSET RETIREMENT OBLIGATION We recognize the fair value of a liability for an asset retirement obligation (“ARO”) in the period in which it is incurred if a reasonable estimate of fair value can be made. Each period, we accrete the ARO to its then present value. The associated asset retirement cost (“ARC”) is capitalized as part of the carrying amount of our gathering and transportation assets. Subsequently, the ARC is depreciated using the straight-line method. The AROs recorded by us relate to the abandonment of natural gas gathering and other facilities. Inherent in the fair value calculation of AROs are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions result in adjustments to the recorded fair value of the existing ARO, a corresponding adjustment is made to the ARC capitalized as part of gathering and transportation assets. The following table is a reconciliation of changes in ARO for the three months ended March 31, 2023 and the year ended December 31, 2022 (in thousands): Three Months Ended Year Ended Asset retirement obligation, beginning balance $ 5,121 $ 4,700 Accretion expense 111 421 Asset retirement obligation, ending balance $ 5,232 $ 5,121 Additional AROs increase the liability associated with new gathering and transportation assets and other facilities as these obligations are incurred. Abandonments of gathering and transportation assets and other facilities reduce the liability for AROs. During the three months ended March 31, 2023 and the year ended December 31, 2022, there were no significant expenditures for abandonments and there were no assets legally restricted for purposes of settling existing AROs. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS Intangible assets are comprised of customer and marketing contracts. The intangible assets balance as of March 31, 2023 is related to the Gathering Agreement with Mesquite that was entered into as part of the acquisition of the Catarina Gathering System, which is located on the western portion of Mesquite’s acreage position in Dimmit, La Salle and Webb counties, Texas (the western portion of such acreage, “Western Catarina”). Pursuant to the Gathering Agreement, Mesquite tenders all of its crude oil, natural gas and other hydrocarbon-based product volumes produced in Western Catarina and Eastern Catarina for processing and transportation through the Catarina Gathering System. These intangible assets are being amortized using the straight-line method over the 17-year life of the agreement. We perform a periodic review of intangible assets to identify facts and circumstances, or triggering events, that indicate the carrying value may not be recoverable. Amortization expense for the three months ended March 31, 2023 and 2022 was approximately $2.7 million and $3.4 million, respectively. These costs are amortized to depreciation, depletion, and amortization expense in our condensed consolidated statements of operations. The following table is a reconciliation of changes in intangible assets for the three months ended March 31, 2023 and the year ended December 31, 2022 (in thousands): Three Months Ended Year Ended Beginning balance $ 106,752 $ 118,329 Amortization (2,737) (11,577) Ending balance $ 104,015 $ 106,752 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | INVESTMENTS In July 2016, we completed a transaction pursuant to which we acquired from Mesquite a 50% interest in Carnero Gathering, LLC (“Carnero Gathering”), a joint venture that was 50% owned and operated by Targa Resources Corp. (NYSE: TRGP) (“Targa”), for an initial payment of approximately $37.0 million and the assumption of remaining capital commitments to Carnero Gathering, estimated at approximately $7.4 million as of the acquisition date (the “Carnero Gathering Transaction”). The fair value of the intangible asset for the contractual customer relationship related to Carnero Gathering was valued at approximately $13.0 million. This amount is being amortized over a contract term of 15 years and decreases earnings from equity investments in our condensed consolidated statements of operations. As part of the Carnero Gathering Transaction, we are required to pay Mesquite an earnout based on natural gas received above a threshold volume and tariff at designated delivery points from Mesquite and other producers. See Note 5 “Fair Value Measurements” for further discussion of the earnout derivative. In November 2016, we completed a transaction pursuant to which we acquired from Mesquite a 50% interest in Carnero Processing, LLC (“Carnero Processing”), a joint venture that was 50% owned and operated by Targa, for aggregate cash consideration of approximately $55.5 million and the assumption of remaining capital contribution commitments to Carnero Processing, estimated at approximately $24.5 million as of the date of acquisition. In May 2018, we executed a series of agreements with Targa and other parties pursuant to which, among other things: (1) the parties merged their respective 50% interests in Carnero Gathering and Carnero Processing (the “Carnero JV Transaction”) to form an expanded 50 / 50 joint venture in South Texas, within Carnero G&P, LLC (“Carnero JV”), (2) Targa contributed 100% of the equity interest in the Silver Oak II Gas Processing Plant (“Silver Oak II Plant”), located in Bee County, Texas, to Carnero JV, which expands the processing capacity of Carnero JV from 260 MMcf/d to 460 MMcf/d, (3) Targa contributed certain capacity in the 45 miles of high pressure natural gas gathering pipelines owned by Carnero Gathering (the “Carnero Gathering Line”) that connect the Catarina Gathering System to nearby pipelines and the 260 MMcf/d cryogenic natural gas processing plant located in La Salle County, Texas (the “Raptor