Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document Information [Line Items] | |||
Entity Registrant Name | Noble Midstream Partners LP | ||
Entity Central Index Key | 1,647,513 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Entity Public Float | $ 813 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Common Units | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 23,758,442 | ||
Subordinated Units | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 15,902,584 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | |||
Midstream Services — Affiliate | $ 224,401 | $ 160,724 | $ 87,837 |
Midstream Services — Third Party | 14,880 | 0 | 0 |
Total Revenues | 239,281 | 160,724 | 87,837 |
Costs and Expenses | |||
Direct Operating | 54,007 | 29,107 | 16,933 |
Depreciation and Amortization | 12,953 | 9,066 | 6,891 |
General and Administrative | 13,396 | 9,914 | 2,771 |
Total Operating Expenses | 80,356 | 48,087 | 26,595 |
Operating Income | 158,925 | 112,637 | 61,242 |
Other (Income) Expense | |||
Interest Expense, Net of Amount Capitalized | 1,603 | 3,373 | 4,595 |
Investment Income | (6,334) | (4,526) | (4,621) |
Total Other (Income) Expense | (4,731) | (1,153) | (26) |
Income Before Income Taxes | 163,656 | 113,790 | 61,268 |
Income Tax Provision | 20 | 28,288 | 23,226 |
Net Income | 163,636 | 85,502 | $ 38,042 |
Less: Net Income Attributable to Noncontrolling Interests | 23,064 | 11,054 | |
Net Income Attributable to Noble Midstream Partners LP | 140,572 | 28,458 | |
Less: Net Income Attributable to Incentive Distribution Rights | 835 | 0 | |
Net Income Attributable to Limited Partners | 139,737 | 28,458 | |
Common Units | |||
Other (Income) Expense | |||
Net Income Attributable to Limited Partners | $ 75,076 | $ 14,229 | |
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted | |||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 4.10 | $ 0.89 | |
Weighted Average Limited Partner Units Outstanding — Basic | |||
Average Limited Partner Units Outstanding - Basic (in units) | 18,192 | 15,903 | |
Weighted Average Limited Partner Units Outstanding — Diluted | |||
Average Limited Partner Units Outstanding - Diluted (in units) | 18,204 | 15,903 | |
Subordinated Units | |||
Other (Income) Expense | |||
Net Income Attributable to Limited Partners | $ 64,661 | $ 14,229 | |
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted | |||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 4.10 | $ 0.89 | |
Weighted Average Limited Partner Units Outstanding — Basic | |||
Average Limited Partner Units Outstanding - Basic (in units) | 15,903 | 15,903 | |
Weighted Average Limited Partner Units Outstanding — Diluted | |||
Average Limited Partner Units Outstanding - Diluted (in units) | 15,903 | 15,903 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and Cash Equivalents | $ 18,026 | $ 57,421 |
Restricted Cash | 37,505 | 0 |
Accounts Receivable — Affiliate | 27,539 | 19,191 |
Accounts Receivable — Third Party | 2,641 | 0 |
Other Current Assets | 389 | 380 |
Total Current Assets | 86,100 | 76,992 |
Property, Plant and Equipment | ||
Total Property, Plant and Equipment, Gross | 706,039 | 311,045 |
Less: Accumulated Depreciation and Amortization | (44,271) | (31,642) |
Total Property, Plant and Equipment, Net | 661,768 | 279,403 |
Investments | 80,461 | 11,151 |
Deferred Charges | 1,429 | 1,813 |
Total Assets | 829,758 | 369,359 |
Current Liabilities | ||
Accounts Payable — Affiliate | 1,616 | 1,452 |
Accounts Payable — Trade | 109,893 | 12,501 |
Current Portion of Capital Lease | 0 | 4,786 |
Ad Valorem Tax | 1,137 | 1,187 |
Other Current Liabilities | 1,739 | 430 |
Total Current Liabilities | 114,385 | 20,356 |
Long-Term Liabilities | ||
Long-Term Debt | 85,000 | 0 |
Asset Retirement Obligations | 10,416 | 5,415 |
Long-Term Portion of Capital Lease | 3,142 | 0 |
Other Long-Term Liabilities | 585 | 683 |
Total Liabilities | 213,528 | 26,454 |
EQUITY | ||
General Partner | 520 | 0 |
Total Partners’ Equity | 475,000 | 271,539 |
Noncontrolling Interests | 141,230 | 71,366 |
Total Equity | 616,230 | 342,905 |
Total Liabilities and Equity | 829,758 | 369,359 |
Common Units (23,712 and 15,903 units outstanding, respectively) | ||
EQUITY | ||
Limited Partner | 642,616 | 308,338 |
Subordinated Units (15,903 units outstanding) | ||
EQUITY | ||
Limited Partner | $ (168,136) | $ (36,799) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Common Units | ||
Units outstanding (in units) | 23,712 | 15,903 |
Subordinated Units | ||
Units outstanding (in units) | 15,903 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows From Operating Activities | |||
Net Income | $ 163,636 | $ 85,502 | $ 38,042 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | |||
Depreciation and Amortization | 12,953 | 9,066 | 6,891 |
Deferred Income Taxes | 0 | 28,288 | 23,062 |
Income from Equity Method Investee | (1,779) | 0 | 0 |
Unit-Based Compensation | 790 | 42 | 0 |
Other Adjustments for Noncash Items Included in Income | 384 | 226 | 145 |
Changes in Operating Assets and Liabilities | |||
Increase in Accounts Receivable | (12,293) | (4,637) | (13,250) |
Increase (Decrease) in Accounts Payable | 1,384 | (104) | 14,812 |
Other Operating Assets and Liabilities, Net | 1,150 | 68 | (308) |
Net Cash Provided by Operating Activities | 166,225 | 118,451 | 69,394 |
Cash Flows From Investing Activities | |||
Additions to Property, Plant and Equipment | (294,664) | (41,115) | (53,259) |
Additions to Investments | (68,504) | (147) | (2,294) |
Distributions from Cost Method Investee | 973 | 1,275 | 1,092 |
Deposit for Acquisition | (18,750) | 0 | 0 |
Proceeds from Asset Sale — Affiliate | 0 | 1,850 | 0 |
Net Cash Used in Investing Activities | (380,945) | (38,137) | (54,461) |
Cash Flows From Financing Activities | |||
Distributions to Parent | 0 | (42,480) | 0 |
Contributions from Parent | 0 | 1,036 | 11,679 |
Proceeds from IPO, Net of Cash Offering Costs | 0 | 300,625 | 0 |
Distribution to Noble Subsequent to the IPO | 0 | (296,820) | 0 |
Revolving Credit Facility Origination Fees and Expenses Paid | 0 | (1,920) | 0 |
Distributions to Noncontrolling Interests | (21,737) | (10,057) | 0 |
Cash Contributions from Noncontrolling Interests | 105,932 | 325 | 0 |
Borrowings Under Revolving Credit Facility | 325,000 | 0 | 0 |
Repayment of Revolving Credit Facility | (240,000) | 0 | 0 |
Proceeds from Offerings, Net of Cash Offering Costs | 312,579 | 0 | 0 |
Distribution to Noble for Contributed Assets | (245,000) | 0 | 0 |
Distributions to Unitholders | (59,917) | 0 | 0 |
Repayment of Capital Lease Obligation | (1,532) | (214) | 0 |
Net Cash Provided by (Used in) Financing Activities | 175,325 | (49,505) | 11,679 |
(Decrease) Increase in Cash and Cash Equivalents | (39,395) | 30,809 | 26,612 |
Cash and Cash Equivalents at Beginning of Period | 57,421 | 26,612 | 0 |
Cash and Cash Equivalents at End of Period | $ 18,026 | $ 57,421 | $ 26,612 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Parent Net Investment | Noncontrolling Interests | Limited PartnerCommon Units | Limited PartnerSubordinated Units | General Partner | |
Capital, beginning at Dec. 31, 2014 | $ 213,673 | $ 213,673 | $ 0 | $ 0 | $ 0 | $ 0 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Net Income | 38,042 | 38,042 | |||||
Contributions from Parent | 11,824 | 11,824 | |||||
Capital, ending at Dec. 31, 2015 | 263,539 | 263,539 | 0 | 0 | 0 | 0 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Net Income | 45,990 | 45,990 | |||||
Contributions from Parent | 1,155 | 1,155 | |||||
Distributions to Parent | (42,480) | (42,480) | |||||
Capital, ending at Sep. 19, 2016 | 268,204 | 268,204 | 0 | 0 | 0 | 0 | |
Capital, beginning at Dec. 31, 2015 | 263,539 | 263,539 | 0 | 0 | 0 | 0 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Net Income | 85,502 | ||||||
Capital, ending at Dec. 31, 2016 | 342,905 | 0 | 71,366 | 308,338 | (36,799) | 0 | |
Capital, beginning at Sep. 19, 2016 | 268,204 | 268,204 | 0 | 0 | 0 | 0 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Net Income | 39,512 | 11,054 | 14,229 | 14,229 | |||
Distributions to Parent | (296,820) | (26,013) | (270,807) | ||||
Elimination of Current and Deferred Tax Liability | 41,428 | 41,428 | |||||
Allocation of Net Investment to Unitholders | 0 | (309,632) | 68,741 | 21,112 | 219,779 | ||
Proceeds from IPO, Net of Offering Costs | 298,968 | 298,968 | |||||
Unit-Based Compensation | 42 | 42 | |||||
Contributions from Noncontrolling Interests | [1] | 1,628 | 1,628 | ||||
Distributions to Noncontrolling Interests | (10,057) | (10,057) | |||||
Capital, ending at Dec. 31, 2016 | 342,905 | 0 | 71,366 | 308,338 | (36,799) | 0 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||
Net Income | 163,636 | 23,064 | 75,076 | 64,661 | 835 | ||
Distributions to Parent | (245,000) | (28,459) | (216,541) | ||||
Unit-Based Compensation | 790 | 790 | |||||
Contributions from Noncontrolling Interests | 123,381 | 123,381 | |||||
Distributions to Noncontrolling Interests | (21,737) | (21,737) | |||||
Distributions to Unitholders | (59,917) | (31,672) | (27,930) | (315) | |||
Net Proceeds from Offerings | 312,172 | 312,172 | |||||
Contributed Assets Transfer from Noble | 0 | (54,844) | 6,371 | 48,473 | |||
Capital, ending at Dec. 31, 2017 | $ 616,230 | $ 0 | $ 141,230 | $ 642,616 | $ (168,136) | $ 520 | |
[1] | Includes an outstanding cash call as of December 31, 2016. |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1. Organization and Nature of Operations Organization We are a growth-oriented Delaware master limited partnership formed in December 2014 by Noble to own, operate, develop and acquire a wide range of domestic midstream infrastructure assets. Our current areas of focus are in the DJ Basin and the Delaware Basin. Initial Public Offering On September 20, 2016, we completed the IPO of 14,375,000 common units representing limited partner interests in the Partnership (common units), which included 1,875,000 common units issued pursuant to the underwriters’ exercise of their option to purchase additional common units, at a price to the public of $22.50 per common unit ( $21.20625 per common unit, net of underwriting discounts). In connection with the IPO, Noble contributed ownership interests in certain DevCos and a 3.33% ownership interest in White Cliffs. The ownership interests in the DevCos, together with the White Cliffs Interest, are referred to collectively as the Contributed Businesses. Advantage Joint Venture Trinity River DevCo LLC, an indirect wholly owned subsidiary of the Partnership, and Plains Pipeline, L.P. (Plains), a wholly owned subsidiary of Plains All American Pipeline, L.P., completed the acquisition of Advantage Pipeline, L.L.C. (Advantage) for $133 million through a newly formed 50/50 joint venture (the Advantage Joint Venture). Trinity River DevCo LLC contributed $66.8 million of cash in exchange for its 50% interest in the Advantage Joint Venture. We serve as the operator of the Advantage system, which includes a 70 -mile crude oil pipeline in the Southern Delaware Basin from Reeves County, Texas to Crane County, Texas, with 150,000 barrels of daily shipping capacity and 490,000 barrels of storage capacity. The Partnership funded the acquisition with a combination of borrowings under our revolving credit facility and from cash on hand. The transaction closed on April 3, 2017. See Note 5. Investments . Contribution Agreement On June 20, 2017, the Partnership entered into a Contribution Agreement (the Contribution Agreement) by and among the Partnership, Noble Midstream GP LLC, our General Partner, Noble Midstream Services, LLC (Midstream Services), NBL Midstream, LLC (NBL Midstream), a subsidiary of Noble, and Blanco River DevCo GP LLC (Blanco River DevCo GP). Pursuant to the terms of the Contribution Agreement, the Partnership agreed to acquire from NBL Midstream (i) the remaining 20% limited partner interest in Colorado River DevCo LP and (ii) an additional 15% limited partner interest in Blanco River DevCo LP (collectively, the Contributed Assets). In consideration for the Contributed Assets, the Partnership agreed to pay NBL Midstream $270 million , consisting of (i) $245 million in cash and (ii) 562,430 common units issued to NBL Midstream at an issue price of $44.45 per common unit, the closing price of our common units on the New York Stock Exchange on June 20, 2017 (the Transaction). The Transaction closed on June 26, 2017. The Partnership funded the cash consideration with a combination of borrowings under our revolving credit facility, proceeds from the Private Placement (as defined below), and from cash on hand. Prior to the acquisition of the Contributed Assets, the Contributed Assets were reflected as noncontrolling interests in the Partnership’s consolidated financial statements. As the Partnership acquired additional interests in already-consolidated entities, the acquisition did not result in a change in reporting entity, as defined under the FASB Accounting Standards Codification Topic 805, Business Combinations , and was accounted for on a prospective basis. Therefore, beginning June 26, 2017, the Partnership’s consolidated financial statements reflect its 100% ownership interest in Colorado River DevCo LP and its 40% ownership interest in Blanco River DevCo LP. Private Placement On June 20, 2017, the Partnership entered into a Common Unit Purchase Agreement with certain institutional investors, pursuant to which the Partnership agreed to sell 3,525,000 common units in a private placement for gross proceeds of approximately $142.6 million (the Private Placement). Net proceeds totaled approximately $138.0 million , after deducting offering expenses of approximately $4.6 million . The closing of the Private Placement occurred on June 26, 2017. Black Diamond Gathering LLC On December 12, 2017, Black Diamond Gathering LLC (Black Diamond), formed by Black Diamond Gathering Holdings LLC (the Noble Member), a wholly-owned subsidiary of the Partnership, and Greenfield Midstream, LLC, an EnCap Flatrock Midstream portfolio company (the Greenfield Member), entered into a Membership Interest Purchase and Sale Agreement (the Acquisition Agreement) with Saddle Butte Pipeline II, LLC (Seller), pursuant to which Black Diamond agreed to acquire (the Acquisition) all of the issued and outstanding limited liability company interests in Saddle Butte Rockies Midstream, LLC and certain affiliates (collectively, Saddle Butte). We will serve as the operator of the Saddle Butte system which includes a large-scale integrated gathering system located in the core of the DJ Basin with approximately 160 miles of pipeline in operation and delivery capacity of approximately 300 MBbl/d. Saddle