QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Large accelerated filer | ☐ | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | |||
Emerging growth company | |||||
Number of shares of registrant’s Class A common stock, par value $0.0001 per share issued and outstanding as of July 29, 2020 | |||||
Number of shares of registrant’s Class C common stock, par value $0.0001 per share issued and outstanding as of July 29, 2020 | |||||
Item | Page | |
PART I — FINANCIAL INFORMATION | ||
1. | ||
2. | ||
3. | ||
4. | ||
PART II — OTHER INFORMATION | ||
1. | ||
1A. | ||
5. | ||
6. | ||
• | the scope, duration, and reoccurrence of any epidemics or pandemics (including specifically the coronavirus disease 2019 (COVID-19) pandemic) and the actions taken by third parties, including, but not limited to, governmental authorities, customers, contractors, and suppliers, in response to such epidemics or pandemics; |
• | the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services; |
• | pipeline and gathering system capacity and availability; |
• | production rates, throughput volumes, reserve levels and development success of dedicated oil and gas fields; |
• | economic and competitive conditions; |
• | the availability of capital; |
• | cash flow and the timing of expenditures; |
• | capital expenditures and other contractual obligations; |
• | weather conditions; |
• | inflation rates; |
• | the availability of goods and services; |
• | legislative, regulatory, or policy changes; |
• | terrorism or cyberattacks; |
• | occurrence of property acquisitions or divestitures; |
• | the integration of acquisitions; |
• | a decline in oil, natural gas, and NGL production, and the impact of general economic conditions on the demand for oil, natural gas, and NGLs; |
• | the impact of environmental, health and safety, and other governmental regulations and of current or pending legislation; |
• | environmental risks; |
• | the effects of competition; |
• | the retention of key members of senior management and key technical personnel; |
• | increases in interest rates; |
• | the effectiveness of the Company’s business strategy; |
• | changes in technology; |
• | market-related risks, such as general credit, liquidity and interest-rate risks; |
• | the timing, amount and terms of the Company’s future issuances of equity and debt securities; |
• | other factors disclosed under Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Company’s most recently filed Annual Report on Form 10-K; |
• | other risks and uncertainties disclosed in the Company’s second-quarter 2020 earnings release; |
• | other factors disclosed under Part II, Item 1A-Risk Factors in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020; |
• | other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q; and |
• | any other factors disclosed in the other filings that the Company makes with the Securities and Exchange Commission (SEC). |
• | Bbl. One stock tank barrel of 42 United States (U.S.) gallons liquid volume used herein in reference to crude oil, condensate or NGLs. |
• | Bbl/d. One Bbl per day. |
• | Bcf. One billion cubic feet of natural gas. |
• | Bcf/d. One Bcf per day. |
• | Btu. One British thermal unit, which is the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit. |
• | Field. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations. |
• | Formation. A layer of rock which has distinct characteristics that differs from nearby rock. |
• | MBbl. One thousand barrels of crude oil, condensate or NGLs. |
• | MBbl/d. One MBbl per day. |
• | Mcf. One thousand cubic feet of natural gas. |
• | Mcf/d. One Mcf per day. |
• | MMBbl. One million barrels of crude oil, condensate or NGLs. |
• | MMBtu. One million British thermal units. |
• | MMcf. One million cubic feet of natural gas. |
• | MMcf/d. One MMcf per day. |
• | NGLs. Natural gas liquids. Hydrocarbons found in natural gas, which may be extracted as liquefied petroleum gas and natural gasoline. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
REVENUES: | ||||||||||||||||
Midstream services revenue — affiliate (Note 2) | $ | $ | $ | $ | ||||||||||||
Total revenues | ||||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Operations and maintenance(1) | ||||||||||||||||
General and administrative(2) | ||||||||||||||||
Depreciation and accretion | ||||||||||||||||
Taxes other than income | ||||||||||||||||
Total costs and expenses | ||||||||||||||||
OPERATING INCOME (LOSS) | ( | ) | ( | ) | ||||||||||||
OTHER INCOME (LOSS): | ||||||||||||||||
Unrealized derivative instrument loss | ( | ) | ( | ) | ||||||||||||
Interest income | ||||||||||||||||
Income (loss) from equity method interests, net | ( | ) | ( | ) | ||||||||||||