Plant”) to Carnero JV resulting in Carnero JV owning all of the capacity in the Carnero Gathering Line, which has a design limit (without compression) of 400 MMcf/d, (4) Carnero JV received a new dedication from Mesquite and its working interest partners of over 315,000 acres located in the Western Eagle Ford on Mesquite’s acreage in Dimmit, Webb, La Salle, Zavala and Maverick counties, Texas (such acreage is collectively referred to as Mesquite’s “Comanche Asset”) pursuant to a new long-term firm gas gathering and processing agreement. The agreement with Mesquite, which was approved by all of the unaffiliated Comanche Asset working interest partners, establishes commercial terms for the gathering of gas on the Carnero Gathering Line and processing at the Raptor Plant and the Silver Oak II Plant. As a result of the Carnero JV Transaction, we now record our share of earnings and losses from Carnero JV using the Hypothetical Liquidation at Book Value (“HLBV”) method of accounting. HLBV is a balance-sheet approach that calculates the amount we would have received if Carnero JV were liquidated at book value at the end of each measurement period. The change in our allocated amount during the period is recognized in our condensed consolidated statements of operations. In the event of the liquidation of Carnero JV, available proceeds are first distributed to any priority return and unpaid capital associated with the Silver Oak II Plant, and then to members in accordance with their capital accounts. As of March 31, 2023, the Partnership had paid approximately $124.7 million for its investment in Carnero JV related to the initial payments and contributed capital. The Partnership has accounted for this investment using the equity method. Targa is the operator of Carnero JV and has significant influence with respect to the normal day-to-day capital and operating decisions. We have included the investment balance in the equity investments caption on the condensed consolidated balance sheets. For the three months ended March 31, 2023, the Partnership recorded earnings of approximately $0.4 million in equity investments from Carnero JV, which was adjusted by approximately $0.3 million related to the amortization of the contractual customer intangible asset. We have included these equity method earnings in the earnings from equity investments line within the condensed consolidated statements of operations. No cash distributions were received during the three months ended March 31, 2023. Summarized financial information of unconsolidated entities is as follows (in thousands): Three Months Ended March 31, 2023 2022 Sales $ 16,492 $ 34,772 Total expenses 16,263 28,028 Net income $ 229 $ 6,744 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES As part of the Carnero Gathering Transaction, we are required to pay Mesquite an earnout based on natural gas received above a threshold volume and tariff at designated delivery points from Mesquite and other producers. This earnout has an approximate value of zero as of March 31, 2023. For the three months ended March 31, 2023, we made no payments to Mesquite related to the earnout. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Please read the disclosures under the headings “Relationship with Stonepeak” and “Shared Services Agreement” in Note 14 “Related Party Transactions” of our Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a more complete description of certain related party transactions that were entered into prior to 2023. Indirect costs billed by SP Holdings in connection with the Shared Services Agreement are recorded as general and administrative expense - related entities. For the three months ended March 31, 2023 and 2022, indirect costs were recorded as an expense of approximately $1.9 million and as a credit |
Unit-Based Compensation
Unit-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Unit-Based Compensation | UNIT-BASED COMPENSATION The Sanchez Production Partners LP Long-Term Incentive Plan (the “LTIP”) allows for grants of restricted common units. Restricted common unit activity under the LTIP during the three months ended March 31, 2023 is presented in the following table: Number of Weighted Outstanding at December 31, 2022 3,592,834 $ 1.25 Granted 5,725,000 0.19 Vested (5,100,000) 0.20 Outstanding at March 31, 2023 4,217,834 $ 1.08 In January 2023, the Partnership issued 625,000 restricted common units pursuant to the LTIP which vest ratably over two years. In March 2023, the Partnership issued 5,100,000 restricted common units pursuant to the LTIP to certain executives of the Partnership’s general partner which vested immediately as a condition of termination of the executives. As of March 31, 2023, 20,259,840 common units remained available for future issuance to participants under the LTIP. The Evolve Transition Infrastructure LP 2021 Equity Inducement Award Plan (the “Inducement Plan”) allows for grants of restricted common units. During the three months ended March 31, 2023, no restricted common units were issued or forfeited and returned to the Inducement Plan. As of March 31, 2023, there are 11,510,112 unvested common units outstanding and 2,589,888 common units available for issuance to participants under the Inducement Plan. |
Partners' Deficit