Butte has approximately 141,000 dedicated acres from six customers under fixed fee arrangements. The acquisition closed on January 31, 2018. See Note 14. Subsequent Events . Unit Offering On December 12, 2017, the Partnership entered into an Underwriting Agreement (the Underwriting Agreement) by and among the Partnership, our General Partner, and Citigroup Global Markets Inc., as representative of the several underwriters named therein (the Underwriters), providing for the offer and sale by the Partnership, and the purchase by the Underwriters of 3,680,000 common units, which includes 480,000 common units issued pursuant to the Underwriters’ exercise of their option to purchase additional Common Units, at a price of $47.50 per common unit (the Unit Offering). Net proceeds totaled approximately $174.1 million , after deducting offering expenses of approximately $0.7 million . The closing of the Unit Offering occurred on December 15, 2017. Partnership Assets Our assets consist of ownership interests in certain DevCos and consist of the following: DevCo Areas Served NBLX Dedicated Service Current Status of Asset NBLX Ownership Noncontrolling Interest (1) Colorado River DevCo LP Wells Ranch IDP (DJ Basin) East Pony (DJ Basin) All Noble DJ Basin Acreage Crude Oil Gathering Natural Gas Gathering Water Services Crude Oil Gathering Crude Oil Treating Operational Operational Operational 100% N/A San Juan River DevCo LP East Pony IDP (DJ Basin) Water Services Operational 25% 75% Green River DevCo LP Mustang IDP (DJ Basin) Crude Oil Gathering Natural Gas Gathering Water Services Planning Planning Partially Operational 25% 75% Laramie River DevCo LP Greeley Crescent IDP (DJ Basin) Crude Oil Gathering Water Services Operational 100% N/A Blanco River DevCo LP Delaware Basin Crude Oil Gathering Natural Gas Gathering Water Services Operational 40% 60% Gunnison River DevCo LP Bronco IDP (DJ Basin) Crude Oil Gathering Water Services Future Development 5% 95% Trinity River DevCo LLC (2) Delaware Basin Crude Oil Transmission Gas Compression Operational 100% N/A (1) The noncontrolling interest represents Noble’s retained ownership interest in each DevCo. (2) Trinity River DevCo LLC owns the interest in the Advantage Joint Venture. Additionally, we own a 3.33% ownership interest in White Cliffs as well as a 50% interest in the Advantage Joint Venture. Nature of Operations Through our ownership interests in the DevCos, we operate and own interests in the following assets, some of which are currently under construction: • crude oil and natural gas gathering systems; • crude oil treating facilities; • produced water collection, gathering, and cleaning systems; and • fresh water storage and delivery systems. We generate revenues primarily by charging fees on a per unit basis for gathering crude oil and natural gas, delivering and storing fresh water, and collecting, cleaning and disposing of produced water. We have entered into multiple fee-based commercial agreements with Noble, each with an initial term of 15 years, to provide these services which are critical to Noble’s upstream operations. Our agreements include substantial acreage dedications. See Note 3. Transactions with Affiliates . Predecessor References in this report to “Predecessor,” “we,” “our,” “us” or like terms, when referring to periods prior to September 20, 2016, refer to Noble’s Contributed Businesses, our Predecessor for accounting purposes. References to “the Partnership,” “we,” “our," “us” or like terms, when referring to periods after September 20, 2016, refer to the partnership. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Basis of Presentation | Note 2. Summary of Significant Accounting Policies and Basis of Presentation Basis of Presentation and Consolidation The accompanying consolidated financial statements for periods prior to September 20, 2016 represent the Contributed Businesses as the accounting Predecessor to the Partnership, presented on a carve-out basis of Noble’s historical ownership of the Predecessor. The Predecessor financial statements have been prepared from the separate records maintained by Noble and may not necessarily be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods reported. Because a direct ownership relationship did not exist among the businesses comprising the Predecessor, the net investment in the Predecessor is shown as Parent Net Investment, in lieu of partners’ equity, in the accompanying Consolidated Statement of Changes in Equity for years prior to December 31, 2016. All intercompany balances and transactions have been eliminated upon consolidation. The Partnership has no items of other comprehensive income or loss; therefore, its net income is identical to its comprehensive income. Variable Interest Entities Our consolidated financial statements include our accounts and the accounts of the DevCos, each of which we control as General Partner. We have determined that the partners with equity at risk in each of the DevCos lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact their economic performance. Therefore, each DevCo is considered a variable interest entity (VIE). Through our 100% ownership interest in Noble Midstream Services, LLC, a Delaware limited liability company which owns controlling interests in each of the DevCos, we have the authority to direct the activities that most significantly affect economic performance and the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate each of the DevCos in our financial statements. A substantial portion of the financial statement activity associated with our DevCos is captured within the Gathering Systems and Fresh Water Delivery reportable segments. Although our investment in the Advantage Joint Venture is owned by Trinity River DevCo LLC, all financial statement activity associated with our investment is captured within the Investments and Other reportable segment. See Note 8. Segment Information . Our consolidated financial statements include the accounts of Black Diamond, which we control. We have determined that the partners with equity at risk in Black Diamond lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact their economic performance. Therefore, Black Diamond is considered a VIE. Through our majority representation on the Black Diamond company board of directors as well as our responsibility as operator of the acquired system, we have the authority to direct the activities that most significantly affect economic performance and the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate Black Diamond in our financial statements. Equity Method of Accounting Although we serve as the operator of the Advantage system, our operating agreements empower the Advantage board, split between us and Plains, to direct the activities that most significantly affect the long-term economic performance of the entity, primarily the oversight of the commercial function and approval of expansion capital. As a result, our investment in the Advantage Joint Venture does not require consolidation under the VIE consolidation model. We use the equity method of accounting for our investment in the Advantage Joint Venture, as we do not control, but do exert significant influence over, its operations. Under the equity method of accounting, initially we record the investment at our cost. Differences in the cost, or basis, of the investment and the net asset value of the investee will be amortized into earnings over the remaining useful life of the underlying assets. See Note 5. Investments . Cost Method of Accounting We use the cost method of accounting for our White Cliffs Interest as we have virtually no influence over its operations and financial policies. Under the cost method of accounting, we recognize cash distributions from White Cliffs Pipeline L.L.C. as investment income in our consolidated statements of operations to the extent there is net income and record cash distributions in excess of our ratable share of earnings as return of investment. See Note 5. Investments . Noncontrolling Interests We present our consolidated financial statements with a noncontrolling interest section representing Noble’s retained ownership our DevCos as well as Greenfield Member's ownership of Black Diamond. Segment Information Accounting policies for reportable segments are the same as those described in this footnote. Transfers between segments are accounted for at market value. We do not consider interest income and expense or income tax benefit or expense in our evaluation of the performance of reportable segments. See Note 8. Segment Information . Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment. Revenue Recognition We generate revenues primarily by charging fees on a per unit basis for gathering crude oil and natural gas, delivering and storing fresh water, and collecting, cleaning and disposing of produced water. We recognize revenue when services have been rendered, the prices are fixed or determinable, and collectibility is reasonable assured. Property, Plant and Equipment Property and equipment primarily consists of crude oil and natural gas gathering systems, produced water collection, gathering, and cleaning systems, fresh water storage and delivery systems and crude oil treating facilities. Property and equipment is stated at the lower of historical cost less accumulated depreciation, or fair value, if impaired. Capitalized Interest We capitalize construction-related direct labor and incremental costs, such as interest expense. Capitalized interest totaled $2.5 million in 2017 , $0.8 million in 2016 , and $2.5 million in 2015 . Repair and maintenance costs are expensed as incurred. Depreciation Depreciation is computed over the asset’s estimated useful life using the straight line method based on estimated useful lives and asset salvage values. Determination of depreciation expense requires judgment regarding the estimated useful lives and salvage values of property, plant and equipment. As circumstances warrant, depreciation estimates are reviewed to determine if any changes in the underlying assumptions are necessary. The weighted average life of our long-lived assets is 30 years. The depreciation of fixed assets recorded under capital lease agreements is included in depreciation and amortization expense. See Note 4. Property, Plant and Equipment . Impairment of Long-Lived Assets We routinely assess whether impairment indicators arise during any given quarter and have processes in place to ensure that we become aware of such indicators. Impairment indicators include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. In the event that impairment indicators exist, we conduct an impairment test. We evaluate our ability to recover the carrying amounts of long-lived assets and determine whether such long-lived assets have been impaired. Impairment exists when the carrying value of an asset exceeds the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. When the carrying amount of a long-lived asset exceeds its estimated undiscounted future cash flows, the carrying amount of the asset is reduced to its estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. No impairments have been recorded through December 31, 2017 . Asset Retirement Obligations Asset Retirement Obligations (ARO) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our property and equipment. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our infrastructure assets and the obligation can reasonably be estimated. The associated asset retirement cost is capitalized as part of the carrying cost of the infrastructure asset. The recognition of an ARO requires that management make numerous estimates, assumptions and judgments regarding such factors as: the existence of a legal obligation for an ARO; estimated probabilities, amounts and timing of settlements; the credit-adjusted risk-free rate to be used; and inflation rates. In periods subsequent to initial measurement of the ARO, we recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows. Revisions also result in increases or decreases in the carrying cost of the asset. Increases in the ARO liability due to passage of time impact net income as accretion expense. The related capitalized cost, including revisions thereto, is charged to expense through depreciation and amortization. See Note 7. Asset Retirement Obligations . Impairment of Investments We routinely assess our investments for impairment whenever changes in facts and circumstances indicate a loss in value has occurred. When impairment indicators exist, the fair value is estimated and compared to the investment carrying amount. When the carrying amount of an investment exceeds its estimated undiscounted future cash flows, the carrying amount of the investment is reduced to its estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. No impairments have been recorded through December 31, 2017 . Fair Value Measurements We measure assets and liabilities requiring fair value presentation and disclose such amounts according to the quality of valuation inputs under the fair value hierarchy. The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature and maturity of the instruments and use Level 1 inputs. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include unrestricted cash on hand and investments with original maturities of three months or less at the time of purchase. Restricted Cash Represents approximately $37.5 million held in escrow at December 31, 2017 for the purchase of Saddle Butte. See Note 1. Organization and Nature of Operations . Transactions with Affiliates Transactions between Noble, its affiliates and us have been identified in the consolidated financial statements as transactions with affiliates. See Note 3. Transactions with Affiliates . Debt Origination Fees and Expenses Debt origination fees and expenses of $1.9 million associated with our Revolving Credit Facility are included in deferred charges and amortized on a straight line basis over the five -year term. Amortization is included in interest expense. See Note 6. Long-Term Debt . Capital Lease Obligation We entered into a capital lease for a pond to be used in our fresh water delivery system. The amount of the capital lease obligation is based on the discounted present value of future minimum lease payments, and therefore does not reflect future cash lease payments. See Note 9. Commitments and Contingencies . Unit-Based Compensation Unit-based compensation issued to individuals providing services to us is recorded at grant-date fair value. Expense is recognized on a straight-line basis over the requisite service period (generally the vesting period of the award) in the consolidated statements of operations. See Note 10. Unit-Based Compensation . Income Taxes We are not a taxable entity for U.S. federal income tax purposes or for the majority of states that impose an income tax. Taxes are generally borne by our partners through the allocation of taxable income, and accordingly for the periods subsequent to the IPO, we do not record deferred taxes related to the aggregate difference in the basis of our assets for financial and tax reporting purposes. During 2017, we commenced operations in the Delaware Basin and are subject to a Texas Margin Tax. For periods prior to the IPO, our consolidated financial statements include a provision for tax expense on income related to the assets that Noble contributed to the Partnership at the IPO date. Deferred federal and state income taxes were provided on temporary differences between the financial statement carrying amounts of recognized assets and liabilities and their respective tax bases as if the Partnership filed tax returns as a stand-alone entity. See Note 13. Income Taxes . Litigation and Other Contingencies We may become subject to legal proceedings, claims and liabilities that will arise in the ordinary course of business. We will accrue for losses associated with legal claims when such losses are considered probable and the amounts can be reasonably estimated. See Note 9. Commitments and Contingencies . Supplemental Cash Flow Information We accrued $99.8 million and $3.9 million related to midstream capital expenditures as of December 31, 2017 and 2016 , respectively. Greenfield Member contributed approximately $18.8 million of the amount held in escrow at December 31, 2017 for the purchase of Saddle Butte. Immediately prior to closing of the IPO, the Partnership recorded an adjustment to equity of $41.4 million for the elimination of current and deferred tax liabilities, representing a significant non-cash activity. Cash interest paid totaled $3.7 million and $0.2 million for the years ended December 31, 2017 and December 31, 2016 , respectively. Prior to closing of the IPO, interest expense was allocated to us from Noble. Concentration of Credit Risk For the year ended December 31, 2017 , 94% of our revenues are from Noble and its affiliates. For all other periods presented, 100% of our revenues are from Noble and its affiliates. Recently Issued Accounting Standards Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued Accounting Standards Update No. 2017-09 (ASU 2017-09) Compensation - Stock Compensation (Topic 718). The purpose of this update is to provide clarity as to which modifications of awards require modification accounting under Topic 718, whereas previously issued guidance frequently resulted in varying interpretations and a diversity of practice. Under ASU 2017-09, an entity should employ modification accounting unless the following items are met: (1) the fair value of the award is the same immediately before and after the award is modified; (2) the vesting conditions are the same under both the modified award and the original award; and (3) the classification of the modified award is the same as the original award, either equity or liability. Regardless of whether modification accounting is utilized, award disclosure requirements under Topic 718 remain unchanged. ASU 2017-09 will be effective for annual or any interim periods beginning after December 15, 2017. We do not believe adoption of ASU 2017-09 will have a material impact on our financial statements. We will adopt the new standard on the effective date of January 1, 2018. Business Combinations – Clarifying the Definition of a Business In January 2017, the FASB issued Account Standards Update No. 2017-01 (ASU 2017-01): Business Combinations - Clarifying the Definition of a Business, that assists in determining whether certain transactions should be accounted for as acquisitions or dispositions of assets or businesses. The amendment provides a screen to be applied to the fair value of an acquisition or disposal to evaluate whether the assets in question are simply assets or if they meet the definition of a business. If the screen is not met, no further evaluation is needed. If the screen is met, certain steps are subsequently taken to make the determination. This ASU is effective for annual and interim periods beginning after December 15, 2017 and is required to be applied prospectively. We will adopt the new standard on the effective date of January 1, 2018. Statement of Cash Flows – Restricted Cash In November 2016, the FASB issued Accounting Standards Update No. 2016-18 (ASU 2016-18): Statement of Cash Flows - Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This ASU will be effective for annual and interim periods beginning after December 15, 2017, with earlier application permitted. We will adopt the new standard on the effective date of January 1, 2018. Under the provisions of ASU 2016-18, we will no longer reflect a cash outflow for cash becoming restricted. Additionally, the statement of cash flows will reconcile changes in both cash and restricted cash. Based on the balance of restricted cash as of December 31, 2017, adoption of ASU 2016-18 will have a material impact on our consolidated statement of cash flows and related disclosures. Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued Accounting Standards Update No. 2016-15 (ASU 2016-15): Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, to clarify how eight specific cash receipt and cash payment transactions should be presented in the statement of cash flows. ASU 2016-15 will be effective for annual and interim periods beginning after December 15, 2017, with earlier application permitted. We will adopt the new standard on the effective date of January 1, 2018. Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02): Leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by leases with terms of more than 12 months. ASU 2016-02 also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with earlier application permitted. In the normal course of business, we enter into capital and operating lease agreements to support our operations and may lease water-related, field-related and other assets. At this time, we cannot reasonably estimate the financial impact ASU 2016-02 will have on our financial statements; however, we believe adoption and implementation of ASU 2016-02 will likely materially impact our balance sheet resulting from an increase in both assets and liabilities relating to our leasing activities. As part of our assessment to date, we have formed an implementation work team, prepared educational and training materials pertinent to ASU 2016-02 and have begun contract review and documentation. Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), which creates Topic 606, Revenue from Contracts with Customers . In summary, revenue recognition would occur upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, ASU 2014-09 requires enhanced financial statement disclosures over revenue recognition. We continue to evaluate the impact of ASU 2014-09 on our accounting policies, internal controls, and consolidated financial statements and related disclosures. We have performed a review of contracts for each of our revenue streams and are developing accounting policies to address the provisions of ASU 2014-09. We have evaluated the impact on the presentation of our future revenues and expenses under the gross-versus-net presentation guidance. Based upon assessments performed to date, we do not expect ASU 2014-09 to have an effect on the timing of revenue recognition or our financial position. We will adopt the new standard on the effective date of January 1, 2018. After adoption of ASU 2015-09, we will begin to net certain immaterial revenues and expenses using the modified retrospective approach in accordance with the gross-versus-net presentation guidance. |
Transactions with Affiliates
Transactions with Affiliates | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | Note 3. Transactions with Affiliates Revenues We derive a substantial portion of our revenues from commercial agreements with Noble. Revenues generated from commercial agreements with Noble and its affiliates consist of the following: Year Ended December 31, (in thousands) 2017 2016 2015 Crude Oil, Natural Gas and Produced Water Gathering $ 142,864 $ 94,160 $ 56,042 Fresh Water Delivery 75,860 60,001 27,097 Crude Oil Treating 4,473 5,371 4,403 Other 1,204 1,192 295 Total Midstream Services — Affiliate $ 224,401 $ 160,724 $ 87,837 Expenses General and administrative expense consists of the following: Year Ended December 31, (in thousands) 2017 2016 2015 General and Administrative Expense — Affiliate $ 7,323 $ 6,984 $ 2,285 General and Administrative Expense — Third Party 6,073 2,930 486 Total General and Administrative Expense $ 13,396 $ 9,914 $ 2,771 Asset Sale and Purchases — Affiliate During third quarter 2016, we sold certain equipment to Noble, at cost, and received proceeds of $1.9 million . No gain or loss was recognized for the transaction. During fourth quarter 2016, we purchased certain equipment from Noble, at market value, for approximately $0.9 million . Agreements with Noble We have entered into various agreements with Noble, as summarized below: Commercial Agreements Our commercial agreements with Noble provide for fees based on the type and scope of the midstream services we provide and the midstream system we use to provide our services, as follows: • Crude Oil Gathering Agreement - Under the applicable crude oil gathering agreement, we receive a volumetric fee per barrel (Bbl) for the crude oil gathering services we provide. • Natural Gas Gathering Agreement - Under the natural gas gathering agreement, we receive a volumetric fee per million British Thermal Units (MMBtu) for the natural gas gathering services we provide. • Produced Water Services Agreement - Under the applicable produced water services agreement, we receive a fee for collecting, cleaning or otherwise disposing of water produced from operating crude oil and natural gas wells in the dedication area. The fee is comprised of a volumetric component for services we provide directly and a pass through component for services we provide through contracts with third parties. • Fresh Water Services Agreement - Under the applicable fresh water services agreement, we receive a fee for delivering fresh water. The fee is comprised of a volumetric component for services we provide directly and a pass through component for services we provide through contracts with third parties. The cost of storing the fresh water is included in the delivery fee. • Crude Oil Treating Agreement - Under the crude oil treating agreement, we receive a monthly fee for the crude oil treating services we provide based on each well operated by Noble that is producing in paying quantities that is not connected to our crude oil gathering systems during such month. Under each of these commercial agreements, the volumetric fees we charge Noble (other than pass through fees) are automatically increased each calendar year by 2.5% , expect for Blanco River DevCo LP Natural Gas Gathering. The volumetric fee for Blanco Gas Gathering is automatically increased by the Consumer Price Index (CPI) for the previous year; provided, however, that no such increase may exceed 2.5% for any given year. In addition, we will propose a redetermination of the fees charged under our various systems on an annual basis, taking into account, among other things, expected capital expenditures necessary to provide our services under the applicable development plan. However, if we and Noble are unable to agree on a fee redetermination (other than the automatic annual adjustment), the prior fee will remain in effect, which in effect allows Noble to unilaterally exercise control over the decision of whether to change the fee. Omnibus Agreement Our omnibus agreement with Noble provides for: • our payment of an annual general and administrative fee, initially in the amount of $6.9 million (prorated for the first year of service), for the provision of certain services by Noble and its affiliates, which fee cannot be increased until after the third anniversary of the IPO with annual redetermination thereafter; • our right of first refusal on existing Noble and future Noble acquired assets and the right to provide certain services, including the right to provide crude oil gathering, natural gas gathering and processing, and water services on certain acreage owned, or to be acquired, by Noble; • our right of first offer to acquire Noble’s retained interests in each of the development companies; and • an indemnity by Noble for certain environmental and other liabilities, and our obligation to indemnify Noble for events and conditions associated with the operations of its assets that occur after the closing of the IPO and for environmental liabilities related to our assets to the extent Noble is not required to indemnify us. Operational Services Agreement Our Operational Services and Secondment Agreement (Operational Services Agreement) with Noble provides for: • secondment by Noble of certain operational, construction, design and management employees and contractors to our general partner, us and our subsidiaries to provide management, maintenance and operational functions with respect to our assets. These functions include performing the activities and day-to-day management of the business pursuant to certain commercial agreements listed in the Operational Services Agreement, and designing, building, constructing and otherwise installing the infrastructure required by such agreements; • reimbursement by us to Noble of the cost of the seconded employees and contractors, including their wages and benefits, based on the percentage of the employee’s or contractor’s time spent working for us; and • an initial term of 15 years and automatic extensions for successive renewal terms of one year each, unless terminated by either party. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 4. Property, Plant and Equipment Property, plant and equipment, at cost, is as follows: (in thousands) December 31, 2017 December 31, 2016 Crude Oil, Natural Gas and Produced Water Gathering Systems and Facilities $ 451,275 $ 201,323 Fresh Water Delivery System (1) 76,745 56,792 Crude Oil Treating Facilities 20,099 20,099 Construction-in-Progress (2) 157,920 32,831 Total Property, Plant and Equipment, at Cost 706,039 311,045 Accumulated Depreciation and Amortization (44,271 ) (31,642 ) Property, Plant and Equipment, Net $ 661,768 $ 279,403 (1) Fresh water delivery system assets at December 31, 2017 and December 31, 2016 include $5 million related to a leased pond accounted for as a capital lease. See Note 9. Commitments and Contingencies . (2) Construction-in-progress at December 31, 2017 primarily includes $157.4 million in gathering system projects and $0.5 million in fresh water delivery system projects. Construction-in-progress at December 31, 2016 primarily includes $27.6 million in gathering system projects and $5.2 million in fresh water delivery system projects. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Note 5. Investments The following table presents our investments at the dates indicated: (in thousands) December 31, 2017 December 31, 2016 Advantage Joint Venture (1) $ 70,283 $ — White Cliffs Interest 10,178 11,151 Total Investments $ 80,461 $ 11,151 (1) We capitalized $1.7 million in acquisition related expenses that are included in the basis of the investment. As of December 31, 2017 , $1.6 million in acquisition related expenses remains unamortized. The following table presents our investment income for the periods indicated: Year Ended December 31, (in thousands) 2017 2016 2015 Advantage Joint Venture (1) $ 1,779 $ — $ — White Cliffs Interest 4,088 4,526 4,621 Other (2) 467 — — Total Investment Income $ 6,334 $ 4,526 $ 4,621 (1) Includes the amortization of acquisition related expenses. As we completed the Advantage acquisition on April 3, 2017, the year-to-date results are for the period beginning on April 3, 2017 and ending on December 31, 2017. (2) Represents income associated with our fee for serving as the operator of the Advantage Joint Venture. The fee totals approximately $0.7 million per year. Summarized, 100% combined balance sheet financial information for the Advantage Joint Venture at the date indicated: (in thousands) December 31, 2017 Current Assets $ 9,271 Noncurrent Assets 131,217 Current Liabilities 3,200 Noncurrent Liabilities $ 4 Summarized, 100% combined statement of operations information for the Advantage Joint Venture for the periods indicated: (in thousands) Year Ended December 31, 2017 (1) Operating Revenues $ 11,034 Operating Expenses 7,358 Income Before Taxes 3,676 Income Tax Expense 35 Net Income $ 3,641 (1) As we completed the Advantage acquisition on April 3, 2017, the year-to-date results are for the period beginning on April 3, 2017 and ending on December 31, 2017. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 6. Long-Term Debt Revolving Credit Facility We maintain a $350 million revolving credit facility to fund working capital and to finance acquisitions and other capital expenditures. The revolving credit facility matures on September 20, 2021. The borrowing capacity on our revolving credit facility may be increased by up to an additional $350 million subject to certain conditions including compliance with the covenants contained in the credit agreement and requisite commitments from existing or new lenders. There were no amounts outstanding under the revolving credit facility as of December 31, 2016 . As of December 31, 2017 , $85 million was outstanding under our revolving credit facility. During the year ended December 31, 2017 , borrowings under our revolving credit facility were primarily used to fund portions of our construction activities, the Advantage acquisition, and the cash consideration for the Contributed Assets. Borrowings under the revolving credit facility bear interest at a rate equal to an applicable margin plus, at our option, either (a) in the case of base rate borrowings, a rate equal to the highest of (1) the prime rate, (2) the greater of the federal funds rate or the overnight bank funding rate, plus 0.5% and (3) the LIBOR for an interest period of one month plus 1.0% ; or (b) in the case of LIBOR borrowings, the offered rate per annum for deposits of dollars for the applicable interest period. Interest was incurred on the revolving credit facility at a weighted average annual interest rate of 2.5% during the year ended December 31, 2017 . The unused portion of the revolving credit facility is subject to a commitment fee. Commitment fees began to accrue beginning on the date we entered into the revolving credit facility. As of December 31, 2016 and December 31, 2017 , the commitment fee rate was 0.2% . Unamortized debt issuance costs totaled $1.8 million and $1.4 million as of December 31, 2016 and December 31, 2017 , respectively. The revolving credit facility requires us to comply with certain financial covenants as of the end of each fiscal quarter, including a (1) consolidated leverage ratio to consolidated adjusted earnings before interest expense, income taxes, depreciation and amortization (EBITDA) and (2) consolidated interest coverage ratio. The Partnership was in compliance with such covenants as of December 31, 2017 . Certain lenders that are a party to the credit agreement have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending or commercial banking services for us for which they have received, and may in the future receive, customary compensation and reimbursement of expenses. On January 31, 2018, the Partnership increased the capacity on our revolving credit facility. See Note 14. Subsequent Events . |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 7. Asset Retirement Obligations ARO consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our infrastructure assets. Changes in ARO are as follows: Year Ended December 31, (in thousands) 2017 2016 Asset Retirement Obligations, Beginning Balance $ 5,415 $ 3,612 Liabilities Incurred 4,828 365 Revision of Estimate (151 ) 1,224 Accretion Expense (1) 324 214 Asset Retirement Obligations, Ending Balance $ 10,416 $ 5,415 (1) Accretion expense is included in depreciation and amortization expense in the consolidated statement of operations. Liabilities incurred in 2017 were primarily related to our Billy Miner I and Jesse James CGFs in the Delaware Basin as well as the expansion of our gathering systems in the Delaware Basin and Greeley Crescent IDP area. Liabilities incurred in 2016 were primarily related to the expansion of the gathering systems in the Wells Ranch IDP area. Revisions in 2016 were primarily due to changes in estimated costs for future abandonment activities of our gathering systems in the Wells Ranch and East Pony IDP areas. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 8. Segment Information Our operations are located in the U.S. and are organized into the following reportable segments: Gathering Systems (crude oil, natural gas and produced water gathering as well as crude oil treating), Fresh Water Delivery, and Investments and Other. We often refer to the services of our Gathering Systems and Fresh Water Delivery reportable segments collectively as our midstream services. Our reportable segments comprise the structure used to make key operating decisions and assess performance. Summarized financial information concerning our reportable segments is as follows: (in thousands) Gathering Systems (1) Fresh Water Delivery (1) Investments and Other (1) (2) Consolidated Year Ended December 31, 2017 Midstream Services — Affiliate $ 148,541 $ 75,860 $ — $ 224,401 Midstream Services — Third Party 3,971 10,909 — 14,880 Total Midstream Services Revenues 152,512 86,769 — 239,281 Direct Operating Expense 37,138 16,011 858 54,007 Depreciation and Amortization 10,687 2,266 — 12,953 Income (Loss) Before Income Taxes 104,687 68,492 (9,523 ) 163,656 Year Ended December 31, 2016 Midstream Services — Affiliate $ 100,723 $ 60,001 $ — $ 160,724 Direct Operating Expense 14,443 14,390 274 29,107 Depreciation and Amortization 7,361 1,705 — 9,066 Income (Loss) Before Income Taxes 78,919 43,906 (9,035 ) 113,790 Year Ended December 31, 2015 Midstream Services — Affiliate $ 60,740 $ 27,097 $ — $ 87,837 Direct Operating Expense 13,806 2,595 532 16,933 Depreciation and Amortization 5,288 1,603 — 6,891 Income (Loss) Before Income Taxes 41,646 22,899 (3,277 ) 61,268 December 31, 2017 Total Assets $ 593,590 $ 68,178 $ 167,990 $ 829,758 Additions to Long-Lived Assets 373,857 16,469 — 390,326 December 31, 2016 Total Assets $ 224,861 $ 54,542 $ 89,956 $ 369,359 Additions to Long-Lived Assets 30,020 2,564 — 32,584 December 31, 2015 Total Assets $ 201,744 $ 49,189 $ 54,385 $ 305,318 Additions to Long-Lived Assets 50,858 11,278 — 62,136 (1) A substantial portion of the financial statement activity associated with our DevCos is captured within the Gathering Systems and Fresh Water Delivery reportable segments. Although our investment in the Advantage Joint Venture is owned by Trinity River DevCo LLC, all financial statement activity associated with our investment is captured within the Investments and Other reportable segment. As our DevCos represent VIEs, see the above reportable segments for our VIEs impact to the consolidated financial statements. (2) The Investments and Other segment includes our investments in the Advantage Joint Venture and White Cliffs Interest as well as all general Partnership activity not attributable to our DevCos. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9. Commitments and Contingencies Legal Proceedings We may become involved in various legal proceedings in the ordinary course of business. These proceedings would be subject to the uncertainties inherent in any litigation, and we will regularly assess the need for accounting recognition or disclosure of these contingencies. We will defend ourselves vigorously in all such matters. For periods prior to the IPO, we were part of Noble’s integrated business. In the ordinary course of business, Noble is from time to time party to various judicial and administrative proceedings. As of December 31, 2017 and December 31, 2016 , we did not have accrued liabilities for any legal contingencies related to us. Based on currently available information, we believe it is unlikely that the outcome of known matters would have a material adverse impact on our combined financial condition, results of operations or cash flows. Omnibus Agreement Our omnibus agreement with Noble contractually requires us to pay a fixed annual fee of $6.9 million (prorated for the first year of service) to Noble for certain administrative and operational support services being provided to us. The omnibus agreement generally remains in full force and effect so long as Noble controls our general partner. See Note 3. Transactions with Affiliates . Capital Lease During third quarter 2016, we leased a pond for use in our fresh water delivery system. We are accounting for the lease as a capital lease. During 2017, we reclassified the obligation from current to long-term on the consolidated balance sheet to reflect our estimate of the timing of future cash payments. The discounted present value of future minimum lease payments totals approximately $3.1 million as of December 31, 2017 . Minimum commitments as of December 31, 2017 are as follows: (in thousands) Surface Lease Obligations Purchase Obligations (1) Future Minimum Capital Lease Payments Omnibus Fee (2) 2018 $ 90 $ 160,559 $ — $ 6,850 2019 90 — 3,095 6,850 2020 90 — — — 2021 91 — — — 2022 91 — — — 2023 and Beyond 221 — — — Total $ 673 $ 160,559 $ 3,095 $ 13,700 (1) Purchase obligations represent contractual agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed and minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The amount represents the obligation to purchase materials for use in our capital projects. (2) Annual general and administrative fee we pay to Noble f or certain administrative and operational support services being provided to us. The annual general and administrative fee cannot be increased until after the third anniversary of the IPO and will be redetermined annually thereafter. |
Unit-Based Compensation
Unit-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Unit-Based Compensation | Note 10. Unit-Based Compensation The Noble Midstream Partners LP 2016 Long-Term Incentive Plan (the LTIP) provides for the grant, at the discretion of the board of directors of our general partner, of unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights, profits interest units and other unit-based awards. The purpose of awards under the LTIP is to provide additional incentive compensation to individuals providing services to us, and to align the economic interests of such individuals with the interests of our unitholders. The LTIP limits the number of units that may be delivered pursuant to vested awards to 1,860,000 common units, subject to proportionate adjustment in the event of unit splits and similar events. Common units subject to awards that are canceled, forfeited, withheld to satisfy exercise prices or tax withholding obligations or otherwise terminated without delivery of common units will be available for delivery pursuant to other awards. As of December 31, 2017 , 1,817,428 common units are available for future grant under the LTIP. Restricted unit activity for the year ended December 31, 2017 was as follows: Number of Units Weighted Average Award Date Fair Value Awarded and Unvested Units at December 31, 2016 7,868 $ 30.50 Awarded 34,704 45.10 Vested (7,868 ) 30.50 Awarded and Unvested Units at December 31, 2017 34,704 $ 45.10 As of December 31, 2017 , $1.0 million of compensation cost related to all of our unvested restricted units awarded under the LTIP remained to be recognized. The cost is expected to be recognized over a weighted-average period of 1.75 years . |
Partnership Distributions
Partnership Distributions | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Partnership Distributions | Note 11. Partnership Distributions Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash to unitholders of record on the applicable record date. The following table details the distributions paid in respect of the periods presented below: Distributions Limited Partners Period Record Date Distribution Date Distribution per Limited Partner Unit Common Unitholders (1) Subordinated Unitholders Holder of IDRs Total Q4 2016 (2) February 6, 2017 February 14, 2017 $ 0.4333 $ 6,891 $ 6,891 $ — $ 13,782 Q1 2017 May 8, 2017 May 16, 2017 $ 0.4108 $ 6,533 $ 6,533 $ — $ 13,066 Q2 2017 August 7, 2017 August 14, 2017 $ 0.4457 $ 8,909 $ 7,088 $ 92 $ 16,089 Q3 2017 November 6, 2017 November 13, 2017 $ 0.4665 $ 9,330 $ 7,418 $ 223 $ 16,971 (1) Distributions to common unitholders does not include distribution equivalent rights on units that vested under the LTIP. (2) The distribution for the fourth quarter 2016 is comprised of $0.3925 per unit for the fourth quarter 2016 and $0.0408 per unit for the 10-day period beginning on the closing of the IPO on September 20, 2016 and ending on September 30, 2016. Incentive Distribution Rights Noble currently holds IDRs that entitle it to receive increasing percentages, up to a maximum of 50% , of the available cash we distribute from operating surplus in excess of $0.4313 per unit per quarter. The maximum distribution of 50% does not include any distributions that Noble may receive on Common Units or Subordinated Units that it owns. Cash Distributions On January 25, 2018 , the board of directors of our general partner declared a quarterly cash distribution of $0.4883 per limited partner unit. The distribution was paid on February 12, 2018 , to unitholders of record on February 5, 2018 . Also on February 12, 2018 , a cash distribution of $0.5 million was paid to Noble related to its IDRs, based upon the level of distribution paid per Common and Subordinated unit. |
