Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2020 |
Document Transition Report | false |
Entity File Number | 001-37640 |
Entity Registrant Name | NOBLE MIDSTREAM PARTNERS LP |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 47-3011449 |
Entity Address, Address Line One | 1001 Noble Energy Way |
Entity Address, City | Houston, |
Entity Address, State | TX |
Entity Address, Postal Zip Code | 77070 |
City Area Code | 281 |
Local Phone Number | 872-3100 |
Title of each class | Common Units, Representing Limited Partner Interests |
Trading Symbol(s) | NBLX |
Name of each exchange on which registered | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Units Outstanding | 90,369,975 |
Entity Central Index Key | 0001647513 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and Cash Equivalents | $ 12,729 | $ 12,676 |
Accounts Receivable — Affiliate | 37,298 | 42,428 |
Accounts Receivable — Third Party | 24,751 | 44,093 |
Other Current Assets | 7,196 | 8,730 |
Total Current Assets | 81,974 | 107,927 |
Property, Plant and Equipment | ||
Total Property, Plant and Equipment, Gross | 2,056,882 | 2,006,995 |
Less: Accumulated Depreciation and Amortization | (279,115) | (244,038) |
Total Property, Plant and Equipment, Net | 1,777,767 | 1,762,957 |
Investments | 860,817 | 660,778 |
Intangible Assets, Net | 261,794 | 277,900 |
Goodwill | 0 | 109,734 |
Other Noncurrent Assets | 25,995 | 6,786 |
Total Assets | 3,008,347 | 2,926,082 |
Current Liabilities | ||
Accounts Payable — Affiliate | 6,557 | 8,155 |
Accounts Payable — Trade | 46,138 | 107,705 |
Other Current Liabilities | 11,096 | 11,680 |
Total Current Liabilities | 63,791 | 127,540 |
Long-Term Liabilities | ||
Long-Term Debt | 1,635,919 | 1,495,679 |
Asset Retirement Obligations | 40,762 | 37,842 |
Other Long-Term Liabilities | 3,849 | 4,160 |
Total Liabilities | 1,744,321 | 1,665,221 |
Mezzanine Equity | ||
Redeemable Noncontrolling Interest, Net | 112,646 | 106,005 |
Equity | ||
Noncontrolling Interests | 363,796 | 340,857 |
Total Equity | 1,151,380 | 1,154,856 |
Total Liabilities, Mezzanine Equity and Equity | 3,008,347 | 2,926,082 |
Common Units (90,164 and 90,136 units outstanding, respectively) | ||
Equity | ||
Limited Partner | $ 787,584 | $ 813,999 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Common Units | ||
Units outstanding (in shares) | 90,164,000 | 90,136,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | ||||
Midstream Services — Affiliate | $ 93,739 | $ 97,269 | $ 207,523 | $ 201,072 |
Total Revenues | 145,950 | 170,660 | 369,995 | 331,362 |
Costs and Expenses | ||||
Direct Operating | 20,039 | 32,866 | 46,889 | 63,289 |
Depreciation and Amortization | 26,354 | 23,980 | 52,285 | 47,013 |
General and Administrative | 6,446 | 5,171 | 11,932 | 9,532 |
Goodwill Impairment | 0 | 0 | 109,734 | 0 |
Other Operating Expense | 2,576 | 0 | 3,862 | 0 |
Total Operating Expenses | 84,519 | 110,096 | 333,665 | 198,811 |
Operating Income | 61,431 | 60,564 | 36,330 | 132,551 |
Other Expense (Income) | ||||
Interest Expense, Net of Amount Capitalized | 6,633 | 2,322 | 13,490 | 7,550 |
Investment Loss (Income) | 2,730 | 1,748 | 8,139 | (593) |
Other Non-Operating Expense | 1,336 | 0 | 1,336 | 0 |
Total Other Expense (Income) | 10,699 | 4,070 | 22,965 | 6,957 |
Income Before Income Taxes | 50,732 | 56,494 | 13,365 | 125,594 |
Income Tax (Benefit) Expense | (128) | 731 | 21 | 2,040 |
Net Income | 50,860 | 55,763 | 13,344 | 123,554 |
Less: Net Income Prior to the Drop-Down and Simplification Transaction | 0 | 2,565 | 0 | 7,101 |
Net Income Subsequent to the Drop-Down and Simplification Transaction | 50,860 | 53,198 | 13,344 | 116,453 |
Less: Net Income (Loss) Attributable to Noncontrolling Interests | 2,624 | 16,789 | (44,995) | 36,485 |
Net Income Attributable to Noble Midstream Partners LP | 48,236 | 36,409 | 58,339 | 79,968 |
Less: Net Income Attributable to Incentive Distribution Rights | 0 | 4,640 | 0 | 8,147 |
Net Income Attributable to Limited Partners | 48,236 | 31,769 | 58,339 | 71,821 |
Common Units | ||||
Other Expense (Income) | ||||
Net Income Attributable to Limited Partners | $ 48,236 | $ 25,487 | $ 58,339 | $ 49,454 |
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 0.53 | $ 0.79 | $ 0.65 | $ 1.77 |
Weighted Average Limited Partner Units Outstanding — Basic | ||||
Basic (in sharers) | 90,163 | 32,090 | 90,158 | 27,916 |
Weighted Average Limited Partner Units Outstanding — Diluted | ||||
Diluted (in shares) | 90,164 | 32,121 | 90,163 | 27,944 |
Subordinated Units | ||||
Other Expense (Income) | ||||
Net Income Attributable to Limited Partners | $ 0 | $ 6,282 | $ 0 | $ 22,367 |
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 0 | $ 0.84 | $ 0 | $ 1.91 |
Weighted Average Limited Partner Units Outstanding — Basic | ||||
Basic (in sharers) | 0 | 7,514 | 0 | 11,685 |
Weighted Average Limited Partner Units Outstanding — Diluted | ||||
Diluted (in shares) | 0 | 7,514 | 0 | 11,685 |
Midstream Services — Third Party | ||||
Revenues | ||||
Services and Sales Revenues - Third Party | $ 22,997 | $ 21,609 | $ 50,895 | $ 45,638 |
Crude Oil Sales — Third Party | ||||
Revenues | ||||
Services and Sales Revenues - Third Party | 29,214 | 51,782 | 111,577 | 84,652 |
Costs and Expenses | ||||
Cost of Crude Oil Sales | $ 29,104 | $ 48,079 | $ 108,963 | $ 78,977 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Cash Flows From Operating Activities | |||
Net Income | $ 13,344 | $ 123,554 | |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | |||
Depreciation and Amortization | 52,285 | 47,013 | |
Income Taxes | 0 | 1,842 | |
Goodwill Impairment | 109,734 | 0 | |
Loss from Equity Method Investees | 10,276 | 2,083 | |
Distributions from Equity Method Investees | 18,820 | 6,944 | |
Other Adjustments for Noncash Items Included in Income | 6,354 | 1,647 | |
Changes in Operating Assets and Liabilities, Net of Assets Acquired and Liabilities Assumed | |||
Decrease (Increase) in Accounts Receivable | 24,472 | (12,284) | |
(Decrease) Increase in Accounts Payable | (16,630) | 22,739 | |
Other Operating Assets and Liabilities, Net | 796 | (4,593) | |
Net Cash Provided by Operating Activities | 219,451 | 188,945 | |
Cash Flows From Investing Activities | |||
Additions to Property, Plant and Equipment | (96,777) | (141,716) | |
Additions to Investments | (228,226) | (414,587) | |
Loan to Equity Method Investee | (22,500) | 0 | |
Other | 2,224 | 588 | |
Net Cash Used in Investing Activities | (345,279) | (555,715) | |
Cash Flows From Financing Activities | |||
Distributions to Noncontrolling Interests and Parent | (13,224) | (26,476) | |
Contributions from Noncontrolling Interests | 81,158 | 34,110 | |
Borrowings Under Revolving Credit Facility | 350,000 | 560,000 | |
Repayment of Revolving Credit Facility | (210,000) | (250,000) | |
Distributions to Unitholders | (79,020) | (53,459) | |
Proceeds from Preferred Equity, Net of Issuance Costs | 0 | 99,450 | |
Other | (3,083) | (980) | |
Net Cash Provided by Financing Activities | 125,831 | 362,645 | |
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 3 | (4,125) | |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | [1] | 12,726 | 15,712 |
Cash, Cash Equivalents, and Restricted Cash at End of Period | [1] | $ 12,729 | $ 11,587 |
[1] | See Note 2. Basis of Presentation for our reconciliation of total cash. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Parent Net Investment | Noncontrolling Interests | Limited PartnerCommon Units | Limited PartnerSubordinated UnitsNoble | General Partner |
Capital, beginning at Dec. 31, 2018 | $ 1,486,555 | $ 170,322 | $ 744,153 | $ 699,866 | $ (130,207) | $ 2,421 |
Increase (Decrease) in Partners' Capital | ||||||
Net Income (Loss) | 67,791 | 4,536 | 19,696 | 23,967 | 16,085 | 3,507 |
Contributions from Noncontrolling Interests and Parent | 15,969 | 15,969 | ||||
Distributions to Noncontrolling Interests and Parent | (11,164) | (6,495) | (4,669) | |||
Distributions to Unitholders | (25,667) | (13,930) | (9,316) | (2,421) | ||
Black Diamond Equity Ownership Promote Vesting | 0 | (6,838) | 4,092 | 2,746 | ||
Other | 470 | 470 | ||||
Capital, ending at Mar. 31, 2019 | 1,533,954 | 168,363 | 768,311 | 714,465 | (120,692) | 3,507 |
Capital, beginning at Dec. 31, 2018 | 1,486,555 | 170,322 | 744,153 | 699,866 | (130,207) | 2,421 |
Increase (Decrease) in Partners' Capital | ||||||
Net Income (Loss) | 123,554 | |||||
Capital, ending at Jun. 30, 2019 | 1,559,967 | 161,023 | 787,729 | 606,575 | 0 | 4,640 |
Capital, beginning at Mar. 31, 2019 | 1,533,954 | 168,363 | 768,311 | 714,465 | (120,692) | 3,507 |
Increase (Decrease) in Partners' Capital | ||||||
Net Income (Loss) | 55,763 | 2,565 | 16,789 | 25,487 | 6,282 | 4,640 |
Contributions from Noncontrolling Interests and Parent | 18,141 | 18,141 | ||||
Distributions to Noncontrolling Interests and Parent | (17,221) | (9,905) | (7,316) | |||
Distributions to Unitholders | (27,792) | (14,534) | (9,751) | (3,507) | ||
Black Diamond Equity Ownership Promote Vesting | 0 | (8,196) | 8,196 | |||
Conversion of Subordinated Units to Common Units | 0 | (124,161) | 124,161 | |||
Preferred Equity Accretion | (3,151) | (3,151) | ||||
Other | 273 | 273 | ||||
Capital, ending at Jun. 30, 2019 | 1,559,967 | 161,023 | 787,729 | 606,575 | 0 | 4,640 |
Capital, beginning at Dec. 31, 2019 | 1,154,856 | 0 | 340,857 | 813,999 | 0 | 0 |
Increase (Decrease) in Partners' Capital | ||||||
Net Income (Loss) | (37,516) | (47,619) | 10,103 | |||
Contributions from Noncontrolling Interests and Parent | 77,966 | 77,966 | ||||
Distributions to Noncontrolling Interests and Parent | (5,700) | (5,700) | ||||
Distributions to Unitholders | (62,114) | (62,114) | ||||
Preferred Equity Accretion | (3,276) | (3,276) | ||||
Other | 433 | 433 | ||||
Capital, ending at Mar. 31, 2020 | 1,124,649 | 0 | 365,504 | 759,145 | 0 | 0 |
Capital, beginning at Dec. 31, 2019 | 1,154,856 | 0 | 340,857 | 813,999 | 0 | 0 |
Increase (Decrease) in Partners' Capital | ||||||
Net Income (Loss) | 13,344 | |||||
Preferred Equity Accretion | (6,600) | |||||
Capital, ending at Jun. 30, 2020 | 1,151,380 | 0 | 363,796 | 787,584 | 0 | 0 |