Partners' Deficit | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Partners' Deficit | PARTNERS’ DEFICIT Outstanding Units As of March 31, 2023, we had 37,751,041 Class C Preferred Units outstanding and 231,032,052 common units outstanding which included 4,217,834 unvested restricted common units issued under the LTIP. Common Unit Issuances We entered into a letter agreement with SP Holdings providing that during the period beginning with the fiscal quarter ended September 30, 2019 and continuing until the end of the fiscal quarter after the fiscal quarter in which we redeem all of our issued and outstanding Class C Preferred Units, SP Holdings agrees to delay receipt of its fees, not including reimbursement of costs. As of March 31, 2023, we have not redeemed any Class C Preferred Units and, as a result, we have not issued any common units to SP Holdings in connection with providing services under the Shared Services Agreement for any quarter following the quarter ended June 30, 2019. As of March 31, 2023, the number of units to be issued under the Shared Services Agreement is 21,473,205. At March 31, 2023, the value of these units was approximately $5.7 million and is recorded on the condensed consolidated balance sheets in accrued shared services fees - related entities. Class C Preferred Units On August 2, 2019, Stonepeak exchanged all of their current equity ownership for newly issued Class C Preferred Units and the Original Warrant in a private placement transaction (the “Exchange”). The holders of the Class C Preferred Units receive a quarterly distribution of 14.0% per annum payable in cash. To the extent that Available Cash (as defined in our partnership agreement) is insufficient to pay the distribution in cash, all or a portion of the distribution may be paid in Class C Preferred PIK Units. Distributions are to be paid on or about the last day of each of February, May, August and November following the end of each quarter and are charged to interest expense - related entities in our condensed consolidated statements of operations. As of January 1, 2022, Adjusted Available Cash (as defined in our partnership agreement) will be distributed to holders of the Class C Preferred Units to redeem a number of Class C Preferred Units to be determined based on the amount of Adjusted Available Cash. As of March 31, 2023, no Class C Preferred Units have been redeemed. During the three months ended March 31, 2023 and 2022, we recorded non-cash interest expense related to the Class C Preferred Units of approximately $14.9 million and $14.4 million, respectively, which are recorded in interest expense - related entities on our condensed consolidated statements of operations. The Class C Preferred Units are accounted for as a current liability on our condensed consolidated balance sheets consisting of the following (in thousands): March 31, December 31, Class C Preferred Units, beginning balance $ 411,800 $ 397,387 Distribution accrual — 14,413 Class C Preferred Units, ending balance $ 411,800 $ 411,800 The table below reflects the payment of distributions on Class C Preferred Units related to the periods indicated. Three Months Ended Class C Preferred Date of Date of Date of December 31, 2022 1,276,605 February 10, 2023 February 20, 2023 February 28, 2023 On November 16, 2020, the Partnership and Stonepeak entered into the Stonepeak Letter Agreement which provides that Stonepeak will be able to elect to receive distributions on the Class C Preferred Units in common units by providing written notice to the Partnership no later than the last day of the calendar month following the end of such quarter. The table below reflects distributions on Class C Preferred Units which were elected to be paid in common units related to the periods indicated. Three Months Ended Number of Common Units Date of December 31, 2021 24,502,356 February 22, 2022 March 31, 2022 24,721,910 May 20, 2022 June 30, 2022 27,442,638 August 22, 2022 September 30, 2022 27,442,638 December 28, 2022 Stonepeak Warrant On August 2, 2019, in connection with the Exchange, the Partnership issued to Stonepeak the Original Warrant, which entitles the holder to receive junior securities of the Partnership representing ten percent of junior securities deemed outstanding when exercised. The Stonepeak Warrant expires on the later of August 2, 2026 or 30 days following the full redemption of the Class C Preferred Units. There is no strike price associated with the exercise of the Stonepeak Warrant. The Stonepeak Warrant is accounted for as a liability in accordance with ASC 480 and is presented within other liabilities on the condensed consolidated balance sheets. Changes in the fair value of the Stonepeak Warrant are charged to interest expense - related entities in our condensed consolidated statements of operations. During the three months ended March 31, 2023 and 2022, we recorded an expense of approximately $1.9 million and $0.6 million, respectively, related to the Stonepeak Warrant. Earnings per Unit Net income (loss) per common unit for the period is based on any distributions that are made to the unitholders (common units) plus an allocation of undistributed net income (loss) based on provisions of our partnership agreement, divided by the weighted average number of common units outstanding. Unit-based awards granted but unvested are eligible to receive distributions. The underlying unvested restricted unit awards are considered participating securities for purposes of determining net income (loss) per unit. Undistributed income is allocated to participating securities based on the proportional relationship of the weighted average number of common units and unit-based awards outstanding. Undistributed losses (including those resulting from distributions in excess of net income) are allocated to common units based on provisions of our partnership agreement. Undistributed losses are not allocated to unvested restricted unit awards as they do not participate in net losses. Distributions declared and paid in the period are treated as distributed earnings in the computation of earnings per common unit even though cash distributions are not necessarily derived from current or prior period earnings. The Partnership’s general partner does not have an economic interest in the Partnership and, therefore, does not participate in the Partnership’s net income. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The Partnership’s investment in Carnero JV represents a variable interest entity (“VIE”) that could expose the Partnership to losses. The amount of losses the Partnership could be exposed to from Carnero JV is limited to the capital investment of approximately $15.1 million. As of March 31, 2023, the Partnership had invested approximately $124.7 million in Carnero JV and no debt has been incurred by Carnero JV. We have included this VIE in equity investments on our condensed consolidated balance sheets. Below is a tabular comparison of the carrying amounts of the assets and liabilities of the VIE and the Partnership’s maximum exposure to loss as of March 31, 2023 and December 31, 2022 (in thousands): March 31, December 31, Acquisitions, earnout and capital investments $ 128,781 $ 128,781 Earnings in equity investments (17,334) (17,479) Distributions received (96,338) (96,338) Maximum exposure to loss $ 15,109 $ 14,964 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | LEASES On November 9, 2021, the Partnership entered into a Gas Compression Agreement with Kodiak to lease gas compression units from Kodiak (the “Gas Compression Agreement”). All leased units have a 36 month primary term commencing on the startup date. Following the primary term of the leased units, the Gas Compression Agreement calls for continuation of the term on a month-to-month basis until terminated with 30 days written notice. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On April, 28 2023, the Partnership received written notice of Stonepeak Catarina’s election to receive distributions on the Class C Preferred Units for the quarter ended March 31, 2023 in common units. The aggregate distribution of 28,403,130 common units (the “Q123 Stonepeak Units”) is payable to Stonepeak Catarina following satisfaction of certain issuance conditions, including, among other things, the compliance by the Partnership and Stonepeak with any applicable federal securities laws applicable to the issuance of the Q123 Stonepeak Units. On May 1, 2023, in connection with Stonepeak Catarina’s election above, we entered into Warrant Amendment 10 with Stonepeak Catarina to exclude from the Stonepeak Warrant 4,260,470 common units issuable under the LTIP. For purposes of this paragraph, we refer to the Credit Agreement, prior to the effectiveness of the Thirteenth Amendment, as the “Existing Credit Agreement” and to the Credit Agreement, as amended by the Thirteenth Amendment, as the “Amended Credit Agreement.” On April 10, 2023, the Partnership entered into the Thirteenth Amendment. Among other things, the Amended Credit Agreement provided for (a) reduction of the quarterly amortizing term loan (the “Term Loan”) from an aggregate principal amount of $65.0 million to an aggregate principal amount of up to $20.0 million, (b) extension of the maturity date to September 30, 2025, (c) removal of the requirement to prepay the Term Loan in the event cash or cash equivalents is in excess of $3,500,000, as well as the removal of related cash balance reporting requirements; provided that the Partnership cannot have cash or cash equivalents in excess of $3,500,000 at, or immediately after giving effect to, any Borrowing or any issuance, amendment, renewal or extension of any Letter of Credit (as each term is defined in the Amended Credit Agreement), (d) reduction and modification of the Partnership’s mandatory amortizing payments of outstanding principal of the Term Loan from $2,000,000 per quarter to a single annual amortizing payment of $2,500,000 on each of December 31, 2023, December 31, 2024 and June 30, 2025, (e) the ability to apply proceeds from asset dispositions having a fair market value in excess of $1 million to either prepay the Term Loan or, subject to compliance with certain notice provisions, utilize such proceeds for capital redeployment, including Investments (as defined in the Amended Credit Agreement), (f) adoption of SOFR as the Benchmark (as defined in the Amended Credit Agreement), (g) removal of the requirement to post Additional Credit Support (as defined in the Existing Credit Agreement) and the return of all Additional Credit Support held by or on behalf of the administrative agent or the collateral agent, as applicable, within five business days of the effective date of the Amended Credit Agreement, (h) changes to the calculation of Adjusted EBITDA (as defined in the Amended Credit Agreement) for the most recent four fiscal quarter period, starting as of January 1, 2023, with annualization adjustments and a 10% capped addback to Adjusted EBITDA for (x) certain restructuring costs, charges or reserves and (y) transaction expenses incurred in connection with potential acquisitions and sales, and (i) permitted Investments (as defined in the Amended Credit Agreement) with the proceeds of 50% of quarterly consolidated net income, net cash proceeds of equity issuances, cash capital contributions made to the Partnership and certain asset dispositions , subject to leverage compliance, absence of an Event of Default (as defined in the Amended Credit Agreement) and at least ten percent (10%) unused availability of the Maximum Revolving Credit Amounts (as defined in the Amended Credit Agreement) remaining after giving effect to such Investment. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Accounting policies used by us conform to GAAP. The accompanying financial statements include the accounts of us and our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to those rules and regulations. We believe that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. Certain amounts from the prior period have been reclassified to confirm to current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), which are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not effective, will not have a material impact on our condensed consolidated financial statements upon adoption. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU modifies the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. Additionally, in November 2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” which changed the effective date for certain issuers to annual and interim periods in fiscal years beginning after December 15, 2022, and earlier adoption is permitted. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. |
