Delaware | 001-37640 | 47-3011449 | ||
(State or other jurisdiction of incorporation or organization) | Commission File Number | (I.R.S. Employer Identification No.) | ||
1001 Noble Energy Way, Houston, Texas | 77070 | |||
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
23.1 | ||
23.2 | ||
99.1 | ||
99.2 |
NOBLE MIDSTREAM PARTNERS LP | ||||||
By: Noble Midstream GP, LLC, Its General Partner | ||||||
Date: | April 13, 2018 | By: | /s/ John F. Bookout, IV | |||
John F. Bookout, IV | ||||||
Chief Financial Officer |
DECEMBER 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 17,808 | $ | 14,229 | $ | 28,136 | ||||||
Crude oil sales receivables | 11,942 | 8,040 | — | |||||||||
Crude oil inventory | 328 | 5,196 | — | |||||||||
Other inventory | 110 | — | — | |||||||||
Other current assets | 342 | 378 | 290 | |||||||||
Short-term investments | 301 | 1,805 | 856 | |||||||||
Total current assets | 30,831 | 29,648 | 29,282 | |||||||||
PROPERTY AND EQUIPMENT: | ||||||||||||
Land | 3,536 | 2,499 | 324 | |||||||||
Line pack | 1,537 | 867 | — | |||||||||
Right of way | 33,107 | 16,295 | — | |||||||||
Pipelines | 58,883 | 34,092 | — | |||||||||
Buildings | 417 | 417 | 417 | |||||||||
Plant and facilities | 29,971 | 15,987 | — | |||||||||
Field equipment and machinery | 16,285 | 7,299 | 793 | |||||||||
Vehicles | 363 | 280 | 194 | |||||||||
Office equipment | 1,019 | 977 | 758 | |||||||||
Less accumulated depreciation | (8,181 | ) | (2,562 | ) | (786 | ) | ||||||
Net property and equipment | 136,937 | 76,151 | 1,700 | |||||||||
Construction work in progress | 62,992 | 49,015 | 67,738 | |||||||||
Total property and equipment, net | 199,929 | 125,166 | 69,438 | |||||||||
DEFERRED FINANCING COSTS, net | 1,088 | 342 | 69 | |||||||||
INVESTMENT IN EQUITY METHOD INVESTEE | 1,585 | — | — | |||||||||
TOTAL ASSETS | $ | 233,433 | $ | 155,156 | $ | 98,789 | ||||||
LIABILITIES AND MEMBERS’ CAPITAL | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Accounts payable | $ | 10,504 | $ | 12,039 | $ | 4,083 | ||||||
Oil commodity derivatives | 12 | 514 | — | |||||||||
Unearned revenue | 378 | — | — | |||||||||
Accrued liabilities | 1,343 | 233 | 317 | |||||||||
Total current liabilities | 12,237 | 12,786 | 4,400 | |||||||||
LONG-TERM LIABILITIES: | ||||||||||||
Line of credit (Note 7) | 27,095 | — | — | |||||||||
Construction liability | 2,418 | — | — | |||||||||
Total long-term liabilities | 29,513 | — | — | |||||||||
TOTAL LIABILITIES | 41,750 | 12,786 | 4,400 | |||||||||
COMMITMENTS AND CONTINGENCIES (Note 6) | ||||||||||||
MEMBERS’ CAPITAL | 191,683 | 142,370 | 94,389 | |||||||||
TOTAL LIABILITIES AND MEMBERS’ CAPITAL | $ | 233,433 | $ | 155,156 | $ | 98,789 |
FOR THE YEARS ENDED DECEMBER 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
REVENUE: | ||||||||||||
Crude oil sales | $ | 739,035 | $ | 174,084 | $ | — | ||||||
Purchase fees | 22,625 | 6,537 | — | |||||||||
Other revenue | 178 | 8 | 28 | |||||||||
Total operating revenue | 761,838 | 180,629 | 28 | |||||||||
COST OF PURCHASED GAS AND CRUDE OIL | 732,330 | 172,947 | 15 | |||||||||
NET MARGIN | 29,508 | 7,682 | 13 | |||||||||
OPERATING EXPENSES: | ||||||||||||
Field operating and maintenance | 3,452 | 1,313 | 189 | |||||||||
Impairment of long-lived assets | — | 3,719 | — | |||||||||
General and administrative | 9,860 | 7,615 | 7,245 | |||||||||
Depreciation and amortization | 5,637 | 1,811 | 309 | |||||||||
Total operating expenses | 18,949 | 14,458 | 7,743 | |||||||||
INCOME (LOSS) FROM OPERATIONS | 10,559 | (6,776 | ) | (7,730 | ) | |||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Interest income | 5 | 2 | — | |||||||||
Interest expense, net | (519 | ) | (140 | ) | — | |||||||
Loss from equity method investee | (724 | ) | — | — | ||||||||
Unrealized gain (loss) on commodity derivative | 502 | (514 | ) | — | ||||||||
Realized gain (loss) on commodity derivative | (623 | ) | 302 | — | ||||||||
Gain (loss) on sale of assets | 185 | (1 | ) | 487 | ||||||||
Other income | 6 | — | — | |||||||||
Total other income (expense) | (1,168 | ) | (351 | ) | 487 | |||||||
NET INCOME (LOSS) | $ | 9,391 | $ | (7,127 | ) | $ | (7,243 | ) |
CONTRIBUTED CAPITAL | SUBSCRIPTIONS RECEIVABLE | ACCUMULATED DEFECIT | TOTAL | ||||||||||||
BALANCES, January 1, 2015 | $ | 32,593 | $ | — | $ | (2,008 | ) | $ | 30,585 | ||||||