Capital, beginning at Mar. 31, 2020 | 1,124,649 | 0 | 365,504 | 759,145 | 0 | 0 |
Increase (Decrease) in Partners' Capital | ||||||
Net Income (Loss) | 50,860 | 2,624 | 48,236 | |||
Contributions from Noncontrolling Interests and Parent | 3,192 | 3,192 | ||||
Distributions to Noncontrolling Interests and Parent | (7,524) | (7,524) | ||||
Distributions to Unitholders | (16,906) | (16,906) | ||||
Preferred Equity Accretion | (3,366) | (3,366) | ||||
Other | 475 | 475 | ||||
Capital, ending at Jun. 30, 2020 | $ 1,151,380 | $ 0 | $ 363,796 | $ 787,584 | $ 0 | $ 0 |
Organization and Nature of Oper
Organization and Nature of Operations | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization Noble Midstream Partners LP (the “Partnership”, “NBLX”, “we”, “us” or “our”) is a growth-oriented Delaware master limited partnership formed in December 2014 by our sponsor, Noble Energy, Inc. (“Noble” or “Parent”), to own, operate, develop and acquire a wide range of domestic midstream infrastructure assets. Our current focus areas are the Denver-Julesburg Basin (“DJ Basin”) in Colorado and the Southern Delaware Basin position of the Permian Basin (“Delaware Basin”) in Texas. Chevron Merger On July 20, 2020, Noble, our sponsor and majority unitholder, entered into a definitive merger agreement (the “Chevron Merger Agreement”) with Chevron Corporation (NYSE: CVX) pursuant to which, and subject to the conditions of the agreement, all outstanding shares of Noble will be acquired by Chevron in an all-stock transaction (the “Chevron Merger”). The transaction was approved by the Boards of Directors of both Noble and Chevron and is anticipated to close in fourth quarter 2020. The transaction is subject to Noble stockholder approval, regulatory approvals, and other customary closing conditions. See Item 1A. Risk Factors for a discussion of risks related to the Chevron Merger. Partnership Assets Our assets consist of ownership interests in certain companies which serve specific areas and integrated development plan (“IDP”) areas and consist of the following: DevCo Areas Served NBLX Dedicated Service NBLX Ownership Noncontrolling Interest (1) Colorado River LLC (2) Wells Ranch IDP (DJ Basin) East Pony IDP (DJ Basin) All Noble DJ Basin Acreage Crude Oil Gathering Natural Gas Gathering Water Services Crude Oil Gathering Crude Oil Treating 100% N/A San Juan River LLC (2) East Pony IDP (DJ Basin) Water Services 100% N/A Green River DevCo LLC (2) Mustang IDP (DJ Basin) Crude Oil Gathering Natural Gas Gathering Water Services 100% N/A Laramie River LLC (2) Greeley Crescent IDP (DJ Basin) Crude Oil Gathering Water Services 100% N/A Black Diamond Dedication Area (DJ Basin) (3) Crude Oil Gathering Natural Gas Gathering Crude Oil Transmission 54.4% 45.6% Gunnison River DevCo LP Bronco IDP (DJ Basin) (4) Crude Oil Gathering Water Services 5% 95% Blanco River LLC (2) Delaware Basin Crude Oil Gathering Natural Gas Gathering Produced Water Services 100% N/A Trinity River DevCo LLC (5) Delaware Basin Crude Oil Transmission Natural Gas Compression 100% N/A Dos Rios DevCo LLC (6) Delaware Basin Crude Oil Transmission Y-Grade Transmission 100% N/A NBL Midstream Holdings LLC East Pony IDP (DJ Basin) Natural Gas Gathering 100% N/A Delaware Basin Crude Oil Gathering 100% N/A (1) The noncontrolling interest represents Noble’s retained ownership interest in the Gunnison River DevCo LP. The noncontrolling interest in Black Diamond Gathering LLC (“Black Diamond”) represents Greenfield Midstream, LLC's (the “Greenfield Member”) interest in Black Diamond. (2) On December 31, 2019, the general partner and limited partnership of each of the companies were merged into limited liability companies. (3) Our ownership interest in Saddlehorn Pipeline Company, LLC (“Saddlehorn”) is owned through a wholly-owned subsidiary of Black Diamond. See Note 6. Investments . (4) The Bronco IDP is a future development area. We currently have no midstream infrastructure assets in the Bronco IDP. (5) Our interest in Advantage Pipeline Holdings, L.L.C. (“Advantage”) is owned through Trinity River DevCo LLC. (6) Our ownership interests in Delaware Crossing LLC (“Delaware Crossing”), EPIC Y-Grade, LP (“EPIC Y-Grade”), EPIC Crude Holdings, LP (“EPIC Crude”) and EPIC Propane Pipeline Holdings, LP (“EPIC Propane”) are owned through wholly-owned subsidiaries of Dos Rios DevCo LLC. See Note 6. Investments . Nature of Operations We operate and own interests in the following assets: • crude oil gathering systems; • natural gas gathering and processing systems and compression units; • crude oil treating facilities; • produced water collection, gathering, and cleaning systems; • fresh water storage and delivery systems; and • investments in midstream entities that provide transportation and fractionation services. 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. Additionally, we purchase and sell crude oil to customers at various delivery points on our gathering systems. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 2. Basis of Presentation Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying consolidated financial statements at June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019 contain all normally recurring adjustments considered necessary for a fair presentation of our financial position, results of operations, cash flows and equity for such periods. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . We have no items of other comprehensive income; therefore, our net income is identical to our comprehensive income. Consolidation Our consolidated financial statements include our accounts, the accounts of subsidiaries which the Partnership wholly owns and the accounts of subsidiaries in which the Partnership has partial ownership. Variable Interest Entities 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 variable interest entity. Through our majority representation on the Black Diamond board of directors as well as our responsibility as operator of the Black Diamond 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. Financial statement activity associated with Black Diamond is captured within the Gathering Systems and the Investments in Midstream Entities reportable segments. See Note 7. Segment Information . Drop-Down and Simplification Transaction On November 14, 2019, we entered into a Contribution, Conveyance, Assumption and Simplification Agreement with Noble. Pursuant to such agreement, we acquired (i) the remaining 60% limited partner interest in Blanco River DevCo LP, (ii) the remaining 75% limited partner interest in Green River DevCo LP, (iii) the remaining 75% limited partner interest in San Juan River DevCo LP and (iv) all of the issued and outstanding limited liability company interests of NBL Midstream Holdings LLC (“NBL Holdings”). Additionally, all of the Incentive Distribution Rights (“IDRs”) were converted into common units representing limited partner interests in the Partnership (“Common Units”). The acquisition of the interests and conversion of the IDRs are collectively referred to as the “Drop-Down and Simplification Transaction.” The total consideration paid by the Partnership for the Drop-Down and Simplification Transaction was $1.6 billion , which consisted of $670 million in cash and 38,455,018 Common Units issued to Noble. The Drop-Down and Simplification Transaction represented a transaction between entities under common control. Prior to the acquisition of the remaining limited partner interests in Blanco River DevCo LP, Green River DevCo LP and San Juan River DevCo LP, the interests were reflected as noncontrolling interests in the Partnership’s consolidated financial statements. As we acquired additional interests in already-consolidated entities, the acquisition of these interests did not result in a change in reporting entity, as defined under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 805, Business Combinations. Therefore, results of operations related to these entities are accounted for on a prospective basis. Conversely, the acquisition of all of the issued and outstanding limited liability company interests of NBL Holdings is characterized as a change in reporting entity, as defined under FASB Accounting Standards Codification Topic 805, Business Combinations, as this entity previously had not been consolidated by us. Therefore, results of operations related to NBL Holdings have been accounted for on a retrospective basis. Our financial information has been recast to include the historical results of NBL Holdings for the three and six months ended June 30, 2019 . The financial statements of NBL Holdings for the period prior to the Drop-Down and Simplification Transaction have been prepared from the separate records maintained by Noble and may not necessarily be indicative of the results of operations had these entities operated on a consolidated basis during those periods. Because a direct ownership relationship did not exist among the Partnership and NBL Holdings prior to the Drop-Down and Simplification Transaction, the net investment in NBL Holdings is shown as Parent Net Investment, in lieu of partners’ equity, in the accompanying Consolidated Statement of Changes in Equity for periods prior to the Drop-Down and Simplification Transaction. Equity Method of Accounting We use the equity method of accounting for investments in entities that we do not control but over which we exert significant influence. For certain entities, we serve as the operator and exert significant influence over the day-to-day operations. For other entities, we do not serve as the operator; however, our voting position on management committees or the board of directors allows us to exert significant influence over decisions regarding capital investments, budgets, turnarounds, maintenance, monetization decisions and other project matters. 