Net Income Per Limited Partner
Net Income Per Limited Partner Unit | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Limited Partner Unit | Note 12. Net Income Per Limited Partner Unit The Partnership’s net income is attributed to limited partners, in accordance with their respective ownership percentages, and when applicable, giving effect to incentive distributions paid to Noble, the holder of our IDRs. The Common and Subordinated unitholders represent an aggregate 100% limited partner interest in us. Pursuant to our partnership agreement, to the extent that the quarterly distributions exceed certain target levels, Noble, as the holder of our IDRs, is entitled to receive certain incentive distributions that will result in more net income proportionately being allocated to Noble than to the holders of Common and Subordinated Units. Because we have more than one class of participating securities, we use the two-class method when calculating the net income per unit applicable to limited partners. The classes of participating securities include Common Units, Subordinated Units and IDRs. Basic and diluted net income per limited partner Common and Subordinated Unit is computed by dividing the respective limited partners’ interest in net income for the period by the weighted-average number of Common and Subordinated Units outstanding for the period. Diluted net income per limited partner Common and Subordinated Unit reflects the potential dilution that could occur if agreements to issue Common Units, such as awards under the LTIP, were settled or converted into Common Units. When it is determined that potential Common Units resulting from an award should be included in the diluted net income per limited partner Common and Subordinated Unit calculation, the impact is reflected by applying the treasury stock method. Our calculation of net income per limited partner Common and Subordinated Unit is as follows: Year Ended December 31, (in thousands) 2017 2016 Net Income Attributable to Noble Midstream Partners LP $ 140,572 $ 28,458 Less: Net Income Attributable to Incentive Distribution Rights 835 — Net Income Attributable to Limited Partners $ 139,737 $ 28,458 Net Income Allocable to Common Units $ 75,076 $ 14,229 Net Income Allocable to Subordinated Units 64,661 14,229 Net Income Attributable to Limited Partners $ 139,737 $ 28,458 Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted Common Units $ 4.10 $ 0.89 Subordinated Units $ 4.10 $ 0.89 Weighted Average Limited Partner Units Outstanding — Basic Common Units 18,192 15,903 Subordinated Units 15,903 15,903 Weighted Average Limited Partner Units Outstanding — Diluted Common Units 18,204 15,903 Subordinated Units 15,903 15,903 Antidilutive Restricted Units 4 — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13. Income Taxes We are not a taxable entity for U.S. federal income tax purposes or for the majority of states that impose an income tax. Taxes are generally borne by our partners through the allocation of taxable income, and accordingly for the periods subsequent to the IPO, we do not record deferred taxes related to the aggregate difference in the basis of our assets for financial and tax reporting purposes. We recorded a de minimis state tax provision for the year ended December 31, 2017 associated with a Texas Margin Tax. The income tax provision for the years ended December 31, 2016 and December 31, 2015 consists of the following: Year Ended December 31, (in thousands) 2016 2015 Current $ 15,450 $ 164 Deferred 12,838 23,062 Total Income Tax Provision $ 28,288 $ 23,226 Effective Tax Rate 24.9 % 37.9 % The increase in income tax expense for the year ended December 31, 2016 as compared with the year ended December 31, 2015 was primarily due to an increase in income before income taxes earned prior to the IPO, which is subject to federal and state income tax. The increase in income tax expense was partially offset by the impact of the Partnership’s non-taxable status for the period beginning on the IPO date and ending on December 31, 2016. Our effective tax rate for the year ended December 31, 2016 varied as compared with the year ended December 31, 2015 primarily due to the Partnership’s U.S. federal income tax status as a non-taxable entity for the period subsequent to the IPO. The effective tax rate for the period beginning on January 1, 2016 and ending on the IPO date was 38.1% . See Note 2. Summary of Significant Accounting Policies and Basis of Presentation above for discussion of elimination of current and deferred tax liabilities prior to the IPO. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14. Subsequent Events On January 31, 2018, Black Diamond completed the Acquisition of Saddle Butte from Saddle Butte Pipeline II, LLC (Seller). The aggregate purchase price for the Acquisition was approximately $638.5 million in cash, which included certain pre-closing adjustments made in proportion to each party’s respective ownership interest. The purchase price is subject to customary adjustments following closing. Noble Member and Greenfield Member funded their share of the purchase price, approximately $319.9 million and $318.6 million , respectively, through contributions to Black Diamond. Noble Member funded its share of the purchase price through a combination of cash on hand, proceeds from the Unit Offering and borrowings under its revolving credit facility. In accordance with the Black Diamond Gathering LLC Agreement, Noble Member received a 54.4% equity ownership interest in Black Diamond and Greenfield Member received a 45.6% equity ownership interest in Black Diamond. In addition to the payment to the Sell, Black Diamond, through an additional contribution from Greenfield Member, paid PDC Energy, Inc. (PDC Energy) approximately $24.1 million to expand PDC Energy’s acreage dedication as well as expand the duration of the acreage dedication by five years. In conjunction with the closing of the Acquisition, Midstream Services, as the Borrower, requested and obtained an increase in the aggregate commitment under the Credit Agreement, increasing the size of the revolving credit facility under the Credit Agreement from $350 million to $530 million . This increase in aggregate commitment became effective on January 31, 2018. On January 31, 2018, in connection with the closing of the Acquisition, the Partnership, JPMorgan Chase Bank, N.A., and the other lenders party thereto entered into the Second Amendment to Credit Agreement (the Second Amendment). The Second Amendment amends the Credit Agreement, dated September 20, 2016. The Second Amendment, among other things, modifies the terms of the Credit Agreement to add specific approval for the Acquisition and add Material Subsidiaries (as defined in the Credit Agreement), Laramie River DevCo LP and Noble Member, as guarantors under the Credit Agreement. In connection with the closing of the Acquisition, the Partnership borrowed $300 million under its revolving credit facility to fund its share of the purchase price. As of January 31, 2018, $410 million was outstanding under our revolving credit facility. |
Supplemental Quarterly Informat
Supplemental Quarterly Information | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Supplemental Quarterly Financial Information | Supplemental quarterly financial information is as follows: (in thousands except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Year Ended December 31, 2017 Total Revenues $ 50,314 $ 57,783 $ 63,111 $ 68,073 Operating Income 33,722 37,566 42,750 44,887 Income Before Income Taxes 34,520 39,107 43,789 46,240 Net Income 34,520 39,107 43,756 46,253 Net Income Attributable to Limited Partners 24,342 31,500 41,447 42,448 Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted Common Units $ 0.77 $ 0.98 $ 1.15 $ 1.16 Subordinated Units 0.77 0.98 1.15 1.16 Year Ended December 31, 2016 Total Revenues $ 32,123 $ 32,970 $ 47,166 $ 48,465 Operating Income 21,437 21,896 34,864 34,440 Income Before Income Taxes 21,820 23,307 33,472 35,191 Net Income 13,510 14,434 22,367 35,191 Net Income Attributable to Limited Partners N/A N/A 3,093 25,365 Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted Common Units N/A N/A $ 0.10 $ 0.80 Subordinated Units N/A N/A 0.10 0.80 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Presentation | Basis of Presentation and Consolidation The accompanying consolidated financial statements for periods prior to September 20, 2016 represent the Contributed Businesses as the accounting Predecessor to the Partnership, presented on a carve-out basis of Noble’s historical ownership of the Predecessor. The Predecessor financial statements have been prepared from the separate records maintained by Noble and may not necessarily be indicative of the actual results of operations that might have occurred if the Predecessor had been operated separately during the periods reported. Because a direct ownership relationship did not exist among the businesses comprising the Predecessor, the net investment in the Predecessor is shown as Parent Net Investment, in lieu of partners’ equity, in the accompanying Consolidated Statement of Changes in Equity for years prior to December 31, 2016. All intercompany balances and transactions have been eliminated upon consolidation. The Partnership has no items of other comprehensive income or loss; therefore, its net income is identical to its comprehensive income. |
Variable Interest Entities | Variable Interest Entities Our consolidated financial statements include our accounts and the accounts of the DevCos, each of which we control as General Partner. We have determined that the partners with equity at risk in each of the DevCos lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact their economic performance. Therefore, each DevCo is considered a variable interest entity (VIE). Through our 100% ownership interest in Noble Midstream Services, LLC, a Delaware limited liability company which owns controlling interests in each of the DevCos, we have the authority to direct the activities that most significantly affect economic performance and the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate each of the DevCos in our financial statements. A substantial portion of the financial statement activity associated with our DevCos is captured within the Gathering Systems and Fresh Water Delivery reportable segments. Although our investment in the Advantage Joint Venture is owned by Trinity River DevCo LLC, all financial statement activity associated with our investment is captured within the Investments and Other reportable segment. See Note 8. Segment Information . Our consolidated financial statements include the accounts of Black Diamond, which we control. We have determined that the partners with equity at risk in Black Diamond lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact their economic performance. Therefore, Black Diamond is considered a VIE. Through our majority representation on the Black Diamond company board of directors as well as our responsibility as operator of the acquired system, we have the authority to direct the activities that most significantly affect economic performance and the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate Black Diamond in our financial statements. |
Equity Method of Accounting | Equity Method of Accounting Although we serve as the operator of the Advantage system, our operating agreements empower the Advantage board, split between us and Plains, to direct the activities that most significantly affect the long-term economic performance of the entity, primarily the oversight of the commercial function and approval of expansion capital. As a result, our investment in the Advantage Joint Venture does not require consolidation under the VIE consolidation model. We use the equity method of accounting for our investment in the Advantage Joint Venture, as we do not control, but do exert significant influence over, its operations. Under the equity method of accounting, initially we record the investment at our cost. Differences in the cost, or basis, of the investment and the net asset value of the investee will be amortized into earnings over the remaining useful life of the underlying assets. |
Cost Method of Accounting | Cost Method of Accounting We use the cost method of accounting for our White Cliffs Interest as we have virtually no influence over its operations and financial policies. Under the cost method of accounting, we recognize cash distributions from White Cliffs Pipeline L.L.C. as investment income in our consolidated statements of operations to the extent there is net income and record cash distributions in excess of our ratable share of earnings as return of investment. |
Noncontrolling Interests | Noncontrolling Interests We present our consolidated financial statements with a noncontrolling interest section representing Noble’s retained ownership our DevCos as well as Greenfield Member's ownership of Black Diamond. |
Segment Information | Segment Information Accounting policies for reportable segments are the same as those described in this footnote. Transfers between segments are accounted for at market value. We do not consider interest income and expense or income tax benefit or expense in our evaluation of the performance of reportable segments. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment. |
Revenue Recognition | Revenue Recognition We generate revenues primarily by charging fees on a per unit basis for gathering crude oil and natural gas, delivering and storing fresh water, and collecting, cleaning and disposing of produced water. We recognize revenue when services have been rendered, the prices are fixed or determinable, and collectibility is reasonable assured. |