Other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Total other income (loss) | ( | ) | ( | ) | ||||||||||||
Financing costs, net of capitalized interest | ||||||||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES | ( | ) | ( | ) | ||||||||||||
Current income tax benefit | ( | ) | ||||||||||||||
Deferred income tax benefit | ( | ) | ( | ) | ||||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | ( | ) | ( | ) | ||||||||||||
Net income attributable to Preferred Unit limited partners | ||||||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net loss attributable to Apache limited partner | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS, PER SHARE(3) | ||||||||||||||||
Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
WEIGHTED AVERAGE SHARES(3) | ||||||||||||||||
Basic | ||||||||||||||||
Diluted | ||||||||||||||||
(1) | Includes amounts of $ |
(2) | Includes amounts of $ |
(3) | Share and p |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||||||||||
Share of equity method interests other comprehensive income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | ( | ) | ( | ) | ( | ) | ||||||||||
Comprehensive income attributable to Preferred Unit limited partners | ||||||||||||||||
Comprehensive loss attributable to Apache limited partner | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
COMPREHENSIVE LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Accounts receivable from Apache Corporation (Note 1) | ||||||||
Revenue receivables (Note 3) | ||||||||
Inventories | ||||||||
Prepaid assets and other | ||||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||
Property, plant and equipment | ||||||||
Less: Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
OTHER ASSETS: | ||||||||
Equity method interests | ||||||||
Deferred charges and other | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable to Apache Corporation (Note 1) | $ | $ | ||||||
Current debt (Note 5) | ||||||||
Other current liabilities (Note 6) | ||||||||
LONG-TERM DEBT | ||||||||
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES: | ||||||||
Asset retirement obligation | ||||||||
Embedded derivative | ||||||||
Other non-current liabilities | ||||||||
Total liabilities | ||||||||
COMMITMENTS AND CONTINGENCIES (Note 7) | ||||||||
Redeemable noncontrolling interest — Apache limited partner | ||||||||
Redeemable noncontrolling interest — Preferred Unit limited partners | ||||||||
EQUITY: | ||||||||
Class A Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 3,746,460 shares issued and outstanding at June 30, 2020 and December 31, 2019(1) | ||||||||
Class C Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 12,500,000 shares issued and outstanding at June 30, 2020 and December 31, 2019(1) | ||||||||
Additional paid-in capital | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
( | ) | |||||||
Total liabilities, noncontrolling interests, and equity | $ | $ | ||||||
(1) | Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) including noncontrolling interests | $ | ( | ) | $ | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Unrealized derivative instrument loss | ||||||||
Depreciation and accretion | ||||||||
Deferred income tax benefit | ( | ) | ||||||
Income (loss) from equity method interests, net | ( | ) | ||||||
Distributions from equity method interests | ||||||||
Other | ( | ) | ||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in inventories | ( | ) | ||||||
Increase in prepaid assets and other | ( | ) | ( | ) | ||||
Decrease in revenue receivables (Note 2) | ||||||||
(Increase) decrease in account receivables from/payable to affiliate | ( | ) | ||||||
Increase in accrued expenses | ||||||||
Increase deferred credits and noncurrent liabilities | ||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures(1) | ( | ) | ( | ) | ||||
Proceeds from sale of assets | ||||||||
Contributions to equity method interests | ( | ) | ( | ) | ||||
Distributions from equity method interests | ||||||||
Acquisition of equity method interests | ( | ) | ||||||
Capitalized interest paid | ( | ) | ||||||
NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Redeemable noncontrolling interest — Preferred Unit limited partners, net | ||||||||
Proceeds from revolving credit facility | ||||||||
Finance lease | ( | ) | ( | ) | ||||
Deferred facility fees | ( | ) | ( | ) | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
DECREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | ||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||||
SUPPLEMENTAL CASH FLOW DATA: | ||||||||
Accrued capital expenditures(2) | $ | $ | ||||||
Finance lease liability(3) | ||||||||
Interest paid, net of capitalized interest | ||||||||
Cash received for income tax refunds | ||||||||