Use of Estimates | Use of Estimates The condensed consolidated financial statements are prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and reported amounts of revenues and expenses. The estimates that are |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities on a recurring basis | The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2023 (in thousands): Fair Value Measurements at March 31, 2023 Active Markets for Observable Unobservable Inputs Fair Value Fair value of warrants Nuvve Holding Warrants $ — $ — $ — $ — Other liabilities Stonepeak Warrant — (4,772) — (4,772) Total $ — $ (4,772) $ — $ (4,772) The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2022 (in thousands): Fair Value Measurements at December 31, 2022 Active Markets for Observable Unobservable Inputs Fair Value Fair value of warrants Nuvve Holding Warrants $ — $ — $ — $ — Other liabilities Stonepeak Warrant — (2,853) — (2,853) Total $ — $ (2,853) $ — $ (2,853) |
Derivative and Financial Inst_2
Derivative and Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Reconciliation of changes in fair value of derivatives | The following table sets forth a reconciliation of the changes in fair value of the Partnership’s Nuvve Holding Warrants for the periods indicated (in thousands): Three Months Ended Year Ended Beginning fair value of warrants $ — $ 664 Net gain (loss) on warrants — (664) Ending fair value of warrants $ — $ — |
Gathering and Transportation _2
Gathering and Transportation Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Extractive Industries [Abstract] | |
Schedule of gathering and transportation assets | Gathering and transportation assets consisted of the following (in thousands): March 31, December 31, Gathering and transportation assets Midstream assets $ 183,129 $ 181,981 Less: Accumulated depreciation and impairment (96,101) (94,503) Total gathering and transportation assets, net $ 87,028 $ 87,478 |
Schedule of depreciation, depletion, and amortization | Depreciation and amortization consisted of the following (in thousands): Three Months Ended 2023 2022 Depreciation and amortization of gathering and transportation assets $ 1,707 $ 1,774 Amortization of intangible assets 2,737 3,365 Total depreciation and amortization $ 4,444 $ 5,139 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Reconciliation of changes in asset retirement obligation | The following table is a reconciliation of changes in ARO for the three months ended March 31, 2023 and the year ended December 31, 2022 (in thousands): Three Months Ended Year Ended Asset retirement obligation, beginning balance $ 5,121 $ 4,700 Accretion expense 111 421 Asset retirement obligation, ending balance $ 5,232 $ 5,121 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | The following table is a reconciliation of changes in intangible assets for the three months ended March 31, 2023 and the year ended December 31, 2022 (in thousands): Three Months Ended Year Ended Beginning balance $ 106,752 $ 118,329 Amortization (2,737) (11,577) Ending balance $ 104,015 $ 106,752 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized financial information of unconsolidated entities | Summarized financial information of unconsolidated entities is as follows (in thousands): Three Months Ended March 31, 2023 2022 Sales $ 16,492 $ 34,772 Total expenses 16,263 28,028 Net income $ 229 $ 6,744 |
Unit-Based Compensation (Tables
Unit-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of units activity | Restricted common unit activity under the LTIP during the three months ended March 31, 2023 is presented in the following table: Number of Weighted Outstanding at December 31, 2022 3,592,834 $ 1.25 Granted 5,725,000 0.19 Vested (5,100,000) 0.20 Outstanding at March 31, 2023 4,217,834 $ 1.08 |
Partners' Deficit (Tables)
Partners' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Class C preferred units | The Class C Preferred Units are accounted for as a current liability on our condensed consolidated balance sheets consisting of the following (in thousands): March 31, December 31, Class C Preferred Units, beginning balance $ 411,800 $ 397,387 Distribution accrual — 14,413 Class C Preferred Units, ending balance $ 411,800 $ 411,800 |
Schedule of distributions | The table below reflects the payment of distributions on Class C Preferred Units related to the periods indicated. Three Months Ended Class C Preferred Date of Date of Date of December 31, 2022 1,276,605 February 10, 2023 February 20, 2023 February 28, 2023 The table below reflects distributions on Class C Preferred Units which were elected to be paid in common units related to the periods indicated. Three Months Ended Number of Common Units Date of December 31, 2021 24,502,356 February 22, 2022 March 31, 2022 24,721,910 May 20, 2022 June 30, 2022 27,442,638 August 22, 2022 September 30, 2022 27,442,638 December 28, 2022 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities | |
Schedule of carrying amounts of assets and liabilities of variable interest entity | Below is a tabular comparison of the carrying amounts of the assets and liabilities of the VIE and the Partnership’s maximum exposure to loss as of March 31, 2023 and December 31, 2022 (in thousands): March 31, December 31, Acquisitions, earnout and capital investments $ 128,781 $ 128,781 Earnings in equity investments (17,334) (17,479) Distributions received (96,338) (96,338) Maximum exposure to loss $ 15,109 $ 14,964 |
Divestitures (Narrative) (Detai
Divestitures (Narrative) (Details) - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands | May 09, 2022 | Mar. 11, 2022 |
Divestiture of (The "Kodiak 1 Assets") | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from divestiture | $ 250 | |
Divestiture gain (loss) | $ (2,200) | |
Divestiture of (The "Kodiak 2 Assets") | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from divestiture | $ 250 | |
Divestiture gain (loss) | $ (2,200) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Apr. 01, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 6.4 | $ 15.1 | |||
Receivables | 2.2 | $ 2.3 | |||
A&R Gathering Agreement | |||||
Disaggregation of Revenue [Line Items] | |||||
Disputed receivable balance | $ 26.7 | $ 26.7 | |||
Disputed receivable balance paid in cash | $ 15.1 | ||||
Amortization | $ 0.3 | ||||
Other Noncurrent Assets | A&R Gathering Agreement | |||||
Disaggregation of Revenue [Line Items] | |||||
Related party receivables | $ 11.6 |
Fair Value Measurements (Recurr
Fair Value Measurements (Recurring) (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Nuvve Holding Warrants | $ 0 | $ 0 |
Stonepeak Warrant | (4,772) | (2,853) |
Total | (4,772) | (2,853) |
Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Nuvve Holding Warrants | 0 | 0 |
Stonepeak Warrant | 0 | 0 |
Total | 0 | 0 |
Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Nuvve Holding Warrants | 0 | 0 |
Stonepeak Warrant | (4,772) | (2,853) |
Total | (4,772) | (2,853) |
Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Nuvve Holding Warrants | 0 | 0 |
Stonepeak Warrant | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements (Non-Re
Fair Value Measurements (Non-Recurring) (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value | $ 0 | $ 0 | $ 664,000 |
Earnout | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value | $ 0 | $ 0 |
Derivative and Financial Inst_3
Derivative and Financial Instruments (Narrative) (Details) - Levo Mobility LLC Joint Venture - Nuvve Holding Corp $ / shares in Units, $ in Millions | May 17, 2021 USD ($) $ / shares shares |
Derivative [Line Items] | |
Warrants term | 10 years |
Series B Warrants | |
Derivative [Line Items] | |
Number of shares called by warrants (in shares) | shares | 200,000 |
Warrants exercise price (in dollars per share) | $ / shares | $ 10 |
Series C Warrants | |
Derivative [Line Items] | |
Number of shares called by warrants (in shares) | shares | 100,000 |
Warrants exercise price (in dollars per share) | $ / shares | $ 15 |
Aggregate capital expenditures threshold for warrants vesting | $ | $ 125 |
Series C Warrants | Vested upon issuance | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series C Warrants | Vested upon Levo entry into threshold amount of contracts with third parties | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series D Warrants | |
Derivative [Line Items] | |
Number of shares called by warrants (in shares) | shares | 100,000 |
Warrants exercise price (in dollars per share) | $ / shares | $ 20 |
Aggregate capital expenditures threshold for warrants vesting | $ | $ 250 |
Series D Warrants | Vested upon issuance | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series D Warrants | Vested upon Levo entry into threshold amount of contracts with third parties | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series E Warrants | |
Derivative [Line Items] | |
Number of shares called by warrants (in shares) | shares | 100,000 |
Warrants exercise price (in dollars per share) | $ / shares | $ 30 |
Aggregate capital expenditures threshold for warrants vesting | $ | $ 375 |
Series E Warrants | Vested upon issuance | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series E Warrants | Vested upon Levo entry into threshold amount of contracts with third parties | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series F Warrants | |
Derivative [Line Items] | |
Number of shares called by warrants (in shares) | shares | 100,000 |
Warrants exercise price (in dollars per share) | $ / shares | $ 40 |
Aggregate capital expenditures threshold for warrants vesting | $ | $ 500 |
Series F Warrants | Vested upon issuance | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Series F Warrants | Vested upon Levo entry into threshold amount of contracts with third parties | |
Derivative [Line Items] | |
Warrants vesting percentage | 50% |
Derivative and Financial Inst_4
Derivative and Financial Instruments (Changes In Fair Value) (Details) - Warrants - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Derivative, Fair Value [Roll Forward] | ||
Beginning fair value | $ 0 | $ 664 |
Net gain (loss) on warrants | 0 | (664) |
Ending fair value | $ 0 | $ 0 |
Debt (Details)
Debt (Details) $ in Thousands | 3 Months Ended | |||||
Apr. 10, 2023 USD ($) | Apr. 09, 2023 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Line of Credit Facility [Line Items] | ||||||
Credit agreement, outstanding | $ 19,700 | |||||
Credit agreement available | 1,500 | |||||
Unamortized debt issue costs | 300 | $ 400 | ||||
Amortization of debt issuance costs | 134 | $ 123 | ||||
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit agreement, outstanding | $ 18,200 | |||||