Contributions | 70,818 | — | — | 70,818 | |||||||||||
Member subscriptions | 6,090 | (6,090 | ) | — | — | ||||||||||
Interest on subscriptions | 216 | (216 | ) | — | — | ||||||||||
Unit compensation expense | 229 | — | — | 229 | |||||||||||
Net loss | — | — | (7,243 | ) | (7,243 | ) | |||||||||
BALANCES, December 31, 2015 | 109,946 | (6,306 | ) | (9,251 | ) | 94,389 | |||||||||
Contributions | 54,322 | — | — | 54,322 | |||||||||||
Member subscriptions | 16,282 | (16,282 | ) | — | — | ||||||||||
Interest on subscriptions | 824 | (824 | ) | — | — | ||||||||||
Unit compensation expense | 786 | — | — | 786 | |||||||||||
Net loss | — | — | (7,127 | ) | (7,127 | ) | |||||||||
BALANCES, December 31, 2016 | 182,160 | (23,412 | ) | (16,378 | ) | 142,370 | |||||||||
Contributions | 38,025 | — | — | 38,025 | |||||||||||
Member subscriptions | 7,800 | (7,800 | ) | — | — | ||||||||||
Interest on subscriptions | 1,721 | (1,721 | ) | — | — | ||||||||||
Unit compensation expense | 1,897 | — | — | 1,897 | |||||||||||
Net income | — | — | 9,391 | 9,391 | |||||||||||
BALANCES, December 31, 2017 | $ | 231,603 | $ | (32,933 | ) | $ | (6,987 | ) | $ | 191,683 |
FOR THE YEARS ENDED DECEMBER 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income (loss) | $ | 9,391 | $ | (7,127 | ) | $ | (7,243 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 5,637 | 1,811 | 309 | ||||||||
Amortization of deferred financing costs | 179 | 85 | — | ||||||||
(Gain) loss on sale of assets | (185 | ) | 1 | (487 | ) | ||||||
Impairment of long-lived assets | — | 3,719 | — | ||||||||
Unrealized (gain) loss on commodity derivatives | (502 | ) | 514 | — | |||||||
Unit option compensation expense | 1,897 | 786 | 229 | ||||||||
Loss from equity method investee | 724 | — | — | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (4,128 | ) | (8,040 | ) | — | ||||||
Inventory | 4,758 | (5,196 | ) | — | |||||||
Other current assets | 35 | (87 | ) | (61 | ) | ||||||
Accounts payable and accrued expenses | (979 | ) | 9,531 | 50 | |||||||
Net cash provided by (used in) operating activities | 16,827 | (4,003 | ) | (7,203 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Additions to pipeline and facilities | (79,974 | ) | (62,803 | ) | (58,144 | ) | |||||
Additions to office equipment | (183 | ) | (116 | ) | (42 | ) | |||||
Investment in equity method investee | (2,309 | ) | — | — | |||||||
Proceeds from sale of assets | 800 | — | 737 | ||||||||
Construction deposits | 2,718 | — | — | ||||||||
Proceeds from sale of short-term investments | 1,505 | 651 | 9,465 | ||||||||
Purchase of short-term investments | — | (1,600 | ) | — | |||||||
Net cash used in investing activities | (77,443 | ) | (63,868 | ) | (47,984 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Contributions from members | 38,025 | 54,322 | 70,818 | ||||||||
Proceeds from long-term debt | 27,095 | — | — | ||||||||
Deferred financing costs | (925 | ) | (358 | ) | (69 | ) | |||||
Net cash provided by investing activities | 64,195 | 53,964 | 70,749 | ||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 3,579 | (13,907 | ) | 15,562 | |||||||
CASH AND CASH EQUIVALENTS, beginning of year | 14,229 | 28,136 | 12,574 | ||||||||
CASH AND CASH EQUIVALENTS, end of year | $ | 17,808 | $ | 14,229 | 28,136 | ||||||
SUPPLEMENTAL STATEMENT OF CASH FLOW DISCLOSURES: | |||||||||||
Additions to pipeline and facilities included in accounts payable | $ | 2,210 | $ | 1,053 | $ | 3,655 | |||||
Subscription units issued for notes receivable and related interest | $ | 9,521 | $ | 17,106 | $ | 6,306 | |||||
Cash paid for interest | $ | 206 | — | — |
Asset | Depreciable Life (years) |
Vehicles | 3 |
Computers | 3 |
Furniture | 5 |
Pipelines | 20 |
Right-of-way | 20 |
Field equipment | 20 |
2. | FAIR VALUE MEASUREMENTS: |
Level 1: | Quoted prices are available in active markets for identical assets or liabilities; |
Level 2: | Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; or |
Level 3: | Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations. |
2017 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Liabilities: | ||||||||||||
Oil commodity derivatives | $ | — | $ | 12 | $ | — |
2016 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Liabilities: | ||||||||||||
Oil commodity derivatives | $ | — | $ | 514 | $ | — |
Level 1 | Level 2 | Level 3 | ||||||||||
