Acquisitions and Divestitures (Tables)
|
12 Months Ended |
Dec. 31, 2015 |
|---|
| Property, Plant and Equipment [Abstract] |
|
| Acquisitions Table |
The following table presents the acquisitions completed by WES during the years ended December 31, 2015, 2014 and 2013, and identifies the funding sources for such acquisitions: | | | | | | | | | | | | | | | | | | | | | | | | | thousands except unit and percent amounts | | Acquisition Date | | Percentage
Acquired | | Deferred Purchase Price
Obligation - Anadarko | | Borrowings | | Cash On Hand | | WES Common Units Issued to Anadarko | | WES Class C Units Issued to Anadarko | Non-Operated Marcellus Interest (1) | | 03/01/2013 | | 33.75 | % | | $ | — |
| | $ | 250,000 |
| | $ | 215,500 |
| | 449,129 |
| | — |
| Anadarko-Operated Marcellus Interest (2) | | 03/08/2013 | | 33.75 | % | | — |
| | 133,500 |
| | — |
| | — |
| | — |
| Mont Belvieu JV (3) | | 06/05/2013 | | 25 | % | | — |
| | — |
| | 78,129 |
| | — |
| | — |
| OTTCO (4) | | 09/03/2013 | | 100 | % | | — |
| | 27,500 |
| | — |
| | — |
| | — |
| TEFR Interests (5) | | 03/03/2014 | | Various (5) |
| | — |
| | 350,000 |
| | 6,250 |
| | 308,490 |
| | — |
| DBM (6) | | 11/25/2014 | | 100 | % | | — |
| | 475,000 |
| | 298,327 |
| | — |
| | 10,913,853 |
| DBJV system (7) | | 03/02/2015 | | 50 | % | | 174,276 |
| | — |
| | — |
| | — |
| | — |
|
| | (1) | WES acquired Anadarko’s 33.75% interest (non-operated) (the “Non-Operated Marcellus Interest”) in the Liberty and Rome gas gathering systems (the “Non-Operated Marcellus Interest systems”), serving production from the Marcellus shale in North-central Pennsylvania. In connection with the issuance of WES common units, WES GP purchased 9,166 general partner units for consideration of $0.5 million. |
| | (2) | WES acquired a 33.75% interest (the “Anadarko-Operated Marcellus Interest”) in each of the Larry’s Creek, Seely and Warrensville gas gathering systems (the “Anadarko-Operated Marcellus Interest systems”), which are operated by Anadarko and serve production from the Marcellus shale in North-central Pennsylvania, from a third party. During the third quarter of 2013, WES recorded a $1.1 million decrease in the assets acquired and liabilities assumed in the acquisition, representing the final purchase price allocation. |
| | (3) | WES acquired a 25% interest in the Mont Belvieu JV, an entity formed to design, construct, and own two fractionation trains located in Mont Belvieu, Texas, from a third party. The interest acquired is accounted for under the equity method of accounting. |
| | (4) | WES acquired Overland Trail Transmission, LLC (“OTTCO”), a Delaware limited liability company, from a third party. OTTCO owns and operates an intrastate pipeline that connects WES’s Red Desert and Granger complexes in southwestern Wyoming. |
| | (5) | WES acquired a 20% interest in each of TEG and TEP and a 33.33% interest in FRP from Anadarko. These assets gather and transport NGLs primarily from the Anadarko and Denver-Julesburg (“DJ”) Basins. The interests in these entities are accounted for under the equity method of accounting. In connection with the issuance of WES common units, WES issued 6,296 general partner units to WES GP in exchange for WES GP’s proportionate capital contribution of $0.4 million. |
| | (6) | WES acquired Nuevo Midstream, LLC (“Nuevo”) from a third party. Following the acquisition, WES changed the name of Nuevo to Delaware Basin Midstream, LLC (“DBM”). The assets acquired include cryogenic processing plants, a gas gathering system, and related facilities and equipment, which are collectively referred to as the “DBM complex” and serve production from Reeves, Loving and Culberson Counties, Texas and Eddy and Lea Counties, New Mexico. See DBM acquisition below for further information, including the final allocation of the purchase price. |