Commitment fee on unutilized borrowing base | 0.50% | |||||
Current assets to current liabilities ratio | 1 | |||||
Debt to adjusted EBITDA ratio | 3.25 | |||||
Credit Agreement | Subsequent event | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 20,000 | $ 65,000 | ||||
Principal repayment required | 2,500 | $ 2,000 | ||||
Credit Agreement | Scenario One | ||||||
Line of Credit Facility [Line Items] | ||||||
Periodic payments | $ 3,000 | |||||
Credit Agreement | Scenario Two | ||||||
Line of Credit Facility [Line Items] | ||||||
Periodic payments | $ 2,000 | |||||
Revolving Credit Facility | Subsequent event | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 5,000 | |||||
Unused borrowing capacity | $ 3,500 | |||||
Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 2,500 | |||||
Minimum | Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Ownership percentage by subsidiary | 0.50 | |||||
Minimum | Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable interest rate | 2.75% | |||||
Minimum | Credit Agreement | ABR | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable interest rate | 1.75% | |||||
Maximum | Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable interest rate | 3.50% | |||||
Maximum | Credit Agreement | ABR | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable interest rate | 2.50% |
Gathering and Transportation _3
Gathering and Transportation Assets (Gathering and Transportation Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Midstream assets | $ 87,028 | $ 87,478 |
Midstream | ||
Property, Plant and Equipment [Line Items] | ||
Midstream assets | 183,129 | 181,981 |
Less: Accumulated depreciation and impairment | (96,101) | (94,503) |
Total gathering and transportation assets, net | $ 87,028 | $ 87,478 |
Gathering and Transportation _4
Gathering and Transportation Assets (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Minimum | Furniture and Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Maximum | Furniture and Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Maximum | Gathering Facilities | |
Property, Plant and Equipment [Line Items] | |
Useful life | 36 years |
Maximum | Transportation assets | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Gathering and Transportation _5
Gathering and Transportation Assets (DDA and Impairments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Amortization of intangible assets | $ 2,737 | $ 3,365 |
Depreciation, depletion and amortization | 1,707 | 1,774 |
Gathering and Transportation Related Assets | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation, depletion and amortization | 1,707 | 1,774 |
Oil and Natural Gas-Related Assets and Gathering and Transportation-Related Assets | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation, depletion and amortization | $ 4,444 | $ 5,139 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligation, beginning balance | $ 5,121,000 | $ 4,700,000 | $ 4,700,000 |
Accretion expense | 111,000 | $ 102,000 | 421,000 |
Asset retirement obligation, ending balance | 5,232,000 | 5,121,000 | |
Legally restricted assets | $ 0 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization | $ 2,737 | $ 3,400 | $ 11,577 |
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | 106,752 | 118,329 | 118,329 |
Amortization | (2,737) | $ (3,400) | (11,577) |
Ending balance | $ 104,015 | $ 106,752 | |
Customer Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 17 years |
Investments (Narrative) (Detail
Investments (Narrative) (Details) a in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
May 31, 2018 a MMcf | Apr. 30, 2018 MMcf | Nov. 30, 2016 USD ($) | Jul. 31, 2016 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Amortization of intangible assets | $ 2,737 | $ 3,365 | ||||
Earnings (loss) from equity investments | 145 | 3,391 | ||||
Distributions received | 0 | $ 1,263 | ||||
Carnero Gathering, Joint Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 50% | |||||
Payments to acquire joint venture | $ 37,000 | 124,700 | ||||
Assumption of capital commitments in joint venture | 7,400 | |||||
Daily processing capacity | MMcf | 400 | |||||
Carnero Gathering, Joint Venture | Customer Relationships | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Intangible asset, fair value | $ 13,000 | |||||
Agreement term (in years) | 15 years | |||||
Carnero Processing, Joint Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 50% | |||||
Payments to acquire joint venture | $ 55,500 | |||||
Assumption of capital commitments in joint venture | $ 24,500 | |||||
Carnero Gathering and Carnero Processing | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 50% | |||||
Carnero G&P, Joint Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 50% | |||||
Payments to acquire joint venture | 124,700 | |||||
Daily processing capacity | MMcf | 460 | 260 | ||||
Earnings (loss) from equity investments | 400 | |||||
Distributions received | 0 | |||||
Carnero G&P, Joint Venture | Customer Relationships | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Amortization of intangible assets | $ 300 | |||||
Mesquite Energy, Inc. | Carnero Gathering, Joint Venture | Western Eagle Ford | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Acres dedicated for gathering | a | 315 | |||||
Targa | Carnero Gathering, Joint Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 50% | |||||
Targa | Carnero Processing, Joint Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 50% | |||||
Targa | SIlver Oak II [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percent) | 100% |
Investments (Unconsolidated Ent
Investments (Unconsolidated Entities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||
Sales | $ 6,400 | $ 15,100 |