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 6. Investments . Cost Method of Accounting We use the cost method of accounting for our 3.33% interest in White Cliffs Pipeline L.L.C. (“White Cliffs”) 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 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 6. Investments . Redeemable Noncontrolling Interest Our redeemable noncontrolling interest is related to the preferred equity issuance by one of our subsidiaries. We can redeem the preferred equity in whole or in part at any time for cash at a predetermined redemption price. The predetermined redemption price is the greater of (i) an amount necessary to achieve a 12% internal rate of return or (ii) an amount necessary to achieve a 1.375x multiple on invested capital. GIP CAPS Dos Rios Holding Partnership, L.P. (“GIP”) can request redemption of the preferred equity on or after March 25, 2025. As GIP’s redemption right is outside of our control, the preferred equity is not considered to be a component of equity on the consolidated balance sheet, and is reported as mezzanine equity on the consolidated balance sheet. In addition, because the preferred equity was issued by a subsidiary of the Partnership and is held by a third party, it is considered a redeemable noncontrolling interest. The preferred equity was recorded initially at fair value on the issuance date. Subsequent to issuance, we accrete changes in the redemption value of the preferred equity from the date of issuance to GIP’s earliest redemption date. The preferred equity is perpetual and has a 6.5% annual dividend rate, payable quarterly in cash, with the ability to accrue unpaid dividends during the first two years following the closing. During any quarter in which a dividend is accrued, the accreted value of the preferred equity will be increased by the accrued but unpaid dividend (i.e., a paid-in-kind dividend). Accretion during the three and six months ended June 30, 2020 was approximately $3.4 million and $6.6 million , respectively. Noncontrolling Interests We present our consolidated financial statements with a noncontrolling interest section representing Greenfield Member’s ownership of Black Diamond and Noble’s retained ownership in the Gunnison River DevCo LP. 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 7. Segment Information . Use of Estimates The preparation of consolidated financial statements in conformity with 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. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment. The current commodity price, supply and demand environment coupled with the novel coronavirus (“COVID-19”) pandemic contributed to an unusually high degree of uncertainty in our estimates this quarter and have increased the likelihood that actual results could differ significantly from those estimates. Impairments During second quarter 2020, we performed qualitative impairment assessments over property, plant and equipment, investments, and intangible assets. No impairment indicators were identified and no impairments were recorded. During first quarter 2020, we identified certain impairment indicators including the significant decrease in commodity prices, changes to our customers’ development outlook due to reductions in demand resulting from the novel coronavirus (“COVID-19”) pandemic and excess crude oil and natural gas inventories, and a decrease in our market capitalization. Due to these impairment indicators, we conducted impairment testing of certain of our assets, as follows: Property, Plant and Equipment and Intangible Assets Due to publicly announced changes to our customers’ development outlook within the Delaware Basin and the Black Diamond dedication area, we concluded impairment indicators existed and conducted an undiscounted cash flow test. We developed estimates of future undiscounted cash flows expected in connection with providing midstream services within the dedication areas and compared the estimates to the carrying amount of the assets utilized to provide midstream services. Assumptions used in the estimates include expectations of throughput volumes, future development and capital spending plans. Based upon the results of the undiscounted cash flow test, we concluded that the carrying amount of the assets were recoverable and no impairment was recorded. Goodwill All of our goodwill was assigned to the Black Diamond reporting unit within the Gathering Systems reportable segment. We performed a qualitative assessment and concluded it was more likely than not that the fair value of the Black Diamond reporting unit was less than its carrying value. We then performed a fair value assessment using the income approach. Our estimate of fair value required us to use significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions for operating and development costs as well as taking into account changes and uncertainties in our customers’ development outlook. Based on these assessments, we concluded that our goodwill was fully impaired and recorded a non-cash charge of $109.7 million in March 2020. Equity Method Investments We consider our equity method investments to be essential components of our business and necessary and integral elements of our value chain in support of our operations. We considered whether any facts or circumstances suggested that our equity method investments were impaired on an other-than-temporary basis and concluded that the carrying values of our equity method investments were not impaired. Intangible Assets Our intangible asset accumulated amortization totaled approximately $78.0 million and $61.9 million as of June 30, 2020 and December 31, 2019 , respectively. Intangible asset amortization expense totaled approximately $8.1 million for the three months ended June 30, 2020 and 2019 and $16.1 million and $16.0 million for the six months ended June 30, 2020 and 2019 , respectively. Loan to Equity Method Investee On April 2, 2020, we entered into a loan agreement with EPIC Y-Grade. In accordance with the loan agreement, we loaned $22.5 million to EPIC Y-Grade, to be used for construction and working capital purposes. The maturity date of the loan is December 15, 2023. As the loan does not represent an in-substance capital contribution, it is recorded within other noncurrent assets in our consolidated balance sheets. The loan bears interest at a rate equal to applicable margins plus the London Interbank Offered Rate (“LIBOR”), or alternate base rate. EPIC Y-Grade has the option to defer payment of interest (“PIK Interest”) for a 12-month period commencing on April 2, 2020. All PIK Interest is added to the outstanding principal amount of the loan and shall be paid on the maturity date. The loan plus accrued PIK Interest totaled $23.1 million at June 30, 2020. We recorded an allowance for expected credit losses of $1.3 million that is recorded within other non-operating expense in our consolidated statement of operations. The carrying amount of the loan, net of the allowance for expected credit losses, approximates fair value as a portion of the interest rate is variable and reflective of market rates. Tax Provision We are not a taxable entity for United States 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 we do not record deferred taxes related to the aggregate difference in the basis of our assets for financial and tax reporting purposes. We are subject to a Texas margin tax due to our operations in the Delaware Basin and we recorded a de minimis state tax provision for the three months ended June 30, 2020 and 2019 . For periods prior to the Drop-Down and Simplification Transaction, our consolidated financial statements include a provision for tax expense on income related to the assets contributed to the Partnership. 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. Substantially all of our tax provision for the three months ended June 30, 2019 represents federal income taxes associated with the assets contributed in the Drop-Down and Simplification Transaction. Recently Adopted Accounting Standards Clarifying Certain Accounting Standards Codification (“ASC”) Topics In first quarter 2020, the FASB issued ASU No. 2020-01: Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) , to clarify the interactions between these Topics. The update provides clarifications for entities investing in equity securities accounted for under the ASC 321 measurement alternative and companies that hold certain non-derivative forward contracts and purchased options to acquire equity securities. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We early adopted this ASU in first quarter 2020. This adoption did not have a material impact on our financial statements. Recently Issued Accounting Standards LIBOR Reform In first quarter 2020, the FASB issued ASU No. 2020-04 (ASU 2020-04): Reference Rate Reform (Topic 848), which provides optional guidance for a limited period of time to ease the transition from LIBOR to an alternative reference rate. The ASU intends to address certain concerns stakeholders raised relating to accounting for contract modifications and hedge accounting. These optional expedients and exceptions to applying GAAP, assuming certain criteria are met, are allowed through December 31, 2022. We are currently evaluating the provisions of ASU 2020-04 and have not yet determined whether we will elect the optional expedients. We do not expect the transition to an alternative rate to have a significant impact on our business, operations or liquidity. Reconciliation of Total Cash We define total cash as cash, cash equivalents and restricted cash. Our restricted cash is included in other current assets in our consolidated balance sheets. The following table provides a reconciliation of total cash: Six Months Ended June 30, (in thousands) 2020 2019 Cash and Cash Equivalents at Beginning of Period $ 12,676 $ 14,761 Restricted Cash at Beginning of Period (1) 50 951 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period $ 12,726 $ 15,712 Cash and Cash Equivalents at End of Period $ 12,729 $ 11,537 Restricted Cash at End of Period (1) — 50 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 12,729 $ 11,587 (1) Restricted cash represents the amount held as collateral for certain of our letters of credit. Revenue Recognition We recognize revenue at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer, using a five-step process, in accordance with ASC 606 – Revenue from Contracts with Customers (ASC 606). Under ASC 606, remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied as of June 30, 2020 . A certain fresh water delivery affiliate revenue agreement contains a minimum volume commitment for the delivery of fresh water for a fixed fee per barrel with annual percentage escalations. The following table includes estimated revenues, as of June 30, 2020 , for the agreement. Our actual volumes delivered may exceed the future minimum volume commitment. (in thousands) Midstream Services — Affiliate Remainder of 2020 $ 18,736 2021 37,635 Total $ 56,371 |