(in thousands) | ||||||||||||
Oil and gas properties | $ | — | $ | — | $ | 3,719 |
3. | EQUITY METHOD INVESTMENT: |
4. | MEMBERS’ CAPITAL: |
2017 | 2016 | 2015 | ||
Expected volatility | 260% | 260% | 260% | |
Risk-free interest rate | 0.81% | 1.481% | 1.032% | |
Expected dividends | — | — | — | |
Expected terms (in years) | 10 | 10 | 10 | |
Market price | $100 | $100 | $100 |
Units | Weighted- Average Exercise Price | ||||||
Outstanding at January 1, 2015 | — | ||||||
Granted | 10,300 | $ | 100 | ||||
Forfeited | — | ||||||
Outstanding at December 31, 2015 | 10,300 | $ | 100 | ||||
Granted | 33,200 | $ | 100 | ||||
Forfeited | — | ||||||
Outstanding at December 31, 2016 | 43,500 | $ | 100 | ||||
Granted | 17,900 | $ | 100 | ||||
Forfeited | — | ||||||
Outstanding at December 31, 2017 | 61,400 | $ | 100 | ||||
Exercisable at December 31, 2017 | — |
5. | GAIN ON SALE OF ASSETS: |
6. | COMMITMENTS AND CONTINGENCIES: |
2018 | $ | 337 | ||
2019 | 66 | |||
Total | $ | 403 |
7. | LINE OF CREDIT: |
Years Ended December 31, | ||||||||
2017 | 2016 | |||||||
(in thousands) | ||||||||
Interest on outstanding balance | $ | 207 | $ | — | ||||
Amortization of deferred financing costs | 179 | 85 | ||||||
Commitment fees and other | 133 | 55 | ||||||
Total interest expense | $ | 519 | $ | 140 |
8. | SUBSEQUENT EVENTS: |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 9,233 | $ | 6,945 | $ | 40 | $ | 1,053 | $ | 58 | $ | 479 | $ | — | $ | 17,808 | ||||||||||||||||
Accounts receivable | 295 | 8,176 | — | 3,927 | 65 | 387 | (908 | ) | 11,942 | |||||||||||||||||||||||
Crude oil inventory | — | 328 | — | — | — | — | — | 328 | ||||||||||||||||||||||||
Other inventory | — | — | — | 110 | — | — | — | 110 | ||||||||||||||||||||||||
Other current assets | 187 | 4 | — | 122 | 29 | — | — | 342 | ||||||||||||||||||||||||
Short-term investments | 251 | — | — | 50 | — | — | — | 301 | ||||||||||||||||||||||||
Total current assets | 9,966 | 15,453 | 40 | 5,262 | 152 | 866 | (908 | ) | 30,831 | |||||||||||||||||||||||
Property and Equipment: | ||||||||||||||||||||||||||||||||
Land | 324 | — | 1,653 | — | 1,559 | — | — | 3,536 | ||||||||||||||||||||||||
Line pack | — | — | — | 1,288 | 249 | — | — | 1,537 | ||||||||||||||||||||||||
Right-of-way | — | — | — | 32,935 | 172 | — | — | 33,107 | ||||||||||||||||||||||||
Pipeline | — | — | — | 56,502 | 2,381 | — | — | 58,883 | ||||||||||||||||||||||||
Buildings | 417 | — | — | — | — | — | — | 417 | ||||||||||||||||||||||||
Plant and facilities | — | — | — | — | 29,971 | — | — | 29,971 | ||||||||||||||||||||||||
Field equipment and machinery | 112 | — | — | 14,237 | 1,936 | — | — | 16,285 | ||||||||||||||||||||||||
Vehicles | 8 | — | — | 355 | — | — | — | 363 | ||||||||||||||||||||||||
Office equipment | 999 | — | — | 20 | — | — | — | 1,019 | ||||||||||||||||||||||||
Less accumulated depreciation | (1,240 | ) | — | — | (5,166 | ) | (1,775 | ) | — | — | (8,181 | ) | ||||||||||||||||||||
Total property and equipment | 620 | — | 1,653 | 100,171 | 34,493 | — | — | 136,937 | ||||||||||||||||||||||||
Construction work in progress | — | — | — | 50,987 | 12,005 | — | — | 62,992 | ||||||||||||||||||||||||
Net property and equipment | 620 | — | 1,653 | 151,158 | 46,498 | — | — | 199,929 | ||||||||||||||||||||||||
Deferred Financing Costs, net | — | — | — | 1,088 | — | — | — | 1,088 | ||||||||||||||||||||||||
Investment in Subsidiaries | 170,087 | — | — | 45,375 | — | — | (215,462 | ) | — | |||||||||||||||||||||||
Investment in Equity Method Investee | 1,585 | — | — | — | — | — | — | 1,585 | ||||||||||||||||||||||||
Total Assets | $ | 182,258 | $ | 15,453 | $ | 1,693 | $ | 202,883 | $ | 46,650 | $ | 866 | $ | (216,370 | ) | $ | 233,433 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 326 | $ | 8,008 | $ | — | $ | 1,698 | $ | 1,379 | $ | 1 | $ | (908 | ) | $ | 10,504 | |||||||||||||||
Commodity derivative | — | 12 | — | — | — | — | — | 12 | ||||||||||||||||||||||||
Unearned revenue | — | — | — | 378 | — | — | — | 378 | ||||||||||||||||||||||||
Accrued liabilities | 50 | 7 | — | 665 | 172 | 449 | — | 1,343 | ||||||||||||||||||||||||
Total current liabilities | 376 | 8,027 | — | 2,741 | 1,551 | 450 | (908 | ) | 12,237 | |||||||||||||||||||||||
Other Long-Term Liabilities: | ||||||||||||||||||||||||||||||||