Property, Plant and Equipment | Property, Plant and Equipment Property and equipment primarily consists of crude oil and natural gas gathering systems, produced water collection, gathering, and cleaning systems, fresh water storage and delivery systems and crude oil treating facilities. Property and equipment is stated at the lower of historical cost less accumulated depreciation, or fair value, if impaired. Capitalized Interest We capitalize construction-related direct labor and incremental costs, such as interest expense. Capitalized interest totaled $2.5 million in 2017 , $0.8 million in 2016 , and $2.5 million in 2015 . Repair and maintenance costs are expensed as incurred. Depreciation Depreciation is computed over the asset’s estimated useful life using the straight line method based on estimated useful lives and asset salvage values. Determination of depreciation expense requires judgment regarding the estimated useful lives and salvage values of property, plant and equipment. As circumstances warrant, depreciation estimates are reviewed to determine if any changes in the underlying assumptions are necessary. The weighted average life of our long-lived assets is 30 years. The depreciation of fixed assets recorded under capital lease agreements is included in depreciation and amortization expense. |
Impairment of Long-Live Assets | Impairment of Long-Lived Assets We routinely assess whether impairment indicators arise during any given quarter and have processes in place to ensure that we become aware of such indicators. Impairment indicators include, but are not limited to, sustained decreases in commodity prices, a decline in customer well results and lower throughput forecasts, and increases in construction or operating costs. In the event that impairment indicators exist, we conduct an impairment test. We evaluate our ability to recover the carrying amounts of long-lived assets and determine whether such long-lived assets have been impaired. Impairment exists when the carrying value of an asset exceeds the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. When the carrying amount of a long-lived asset exceeds its estimated undiscounted future cash flows, the carrying amount of the asset is reduced to its estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. |
Asset Retirement Obligations | Asset Retirement Obligations Asset Retirement Obligations (ARO) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our property and equipment. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our infrastructure assets and the obligation can reasonably be estimated. The associated asset retirement cost is capitalized as part of the carrying cost of the infrastructure asset. The recognition of an ARO requires that management make numerous estimates, assumptions and judgments regarding such factors as: the existence of a legal obligation for an ARO; estimated probabilities, amounts and timing of settlements; the credit-adjusted risk-free rate to be used; and inflation rates. In periods subsequent to initial measurement of the ARO, we recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows. Revisions also result in increases or decreases in the carrying cost of the asset. Increases in the ARO liability due to passage of time impact net income as accretion expense. The related capitalized cost, including revisions thereto, is charged to expense through depreciation and amortization. |
Impairment of Investments | Impairment of Investments We routinely assess our investments for impairment whenever changes in facts and circumstances indicate a loss in value has occurred. When impairment indicators exist, the fair value is estimated and compared to the investment carrying amount. When the carrying amount of an investment exceeds its estimated undiscounted future cash flows, the carrying amount of the investment is reduced to its estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. |
Fair Value Measurements | Fair Value Measurements We measure assets and liabilities requiring fair value presentation and disclose such amounts according to the quality of valuation inputs under the fair value hierarchy. The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature and maturity of the instruments and use Level 1 inputs. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include unrestricted cash on hand and investments with original maturities of three months or less at the time of purchase. |
Transactions With Affiliates | Transactions with Affiliates Transactions between Noble, its affiliates and us have been identified in the consolidated financial statements as transactions with affiliates. |
Debt Origination Fees and Expenses | Debt Origination Fees and Expenses Debt origination fees and expenses of $1.9 million associated with our Revolving Credit Facility are included in deferred charges and amortized on a straight line basis over the five -year term. Amortization is included in interest expense. |
Capital Lease Obligation | Capital Lease Obligation We entered into a capital lease for a pond to be used in our fresh water delivery system. The amount of the capital lease obligation is based on the discounted present value of future minimum lease payments, and therefore does not reflect future cash lease payments. |
Unit-Based Compensation | Unit-Based Compensation Unit-based compensation issued to individuals providing services to us is recorded at grant-date fair value. Expense is recognized on a straight-line basis over the requisite service period (generally the vesting period of the award) in the consolidated statements of operations. |
Income Taxes | Income Taxes We are not a taxable entity for U.S. federal income tax purposes or for the majority of states that impose an income tax. Taxes are generally borne by our partners through the allocation of taxable income, and accordingly for the periods subsequent to the IPO, we do not record deferred taxes related to the aggregate difference in the basis of our assets for financial and tax reporting purposes. During 2017, we commenced operations in the Delaware Basin and are subject to a Texas Margin Tax. For periods prior to the IPO, our consolidated financial statements include a provision for tax expense on income related to the assets that Noble contributed to the Partnership at the IPO date. Deferred federal and state income taxes were provided on temporary differences between the financial statement carrying amounts of recognized assets and liabilities and their respective tax bases as if the Partnership filed tax returns as a stand-alone entity. |
Litigation and Other Contingencies | Litigation and Other Contingencies We may become subject to legal proceedings, claims and liabilities that will arise in the ordinary course of business. We will accrue for losses associated with legal claims when such losses are considered probable and the amounts can be reasonably estimated. |
Concentration of Credit Risk | Concentration of Credit Risk For the year ended December 31, 2017 , 94% of our revenues are from Noble and its affiliates. For all other periods presented, 100% of our revenues are from Noble and its affiliates. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued Accounting Standards Update No. 2017-09 (ASU 2017-09) Compensation - Stock Compensation (Topic 718). The purpose of this update is to provide clarity as to which modifications of awards require modification accounting under Topic 718, whereas previously issued guidance frequently resulted in varying interpretations and a diversity of practice. Under ASU 2017-09, an entity should employ modification accounting unless the following items are met: (1) the fair value of the award is the same immediately before and after the award is modified; (2) the vesting conditions are the same under both the modified award and the original award; and (3) the classification of the modified award is the same as the original award, either equity or liability. Regardless of whether modification accounting is utilized, award disclosure requirements under Topic 718 remain unchanged. ASU 2017-09 will be effective for annual or any interim periods beginning after December 15, 2017. We do not believe adoption of ASU 2017-09 will have a material impact on our financial statements. We will adopt the new standard on the effective date of January 1, 2018. Business Combinations – Clarifying the Definition of a Business In January 2017, the FASB issued Account Standards Update No. 2017-01 (ASU 2017-01): Business Combinations - Clarifying the Definition of a Business, that assists in determining whether certain transactions should be accounted for as acquisitions or dispositions of assets or businesses. The amendment provides a screen to be applied to the fair value of an acquisition or disposal to evaluate whether the assets in question are simply assets or if they meet the definition of a business. If the screen is not met, no further evaluation is needed. If the screen is met, certain steps are subsequently taken to make the determination. This ASU is effective for annual and interim periods beginning after December 15, 2017 and is required to be applied prospectively. We will adopt the new standard on the effective date of January 1, 2018. Statement of Cash Flows – Restricted Cash In November 2016, the FASB issued Accounting Standards Update No. 2016-18 (ASU 2016-18): Statement of Cash Flows - Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. This ASU will be effective for annual and interim periods beginning after December 15, 2017, with earlier application permitted. We will adopt the new standard on the effective date of January 1, 2018. Under the provisions of ASU 2016-18, we will no longer reflect a cash outflow for cash becoming restricted. Additionally, the statement of cash flows will reconcile changes in both cash and restricted cash. Based on the balance of restricted cash as of December 31, 2017, adoption of ASU 2016-18 will have a material impact on our consolidated statement of cash flows and related disclosures. Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued Accounting Standards Update No. 2016-15 (ASU 2016-15): Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, to clarify how eight specific cash receipt and cash payment transactions should be presented in the statement of cash flows. ASU 2016-15 will be effective for annual and interim periods beginning after December 15, 2017, with earlier application permitted. We will adopt the new standard on the effective date of January 1, 2018. Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02): Leases. The guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by leases with terms of more than 12 months. ASU 2016-02 also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with earlier application permitted. In the normal course of business, we enter into capital and operating lease agreements to support our operations and may lease water-related, field-related and other assets. At this time, we cannot reasonably estimate the financial impact ASU 2016-02 will have on our financial statements; however, we believe adoption and implementation of ASU 2016-02 will likely materially impact our balance sheet resulting from an increase in both assets and liabilities relating to our leasing activities. As part of our assessment to date, we have formed an implementation work team, prepared educational and training materials pertinent to ASU 2016-02 and have begun contract review and documentation. Revenue Recognition In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), which creates Topic 606, Revenue from Contracts with Customers . In summary, revenue recognition would occur upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, ASU 2014-09 requires enhanced financial statement disclosures over revenue recognition. We continue to evaluate the impact of ASU 2014-09 on our accounting policies, internal controls, and consolidated financial statements and related disclosures. We have performed a review of contracts for each of our revenue streams and are developing accounting policies to address the provisions of ASU 2014-09. We have evaluated the impact on the presentation of our future revenues and expenses under the gross-versus-net presentation guidance. Based upon assessments performed to date, we do not expect ASU 2014-09 to have an effect on the timing of revenue recognition or our financial position. We will adopt the new standard on the effective date of January 1, 2018. After adoption of ASU 2015-09, we will begin to net certain immaterial revenues and expenses using the modified retrospective approach in accordance with the gross-versus-net presentation guidance. |
Organization and Nature of Op23
Organization and Nature of Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Subsidiaries | Our assets consist of ownership interests in certain DevCos and consist of the following: DevCo Areas Served NBLX Dedicated Service Current Status of Asset NBLX Ownership Noncontrolling Interest (1) Colorado River DevCo LP Wells Ranch IDP (DJ Basin) East Pony (DJ Basin) All Noble DJ Basin Acreage Crude Oil Gathering Natural Gas Gathering Water Services Crude Oil Gathering Crude Oil Treating Operational Operational Operational 100% N/A San Juan River DevCo LP East Pony IDP (DJ Basin) Water Services Operational 25% 75% Green River DevCo LP Mustang IDP (DJ Basin) Crude Oil Gathering Natural Gas Gathering Water Services Planning Planning Partially Operational 25% 75% Laramie River DevCo LP Greeley Crescent IDP (DJ Basin) Crude Oil Gathering Water Services Operational 100% N/A Blanco River DevCo LP Delaware Basin Crude Oil Gathering Natural Gas Gathering Water Services Operational 40% 60% Gunnison River DevCo LP Bronco IDP (DJ Basin) Crude Oil Gathering Water Services Future Development 5% 95% Trinity River DevCo LLC (2) Delaware Basin Crude Oil Transmission Gas Compression Operational 100% N/A (1) The noncontrolling interest represents Noble’s retained ownership interest in each DevCo. (2) Trinity River DevCo LLC owns the interest in the Advantage Joint Venture. |
Transactions with Affiliates (T
Transactions with Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Revenues generated from commercial agreements with Noble and its affiliates consist of the following: Year Ended December 31, (in thousands) 2017 2016 2015 Crude Oil, Natural Gas and Produced Water Gathering $ 142,864 $ 94,160 $ 56,042 Fresh Water Delivery 75,860 60,001 27,097 Crude Oil Treating 4,473 5,371 4,403 Other 1,204 1,192 295 Total Midstream Services — Affiliate $ 224,401 $ 160,724 $ 87,837 |