Net income | (22,219) | (9,732) |
Unconsolidated entities | ||
Schedule of Equity Method Investments [Line Items] | ||
Sales | 16,492 | 34,772 |
Total expenses | 16,263 | 28,028 |
Net income | $ 229 | $ 6,744 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Carnero Gathering, Joint Venture | |
Variable Interest Entity [Line Items] | |
Earnout derivative liability | $ 0 |
Mesquite Energy, Inc. | |
Variable Interest Entity [Line Items] | |
Earnout payments | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
SP Holdings | ||
Related Party Transaction [Line Items] | ||
Indirect costs | $ 1.9 | $ (0.5) |
Unit-Based Compensation (Unit A
Unit-Based Compensation (Unit Activity) (Details) - Restricted Stock - LTIP - $ / shares | 1 Months Ended | 3 Months Ended |
Jan. 31, 2023 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested restricted units outstanding, beginning balance (in units) | 3,592,834 | 3,592,834 |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ 1.25 | $ 1.25 |
Granted (in units) | 625,000 | 5,725,000 |
Granted (in dollars per share) | $ 0.19 | |
Vested (in units) | (5,100,000) | |
Vested (in dollars per share) | $ 0.20 | |
Unvested restricted units outstanding, ending balance (in units) | 4,217,834 | |
Weighted average grant date fair value, ending balance (in dollars per share) | $ 1.08 |
Unit-Based Compensation (Narrat
Unit-Based Compensation (Narrative) (Details) - shares | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2023 | Jan. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units available for future issuance (in units) | 20,259,840 | 20,259,840 | ||
Restricted Stock | LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units issued (in units) | 625,000 | 5,725,000 | ||
Vesting period | 2 years | |||
Unvested restricted units outstanding (in units) | 4,217,834 | 4,217,834 | 3,592,834 | |
Restricted Stock | LTIP | Executives | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units issued (in units) | 5,100,000 | |||
Restricted Stock | Inducement Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units available for future issuance (in units) | 2,589,888 | 2,589,888 | ||
Units returned (in units) | 0 | |||
Unvested restricted units outstanding (in units) | 11,510,112 | 11,510,112 |
Partners' Deficit (Narratives)
Partners' Deficit (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Limited Partners' Capital Account [Line Items] | |||
Units, outstanding (in units) | 231,032,052 | 225,307,052 | |
Accrued shared services fees - related entities | $ 5.7 | ||
Stonepeak Warrant | |||
Limited Partners' Capital Account [Line Items] | |||
Interest expense, net | $ 1.9 | $ 0.6 | |
Restricted Stock Units (RSUs) | LTIP | |||
Limited Partners' Capital Account [Line Items] | |||
Unvested restricted units outstanding (in units) | 4,217,834 | ||
Class C preferred units | |||
Limited Partners' Capital Account [Line Items] | |||
Preferred units outstanding (in units) | 37,751,041 | ||
Distributions (as a percent) | 14% | ||
Interest expense, net | $ 14.9 | $ 14.4 | |
Warrant exercise period | 30 days | ||
Class C preferred units | Settlement Agreement with Stonepeak Catarina Holdings LLC | |||
Limited Partners' Capital Account [Line Items] | |||
Units to be issued under agreement (in units) | 21,473,205 |
Partners' Deficit (Preferred Un
Partners' Deficit (Preferred Units) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Preferred Units [Roll Forward] | ||
Class C Preferred Units, beginning balance | $ 411,800 | $ 397,387 |
Distribution accrual | 0 | 14,413 |
Class C Preferred Units, ending balance | $ 411,800 | $ 411,800 |
Partners' Deficit (Distribution
Partners' Deficit (Distributions) (Details) - shares | 3 Months Ended | ||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Class C preferred units | |||||
Distribution Made to Limited Partner [Line Items] | |||||
Units distribution (in units) | 1,276,605 | ||||
Common Units | |||||
Distribution Made to Limited Partner [Line Items] | |||||
Units distribution (in units) | 27,442,638 | 27,442,638 | 24,721,910 | 24,502,356 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 31, 2016 | Mar. 31, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss | $ 15,109,000 | $ 14,964,000 | |
Acquisitions, earnout and capital investments | 128,781,000 | 128,781,000 | |
Earnings in equity investments | (17,334,000) | (17,479,000) | |
Distributions received | (96,338,000) | $ (96,338,000) | |
Carnero Gathering, Joint Venture | |||
Variable Interest Entity [Line Items] | |||
Maximum exposure to loss | 15,100,000 | ||
Payments to acquire joint venture | $ 37,000,000 | 124,700,000 | |
Debt incurred | $ 0 |
Leases (Details)
Leases (Details) | Nov. 09, 2021 |
Leases [Abstract] | |
Primary term | 36 months |
Termination notice period | 30 days |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
May 01, 2023 | Apr. 28, 2023 | Apr. 10, 2023 | Apr. 09, 2023 | Dec. 31, 2022 | |
Class C preferred units | |||||
Subsequent Event [Line Items] | |||||
Units distribution (in units) | 1,276,605 | ||||
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Distribution Made to Limited Partner, Unit Distribution, Units Excluded | 4,260,470 | ||||
Subsequent event | Class C preferred units | |||||
Subsequent Event [Line Items] | |||||
Units distribution (in units) | 28,403,130 | ||||
Subsequent event | Credit Agreement | |||||
Subsequent Event [Line Items] | |||||
Maximum borrowing capacity | $ 20 | $ 65 | |||
Cash and cash equivalents maximum balance before prepayment | 3.5 | ||||
Principal repayment required | 2.5 | $ 2 | |||
Minimum fair market value of asset dispositions applied to prepayment | $ 1 | ||||
Maximum percentage addback to adjusted EBITDA | 10% | ||||
Minimum unused availability percentage of credit amounts | 10% |