Long-term debt | — | — | — | 27,095 | — | — | — | 27,095 | ||||||||||||||||||||||||
Long-term commitment | — | — | — | — | 2,418 | — | — | 2,418 | ||||||||||||||||||||||||
Total other-long-term liabilities | — | — | — | 27,095 | 2,418 | — | — | 29,513 | ||||||||||||||||||||||||
Members’ Capital | 181,882 | 7,426 | 1,693 | 173,047 | 42,681 | 416 | (215,462 | ) | 191,683 | |||||||||||||||||||||||
Total Liabilities and Members’ Capital | $ | 182,258 | $ | 15,453 | $ | 1,693 | $ | 202,883 | $ | 46,650 | $ | 866 | $ | (216,370 | ) | $ | 233,433 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
Operating Revenue: | ||||||||||||||||||||||||||||||||
Crude oil sales | $ | 7,503 | $ | 148,115 | $ | — | $ | 704,075 | $ | — | $ | — | $ | (120,658 | ) | $ | 739,035 | |||||||||||||||
Purchase fees | — | — | — | 24,574 | 617 | — | (2,566 | ) | 22,625 | |||||||||||||||||||||||
Other revenue | 116 | — | 62 | — | — | — | — | 178 | ||||||||||||||||||||||||
Total operating revenue | 7,619 | 148,115 | 62 | 728,649 | 617 | — | (123,224 | ) | 761,838 | |||||||||||||||||||||||
Cost of Purchased Gas and Crude | 7,503 | 146,810 | — | 701,241 | — | — | (123,224 | ) | 732,330 | |||||||||||||||||||||||
Net Margin | 116 | 1,305 | 62 | 27,408 | 617 | — | — | 29,508 | ||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||
Field operating and maintenance | 1 | 152 | — | 2,204 | 1,094 | 1 | — | 3,452 | ||||||||||||||||||||||||
General and administrative | 4,486 | 374 | 2 | 4,421 | 234 | 343 | — | 9,860 | ||||||||||||||||||||||||
Depreciation and amortization | 215 | — | — | 4,048 | 1,374 | — | — | 5,637 | ||||||||||||||||||||||||
Total operating expense | 4,702 | 526 | 2 | 10,673 | 2,702 | 344 | — | 18,949 | ||||||||||||||||||||||||
Income (Loss) from Operations | (4,586 | ) | 779 | 60 | 16,735 | (2,085 | ) | (344 | ) | — | 10,559 | |||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||||||||
Interest income | — | 5 | — | — | — | — | — | 5 | ||||||||||||||||||||||||
Interest expense | — | — | — | (519 | ) | — | — | — | (519 | ) | ||||||||||||||||||||||
Loss from equity method investee | (724 | ) | — | — | — | — | — | — | (724 | ) | ||||||||||||||||||||||
Unrealized gain on commodity derivative | — | 502 | — | — | — | — | — | 502 | ||||||||||||||||||||||||
Realized loss on commodity derivatives | — | (623 | ) | — | — | — | — | — | (623 | ) | ||||||||||||||||||||||
Gain on sale of assets | — | — | — | — | 185 | — | — | 185 | ||||||||||||||||||||||||
Other income | — | — | — | 6 | — | — | — | 6 | ||||||||||||||||||||||||
Total other income (expense) | (724 | ) | (116 | ) | — | (513 | ) | 185 | — | — | (1,168 | ) | ||||||||||||||||||||
Net Income (Loss) | $ | (5,310 | ) | $ | 663 | $ | 60 | $ | 16,222 | $ | (1,900 | ) | $ | (344 | ) | $ | — | $ | 9,391 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 11,904 | $ | 1,317 | $ | 50 | $ | 238 | $ | 109 | $ | 611 | $ | — | $ | 14,229 | ||||||||||||||||
Accounts receivable | — | 6,547 | — | 1,426 | 67 | 807 | (807 | ) | 8,040 | |||||||||||||||||||||||
Inventory | — | 4,809 | — | 387 | — | — | — | 5,196 | ||||||||||||||||||||||||
Other current assets | 300 | 9 | — | 32 | 37 | — | — | 378 | ||||||||||||||||||||||||
Short-term investments | 250 | 1,500 | — | 55 | — | — | — | 1,805 | ||||||||||||||||||||||||
Total current assets | 12,454 | 14,182 | 50 | 2,138 | 213 | 1,418 | (807 | ) | 29,648 | |||||||||||||||||||||||
Property and Equipment: | ||||||||||||||||||||||||||||||||
Land | 324 | — | 1,653 | — | 522 | — | — | 2,499 | ||||||||||||||||||||||||
Line pack | — | — | — | 639 | 228 | — | — | 867 | ||||||||||||||||||||||||
Right-of-way | — | — | — | 16,213 | 82 | — | — | 16,295 | ||||||||||||||||||||||||
Pipeline | — | — | — | 32,418 | 1,674 | — | — | 34,092 | ||||||||||||||||||||||||
Buildings | 417 | — | — | — | — | — | — | 417 | ||||||||||||||||||||||||
Plant and facilities | — | — | — | — | 15,987 | — | — | 15,987 | ||||||||||||||||||||||||
Field equipment and machinery | 112 | — | — | 6,395 | 792 | — | — | 7,299 | ||||||||||||||||||||||||
Vehicles | 8 | — | — | 272 | — | — | — | 280 | ||||||||||||||||||||||||
Office equipment | 961 | — | — | 16 | — | — | — | 977 | ||||||||||||||||||||||||
Less accumulated depreciation | (1,025 | ) | — | — | (1,135 | ) | (402 | ) | — | — | (2,562 | ) | ||||||||||||||||||||