Transactions with Affiliates
Transactions with Affiliates | 6 Months Ended |
Jun. 30, 2020 | |
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: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Gathering and Processing $ 82,671 $ 78,136 $ 171,969 $ 153,516 Fresh Water Delivery 10,300 18,367 33,899 45,954 Other 768 766 1,655 1,602 Total Midstream Services — Affiliate $ 93,739 $ 97,269 $ 207,523 $ 201,072 Expenses General and administrative expense consists of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 General and Administrative Expense — Affiliate $ 4,107 $ 2,178 $ 6,782 $ 4,456 General and Administrative Expense — Third Party 2,339 2,993 5,150 5,076 Total General and Administrative Expense $ 6,446 $ 5,171 $ 11,932 $ 9,532 Omnibus Agreement Our omnibus agreement with Noble contractually requires us to pay a fixed annual fee 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, Noble Midstream GP LLC (“General Partner”). The cap on the initial rate of $6.9 million expired in September 2019 and we completed the annual fee redetermination process during February 2020. The redetermined rate is $15.7 million and became effective March 1, 2020. |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
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) June 30, 2020 December 31, 2019 Gathering and Processing Systems $ 1,898,488 $ 1,795,957 Fresh Water Delivery Systems 95,802 96,004 Construction-in-Progress (1) 62,592 115,034 Total Property, Plant and Equipment, at Cost 2,056,882 2,006,995 Accumulated Depreciation and Amortization (279,115 ) (244,038 ) Property, Plant and Equipment, Net $ 1,777,767 $ 1,762,957 (1) Construction-in-progress at June 30, 2020 primarily includes $49.0 million in gathering system projects and $11.6 million in equipment for use in future projects. Construction-in-progress at December 31, 2019 primarily includes $98.4 million in gathering system projects and $15.4 million in equipment for use in future projects. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 5. Debt Debt consists of the following: June 30, 2020 December 31, 2019 (in thousands, except percentages) Debt Interest Rate Debt Interest Rate Revolving Credit Facility, due March 9, 2023 (1) $ 735,000 1.61 % $ 595,000 3.11 % Term Loan Credit Facility, due July 31, 2021 500,000 1.36 % 500,000 2.85 % Term Loan Credit Facility, due August 23, 2022 400,000 1.24 % 400,000 2.74 % Finance Lease Obligation 2,033 — % 2,005 — % Total 1,637,033 1,497,005 Unamortized Debt Issuance Costs (1,114 ) (1,326 ) Total Debt 1,635,919 1,495,679 Finance Lease Obligation Due Within One Year — — Long-Term Debt $ 1,635,919 $ 1,495,679 (1) Our revolving credit facility has a total borrowing capacity of $1.15 billion . As of June 30, 2020 and December 31, 2019 , our revolving credit facility had $415 million and $555 million available for borrowing, respectively. During the first six months of 2020, we borrowed a net $140 million under our revolving credit facility. Proceeds from our revolving credit facility were utilized to fund portions of our capital contributions to investments, capital program and for working capital purposes. Compliance with Covenants The revolving credit facility and term loan credit facilities require us to comply with certain financial covenants as of the end of each fiscal quarter. We were in compliance with such covenants as of June 30, 2020 . Fair Value of Long-Term Debt Our revolving credit facility and term loan credit facilities are variable-rate, non-public debt. The fair value of our revolving credit facility and term loan credit facilities approximates the carrying amount. The fair value is estimated based on observable inputs. As such, we consider the fair value of these facilities to be a Level 2 measurement on the fair value hierarchy. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Note 6. Investments We have ownership interests in the following entities: • 3.33% interest in White Cliffs; • 50% interest in Advantage; • 50% interest in Delaware Crossing; • 15% interest in EPIC Y-Grade; • 30% interest in EPIC Crude; • 15% interest in EPIC Propane; and • 20% interest in Saddlehorn. Delaware Crossing On February 7, 2019, we executed definitive agreements with Salt Creek Midstream LLC and completed the formation of Delaware Crossing, a crude oil pipeline system in the Delaware Basin which began delivering crude oil into all connection points in April 2020. During the first six months of 2020 , we made capital contributions of approximately $16.9 million . EPIC Y-Grade On January 31, 2019, we exercised and closed an option with EPIC Midstream Holdings, LP (“EPIC”) to acquire an interest in EPIC Y-Grade, which owns the EPIC Y-Grade pipeline from the Delaware Basin to Corpus Christi, Texas. Interim crude service on the EPIC Y-Grade mainline ended in March 2020. EPIC Y-Grade began the transition to NGL service in May 2020 and completed construction of its first new build fractionator in June 2020. During the first six months of 2020 , we made capital contributions of approximately $12.8 million . EPIC Crude On January 31, 2019, we exercised an option with EPIC to acquire an interest in EPIC Crude, and on March 8, 2019, we closed the option to acquire the interest. EPIC Crude has been engaged in the construction of the EPIC crude oil pipeline from the Delaware Basin to Corpus Christi, Texas. Construction of the EPIC Crude pipeline was completed, and the pipeline was commissioned in February 2020 and entered full service on April 1, 2020. During the first six months of 2020 , we made capital contributions of approximately $30.0 million . EPIC Propane On December 19, 2019, we exercised and closed an option with EPIC to acquire an interest in EPIC Propane, which is constructing a propane pipeline that will run from the EPIC Y-Grade Logistics, LP fractionator complex in Robstown, Texas to the Phillips 66 petrochemical facility in Sweeney, Texas, with additional connectivity to the Markham underground storage caverns. EPIC Propane completed construction of its first new build fractionator in June 2020. During the first six months of 2020 , we made capital contributions of approximately $4.0 million . Saddlehorn Pipeline On February 1, 2020, Black Diamond exercised and closed an option to acquire a 20% ownership interest in Saddlehorn for $160 million , or $87.0 million net to the Partnership. Greenfield Member contributed $73.0 million for its portion of the purchase price. Black Diamond purchased a 10% interest from each of Magellan Midstream Partners, L.P. (“Magellan”) and Plains All American Pipeline, L.P. (“Plains”). After the transaction, Magellan and Plains each own a 30% membership interest and Black Diamond and Western Midstream each own a 20% membership interest in Saddlehorn. Magellan continues to serve as operator of the Saddlehorn pipeline. The following table presents our investments at the dates indicated: (in thousands) June 30, 2020 December 31, 2019 White Cliffs $ 10,363 $ 10,268 Advantage 72,651 76,834 Delaware Crossing 84,671 68,707 EPIC Y-Grade 163,244 162,850 EPIC Crude 362,912 339,116 EPIC Propane 7,028 3,003 Saddlehorn 159,948 — Total Investments $ 860,817 $ 660,778 The following table presents our investment loss (income) for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 White Cliffs $ (549 ) $ (841 ) $ (1,264 ) $ (1,889 ) Advantage (1,311 ) (1,513 ) (3,387 ) (3,754 ) Delaware Crossing 752 355 1,472 1,538 EPIC Y-Grade 7,977 1,024 13,595 1,054 EPIC Crude 1,972 3,245 8,873 3,245 EPIC Propane 36 — 61 — Saddlehorn (5,712 ) — (10,338 ) — Other (1) (435 ) (522 ) (873 ) (787 ) Total Investment Loss (Income) $ 2,730 $ 1,748 $ 8,139 $ (593 ) (1) Represents income associated with our fee for serving as the operator of Advantage and Delaware Crossing. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 7. Segment Information We manage our operations by the nature of the services we offer. Our reportable segments comprise the structure used to make key operating decisions and assess performance. We are organized into the following reportable segments: Gathering Systems (primarily includes crude oil gathering, natural gas gathering and processing, produced water gathering, and crude oil sales), Fresh Water Delivery, Investments in Midstream Entities and Corporate. We often refer to the services of our Gathering Systems and Fresh Water Delivery reportable segments collectively as our midstream services. Summarized financial information concerning our reportable segments is as follows: (in thousands) Gathering Systems Fresh Water Delivery Investments in Midstream Entities Corporate (1) Consolidated Three Months Ended June 30, 2020 Midstream Services — Affiliate $ 83,439 $ 10,300 $ — $ — $ 93,739 Midstream Services — Third Party 21,186 1,811 — — 22,997 Crude Oil Sales — Third Party 29,214 — — — 29,214 Total Revenues 133,839 12,111 — — 145,950 Income (Loss) Before Income Taxes 58,392 10,336 (2,730 ) (15,266 ) 50,732 Additions to Long-Lived Assets 4,849 — — 148 4,997 Additions to Investments — — 2,627 — 2,627 Three Months Ended June 30, 2019 Midstream Services — Affiliate $ 78,902 $ 18,367 $ — $ — $ 97,269 Midstream Services — Third Party 19,155 2,454 — — 21,609 Crude Oil Sales — Third Party 51,782 — — — 51,782 Total Revenues 149,839 20,821 — — 170,660 Income (Loss) Before Income Taxes 52,668 13,621 (1,748 ) (8,047 ) 56,494 Additions to Long-Lived Assets 56,739 1,113 — 240 58,092 Additions to Investments — — 143,984 — 143,984 Six Months Ended June 30, 2020 Midstream Services — Affiliate $ 173,624 $ 33,899 $ — $ — $ 207,523 Midstream Services — Third Party 44,910 5,985 — — 50,895 Crude Oil Sales — Third Party 111,577 — — — 111,577 Total Revenues 330,111 39,884 — — 369,995 Goodwill Impairment 109,734 — — — 109,734 Income (Loss) Before Income Taxes 17,174 32,779 (8,139 ) (28,449 ) 13,365 Additions to Long-Lived Assets 52,468 — — 257 52,725 Additions to Investments — — 228,226 — 228,226 Six Months Ended June 30, 2019 Midstream Services — Affiliate $ 155,118 $ 45,954 $ — $ — $ 201,072 Midstream Services — Third Party 39,375 6,263 — — 45,638 Crude Oil Sales — Third Party 84,652 — — — 84,652 Total Revenues 279,145 52,217 — — 331,362 Income (Loss) Before Income Taxes 106,328 36,830 593 (18,157 ) 125,594 Additions to Long-Lived Assets 134,388 1,394 — 511 136,293 Additions to Investments — — 414,587 — 414,587 June 30, 2020 Total Assets $ 2,019,477 $ 92,823 $ 860,817 $ 35,230 $ 3,008,347 December 31, 2019 Total Assets $ 2,160,026 $ 91,840 $ 660,778 $ 13,438 $ 2,926,082 (1) The Corporate segment includes all general Partnership activity not attributable to our operating subsidiaries. |