Schedule of General and Administrative Expenses | General and administrative expense consists of the following: Year Ended December 31, (in thousands) 2017 2016 2015 General and Administrative Expense — Affiliate $ 7,323 $ 6,984 $ 2,285 General and Administrative Expense — Third Party 6,073 2,930 486 Total General and Administrative Expense $ 13,396 $ 9,914 $ 2,771 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment, at cost, is as follows: (in thousands) December 31, 2017 December 31, 2016 Crude Oil, Natural Gas and Produced Water Gathering Systems and Facilities $ 451,275 $ 201,323 Fresh Water Delivery System (1) 76,745 56,792 Crude Oil Treating Facilities 20,099 20,099 Construction-in-Progress (2) 157,920 32,831 Total Property, Plant and Equipment, at Cost 706,039 311,045 Accumulated Depreciation and Amortization (44,271 ) (31,642 ) Property, Plant and Equipment, Net $ 661,768 $ 279,403 (1) Fresh water delivery system assets at December 31, 2017 and December 31, 2016 include $5 million related to a leased pond accounted for as a capital lease. See Note 9. Commitments and Contingencies . (2) Construction-in-progress at December 31, 2017 primarily includes $157.4 million in gathering system projects and $0.5 million in fresh water delivery system projects. Construction-in-progress at December 31, 2016 primarily includes $27.6 million in gathering system projects and $5.2 million in fresh water delivery system projects. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Cost and Equity Method Investments | The following table presents our investments at the dates indicated: (in thousands) December 31, 2017 December 31, 2016 Advantage Joint Venture (1) $ 70,283 $ — White Cliffs Interest 10,178 11,151 Total Investments $ 80,461 $ 11,151 (1) We capitalized $1.7 million in acquisition related expenses that are included in the basis of the investment. As of December 31, 2017 , $1.6 million in acquisition related expenses remains unamortized. |
Investment Income | The following table presents our investment income for the periods indicated: Year Ended December 31, (in thousands) 2017 2016 2015 Advantage Joint Venture (1) $ 1,779 $ — $ — White Cliffs Interest 4,088 4,526 4,621 Other (2) 467 — — Total Investment Income $ 6,334 $ 4,526 $ 4,621 (1) Includes the amortization of acquisition related expenses. As we completed the Advantage acquisition on April 3, 2017, the year-to-date results are for the period beginning on April 3, 2017 and ending on December 31, 2017. (2) Represents income associated with our fee for serving as the operator of the Advantage Joint Venture. The fee totals approximately $0.7 million per year. |
Equity Method Investments | Summarized, 100% combined balance sheet financial information for the Advantage Joint Venture at the date indicated: (in thousands) December 31, 2017 Current Assets $ 9,271 Noncurrent Assets 131,217 Current Liabilities 3,200 Noncurrent Liabilities $ 4 Summarized, 100% combined statement of operations information for the Advantage Joint Venture for the periods indicated: (in thousands) Year Ended December 31, 2017 (1) Operating Revenues $ 11,034 Operating Expenses 7,358 Income Before Taxes 3,676 Income Tax Expense 35 Net Income $ 3,641 (1) As we completed the Advantage acquisition on April 3, 2017, the year-to-date results are for the period beginning on April 3, 2017 and ending on December 31, 2017. |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Change in Asset Retirement Obligation | Changes in ARO are as follows: Year Ended December 31, (in thousands) 2017 2016 Asset Retirement Obligations, Beginning Balance $ 5,415 $ 3,612 Liabilities Incurred 4,828 365 Revision of Estimate (151 ) 1,224 Accretion Expense (1) 324 214 Asset Retirement Obligations, Ending Balance $ 10,416 $ 5,415 (1) Accretion expense is included in depreciation and amortization expense in the consolidated statement of operations. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Summarized financial information concerning our reportable segments is as follows: (in thousands) Gathering Systems (1) Fresh Water Delivery (1) Investments and Other (1) (2) Consolidated Year Ended December 31, 2017 Midstream Services — Affiliate $ 148,541 $ 75,860 $ — $ 224,401 Midstream Services — Third Party 3,971 10,909 — 14,880 Total Midstream Services Revenues 152,512 86,769 — 239,281 Direct Operating Expense 37,138 16,011 858 54,007 Depreciation and Amortization 10,687 2,266 — 12,953 Income (Loss) Before Income Taxes 104,687 68,492 (9,523 ) 163,656 Year Ended December 31, 2016 Midstream Services — Affiliate $ 100,723 $ 60,001 $ — $ 160,724 Direct Operating Expense 14,443 14,390 274 29,107 Depreciation and Amortization 7,361 1,705 — 9,066 Income (Loss) Before Income Taxes 78,919 43,906 (9,035 ) 113,790 Year Ended December 31, 2015 Midstream Services — Affiliate $ 60,740 $ 27,097 $ — $ 87,837 Direct Operating Expense 13,806 2,595 532 16,933 Depreciation and Amortization 5,288 1,603 — 6,891 Income (Loss) Before Income Taxes 41,646 22,899 (3,277 ) 61,268 December 31, 2017 Total Assets $ 593,590 $ 68,178 $ 167,990 $ 829,758 Additions to Long-Lived Assets 373,857 16,469 — 390,326 December 31, 2016 Total Assets $ 224,861 $ 54,542 $ 89,956 $ 369,359 Additions to Long-Lived Assets 30,020 2,564 — 32,584 December 31, 2015 Total Assets $ 201,744 $ 49,189 $ 54,385 $ 305,318 Additions to Long-Lived Assets 50,858 11,278 — 62,136 (1) A substantial portion of the financial statement activity associated with our DevCos is captured within the Gathering Systems and Fresh Water Delivery reportable segments. Although our investment in the Advantage Joint Venture is owned by Trinity River DevCo LLC, all financial statement activity associated with our investment is captured within the Investments and Other reportable segment. As our DevCos represent VIEs, see the above reportable segments for our VIEs impact to the consolidated financial statements. (2) The Investments and Other segment includes our investments in the Advantage Joint Venture and White Cliffs Interest as well as all general Partnership activity not attributable to our DevCos. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Capital Leases | Minimum commitments as of December 31, 2017 are as follows: (in thousands) Surface Lease Obligations Purchase Obligations (1) Future Minimum Capital Lease Payments Omnibus Fee (2) 2018 $ 90 $ 160,559 $ — $ 6,850 2019 90 — 3,095 6,850 2020 90 — — — 2021 91 — — — 2022 91 — — — 2023 and Beyond 221 — — — Total $ 673 $ 160,559 $ 3,095 $ 13,700 (1) Purchase obligations represent contractual agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed and minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The amount represents the obligation to purchase materials for use in our capital projects. (2) Annual general and administrative fee we pay to Noble f or certain administrative and operational support services being provided to us. The annual general and administrative fee cannot be increased until after the third anniversary of the IPO and will be redetermined annually thereafter. |
Unit-Based Compensation (Tables
Unit-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation, Activity | Restricted unit activity for the year ended December 31, 2017 was as follows: Number of Units Weighted Average Award Date Fair Value Awarded and Unvested Units at December 31, 2016 7,868 $ 30.50 Awarded 34,704 45.10 Vested (7,868 ) 30.50 Awarded and Unvested Units at December 31, 2017 34,704 $ 45.10 |
Partnership Distributions (Tabl
Partnership Distributions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Distributions Made to Limited Partner, by Distribution | The following table details the distributions paid in respect of the periods presented below: Distributions Limited Partners Period Record Date Distribution Date Distribution per Limited Partner Unit Common Unitholders (1) Subordinated Unitholders Holder of IDRs Total Q4 2016 (2) February 6, 2017 February 14, 2017 $ 0.4333 $ 6,891 $ 6,891 $ — $ 13,782 Q1 2017 May 8, 2017 May 16, 2017 $ 0.4108 $ 6,533 $ 6,533 $ — $ 13,066 Q2 2017 August 7, 2017 August 14, 2017 $ 0.4457 $ 8,909 $ 7,088 $ 92 $ 16,089 Q3 2017 November 6, 2017 November 13, 2017 $ 0.4665 $ 9,330 $ 7,418 $ 223 $ 16,971 (1) Distributions to common unitholders does not include distribution equivalent rights on units that vested under the LTIP. (2) The distribution for the fourth quarter 2016 is comprised of $0.3925 per unit for the fourth quarter 2016 and $0.0408 per unit for the 10-day period beginning on the closing of the IPO on September 20, 2016 and ending on September 30, 2016. |
Net Income Per Limited Partne32
Net Income Per Limited Partner Unit (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Our calculation of net income per limited partner Common and Subordinated Unit is as follows: Year Ended December 31, (in thousands) 2017 2016 Net Income Attributable to Noble Midstream Partners LP $ 140,572 $ 28,458 Less: Net Income Attributable to Incentive Distribution Rights 835 — Net Income Attributable to Limited Partners $ 139,737 $ 28,458 Net Income Allocable to Common Units $ 75,076 $ 14,229 Net Income Allocable to Subordinated Units 64,661 14,229 Net Income Attributable to Limited Partners $ 139,737 $ 28,458 Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted Common Units $ 4.10 $ 0.89 Subordinated Units $ 4.10 $ 0.89 Weighted Average Limited Partner Units Outstanding — Basic Common Units 18,192 15,903 Subordinated Units 15,903 15,903 Weighted Average Limited Partner Units Outstanding — Diluted Common Units 18,204 15,903 Subordinated Units 15,903 15,903 Antidilutive Restricted Units 4 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision for the years ended December 31, 2016 and December 31, 2015 consists of the following: Year Ended December 31, (in thousands) 2016 2015 Current $ 15,450 $ 164 Deferred 12,838 23,062 Total Income Tax Provision $ 28,288 $ 23,226 Effective Tax Rate 24.9 % 37.9 % |
Organization and Nature of Op34
Organization and Nature of Operations (Details) $ / shares in Units, bbl / d in Thousands, bbl in Thousands, a in Thousands, $ in Millions | Dec. 12, 2017USD ($)$ / sharesshares | Jun. 26, 2017 | Jun. 20, 2017USD ($)$ / sharesshares | Apr. 03, 2017USD ($)bbl / dmibbl | Sep. 20, 2016$ / sharesshares | Dec. 31, 2017aMMBTUcustomermi |
Debt Instrument [Line Items] | ||||||
Proceeds from private placement, gross | $ 142.6 | |||||
Proceeds from private placement, net | $ 138 | |||||
Net proceeds from unit offering | $ 174.1 | |||||
Payments of stock issuance costs | $ 0.7 | |||||
Common Units | ||||||
Debt Instrument [Line Items] | ||||||
Sold (in units) | shares | 3,680,000 | |||||
Price ($ per unit) | $ / shares | $ 47.50 | |||||
Colorado River DevCo LP | ||||||
Debt Instrument [Line Items] | ||||||
Interest in partnership | 20.00% | |||||
Controlling interest | 100.00% | 100.00% | ||||
San Juan River DevCo LP | ||||||
Debt Instrument [Line Items] | ||||||
Controlling interest | 25.00% | |||||
Noncontrolling interest | 75.00% | |||||
Green River DevCo LP | ||||||
Debt Instrument [Line Items] | ||||||
Controlling interest | 25.00% | |||||
Noncontrolling interest | 75.00% | |||||
Laramie River DevCo LP | ||||||
Debt Instrument [Line Items] | ||||||
Controlling interest | 100.00% | |||||
Blanco River DevCo LP | ||||||
Debt Instrument [Line Items] | ||||||
Interest in partnership | 15.00% | |||||
Controlling interest | 40.00% | 40.00% | ||||
Noncontrolling interest | 60.00% | |||||
Gunnison River DevCo LP | ||||||
Debt Instrument [Line Items] | ||||||
Controlling interest | 5.00% | |||||
Noncontrolling interest | 95.00% | |||||
Trinity River DevCo LLC | ||||||
Debt Instrument [Line Items] | ||||||
Controlling interest | 100.00% | |||||
White Cliffs Pipeline | ||||||
Debt Instrument [Line Items] | ||||||
Non-controlling ownership | 3.33% | 3.33% | ||||
IPO | Common Units | ||||||
Debt Instrument [Line Items] | ||||||
Sold (in units) | shares | 14,375,000 | |||||
Price ($ per unit) | $ / shares | $ 22.50 | |||||
Price, net ($ per unit) | $ / shares | $ 21.20625 | |||||
Over-Allotment Option | Common Units | ||||||
Debt Instrument [Line Items] | ||||||
Sold (in units) | shares | 480,000 | 1,875,000 | ||||
Private Placement | ||||||
Debt Instrument [Line Items] | ||||||
Sold (in units) | shares | 3,525,000 | |||||
Payments of stock issuance costs | $ 4.6 | |||||
Advantage Pipeline | Corporate Joint Venture | ||||||
Debt Instrument [Line Items] | ||||||
Consideration transferred | $ 133 | |||||
Payments to acquire business | $ 66.8 | |||||
Length (miles) | mi | 70 | |||||
Shipping capacity per day (bbls/day) | bbl / d | 150 | |||||
Storage capacity (bbls) | bbl | 490 | |||||
Advantage Pipeline | Plains All American Pipeline | Corporate Joint Venture | ||||||
Debt Instrument [Line Items] | ||||||
Interest acquired | 50.00% | |||||
Blanco River and Colorado River DevCos | ||||||
Debt Instrument [Line Items] | ||||||
Consideration transferred | 270 | |||||
Payments to acquire businesses | $ 245 | |||||
Equity interest issued (shares) | shares | 562,430 | |||||
Share price ($ per unit) | $ / shares | $ 44.45 | |||||
Saddle Butte | ||||||
Debt Instrument [Line Items] | ||||||
Length (miles) | mi | 160 | |||||
Delivery capacity (Mbbl/day) | MMBTU | 300 | |||||
Saddle Butte | ||||||
Debt Instrument [Line Items] | ||||||
Dedicated acres | a | 141 | |||||
Number of customers under fixed fee arrangements on dedicated acreage | customer | 6 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies and Basis of Presentation (Details) - USD ($) $ in Thousands | Sep. 20, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Concentration Risk [Line Items] | |||||
Capitalized interest | $ 2,500 | $ 800 | $ 2,500 | ||
Restricted cash held in escrow | $ 0 | $ 37,505 | 0 | ||
Useful life | 30 years | ||||
Discounted present value of future lease payments | $ 3,100 | ||||
Accrued capital expenditures | 99,800 | 3,900 | |||
Elimination of current and deferred tax liability | $ 41,400 | $ 41,428 | |||
Interest paid | $ 3,700 | $ 200 | |||
Noble Energy | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 94.00% | 100.00% | 100.00% | ||
Revolving Credit Facility | |||||
Concentration Risk [Line Items] | |||||
Debt expense | $ 1,900 | ||||
Maturity | 5 years | ||||
Noble Midstream Services, LLC | |||||
Concentration Risk [Line Items] | |||||
Controlling interest | 100.00% | ||||
Greenfield Member | Saddle Butte | |||||
Concentration Risk [Line Items] | |||||
Escrow deposit | $ 18,800 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Total Midstream Services — Affiliate | $ 224,401 | $ 160,724 | $ 87,837 | ||
General and Administrative Expense — Affiliate | 7,323 | 6,984 | 2,285 | ||
General and Administrative Expense — Third Party | 6,073 | 2,930 | 486 | ||
Total General and Administrative Expense | 13,396 | 9,914 | 2,771 | ||
Proceeds from asset sale — Affiliate | 0 | 1,850 | 0 | ||
Noble Energy | |||||