Total property and equipment | 797 | — | 1,653 | 54,818 | 18,883 | — | — | 76,151 | ||||||||||||||||||||||||
Construction work in progress | — | — | — | 33,916 | 15,099 | — | — | 49,015 | ||||||||||||||||||||||||
Net property and equipment | 797 | — | 1,653 | 88,734 | 33,982 | — | — | 125,166 | ||||||||||||||||||||||||
Deferred Financing Costs, net | — | — | — | 342 | — | — | — | 342 | ||||||||||||||||||||||||
Investment in Subsidiaries | 134,706 | — | — | 34,286 | — | — | (168,992 | ) | — | |||||||||||||||||||||||
Total Assets | $ | 147,957 | $ | 14,182 | $ | 1,703 | $ | 125,500 | $ | 34,195 | $ | 1,418 | $ | (169,799 | ) | $ | 155,156 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 619 | $ | 10,678 | $ | — | $ | 847 | $ | 702 | $ | — | $ | (807 | ) | $ | 12,039 | |||||||||||||||
Commodity derivative | — | 514 | — | — | — | — | — | 514 | ||||||||||||||||||||||||
Accrued liabilities | 70 | — | — | 5 | 1 | 157 | — | 233 | ||||||||||||||||||||||||
Total current liabilities | 689 | 11,192 | — | 852 | 703 | 157 | (807 | ) | 12,786 | |||||||||||||||||||||||
Other Long-Term Liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Members’ Capital | 147,268 | 2,990 | 1,703 | 124,648 | 33,492 | 1,261 | (168,992 | ) | 142,370 | |||||||||||||||||||||||
Total Liabilities and Members’ Capital | $ | 147,957 | $ | 14,182 | $ | 1,703 | $ | 125,500 | $ | 34,195 | $ | 1,418 | $ | (169,799 | ) | $ | 155,156 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
Operating Revenue: | ||||||||||||||||||||||||||||||||
Crude oil sales | $ | — | $ | 27,471 | $ | — | $ | 147,324 | $ | — | $ | — | $ | (711 | ) | $ | 174,084 | |||||||||||||||
Purchase fees | — | — | — | 7,678 | 67 | — | (1,208 | ) | 6,537 | |||||||||||||||||||||||
Other revenue | — | — | — | — | 8 | — | — | 8 | ||||||||||||||||||||||||
Total operating revenue | — | 27,471 | — | 155,002 | 75 | — | (1,919 | ) | 180,629 | |||||||||||||||||||||||
Cost of Purchased Gas and Crude | 48 | 27,670 | — | 147,148 | — | — | (1,919 | ) | 172,947 | |||||||||||||||||||||||
Net Margin | (48 | ) | (199 | ) | — | 7,854 | 75 | — | — | 7,682 | ||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||
Field operating and maintenance | 2 | 60 | — | 802 | 448 | 1 | — | 1,313 | ||||||||||||||||||||||||
Impairment expense | — | 710 | 3,009 | — | — | — | — | 3,719 | ||||||||||||||||||||||||
General and administrative | 4,142 | 402 | 22 | 2,986 | 14 | 49 | — | 7,615 | ||||||||||||||||||||||||
Depreciation and amortization | 253 | 28 | — | 1,128 | 402 | — | — | 1,811 | ||||||||||||||||||||||||
Total operating expense | 4,397 | 1,200 | 3,031 | 4,916 | 864 | 50 | — | 14,458 | ||||||||||||||||||||||||
Income (Loss) from Operations | (4,445 | ) | (1,399 | ) | (3,031 | ) | 2,938 | (789 | ) | (50 | ) | — | (6,776 | ) | ||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||||||||
Interest income | — | 2 | — | — | — | — | — | 2 | ||||||||||||||||||||||||
Interest expense | — | — | — | (140 | ) | — | — | — | (140 | ) | ||||||||||||||||||||||
Unrealized loss on commodity derivative | — | (514 | ) | — | — | — | — | — | (514 | ) | ||||||||||||||||||||||
Realized gain on commodity derivative | — | 302 | — | — | — | — | — | 302 | ||||||||||||||||||||||||
Loss on sale of assets | (1 | ) | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||
Total other expense | (1 | ) | (210 | ) | — | (140 | ) | — | — | — | (351 | ) | ||||||||||||||||||||
Net Income (Loss) | $ | (4,446 | ) | $ | (1,609 | ) | $ | (3,031 | ) | $ | 2,798 | $ | (789 | ) | $ | (50 | ) | $ | — | $ | (7,127 | ) |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 25,123 | $ | 845 | $ | 76 | $ | 1,046 | $ | 488 | $ | 558 | $ | — | $ | 28,136 | ||||||||||||||||
Accounts receivable | 1,005 | — | — | — | — | 1,422 | (2,427 | ) | — | |||||||||||||||||||||||
Other current assets | 222 | 32 | — | 36 | — | — | — | 290 | ||||||||||||||||||||||||
Short-term investments | 351 | — | — | 505 | — | — | — | 856 | ||||||||||||||||||||||||
Total current assets | 26,701 | 877 | 76 | 1,587 | 488 | 1,980 | (2,427 | ) | 29,282 | |||||||||||||||||||||||
Property and Equipment: | ||||||||||||||||||||||||||||||||
Land | 324 | — | — | — | — | — | — | 324 | ||||||||||||||||||||||||
Buildings | 417 | — | — | — | — | — | — | 417 | ||||||||||||||||||||||||
Field equipment and machinery | 112 | 681 | — | — | — | — | — | 793 | ||||||||||||||||||||||||