Partnership Distributions
Partnership Distributions | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Partnership Distributions | Note 8. 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 (in thousands) Limited Partners Period Record Date Distribution Date Distribution per Limited Partner Unit Common Unitholders (1) Subordinated Unitholders (2) Holder of IDRs (3) Total Q4 2018 February 4, 2019 February 11, 2019 $ 0.5858 $ 13,876 $ 9,316 $ 2,421 $ 25,613 Q1 2019 May 6, 2019 May 13, 2019 $ 0.6132 $ 14,534 $ 9,751 $ 3,507 $ 27,792 Q2 2019 August 5, 2019 August 12, 2019 $ 0.6418 $ 25,418 $ — $ 4,640 $ 30,058 Q3 2019 November 4, 2019 November 12, 2019 $ 0.6716 $ 26,598 $ — $ 5,820 $ 32,418 Q4 2019 February 4, 2020 February 14, 2020 $ 0.6878 $ 62,012 $ — $ — $ 62,012 Q1 2020 May 8, 2020 May 15, 2020 $ 0.1875 $ 16,906 $ — $ — $ 16,906 (1) Distributions to common unitholders does not include distribution equivalent rights on units that vested under the Noble Midstream Partners LP 2016 Long-Term Incentive Plan (the “LTIP”). (2) On May 14, 2019, all Subordinated Units were converted into Common Units. (3) In November 2019, we acquired all of Noble’s IDRs. See Note 2. Basis of Presentation . Cash Distributions On July 24, 2020, the Board of Directors of our General Partner approved a quarterly distribution of $0.1875 per unit. The distribution will be paid on August 14, 2020, to unitholders of record as of August 7, 2020. |
Net Income Per Limited Partner
Net Income Per Limited Partner Unit | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Limited Partner Unit | Note 9. Net Income Per Limited Partner Unit Our 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. For periods prior to the conversion of Subordinated Units and simplification of IDRs, we had more than one class of participating securities and we utilized 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 Unit 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 Units and Subordinated Units outstanding for the period. Diluted net income per limited partner Common Unit 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: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per unit amounts) 2020 2019 2020 2019 Net Income Attributable to Noble Midstream Partners LP $ 48,236 $ 36,409 $ 58,339 $ 79,968 Less: Net Income Attributable to Incentive Distribution Rights — 4,640 — 8,147 Net Income Attributable to Limited Partners $ 48,236 $ 31,769 $ 58,339 $ 71,821 Net Income Attributable to Common Units $ 48,236 $ 25,487 $ 58,339 $ 49,454 Net Income Attributable to Subordinated Units (1) — 6,282 — 22,367 Net Income Attributable to Limited Partners $ 48,236 $ 31,769 $ 58,339 $ 71,821 Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted Common Units $ 0.53 $ 0.79 $ 0.65 $ 1.77 Subordinated Units (1) $ — $ 0.84 $ — $ 1.91 Weighted Average Limited Partner Units Outstanding — Basic Common Units 90,163 32,090 90,158 27,916 Subordinated Units (1) — 7,514 — 11,685 Weighted Average Limited Partner Units Outstanding — Diluted Common Units 90,164 32,121 90,163 27,944 Subordinated Units (1) — 7,514 — 11,685 Antidilutive Restricted Units 207 68 187 71 (1) On May 14, 2019, all Subordinated Units were converted into Common Units. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies 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 would expect to defend ourselves vigorously in all such matters. 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. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying consolidated financial statements at June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019 contain all normally recurring adjustments considered necessary for a fair presentation of our financial position, results of operations, cash flows and equity for such periods. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . We have no items of other comprehensive income; therefore, our net income is identical to our comprehensive income. |
Consolidation | Consolidation Our consolidated financial statements include our accounts, the accounts of subsidiaries which the Partnership wholly owns and the accounts of subsidiaries in which the Partnership has partial ownership. |
Variable Interest Entities | Variable Interest Entities 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 variable interest entity. Through our majority representation on the Black Diamond board of directors as well as our responsibility as operator of the Black Diamond 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. Financial statement activity associated with Black Diamond is captured within the Gathering Systems and the Investments in Midstream Entities reportable segments. See Note 7. Segment Information . |
Equity Method of Accounting | Equity Method of Accounting We use the equity method of accounting for investments in entities that we do not control but over which we exert significant influence. For certain entities, we serve as the operator and exert significant influence over the day-to-day operations. For other entities, we do not serve as the operator; however, our voting position on management committees or the board of directors allows us to exert significant influence over decisions regarding capital investments, budgets, turnarounds, maintenance, monetization decisions and other project matters. 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 6. Investments . |
Cost Method of Accounting | Cost Method of Accounting We use the cost method of accounting for our 3.33% interest in White Cliffs Pipeline L.L.C. (“White Cliffs”) 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 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 6. Investments . |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interest Our redeemable noncontrolling interest is related to the preferred equity issuance by one of our subsidiaries. We can redeem the preferred equity in whole or in part at any time for cash at a predetermined redemption price. The predetermined redemption price is the greater of (i) an amount necessary to achieve a 12% internal rate of return or (ii) an amount necessary to achieve a 1.375x multiple on invested capital. GIP CAPS Dos Rios Holding Partnership, L.P. (“GIP”) can request redemption of the preferred equity on or after March 25, 2025. As GIP’s redemption right is outside of our control, the preferred equity is not considered to be a component of equity on the consolidated balance sheet, and is reported as mezzanine equity on the consolidated balance sheet. In addition, because the preferred equity was issued by a subsidiary of the Partnership and is held by a third party, it is considered a redeemable noncontrolling interest. The preferred equity was recorded initially at fair value on the issuance date. Subsequent to issuance, we accrete changes in the redemption value of the preferred equity from the date of issuance to GIP’s earliest redemption date. The preferred equity is perpetual and has a 6.5% annual dividend rate, payable quarterly in cash, with the ability to accrue unpaid dividends during the first two years following the closing. During any quarter in which a dividend is accrued, the accreted value of the preferred equity will be increased by the accrued but unpaid dividend (i.e., a paid-in-kind dividend). Accretion during the three and six months ended June 30, 2020 was approximately $3.4 million and $6.6 million , respectively. Noncontrolling Interests We present our consolidated financial statements with a noncontrolling interest section representing Greenfield Member’s ownership of Black Diamond and Noble’s retained ownership in the Gunnison River DevCo LP. |
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. See Note 7. Segment Information . |
Use of Estimates | Use of Estimates |