(1) | Following the Business Combination (as defined herein), capital expenditure amounts represent the portion of the total settlements with Apache in the period that are capital in nature, pursuant to the terms of the Construction, Operations and Maintenance Agreement (COMA). Refer to Note 1—Summary of Significant Accounting Policies and Note 2—Transactions with Affiliates for more information. |
(2) | Includes $ |
(3) |
Redeemable Noncontrolling Interest — Preferred Unit Limited Partners(1) | Redeemable Noncontrolling Interest — Apache Limited Partner | Class A Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Equity | |||||||||||||||||||||||||||||||
Shares(2) | Amount | Shares(2) | Amount | |||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||
For the Quarter Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||
Issuance of Series A Cumulative Redeemable Preferred Units | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Net income (loss) | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Accretion of redeemable noncontrolling interest | — | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Change in redemption value of noncontrolling interests | — | ( | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||
Accumulated other comprehensive loss | — | ( | ) | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
For the Quarter Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
Net income (loss) | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Accumulated other comprehensive income | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
(1) | Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units. |
(2) | Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
Redeemable Noncontrolling Interest — Preferred Unit Limited Partners(1) | Redeemable Noncontrolling Interest — Apache Limited Partner | Class A Common Stock | Class C Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Total Equity | |||||||||||||||||||||||||||||||
Shares(2) | Amount | Shares(2) | Amount | |||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||
Issuance of Series A Cumulative Redeemable Preferred Units | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Net income (loss) | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Accretion of redeemable noncontrolling interest | — | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Change in redemption value of noncontrolling interests | — | ( | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||
Accumulated other comprehensive loss | — | ( | ) | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
For the Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
Net income (loss) | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Change in redemption value of noncontrolling interests | — | ( | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Accumulated other comprehensive loss | — | ( | ) | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
(1) | Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units. |
(2) | Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
MIDSTREAM SERVICES REVENUE — AFFILIATE: | |||||||||||||||
Gas gathering and compression | $ | $ | $ | $ | |||||||||||
Gas processing | |||||||||||||||
Transmission | |||||||||||||||
NGL transmission | |||||||||||||||
Other | |||||||||||||||
$ | $ | $ | $ | ||||||||||||
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Gathering, processing and transmission systems and facilities | $ | $ | ||||||
Construction in progress(1) | ||||||||
Other property and equipment | ||||||||
Total property, plant and equipment | ||||||||
Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Total property, plant and equipment, net | $ | $ | ||||||
(1) | Included in construction in progress was capitalized interest of $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||
Interest income | $ | $ | $ | $ | |||||||||||
Interest expense | $ | $ | $ | $ | |||||||||||
Amortization of deferred facility fees | |||||||||||||||
Capitalized interest | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Financing costs, net of capitalized interest | $ | $ | $ | $ | |||||||||||
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Accrued taxes other than income | $ | $ | ||||||
Accrued operations and maintenance expense | ||||||||
Accrued incentive compensation | ||||||||
Accrued professional and consulting fees | ||||||||
Accrued capital costs | ||||||||
Accrued finance lease liability | ||||||||
Other | ||||||||
Total other current liabilities | $ | $ | ||||||
June 30, 2020 | December 31, 2019 | |||||||||
Ownership | Amount | Amount | ||||||||
(In thousands) | ||||||||||
Gulf Coast Express Pipeline LLC | $ | $ | ||||||||
EPIC Crude Holdings, LP | ||||||||||
Permian Highway Pipeline LLC | ||||||||||