Vehicles | 8 | — | — | 186 | — | — | — | 194 | ||||||||||||||||||||||||
Office equipment | 746 | — | — | 12 | — | — | — | 758 | ||||||||||||||||||||||||
Less accumulated depreciation | (773 | ) | (6 | ) | — | (7 | ) | — | — | — | (786 | ) | ||||||||||||||||||||
Total property and equipment | 834 | 675 | — | 191 | — | — | — | 1,700 | ||||||||||||||||||||||||
Construction work in progress | 154 | 61 | 4,656 | 59,698 | 3,169 | — | — | 67,738 | ||||||||||||||||||||||||
Net property and equipment | 988 | 736 | 4,656 | 59,889 | 3,169 | — | — | 69,438 | ||||||||||||||||||||||||
Deferred Financing Costs, net | — | — | — | 69 | — | — | — | 69 | ||||||||||||||||||||||||
Investment in Subsidiaries | 70,502 | — | — | 3,554 | — | — | (74,056 | ) | — | |||||||||||||||||||||||
Total Assets | $ | 98,191 | $ | 1,613 | $ | 4,732 | $ | 65,099 | $ | 3,657 | $ | 1,980 | $ | (76,483 | ) | $ | 98,789 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 1,436 | $ | 61 | $ | — | $ | 3,903 | $ | 108 | $ | 1,002 | $ | (2,427 | ) | $ | 4,083 | |||||||||||||||
Accrued liabilities | 150 | — | — | — | — | 167 | — | 317 | ||||||||||||||||||||||||
Total current liabilities | 1,586 | 61 | — | 3,903 | 108 | 1,169 | (2,427 | ) | 4,400 | |||||||||||||||||||||||
Other Long-Term Liabilities | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Members’ Capital | 96,605 | 1,552 | 4,732 | 61,196 | 3,549 | 811 | (74,056 | ) | 94,389 | |||||||||||||||||||||||
Total Liabilities and Members’ Capital | $ | 98,191 | $ | 1,613 | $ | 4,732 | $ | 65,099 | $ | 3,657 | $ | 1,980 | $ | (76,483 | ) | $ | 98,789 |
Saddle Butte Pipeline II, LLC | Optimized Energy Solutions, LLC | Saddle Butte San Juan Midstream, LLC | Saddle Butte Rockies Midstream, LLC | Saddle Butte Rockies Storage and Terminals, LLC | Saddle Butte Operating, LLC | Eliminations Total | Saddle Butte Pipeline II, LLC Total | |||||||||||||||||||||||||
Operating Revenue: | ||||||||||||||||||||||||||||||||
Other revenue | $ | 5 | $ | 23 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 28 | ||||||||||||||||
Total operating revenue | 5 | 23 | — | — | — | — | — | 28 | ||||||||||||||||||||||||
Cost of Purchased Gas and Crude | — | 15 | — | — | — | — | — | 15 | ||||||||||||||||||||||||
Net Margin | 5 | 8 | — | — | — | — | — | 13 | ||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||
Field operating and maintenance | 4 | 76 | — | 105 | 4 | — | — | 189 | ||||||||||||||||||||||||
General and administrative | 5,900 | 466 | 4 | 763 | 1 | 111 | — | 7,245 | ||||||||||||||||||||||||
Depreciation and amortization | 296 | 6 | — | 7 | — | — | — | 309 | ||||||||||||||||||||||||
Total operating expense | 6,200 | 548 | 4 | 875 | 5 | 111 | — | 7,743 | ||||||||||||||||||||||||
Loss from Operations | (6,195 | ) | (540 | ) | (4 | ) | (875 | ) | (5 | ) | (111 | ) | — | (7,730 | ) | |||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||||||||
Interest income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Gain on sale of assets | 487 | — | — | — | — | — | — | 487 | ||||||||||||||||||||||||
Total other income | 487 | — | — | — | — | — | — | 487 | ||||||||||||||||||||||||
Net Loss | $ | (5,708 | ) | $ | (540 | ) | $ | (4 | ) | $ | (875 | ) | $ | (5 | ) | $ | (111 | ) | $ | — | $ | (7,243 | ) |
Noble Midstream Partners LP as Reported | Pro Forma Adjustments | Noble Midstream Partners LP Pro Forma | |||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and Cash Equivalents | $ | 18,026 | $ | 13,418 | (a) | $ | 26,839 | ||||
(4,605 | ) | (b) | |||||||||
Restricted Cash | 37,505 | (37,505 | ) | (b) | — | ||||||
Accounts Receivable — Affiliate | 27,539 | — | 27,539 | ||||||||
Accounts Receivable — Third Party | 2,641 | 10,661 | (a) | 13,302 | |||||||
Other Current Assets | 389 | 1,058 | (a) | 1,447 | |||||||
Total Current Assets | 86,100 | (16,973 | ) | 69,127 | |||||||
Property, Plant and Equipment | |||||||||||
Total Property, Plant and Equipment, Gross | 706,039 | 206,161 | (a) | 912,200 | |||||||
Less: Accumulated Depreciation and Amortization | (44,271 | ) | — | (44,271 | ) | ||||||
Total Property, Plant and Equipment, Net | 661,768 | 206,161 | 867,929 | ||||||||
Intangible Assets | — | 348,743 | (a) | 348,743 | |||||||
Goodwill | — | 100,867 | (a) | 100,867 | |||||||
Investments | 80,461 | — | 80,461 | ||||||||
Deferred Charges | 1,429 | — | 1,429 | ||||||||