Related Party Transaction [Line Items] | |||||
General and Administrative Expense — Affiliate | 6,900 | ||||
Noble Energy | Noble Energy | |||||
Related Party Transaction [Line Items] | |||||
Total Midstream Services — Affiliate | $ 224,401 | 160,724 | 87,837 | ||
Proceeds from asset sale — Affiliate | $ 1,900 | ||||
Payments for purchase for assets | $ 900 | ||||
Annual increase in fees | 2.50% | ||||
Initial term | 15 years | ||||
Renewal term | 1 year | ||||
Noble Energy | Noble Energy | Crude Oil, Natural Gas and Produced Water Gathering | |||||
Related Party Transaction [Line Items] | |||||
Total Midstream Services — Affiliate | $ 142,864 | 94,160 | 56,042 | ||
Noble Energy | Noble Energy | Fresh Water Delivery | |||||
Related Party Transaction [Line Items] | |||||
Total Midstream Services — Affiliate | 75,860 | 60,001 | 27,097 | ||
Noble Energy | Noble Energy | Crude Oil Treating | |||||
Related Party Transaction [Line Items] | |||||
Total Midstream Services — Affiliate | 4,473 | 5,371 | 4,403 | ||
Noble Energy | Noble Energy | Other | |||||
Related Party Transaction [Line Items] | |||||
Total Midstream Services — Affiliate | $ 1,204 | $ 1,192 | $ 295 |
Property, Plant and Equipment37
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total Property, Plant and Equipment, at Cost | $ 706,039 | $ 311,045 |
Less: Accumulated Depreciation and Amortization | (44,271) | (31,642) |
Total Property, Plant and Equipment, Net | 661,768 | 279,403 |
Crude Oil, Natural Gas and Produced Water Gathering Systems and Facilities | ||
Property, Plant and Equipment [Line Items] | ||
Total Property, Plant and Equipment, at Cost | 451,275 | 201,323 |
Construction in-progress | 157,400 | 27,600 |
Fresh Water Delivery System | ||
Property, Plant and Equipment [Line Items] | ||
Total Property, Plant and Equipment, at Cost | 76,745 | 56,792 |
Capital lease | 5,000 | 5,000 |
Construction in-progress | 500 | 5,200 |
Crude Oil Treating Facilities | ||
Property, Plant and Equipment [Line Items] | ||
Total Property, Plant and Equipment, at Cost | 20,099 | 20,099 |
Construction-in-Progress | ||
Property, Plant and Equipment [Line Items] | ||
Total Property, Plant and Equipment, at Cost | $ 157,920 | $ 32,831 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Advantage Joint Venture | $ 70,283 | $ 0 | |
White Cliffs Interest | 10,178 | 11,151 | |
Total Investments | 80,461 | 11,151 | |
Acquisition costs | 1,700 | ||
Unamortized acquisition related expenses | 1,600 | ||
Schedule of Equity Method Investments [Line Items] | |||
Investment Income | 6,334 | 4,526 | $ 4,621 |
Advantage Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment Income | 1,779 | 0 | 0 |
Current Assets | 9,271 | ||
Noncurrent Assets | 131,217 | ||
Current Liabilities | 3,200 | ||
Noncurrent Liabilities | 4 | ||
Operating Revenues | 11,034 | ||
Operating Expenses | 7,358 | ||
Income Before Taxes | 3,676 | ||
Income Tax Expense | 35 | ||
Net Income | 3,641 | ||
White Cliffs Interest | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment Income | 4,088 | 4,526 | 4,621 |
Other Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment Income | 467 | $ 0 | $ 0 |
Asset management fees | $ 700 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | ||
Unamortized debt issuance costs | $ 1,400,000 | $ 1,800,000 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | 350,000,000 | |
Additional borrowing capacity available | 350,000,000 | |
Debt outstanding | $ 85,000,000 | $ 0 |
Interest rate during period | 2.50% | |
Commitment fee percentage | 0.20% | 0.20% |
Revolving Credit Facility | Federal Funds Effective Swap Rate | ||
Line of Credit Facility [Line Items] | ||
Basis spread | 0.50% | |
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||
Line of Credit Facility [Line Items] | ||
Basis spread | 1.00% |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Asset Retirement Obligations, Beginning Balance | $ 5,415 | $ 3,612 |
Liabilities Incurred | 4,828 | 365 |
Revision of Estimate | (151) | 1,224 |
Accretion Expense | 324 | 214 |
Asset Retirement Obligations, Ending Balance | $ 10,416 | $ 5,415 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Total Midstream Services — Affiliate | $ 224,401 | $ 160,724 | $ 87,837 | ||||||||
Midstream Services — Third Party | 14,880 | 0 | 0 | ||||||||
Total Revenues | $ 68,073 | $ 63,111 | $ 57,783 | $ 50,314 | $ 48,465 | $ 47,166 | $ 32,970 | $ 32,123 | 239,281 | 160,724 | 87,837 |
Direct Operating Expense | 54,007 | 29,107 | 16,933 | ||||||||
Depreciation and Amortization | 12,953 | 9,066 | 6,891 | ||||||||
Income (Loss) Before Income Taxes | 46,240 | $ 43,789 | $ 39,107 | $ 34,520 | 35,191 | $ 33,472 | $ 23,307 | $ 21,820 | 163,656 | 113,790 | 61,268 |
Total Assets | 829,758 | 369,359 | 829,758 | 369,359 | 305,318 | ||||||
Additions to Long-Lived Assets | 390,326 | 32,584 | 62,136 | ||||||||
Gathering Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Midstream Services — Affiliate | 148,541 | 100,723 | 60,740 | ||||||||
Midstream Services — Third Party | 3,971 | ||||||||||
Total Revenues | 152,512 | ||||||||||
Direct Operating Expense | 37,138 | 14,443 | 13,806 | ||||||||
Depreciation and Amortization | 10,687 | 7,361 | 5,288 | ||||||||
Income (Loss) Before Income Taxes | 104,687 | 78,919 | 41,646 | ||||||||
Total Assets | 593,590 | 224,861 | 593,590 | 224,861 | 201,744 | ||||||
Additions to Long-Lived Assets | 373,857 | 30,020 | 50,858 | ||||||||
Fresh Water Delivery | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Midstream Services — Affiliate | 75,860 | 60,001 | 27,097 | ||||||||
Midstream Services — Third Party | 10,909 | ||||||||||
Total Revenues | 86,769 | ||||||||||
Direct Operating Expense | 16,011 | 14,390 | 2,595 | ||||||||
Depreciation and Amortization | 2,266 | 1,705 | 1,603 | ||||||||
Income (Loss) Before Income Taxes | 68,492 | 43,906 | 22,899 | ||||||||
Total Assets | 68,178 | 54,542 | 68,178 | 54,542 | 49,189 | ||||||
Additions to Long-Lived Assets | 16,469 | 2,564 | 11,278 | ||||||||
Investments and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Midstream Services — Affiliate | 0 | 0 | 0 | ||||||||
Midstream Services — Third Party | 0 | ||||||||||
Total Revenues | 0 | ||||||||||
Direct Operating Expense | 858 | 274 | 532 | ||||||||
Depreciation and Amortization | 0 | 0 | 0 | ||||||||
Income (Loss) Before Income Taxes | (9,523) | (9,035) | (3,277) | ||||||||
Total Assets | $ 167,990 | $ 89,956 | 167,990 | 89,956 | 54,385 | ||||||
Additions to Long-Lived Assets | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies42
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
General and administrative expense — affiliate | $ 7,323 | $ 6,984 | $ 2,285 |
Discounted present value of future lease payments | 3,100 | ||
Surface Lease Obligations | |||
2,018 | 90 | ||
2,019 | 90 | ||
2,020 | 90 | ||
2,021 | 91 | ||
2,022 | 91 | ||
2023 and Beyond | 221 | ||
Total | 673 | ||
Purchase Obligations | |||
2,018 | 160,559 | ||
2,019 | 0 | ||
2,020 | 0 | ||
2,021 | 0 | ||
2,022 | 0 | ||
2023 and Beyond | 0 | ||
Total | 160,559 | ||
Future Minimum Capital Lease Payments | |||
2,018 | 0 | ||
2,019 | 3,095 | ||
2,020 | 0 | ||
2,021 | 0 | ||
2,022 | 0 | ||
2023 and Beyond | 0 | ||
Total | 3,095 | ||
Omnibus Fee | |||
2,018 | 6,850 | ||
2,019 | 6,850 | ||
2,020 | 0 | ||
2,021 | 0 | ||
2,022 | 0 | ||
2023 and Beyond | 0 | ||
Total | 13,700 | ||
Noble Energy | |||
Related Party Transaction [Line Items] | |||
General and administrative expense — affiliate | $ 6,900 |
Unit-Based Compensation (Detail
Unit-Based Compensation (Details) - Noble Midstream Partners LP 2016 Long-Term incentive Plan $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Authorized (in units) | 1,860,000 |
Units available for grant (in units) | 1,817,428 |
Restricted Units | |
Number of Units | |
Awarded and Unvested Units, beginning balance (in units) | 7,868 |
Awarded (in units) | 34,704 |
Vested (in units) | (7,868) |
Awarded and Unvested Units, ending balance (in units) | 34,704 |
Weighted Average Award Date Fair Value | |
Awarded and Unvested Units, beginning balance (in dollars per share) | $ / shares | $ 30.50 |
Awarded (in dollars per share) | $ / shares | 45.10 |
Vested (in dollars per share) | $ / shares | 30.50 |
Awarded and Unvested Units, ending balance (in dollars per share) | $ / shares | $ 45.10 |
Cost not yet recognized | $ | $ 1 |
Period for recognition | 1 year 9 months |
Partnership Distributions - Dis
Partnership Distributions - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2017 | Aug. 14, 2017 | May 16, 2017 | Feb. 14, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Distribution Made to Limited Partner [Line Items] | ||||||
Distribution per Limited Partner Unit (in dollars per share) | $ 0.4665 | $ 0.4457 | $ 0.4108 | $ 0.4333 | ||
Distribution to Limited Partners | $ 16,971 | $ 16,089 | $ 13,066 | $ 13,782 | ||
Holder of IDRs | 223 | 92 | ||||
Common Units | ||||||
Distribution Made to Limited Partner [Line Items] | ||||||
Distribution per Limited Partner Unit (in dollars per share) | $ 0.0408 | $ 0.3925 | ||||
Distribution to Limited Partners | 9,330 | 8,909 | 6,533 | 6,891 | ||
Subordinated Units | ||||||
Distribution Made to Limited Partner [Line Items] | ||||||
Distribution to Limited Partners | $ 7,418 | $ 7,088 | $ 6,533 | $ 6,891 |
Partnership Distributions - Nar
Partnership Distributions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 12, 2018 | Jan. 25, 2018 | Nov. 13, 2017 | Aug. 14, 2017 | May 16, 2017 | Feb. 14, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2017 |
Distribution Made to Limited Partner [Line Items] | |||||||||
Partner distribution period | 45 days | ||||||||
Maximum eligibility of available cash | 50.00% | ||||||||
Incentive distribution rights threshold ($ per unit) | $ 0.4313 | ||||||||
Distribution per Limited Partner Unit (in dollars per share) | $ 0.4665 | $ 0.4457 | $ 0.4108 | $ 0.4333 | |||||
Cash distribution to holder of IDRs | $ 223 | $ 92 | |||||||
Common Units | |||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||
Distribution per Limited Partner Unit (in dollars per share) | $ 0.0408 | $ 0.3925 | |||||||
Common Units | Subsequent Event | |||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||
Distribution per Limited Partner Unit (in dollars per share) | $ 0.4883 | ||||||||
General Partner | Subsequent Event | |||||||||
Distribution Made to Limited Partner [Line Items] | |||||||||
Cash distribution to holder of IDRs | $ 500 |
Net Income Per Limited Partne46
Net Income Per Limited Partner Unit (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||
Net Income Attributable to Noble Midstream Partners LP | $ 140,572 | $ 28,458 | ||||||
Less: Net Income Attributable to Incentive Distribution Rights | 835 | 0 | ||||||
Net Income Attributable to Limited Partners | $ 42,448 | $ 41,447 | $ 31,500 | $ 24,342 | $ 25,365 | $ 3,093 | $ 139,737 | $ 28,458 |
Antidilutive Restricted Units (in shares) | 4 | 0 | ||||||
Common Units | ||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||
Net Income Attributable to Limited Partners | $ 75,076 | $ 14,229 | ||||||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 1.16 | $ 1.15 | $ 0.98 | $ 0.77 | $ 0.80 | $ 0.10 | $ 4.10 | $ 0.89 |
Weighted Average Limited Partner Units Outstanding — Basic (in shares) | 18,192 | 15,903 | ||||||
Weighted Average Limited Partner Units Outstanding — Diluted (in shares) | 18,204 | 15,903 | ||||||
Subordinated Units | ||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||
Net Income Attributable to Limited Partners | $ 64,661 | $ 14,229 | ||||||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 1.16 | $ 1.15 | $ 0.98 | $ 0.77 | $ 0.80 | $ 0.10 | $ 4.10 | $ 0.89 |
Weighted Average Limited Partner Units Outstanding — Basic (in shares) | 15,903 | 15,903 | ||||||
Weighted Average Limited Partner Units Outstanding — Diluted (in shares) | 15,903 | 15,903 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 19, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 15,450 | $ 164 | ||
Deferred | 12,838 | 23,062 | ||
Total Income Tax Provision | $ 20 | $ 28,288 | $ 23,226 | |
Effective Tax Rate | 38.10% | 24.90% | 37.90% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 31, 2018 | Dec. 31, 2017 | Jan. 30, 2018 | Dec. 31, 2016 |
Black Diamond Gathering LLC | ||||
Subsequent Event [Line Items] | ||||
Investment acquired | 54.40% | |||
Black Diamond Gathering LLC | ||||
Subsequent Event [Line Items] | ||||
Payment to Expand Acreage Dedication | $ 24,100,000 | |||
Increase in Duration of the Acreage Dedication | 5 years | |||
Saddle Butte | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire businesses | $ 319,900,000 | |||
Saddle Butte | Black Diamond Gathering LLC | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire businesses | 638,500,000 | |||
Greenfield Member | Black Diamond Gathering LLC | ||||
Subsequent Event [Line Items] | ||||
Investment acquired | 45.60% | |||
Greenfield Member | Saddle Butte | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire businesses | 318,600,000 | |||
Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | $ 350,000,000 | |||
Debt outstanding | $ 85,000,000 | $ 0 | ||
Revolving Credit Facility | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | 530,000,000 | $ 350,000,000 | ||
Debt outstanding | 410,000,000 | |||
Revolving Credit Facility | Saddle Butte | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Proceeds from borrowings | $ 300,000,000 |
Supplemental Quarterly Inform49
Supplemental Quarterly Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 19, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total Revenues | $ 68,073 | $ 63,111 | $ 57,783 | $ 50,314 | $ 48,465 | $ 47,166 | $ 32,970 | $ 32,123 | $ 239,281 | $ 160,724 | $ 87,837 | ||
Operating Income | 44,887 | 42,750 | 37,566 | 33,722 | 34,440 | 34,864 | 21,896 | 21,437 | 158,925 | 112,637 | 61,242 | ||
Income Before Income Taxes | 46,240 | 43,789 | 39,107 | 34,520 | 35,191 | 33,472 | 23,307 | 21,820 | 163,656 | 113,790 | 61,268 | ||
Net Income | 46,253 | 43,756 | 39,107 | 34,520 | $ 39,512 | 35,191 | 22,367 | $ 14,434 | $ 13,510 | $ 45,990 | 163,636 | 85,502 | $ 38,042 |
Net Income Attributable to Limited Partners | $ 42,448 | $ 41,447 | $ 31,500 | $ 24,342 | $ 25,365 | $ 3,093 | 139,737 | 28,458 | |||||
Common Units | |||||||||||||
Net Income Attributable to Limited Partners | $ 75,076 | $ 14,229 | |||||||||||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 1.16 | $ 1.15 | $ 0.98 | $ 0.77 | $ 0.80 | $ 0.10 | $ 4.10 | $ 0.89 | |||||
Subordinated Units | |||||||||||||
Net Income Attributable to Limited Partners | $ 64,661 | $ 14,229 | |||||||||||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 1.16 | $ 1.15 | $ 0.98 | $ 0.77 | $ 0.80 | $ 0.10 | $ 4.10 | $ 0.89 |