Intangible Assets | Intangible Assets Our intangible asset accumulated amortization totaled approximately $78.0 million and $61.9 million as of June 30, 2020 and December 31, 2019 , respectively. Intangible asset amortization expense totaled approximately $8.1 million for the three months ended June 30, 2020 and 2019 and $16.1 million and $16.0 million for the six months ended June 30, 2020 and 2019 |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted Accounting Standards Clarifying Certain Accounting Standards Codification (“ASC”) Topics In first quarter 2020, the FASB issued ASU No. 2020-01: Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) , to clarify the interactions between these Topics. The update provides clarifications for entities investing in equity securities accounted for under the ASC 321 measurement alternative and companies that hold certain non-derivative forward contracts and purchased options to acquire equity securities. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We early adopted this ASU in first quarter 2020. This adoption did not have a material impact on our financial statements. Recently Issued Accounting Standards LIBOR Reform In first quarter 2020, the FASB issued ASU No. 2020-04 (ASU 2020-04): Reference Rate Reform (Topic 848), which provides optional guidance for a limited period of time to ease the transition from LIBOR to an alternative reference rate. The ASU intends to address certain concerns stakeholders raised relating to accounting for contract modifications and hedge accounting. These optional expedients and exceptions to applying GAAP, assuming certain criteria are met, are allowed through December 31, 2022. We are currently evaluating the provisions of ASU 2020-04 and have not yet determined whether we will elect the optional expedients. We do not expect the transition to an alternative rate to have a significant impact on our business, operations or liquidity. Reconciliation of Total Cash We define total cash as cash, cash equivalents and restricted cash. Our restricted cash is included in other current assets in our consolidated balance sheets. The following table provides a reconciliation of total cash: Six Months Ended June 30, (in thousands) 2020 2019 Cash and Cash Equivalents at Beginning of Period $ 12,676 $ 14,761 Restricted Cash at Beginning of Period (1) 50 951 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period $ 12,726 $ 15,712 Cash and Cash Equivalents at End of Period $ 12,729 $ 11,537 Restricted Cash at End of Period (1) — 50 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 12,729 $ 11,587 (1) Restricted cash represents the amount held as collateral for certain of our letters of credit. |
Revenue Recognition | Revenue Recognition We recognize revenue at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer, using a five-step process, in accordance with ASC 606 – Revenue from Contracts with Customers (ASC 606). Under ASC 606, remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied as of June 30, 2020 |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of subsidiaries | Our assets consist of ownership interests in certain companies which serve specific areas and integrated development plan (“IDP”) areas and consist of the following: DevCo Areas Served NBLX Dedicated Service NBLX Ownership Noncontrolling Interest (1) Colorado River LLC (2) Wells Ranch IDP (DJ Basin) East Pony IDP (DJ Basin) All Noble DJ Basin Acreage Crude Oil Gathering Natural Gas Gathering Water Services Crude Oil Gathering Crude Oil Treating 100% N/A San Juan River LLC (2) East Pony IDP (DJ Basin) Water Services 100% N/A Green River DevCo LLC (2) Mustang IDP (DJ Basin) Crude Oil Gathering Natural Gas Gathering Water Services 100% N/A Laramie River LLC (2) Greeley Crescent IDP (DJ Basin) Crude Oil Gathering Water Services 100% N/A Black Diamond Dedication Area (DJ Basin) (3) Crude Oil Gathering Natural Gas Gathering Crude Oil Transmission 54.4% 45.6% Gunnison River DevCo LP Bronco IDP (DJ Basin) (4) Crude Oil Gathering Water Services 5% 95% Blanco River LLC (2) Delaware Basin Crude Oil Gathering Natural Gas Gathering Produced Water Services 100% N/A Trinity River DevCo LLC (5) Delaware Basin Crude Oil Transmission Natural Gas Compression 100% N/A Dos Rios DevCo LLC (6) Delaware Basin Crude Oil Transmission Y-Grade Transmission 100% N/A NBL Midstream Holdings LLC East Pony IDP (DJ Basin) Natural Gas Gathering 100% N/A Delaware Basin Crude Oil Gathering 100% N/A (1) The noncontrolling interest represents Noble’s retained ownership interest in the Gunnison River DevCo LP. The noncontrolling interest in Black Diamond Gathering LLC (“Black Diamond”) represents Greenfield Midstream, LLC's (the “Greenfield Member”) interest in Black Diamond. (2) On December 31, 2019, the general partner and limited partnership of each of the companies were merged into limited liability companies. (3) Our ownership interest in Saddlehorn Pipeline Company, LLC (“Saddlehorn”) is owned through a wholly-owned subsidiary of Black Diamond. See Note 6. Investments . (4) The Bronco IDP is a future development area. We currently have no midstream infrastructure assets in the Bronco IDP. (5) Our interest in Advantage Pipeline Holdings, L.L.C. (“Advantage”) is owned through Trinity River DevCo LLC. (6) Our ownership interests in Delaware Crossing LLC (“Delaware Crossing”), EPIC Y-Grade, LP (“EPIC Y-Grade”), EPIC Crude Holdings, LP (“EPIC Crude”) and EPIC Propane Pipeline Holdings, LP (“EPIC Propane”) are owned through wholly-owned subsidiaries of Dos Rios DevCo LLC. See Note 6. Investments . |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | We define total cash as cash, cash equivalents and restricted cash. Our restricted cash is included in other current assets in our consolidated balance sheets. The following table provides a reconciliation of total cash: Six Months Ended June 30, (in thousands) 2020 2019 Cash and Cash Equivalents at Beginning of Period $ 12,676 $ 14,761 Restricted Cash at Beginning of Period (1) 50 951 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period $ 12,726 $ 15,712 Cash and Cash Equivalents at End of Period $ 12,729 $ 11,537 Restricted Cash at End of Period (1) — 50 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 12,729 $ 11,587 (1) Restricted cash represents the amount held as collateral for certain of our letters of credit. |
Revenue, remaining performance obligation, expected timing of satisfaction | The following table includes estimated revenues, as of June 30, 2020 , for the agreement. Our actual volumes delivered may exceed the future minimum volume commitment. (in thousands) Midstream Services — Affiliate Remainder of 2020 $ 18,736 2021 37,635 Total $ 56,371 |
Transactions with Affiliates (T
Transactions with Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Revenues generated from commercial agreements with Noble and its affiliates consist of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 Gathering and Processing $ 82,671 $ 78,136 $ 171,969 $ 153,516 Fresh Water Delivery 10,300 18,367 33,899 45,954 Other 768 766 1,655 1,602 Total Midstream Services — Affiliate $ 93,739 $ 97,269 $ 207,523 $ 201,072 |
Schedule of general and administrative expenses | General and administrative expense consists of the following: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 General and Administrative Expense — Affiliate $ 4,107 $ 2,178 $ 6,782 $ 4,456 General and Administrative Expense — Third Party 2,339 2,993 5,150 5,076 Total General and Administrative Expense $ 6,446 $ 5,171 $ 11,932 $ 9,532 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment, at cost, is as follows: (in thousands) June 30, 2020 December 31, 2019 Gathering and Processing Systems $ 1,898,488 $ 1,795,957 Fresh Water Delivery Systems 95,802 96,004 Construction-in-Progress (1) 62,592 115,034 Total Property, Plant and Equipment, at Cost 2,056,882 2,006,995 Accumulated Depreciation and Amortization (279,115 ) (244,038 ) Property, Plant and Equipment, Net $ 1,777,767 $ 1,762,957 (1) Construction-in-progress at June 30, 2020 primarily includes $49.0 million in gathering system projects and $11.6 million in equipment for use in future projects. Construction-in-progress at December 31, 2019 primarily includes $98.4 million in gathering system projects and $15.4 million in equipment for use in future projects. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Debt consists of the following: June 30, 2020 December 31, 2019 (in thousands, except percentages) Debt Interest Rate Debt Interest Rate Revolving Credit Facility, due March 9, 2023 (1) $ 735,000 1.61 % $ 595,000 3.11 % Term Loan Credit Facility, due July 31, 2021 500,000 1.36 % 500,000 2.85 % Term Loan Credit Facility, due August 23, 2022 400,000 1.24 % 400,000 2.74 % Finance Lease Obligation 2,033 — % 2,005 — % Total 1,637,033 1,497,005 Unamortized Debt Issuance Costs (1,114 ) (1,326 ) Total Debt 1,635,919 1,495,679 Finance Lease Obligation Due Within One Year — — Long-Term Debt $ 1,635,919 $ 1,495,679 (1) Our revolving credit facility has a total borrowing capacity of $1.15 billion . As of June 30, 2020 and December 31, 2019 , our revolving credit facility had $415 million and $555 million available for borrowing, respectively. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of investments | The following table presents our investments at the dates indicated: (in thousands) June 30, 2020 December 31, 2019 White Cliffs $ 10,363 $ 10,268 Advantage 72,651 76,834 Delaware Crossing 84,671 68,707 EPIC Y-Grade 163,244 162,850 EPIC Crude 362,912 339,116 EPIC Propane 7,028 3,003 Saddlehorn 159,948 — Total Investments $ 860,817 $ 660,778 |
Schedule of investment income | The following table presents our investment loss (income) for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2020 2019 2020 2019 White Cliffs $ (549 ) $ (841 ) $ (1,264 ) $ (1,889 ) Advantage (1,311 ) (1,513 ) (3,387 ) (3,754 ) Delaware Crossing 752 355 1,472 1,538 EPIC Y-Grade 7,977 1,024 13,595 1,054 EPIC Crude 1,972 3,245 8,873 3,245 EPIC Propane 36 — 61 — Saddlehorn (5,712 ) — (10,338 ) — Other (1) (435 ) (522 ) (873 ) (787 ) Total Investment Loss (Income) $ 2,730 $ 1,748 $ 8,139 $ (593 ) (1) Represents income associated with our fee for serving as the operator of Advantage and Delaware Crossing. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | Summarized financial information concerning our reportable segments is as follows: (in thousands) Gathering Systems Fresh Water Delivery Investments in Midstream Entities Corporate (1) Consolidated Three Months Ended June 30, 2020 Midstream Services — Affiliate $ 83,439 $ 10,300 $ — $ — $ 93,739 Midstream Services — Third Party 21,186 1,811 — — 22,997 Crude Oil Sales — Third Party 29,214 — — — 29,214 Total Revenues 133,839 12,111 — — 145,950 Income (Loss) Before Income Taxes 58,392 10,336 (2,730 ) (15,266 ) 50,732 Additions to Long-Lived Assets 4,849 — — 148 4,997 Additions to Investments — — 2,627 — 2,627 Three Months Ended June 30, 2019 Midstream Services — Affiliate $ 78,902 $ 18,367 $ — $ — $ 97,269 Midstream Services — Third Party 19,155 2,454 — — 21,609 Crude Oil Sales — Third Party 51,782 — — — 51,782 Total Revenues 149,839 20,821 — — 170,660 Income (Loss) Before Income Taxes 52,668 13,621 (1,748 ) (8,047 ) 56,494 Additions to Long-Lived Assets 56,739 1,113 — 240 58,092 Additions to Investments — — 143,984 — 143,984 Six Months Ended June 30, 2020 Midstream Services — Affiliate $ 173,624 $ 33,899 $ — $ — $ 207,523 Midstream Services — Third Party 44,910 5,985 — — 50,895 Crude Oil Sales — Third Party 111,577 — — — 111,577 Total Revenues 330,111 39,884 — — 369,995 Goodwill Impairment 109,734 — — — 109,734 Income (Loss) Before Income Taxes 17,174 32,779 (8,139 ) (28,449 ) 13,365 Additions to Long-Lived Assets 52,468 — — 257 52,725 Additions to Investments — — 228,226 — 228,226 Six Months Ended June 30, 2019 Midstream Services — Affiliate $ 155,118 $ 45,954 $ — $ — $ 201,072 Midstream Services — Third Party 39,375 6,263 — — 45,638 Crude Oil Sales — Third Party 84,652 — — — 84,652 Total Revenues 279,145 52,217 — — 331,362 Income (Loss) Before Income Taxes 106,328 36,830 593 (18,157 ) 125,594 Additions to Long-Lived Assets 134,388 1,394 — 511 136,293 Additions to Investments — — 414,587 — 414,587 June 30, 2020 Total Assets $ 2,019,477 $ 92,823 $ 860,817 $ 35,230 $ 3,008,347 December 31, 2019 Total Assets $ 2,160,026 $ 91,840 $ 660,778 $ 13,438 $ 2,926,082 (1) The Corporate segment includes all general Partnership activity not attributable to our operating subsidiaries. |