Total Assets | $ | 829,758 | $ | 638,798 | $ | 1,468,556 | |||||
LIABILITIES | |||||||||||
Current Liabilities | |||||||||||
Accounts Payable — Affiliate | $ | 1,616 | $ | — | $ | 1,616 | |||||
Accounts Payable — Trade | 109,893 | 18,259 | (a) | 128,152 | |||||||
Ad Valorem Tax | 1,137 | — | 1,137 | ||||||||
Other Current Liabilities | 1,739 | — | 1,739 | ||||||||
Total Current Liabilities | 114,385 | 18,259 | 132,644 | ||||||||
Long-Term Liabilities | |||||||||||
Long-Term Debt | 85,000 | 300,000 | (b) | 385,000 | |||||||
Asset Retirement Obligations | 10,416 | — | 10,416 | ||||||||
Long-Term Portion of Capital Lease | 3,142 | — | 3,142 | ||||||||
Other Long-Term Liabilities | 585 | — | 585 | ||||||||
Total Liabilities | 213,528 | 318,259 | 531,787 | ||||||||
EQUITY | |||||||||||
Partners’ Equity | |||||||||||
Limited Partner | |||||||||||
Common Units (23,712 units outstanding) | 642,616 | (2,095 | ) | (b) | 640,521 | ||||||
Subordinated Units (15,903 units outstanding) | (168,136 | ) | (1,405 | ) | (b) | (169,541 | ) | ||||
General Partner | 520 | — | 520 | ||||||||
Total Partners’ Equity | 475,000 | (3,500 | ) | 471,500 | |||||||
Noncontrolling Interests | 141,230 | 324,039 | (c) | 465,269 | |||||||
Total Equity | 616,230 | 320,539 | 936,769 | ||||||||
Total Liabilities and Equity | $ | 829,758 | $ | 638,798 | $ | 1,468,556 |
Noble Midstream Partners LP as Reported | Saddle Butte II as Reported | Less Saddle Butte II Excluded Properties (1) | Pro Forma Adjustments | Noble Midstream Partners LP Pro Forma | |||||||||||||||
Revenues | |||||||||||||||||||
Midstream Services — Affiliate | $ | 224,401 | $ | — | $ | — | $ | — | $ | 224,401 | |||||||||
Midstream Services — Third Party | 14,880 | 22,803 | — | — | 37,683 | ||||||||||||||
Commodity Sales | — | 739,035 | (7,681 | ) | (701,241 | ) | (d) | 30,113 | |||||||||||
Total Revenues | 239,281 | 761,838 | (7,681 | ) | (701,241 | ) | 292,197 | ||||||||||||
Costs and Expenses | |||||||||||||||||||
Cost of Commodity Sales | — | 732,330 | (7,503 | ) | (701,241 | ) | (d) | 23,586 | |||||||||||
Direct Operating | 54,007 | 3,452 | (2 | ) | — | 57,457 | |||||||||||||
Depreciation and Amortization | 12,953 | 5,637 | (215 | ) | 32,070 | (e) | 50,445 | ||||||||||||
General and Administrative | 13,396 | 9,860 | (4,831 | ) | — | 18,425 | |||||||||||||
Total Operating Expenses | 80,356 | 751,279 | (12,551 | ) | (669,171 | ) | 149,913 | ||||||||||||
Operating Income | 158,925 | 10,559 | 4,870 | (32,070 | ) | 142,284 | |||||||||||||
Other (Income) Expense | |||||||||||||||||||
Interest Expense, Net of Amount Capitalized | 1,603 | 514 | — | 8,250 | (f) | 10,367 | |||||||||||||
Investment and Other Income | (6,334 | ) | 654 | (724 | ) | — | (6,404 | ) | |||||||||||
Total Other (Income) Expense | (4,731 | ) | 1,168 | (724 | ) | 8,250 | 3,963 | ||||||||||||
Income Before Income Taxes | 163,656 | 9,391 | 5,594 | (40,320 | ) | 138,321 | |||||||||||||
Income Tax Provision | 20 | — | — | — | 20 | ||||||||||||||
Net Income | 163,636 | 9,391 | 5,594 | (40,320 | ) | 138,301 | |||||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 23,064 | — | — | (7,791 | ) | (g) | 15,273 | ||||||||||||
Net Income Attributable to Noble Midstream Partners LP | $ | 140,572 | $ | 9,391 | $ | 5,594 | $ | (32,529 | ) | $ | 123,028 | ||||||||
Less: Net Income Attributable to Incentive Distribution Rights | 835 | — | — | — | 835 | ||||||||||||||
Net Income Attributable to Limited Partners | $ | 139,737 | $ | 9,391 | $ | 5,594 | $ | (32,529 | ) | $ | 122,193 | ||||||||
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic and Diluted | |||||||||||||||||||
Common Units | $ | 4.10 | $ | 3.58 | |||||||||||||||
Subordinated Units | $ | 4.10 | $ | 3.58 | |||||||||||||||
Weighted Average Limited Partner Units Outstanding — Basic | |||||||||||||||||||
Common Units | 18,192 | 18,192 | |||||||||||||||||
Subordinated Units | 15,903 | 15,903 | |||||||||||||||||
Weighted Average Limited Partner Units Outstanding — Diluted | |||||||||||||||||||
Common Units | 18,204 | 18,204 | |||||||||||||||||
Subordinated Units | 15,903 | 15,903 |
(1) | Properties retained by Saddle Butte II. |