| | (7) | WES acquired Anadarko’s interest in Delaware Basin JV Gathering LLC (“DBJV”), which owns a 50% interest in a gathering system and related facilities (the “DBJV system”). The DBJV system is located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. WES will make a cash payment on March 31, 2020, to Anadarko as consideration for the acquisition of DBJV. WES currently estimates the future payment will be $282.8 million, the net present value of which was $174.3 million as of the acquisition date. See DBJV acquisition—Deferred purchase price obligation - Anadarko below. |
|
| Impact to Historical Consolidated Statements of Income Table |
The following table presents the impact of the DBJV and Springfield systems on revenues and other, equity income, net and net income (loss) as presented in WGP’s historical consolidated statements of income: | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2015 | thousands | | WGP Historical | | DBJV System (1) | | Springfield | | Springfield Eliminations | | Combined | Revenues and other | | $ | 1,561,372 |
| | $ | — |
| | $ | 190,766 |
| | $ | (66 | ) | | $ | 1,752,072 |
| Equity income, net | | 71,251 |
| | — |
| | — |
| | — |
| | 71,251 |
| Net income (loss) | | (66,546 | ) | | — |
| | 77,644 |
| | — |
| | 11,098 |
| | | | | | | | | | | | | | Year Ended December 31, 2014 | thousands | | WGP Historical (2) | | DBJV System | | Springfield | | Springfield Eliminations | | Combined | Revenues and other | | $ | 1,320,756 |
| | $ | 62,112 |
| | $ | 150,576 |
| | $ | (67 | ) | | $ | 1,533,377 |
| Equity income, net | | 57,836 |
| | — |
| | — |
| | — |
| | 57,836 |
| Net income (loss) | | 387,379 |
| | 17,309 |
| | 48,801 |
| | — |
| | 453,489 |
| | | | | | | | | | | | | | Year Ended December 31, 2013 | thousands | | WGP Historical (2) | | DBJV System | | Springfield | | Springfield Eliminations | | Combined | Revenues and other | | $ | 1,052,937 |
| | $ | 32,545 |
| | $ | 114,647 |
| | $ | (69 | ) | | $ | 1,200,060 |
| Equity income, net | | 22,948 |
| | — |
| | — |
| | — |
| | 22,948 |
| Net income (loss) | | 281,878 |
| | 4,096 |
| | (1,295 | ) | | — |
| | 284,679 |
|
| | (1) | The financial results for the DBJV system for the year ended December 31, 2015 are reflected in the WGP’s historical financial statements as filed in the WGP’s 2015 Form 10-K with the SEC on February 25, 2016. |
| | (2) | See Adjustments to previously issued financial statements in Note 1. |
|
| Purchase Price Allocation Table |
The following is the final allocation of the purchase price as of December 31, 2015, including $3.5 million of post-closing purchase price adjustments, to the assets acquired and liabilities assumed in the DBM acquisition as of the acquisition date: | | | | | | thousands | | | Current assets | | $ | 60,888 |
| Property, plant and equipment | | 467,171 |
| Goodwill | | 284,749 |
| Other intangible assets | | 811,048 |
| Accounts payables | | (18,621 | ) | Accrued liabilities | | (37,360 | ) | Deferred income taxes | | (1,342 | ) | Asset retirement obligations and other | | (9,060 | ) | Total purchase price | | $ | 1,557,473 |
|
|
| Pro Forma Condensed Financial Information Table |
The following table presents pro forma condensed financial information as if the DBM acquisition had occurred on January 1, 2013: | | | | | | | | | | | | Year Ended December 31, | thousands except per-unit amounts | | 2014 | | 2013 | Revenues and other | | $ | 1,656,644 |
| | $ | 1,277,327 |
| Net income (loss) | | 395,351 |
| | 238,618 |
| Net income (loss) attributable to Western Gas Equity Partners, LP | | 229,883 |
| | 132,785 |
| Net income (loss) per common unit – basic and diluted | | 0.75 |
| | 0.57 |
|
|