Partnership Distributions (Tabl
Partnership Distributions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Distributions made to limited partner, by distribution | The following table details the distributions paid in respect of the periods presented below: Distributions (in thousands) Limited Partners Period Record Date Distribution Date Distribution per Limited Partner Unit Common Unitholders (1) Subordinated Unitholders (2) Holder of IDRs (3) Total Q4 2018 February 4, 2019 February 11, 2019 $ 0.5858 $ 13,876 $ 9,316 $ 2,421 $ 25,613 Q1 2019 May 6, 2019 May 13, 2019 $ 0.6132 $ 14,534 $ 9,751 $ 3,507 $ 27,792 Q2 2019 August 5, 2019 August 12, 2019 $ 0.6418 $ 25,418 $ — $ 4,640 $ 30,058 Q3 2019 November 4, 2019 November 12, 2019 $ 0.6716 $ 26,598 $ — $ 5,820 $ 32,418 Q4 2019 February 4, 2020 February 14, 2020 $ 0.6878 $ 62,012 $ — $ — $ 62,012 Q1 2020 May 8, 2020 May 15, 2020 $ 0.1875 $ 16,906 $ — $ — $ 16,906 (1) Distributions to common unitholders does not include distribution equivalent rights on units that vested under the Noble Midstream Partners LP 2016 Long-Term Incentive Plan (the “LTIP”). (2) On May 14, 2019, all Subordinated Units were converted into Common Units. (3) In November 2019, we acquired all of Noble’s IDRs. See Note 2. Basis of Presentation |
Net Income Per Limited Partne_2
Net Income Per Limited Partner Unit (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per unit amounts) 2020 2019 2020 2019 Net Income Attributable to Noble Midstream Partners LP $ 48,236 $ 36,409 $ 58,339 $ 79,968 Less: Net Income Attributable to Incentive Distribution Rights — 4,640 — 8,147 Net Income Attributable to Limited Partners $ 48,236 $ 31,769 $ 58,339 $ 71,821 Net Income Attributable to Common Units $ 48,236 $ 25,487 $ 58,339 $ 49,454 Net Income Attributable to Subordinated Units (1) — 6,282 — 22,367 Net Income Attributable to Limited Partners $ 48,236 $ 31,769 $ 58,339 $ 71,821 Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted Common Units $ 0.53 $ 0.79 $ 0.65 $ 1.77 Subordinated Units (1) $ — $ 0.84 $ — $ 1.91 Weighted Average Limited Partner Units Outstanding — Basic Common Units 90,163 32,090 90,158 27,916 Subordinated Units (1) — 7,514 — 11,685 Weighted Average Limited Partner Units Outstanding — Diluted Common Units 90,164 32,121 90,163 27,944 Subordinated Units (1) — 7,514 — 11,685 Antidilutive Restricted Units 207 68 187 71 (1) On May 14, 2019, all Subordinated Units were converted into Common Units. |
Organization and Nature of Op_3
Organization and Nature of Operations - Partnership Assets (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Colorado River LLC | |
Equity | |
NBLX Ownership | 100.00% |
San Juan River LLC | |
Equity | |
NBLX Ownership | 100.00% |
Green River DevCo LLC | |
Equity | |
NBLX Ownership | 100.00% |
Laramie River LLC | Greeley Crescent IDP (DJ Basin) | |
Equity | |
NBLX Ownership | 100.00% |
Laramie River LLC | Black Diamond Dedication Area (DJ Basin) | |
Equity | |
NBLX Ownership | 54.40% |
Noncontrolling Interest | 45.60% |
Gunnison River DevCo LP | |
Equity | |
NBLX Ownership | 5.00% |
Noncontrolling Interest | 95.00% |
Blanco River LLC | |
Equity | |
NBLX Ownership | 100.00% |
Trinity River DevCo LLC | |
Equity | |
NBLX Ownership | 100.00% |
Dos Rios DevCo LLC | |
Equity | |
NBLX Ownership | 100.00% |
NBL Midstream Holdings LLC | East Pony IDP (DJ Basin) | |
Equity | |
NBLX Ownership | 100.00% |
NBL Midstream Holdings LLC | Delaware Basin | |
Equity | |
NBLX Ownership | 100.00% |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Nov. 14, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Business Acquisition | |||||||
Internal rate of return on preferred stock (percent) | 12.00% | 12.00% | |||||
Dividend rate (percent) | 6.50% | ||||||
Goodwill Impairment | $ 0 | $ 109,700 | $ 0 | $ 109,734 | $ 0 | ||
Accumulated amortization | 78,000 | 78,000 | $ 61,900 | ||||
Amortization expense related to intangible asset | 8,100 | 8,100 | 16,100 | 16,000 | |||
Payments to acquire loans receivable | 22,500 | $ 0 | |||||
Due from related party | 37,298 | 37,298 | $ 42,428 | ||||
Preferred equity accretion | $ 3,366 | $ 3,276 | $ 3,151 | $ 6,600 | |||
White Cliffs | |||||||
Business Acquisition | |||||||
Ownership percentage (percent) | 3.33% | 3.33% | |||||
EPIC Y-Grade | |||||||
Business Acquisition | |||||||
Payments to acquire loans receivable | $ 22,500 | ||||||
Due from related party | $ 23,100 | 23,100 | |||||
Allowance for doubtful accounts | $ 1,300 | $ 1,300 | |||||
Blanco River LLC | |||||||
Business Acquisition | |||||||
Consideration transferred (percent) | 60.00% | ||||||
Green River LLC | |||||||
Business Acquisition | |||||||
Consideration transferred (percent) | 75.00% | ||||||
San Juan River LLC | |||||||
Business Acquisition | |||||||
Consideration transferred (percent) | 75.00% | ||||||
Blanco River And Colorado River DevCos | |||||||
Business Acquisition | |||||||
Payments to acquire business | $ 1,600,000 | ||||||
Cash payments to acquire entity | $ 670,000 | ||||||
Equity interest issued (shares) | 38,455,018 |
Basis of Presentation - Summary
Basis of Presentation - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||||
Cash and Cash Equivalents | $ 12,729 | $ 12,676 | $ 11,537 | $ 14,761 | |
Restricted Cash | 0 | 50 | 50 | 951 | |
Cash, Cash Equivalents, and Restricted Cash | [1] | $ 12,729 | $ 12,726 | $ 11,587 | $ 15,712 |
[1] | See Note 2. Basis of Presentation for our reconciliation of total cash. |
Basis of Presentation - Perform
Basis of Presentation - Performance Obligation Expected Satisfaction (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Amount | $ 56,371 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Amount | $ 18,736 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected Timing | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Amount | $ 37,635 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected Timing | 1 year |
Transactions with Affiliates (D
Transactions with Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 01, 2020 | Sep. 30, 2019 | |
Related Party Transaction | ||||||
Total Midstream Services — Affiliate | $ 93,739 | $ 97,269 | $ 207,523 | $ 201,072 | ||
General and Administrative Expense — Affiliate | 4,107 | 2,178 | 6,782 | 4,456 | ||
General and Administrative Expense — Third Party | 2,339 | 2,993 | 5,150 | 5,076 | ||
Total General and Administrative Expense | 6,446 | 5,171 | 11,932 | 9,532 | ||
Annual cap rate | $ 15,700 | $ 6,900 | ||||
Noble Energy | Noble Energy | ||||||
Related Party Transaction | ||||||
Total Midstream Services — Affiliate | 93,739 | 97,269 | 207,523 | 201,072 | ||
Noble Energy | Noble Energy | Gathering and Processing | ||||||
Related Party Transaction | ||||||
Total Midstream Services — Affiliate | 82,671 | 78,136 | 171,969 | 153,516 | ||
Noble Energy | Noble Energy | Fresh Water Delivery | ||||||
Related Party Transaction | ||||||
Total Midstream Services — Affiliate | 10,300 | 18,367 | 33,899 | 45,954 | ||
Noble Energy | Noble Energy | Other | ||||||
Related Party Transaction | ||||||
Total Midstream Services — Affiliate | $ 768 | $ 766 | $ 1,655 | $ 1,602 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Total Property, Plant and Equipment, at Cost | $ 2,056,882 | $ 2,006,995 |
Accumulated Depreciation and Amortization | 279,115 | 244,038 |
Total Property, Plant and Equipment, Net | 1,777,767 | 1,762,957 |
Gathering and Processing Systems | ||
Property, Plant and Equipment | ||
Total Property, Plant and Equipment, at Cost | 1,898,488 | 1,795,957 |
Construction in-progress | 49,000 | 98,400 |
Fresh Water Delivery Systems | ||
Property, Plant and Equipment | ||
Total Property, Plant and Equipment, at Cost | 95,802 | 96,004 |
Construction-in-Progress | ||
Property, Plant and Equipment | ||
Total Property, Plant and Equipment, at Cost | 62,592 | 115,034 |
Equipment Reserved For Future Use | ||
Property, Plant and Equipment | ||
Construction in-progress | $ 11,600 | $ 15,400 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument | ||
Interest Rate (percent) | 0.00% | 0.00% |
Finance lease obligation | $ 2,033 | $ 2,005 |
Total | 1,637,033 | 1,497,005 |
Unamortized Debt Issuance Costs | (1,114) | (1,326) |
Total Debt | 1,635,919 | 1,495,679 |
Finance Lease Obligation Due Within One Year | 0 | 0 |
Long-Term Debt | $ 1,635,919 | $ 1,495,679 |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Revolving Credit Facility, due March 9, 2023 | ||
Debt Instrument | ||
Debt | $ 735,000 | $ 595,000 |
Interest Rate (percent) | 1.61% | 3.11% |
Term Loan Credit Facility, due July 31, 2021 | ||
Debt Instrument | ||
Debt | $ 500,000 | $ 500,000 |
Interest Rate (percent) | 1.36% | 2.85% |