(a) | Reflects the pro forma effects of the consideration paid and the application of the acquisition method of accounting in measuring the fair value of acquired assets and liabilities in the Saddle Butte acquisition. The following table summarizes the consideration paid for the acquisition and the preliminary determination of the assets and liabilities acquired at the January 31, 2018 acquisition date (in thousands). |
Cash Consideration | $ | 638,529 | |
PDC Energy Payment | 24,120 | ||
Current Liabilities Assumed | 18,259 | ||
Total Purchase Price and Liabilities Assumed | $ | 680,908 | |
Cash | $ | 13,418 | |
Accounts Receivable | 10,661 | ||
Other Current Assets | 1,058 | ||
Property, Plant and Equipment | 206,161 | ||
Intangible Assets (1) | 348,743 | ||
Fair Value of Identifiable Assets | 580,041 | ||
Implied Goodwill (2) | 100,867 | ||
Total Asset Value | $ | 680,908 |
(1) | Our intangible assets are comprised of customer contracts and related relationships acquired in business combinations and recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. Fair value was calculated using the multi-period excess earnings method under the income approach for the existing customers. This valuation method is based on first forecasting gross profit for the existing customers and then applying expected attrition rates. The operating cash flows were calculated by determining the costs required to generate gross profit from the existing customers. The key assumptions include overall gross profit growth, attrition rate of existing customers over time and the discount rate. |
(2) | Implied goodwill is the cost of the acquisition less the fair value of the assets of the acquired business. |
Restricted Cash (1) | $ | 37,505 | |
Borrowing on Revolving Credit Facility | 300,000 | ||
Greenfield Member Funding | 324,039 | ||
Total Cash | 661,544 | ||
Less: Cash Consideration | (638,529 | ) | |
Less: PDC Energy Payment | (24,120 | ) | |
Less: Transaction Expenses | (3,500 | ) | |
Net Cash Outflow | $ | (4,605 | ) |
(1) | Restricted cash represents the amount held in escrow at December 31, 2017 for the purchase of Saddle Butte. |
(c) | Reflects the adjustment of net assets attributable to Greenfield Member’s equity ownership interest of Black Diamond. |
(d) | Reflects adjustment to report Saddle Butte revenues from the purchase and sale of crude oil inventory with the same counterparty on a net basis to conform to our accounting policy in accordance with ASC Topic 845, “Non-monetary Transactions”. |
Estimated New Book Value (in thousands) | Useful Life (in years) | |||||||
Property, Plant and Equipment (in service) | $ | 135,525 | 3 - 30 | (1) | ||||
Construction in Progress | 70,636 | — | ||||||
Intangible Assets | $ | 348,743 | 7 - 14 | (2) | ||||
Reversal of Depreciation Expense Recorded | $ | (5,422 | ) | |||||
Depreciation Expense Based on the Fair Value | 4,552 | |||||||
Amortization Expense Based on the Fair Value | 32,940 | |||||||
Pro Forma Depreciation and Amortization Expense for the Year Ended December 31, 2017 | $ | 32,070 |
(1) | Depreciation is computed over the asset’s estimated useful life using the straight line method based on estimated useful lives. |
(2) | We utilize the straight-line method of amortization for intangible assets with finite lives. The amortization period is reflective of the pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset. |
(f) | Reflects the net interest expense associated with drawing $300 million on our revolving credit facility. The interest rate at December 31, 2017 was 2.75%. A change of 1/8% in the interest rate would have resulted in a change in interest expense of $0.4 million. |
(g) | Reflects the adjustment of net income attributable to Greenfield Member’s equity ownership of Black Diamond. The adjustment (in thousands) is calculated as follows: |
Net Income of Saddle Butte II Acquired Properties for the Year Ended December 31, 2017 | $ | 14,985 | |
Pro Forma Depreciation and Amortization Expense for the Year Ended December 31, 2017 | (32,070 | ) | |
Pro Forma Net Loss of Saddle Butte II Acquired Properties for the Year Ended December 31, 2017 | $ | (17,085 | ) |
Greenfield Member’s Equity Ownership Interest in Black Diamond for the Year Ended December 31, 2017 | 45.6 | % | |
Pro Forma Net Loss Attributable to Greenfield Member’s Equity Ownership of Black Diamond for the Year Ended December 31, 2017 | $ | (7,791 | ) |
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