Term Loan Credit Facility, due August 23, 2022 | ||
Debt Instrument | ||
Debt | $ 400,000 | $ 400,000 |
Interest Rate (percent) | 1.24% | 2.74% |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Line of Credit Facility | ||
Proceeds revolving credit facility | $ 140,000,000 | |
Revolving Credit Facility, due March 9, 2023 | ||
Line of Credit Facility | ||
Borrowing capacity | 1,150,000,000 | |
Remaining borrowing capacity | $ 415,000,000 | $ 555,000,000 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | |
Feb. 29, 2020 | Jun. 30, 2020 | Feb. 01, 2020 | |
White Cliffs | |||
Schedule of Equity Method Investments | |||
Ownership percentage (percent) | 3.33% | ||
Advantage | |||
Schedule of Equity Method Investments | |||
Ownership interest, equity method (percent) | 50.00% | ||
Delaware Crossing | |||
Schedule of Equity Method Investments | |||
Ownership interest, equity method (percent) | 50.00% | ||
Capital contributions | $ 16.9 | ||
EPIC Y-Grade | |||
Schedule of Equity Method Investments | |||
Ownership interest, equity method (percent) | 15.00% | ||
Capital contributions | $ 12.8 | ||
EPIC Crude | |||
Schedule of Equity Method Investments | |||
Ownership interest, equity method (percent) | 30.00% | ||
Capital contributions | $ 30 | ||
EPIC Propane | |||
Schedule of Equity Method Investments | |||
Ownership interest, equity method (percent) | 15.00% | ||
Capital contributions | $ 4 | ||
Saddlehorn | |||
Schedule of Equity Method Investments | |||
Ownership percentage (percent) | 20.00% | ||
Capital contributions | $ 160 | ||
Payments to acquire equity method investments, net | 87 | ||
Greenfield Member | Saddlehorn | |||
Schedule of Equity Method Investments | |||
Capital contributions | $ 73 | ||
Black Diamond | Saddlehorn | |||
Schedule of Equity Method Investments | |||
Ownership percentage (percent) | 10.00% | ||
Magellan and Plains | Saddlehorn | |||
Schedule of Equity Method Investments | |||
Ownership percentage (percent) | 30.00% | ||
Black Diamond and Western Midstream | Saddlehorn | |||
Schedule of Equity Method Investments | |||
Ownership percentage (percent) | 20.00% |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments | ||
Investments | $ 860,817 | $ 660,778 |
White Cliffs | ||
Schedule of Equity Method Investments | ||
Investments | 10,363 | 10,268 |
Advantage | ||
Schedule of Equity Method Investments | ||
Investments | 72,651 | 76,834 |
Delaware Crossing | ||
Schedule of Equity Method Investments | ||
Investments | 84,671 | 68,707 |
EPIC Y-Grade | ||
Schedule of Equity Method Investments | ||
Investments | 163,244 | 162,850 |
EPIC Crude | ||
Schedule of Equity Method Investments | ||
Investments | 362,912 | 339,116 |
EPIC Propane | ||
Schedule of Equity Method Investments | ||
Investments | 7,028 | 3,003 |
Saddlehorn | ||
Schedule of Equity Method Investments | ||
Investments | $ 159,948 | $ 0 |
Investments - Investment Income
Investments - Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | $ 2,730 | $ 1,748 | $ 8,139 | $ (593) |
White Cliffs | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | (549) | (841) | (1,264) | (1,889) |
Advantage | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | (1,311) | (1,513) | (3,387) | (3,754) |
Delaware Crossing | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | 752 | 355 | 1,472 | 1,538 |
EPIC Y-Grade | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | 7,977 | 1,024 | 13,595 | 1,054 |
EPIC Crude | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | 1,972 | 3,245 | 8,873 | 3,245 |
EPIC Propane | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | 36 | 0 | 61 | 0 |
Saddlehorn | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | (5,712) | 0 | (10,338) | 0 |
Other | ||||
Schedule of Equity Method Investments | ||||
Total Investment Loss (Income) | $ (435) | $ (522) | $ (873) | $ (787) |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information | ||||||
Midstream Services — Affiliate | $ 93,739 | $ 97,269 | $ 207,523 | $ 201,072 | ||
Total Revenues | 145,950 | 170,660 | 369,995 | 331,362 | ||
Goodwill Impairment | 0 | $ 109,700 | 0 | 109,734 | 0 | |
Income (Loss) Before Income Taxes | 50,732 | 56,494 | 13,365 | 125,594 | ||
Additions to Long-Lived Assets | 4,997 | 58,092 | 52,725 | 136,293 | ||
Additions to Investments | 2,627 | 143,984 | 228,226 | 414,587 | ||
Total Assets | 3,008,347 | 3,008,347 | $ 2,926,082 | |||
Gathering Systems | ||||||
Segment Reporting Information | ||||||
Midstream Services — Affiliate | 83,439 | 78,902 | 173,624 | 155,118 | ||
Total Revenues | 133,839 | 149,839 | 330,111 | 279,145 | ||
Goodwill Impairment | 109,734 | |||||
Income (Loss) Before Income Taxes | 58,392 | 52,668 | 17,174 | 106,328 | ||
Additions to Long-Lived Assets | 4,849 | 56,739 | 52,468 | 134,388 | ||
Additions to Investments | 0 | 0 | 0 | 0 | ||
Total Assets | 2,019,477 | 2,019,477 | 2,160,026 | |||
Fresh Water Delivery | ||||||
Segment Reporting Information | ||||||
Midstream Services — Affiliate | 10,300 | 18,367 | 33,899 | 45,954 | ||
Total Revenues | 12,111 | 20,821 | 39,884 | 52,217 | ||
Goodwill Impairment | 0 | |||||
Income (Loss) Before Income Taxes | 10,336 | 13,621 | 32,779 | 36,830 | ||
Additions to Long-Lived Assets | 0 | 1,113 | 0 | 1,394 | ||
Additions to Investments | 0 | 0 | 0 | 0 | ||
Total Assets | 92,823 | 92,823 | 91,840 | |||
Investments in Midstream Entities | ||||||
Segment Reporting Information | ||||||
Midstream Services — Affiliate | 0 | 0 | 0 | 0 | ||
Total Revenues | 0 | 0 | 0 | 0 | ||
Goodwill Impairment | 0 | |||||
Income (Loss) Before Income Taxes | (2,730) | (1,748) | (8,139) | 593 | ||
Additions to Long-Lived Assets | 0 | 0 | 0 | 0 | ||
Additions to Investments | 2,627 | 143,984 | 228,226 | 414,587 | ||
Total Assets | 860,817 | 860,817 | 660,778 | |||
Corporate | ||||||
Segment Reporting Information | ||||||
Midstream Services — Affiliate | 0 | 0 | 0 | 0 | ||
Total Revenues | 0 | 0 | 0 | 0 | ||
Goodwill Impairment | 0 | |||||
Income (Loss) Before Income Taxes | (15,266) | (8,047) | (28,449) | (18,157) | ||
Additions to Long-Lived Assets | 148 | 240 | 257 | 511 | ||
Additions to Investments | 0 | 0 | 0 | 0 | ||
Total Assets | 35,230 | 35,230 | $ 13,438 | |||
Midstream Services — Third Party | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 22,997 | 21,609 | 50,895 | 45,638 | ||
Midstream Services — Third Party | Gathering Systems | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 21,186 | 19,155 | 44,910 | 39,375 | ||
Midstream Services — Third Party | Fresh Water Delivery | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 1,811 | 2,454 | 5,985 | 6,263 | ||
Midstream Services — Third Party | Investments in Midstream Entities | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 0 | 0 | 0 | 0 | ||
Midstream Services — Third Party | Corporate | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 0 | 0 | 0 | 0 | ||
Crude Oil Sales — Third Party | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 29,214 | 51,782 | 111,577 | 84,652 | ||
Crude Oil Sales — Third Party | Gathering Systems | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 29,214 | 51,782 | 111,577 | 84,652 | ||
Crude Oil Sales — Third Party | Fresh Water Delivery | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 0 | 0 | 0 | 0 | ||
Crude Oil Sales — Third Party | Investments in Midstream Entities | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | 0 | 0 | 0 | 0 | ||
Crude Oil Sales — Third Party | Corporate | ||||||
Segment Reporting Information | ||||||
Services and Sales Revenues - Third Party | $ 0 | $ 0 | $ 0 | $ 0 |
Partnership Distributions - Nar
Partnership Distributions - Narrative (Details) - $ / shares | Jul. 24, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 |
Distribution Made to Limited Partner | ||||||||
Partner distribution period | 45 days | |||||||
Distribution (in dollars per share) | $ 0.1875 | $ 0.6878 | $ 0.6716 | $ 0.6418 | $ 0.6132 | $ 0.5858 | ||
Subsequent Event | Common Units | ||||||||
Distribution Made to Limited Partner | ||||||||
Distribution (in dollars per share) | $ 0.1875 |
Partnership Distributions - Sum
Partnership Distributions - Summary of Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Distribution Made to Limited Partner | ||||||
Distribution (in dollars per share) | $ 0.1875 | $ 0.6878 | $ 0.6716 | $ 0.6418 | $ 0.6132 | $ 0.5858 |
Distributions | $ 16,906 | $ 62,012 | $ 32,418 | $ 30,058 | $ 27,792 | $ 25,613 |
Holders of IDRs | 0 | 0 | 5,820 | 4,640 | 3,507 | 2,421 |
Common Units | ||||||
Distribution Made to Limited Partner | ||||||
Distributions | 16,906 | 62,012 | 26,598 | 25,418 | 14,534 | 13,876 |
Subordinated Units | ||||||
Distribution Made to Limited Partner | ||||||
Distributions | $ 0 | $ 0 | $ 0 | $ 0 | $ 9,751 | $ 9,316 |
Net Income Per Limited Partne_3
Net Income Per Limited Partner Unit (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ||||
Net Income Attributable to Noble Midstream Partners LP | $ 48,236 | $ 36,409 | $ 58,339 | $ 79,968 |
Less: Net Income Attributable to Incentive Distribution Rights | 0 | 4,640 | 0 | 8,147 |
Net Income Attributable to Limited Partners | $ 48,236 | $ 31,769 | $ 58,339 | $ 71,821 |
Antidilutive Restricted Units (in shares) | 207 | 68 | 187 | 71 |
Common Units | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ||||
Net Income Attributable to Limited Partners | $ 48,236 | $ 25,487 | $ 58,339 | $ 49,454 |
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 0.53 | $ 0.79 | $ 0.65 | $ 1.77 |
Weighed Average Limited Partner Units Outstanding, Basic (in shares) | 90,163 | 32,090 | 90,158 | 27,916 |
Weighed Average Limited Partner Units Outstanding, Diluted (in shares) | 90,164 | 32,121 | 90,163 | 27,944 |
Subordinated Units | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method | ||||
Net Income Attributable to Limited Partners | $ 0 | $ 6,282 | $ 0 | $ 22,367 |
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted (in dollars per share) | $ 0 | $ 0.84 | $ 0 | $ 1.91 |
Weighed Average Limited Partner Units Outstanding, Basic (in shares) | 0 | 7,514 | 0 | 11,685 |
Weighed Average Limited Partner Units Outstanding, Diluted (in shares) | 0 | 7,514 | 0 | 11,685 |