Breviloba, LLC | ||||||||||
$ | $ | |||||||||
Gulf Coast Express Pipeline LLC | EPIC Crude Holdings, LP | Permian Highway Pipeline LLC | Breviloba, LLC | |||||||||||||||||
Total | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | |||||||||||||||
Contributions | ||||||||||||||||||||
Distributions | ( | ) | ( | ) | ( | ) | ||||||||||||||
Capitalized interest(1) | ||||||||||||||||||||
Equity income (loss), net(2) | ( | ) | ||||||||||||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||
(1) | Altus’ proportionate share of the Permian Highway Pipeline (PHP) construction costs is funded with the revolving credit facility. Accordingly, Altus capitalized $ |
(2) | As of June 30, 2020, the amount of consolidated retained earnings, net of amortized basis differences, which represents undistributed earnings, was $ |
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||
2020 | 2019(1) | |||||||||||||||||||||||||||||||
Gulf Coast Express Pipeline LLC | EPIC Crude Holdings, LP | Permian Highway Pipeline LLC | Breviloba, LLC | Gulf Coast Express Pipeline LLC | EPIC Crude Holdings, LP | Permian Highway Pipeline LLC | Breviloba, LLC | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||
Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net income (loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
(1) | Although the Company’s interests in EPIC Crude Holdings, LP, Permian Highway Pipeline LLC, and Breviloba, LLC were acquired in March, May, and July of 2019, respectively, the financial results are presented for the six months ended June 30, 2019 for comparability. |
June 12, 2019 | ||||
(In thousands) | ||||
Transaction price, gross | $ | |||
Issue discount | ( | ) | ||
Transaction costs to other third parties | ( | ) | ||
Transaction price, net | $ | |||
June 12, 2019 | ||||
(In thousands) | ||||
Redeemable noncontrolling interest - Preferred Units | $ | |||
Long-term liability: Embedded derivative(1) | ||||
$ | ||||
(1) | See Note 13—Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative. |
Six Months Ended June 30, 2020 | |||||||
Units Outstanding | Financial Position(2) | ||||||
(In thousands, except for unit data) | |||||||
Redeemable noncontrolling interest — Preferred Units: at December 31, 2019 | $ | ||||||
Distribution of in-kind additional Preferred Units | — | ||||||
Allocation of Altus Midstream net income | N/A | ||||||
Redeemable noncontrolling interest — Preferred Units: at June 30, 2020 | $ | ||||||
Embedded derivative liability(1) | |||||||
$ | |||||||
(1) | See Note 13—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period. |
(2) | As of June 30, 2020, the aggregate Redemption Price was $ |
Three Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
Loss | Shares(1) | Per Share(1) | Loss | Shares(1) | Per Share(1) | ||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
Basic and diluted: | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Redeemable noncontrolling interest — Apache limited partner | $ | $ | |||||||||||||||||||
Diluted(2): | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
Six Months Ended June 30, | |||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||
Loss | Shares(1) | Per Share(1) | Loss | Shares(1) | Per Share(1) | ||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Redeemable noncontrolling interest — Apache limited partner | $ | ( | ) | $ | |||||||||||||||||
Diluted(2): | |||||||||||||||||||||
Net loss attributable to Class A common shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||
(1) | Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split which was effected June 30, 2020. Refer to Note 9—Equity for further information. |
(2) | The effect of the exchange of outstanding Common Units of Altus Midstream (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) would have been anti-dilutive for the three month periods ended June 30, 2020 and 2019, and also for the six month period ended June 30, 2019. |
• | an assumed exchange of the outstanding Preferred Units of Altus Midstream for shares of Class A Common Stock; and |
• | outstanding warrants of the Company to purchase an aggregate |
Quantitative Information About Level 3 Fair Value Measurements | ||||||||||
Fair Value at June 30, 2020 | Valuation Technique | Significant Unobservable Inputs | Range/Value | |||||||
(In thousands) | ||||||||||
Preferred Units Embedded Derivative | $ | Option Model | Altus Midstream Company’s Imputed Interest Rate | 14.16-15.57% | ||||||
Interest Rate Volatility | ||||||||||
• | a 16 percent equity interest in the Gulf Coast Express Pipeline Project (GCX), which is owned and operated by Kinder Morgan Texas Pipeline, LLC (Kinder Morgan); |
• | a 15 percent equity interest in the EPIC crude oil pipeline (EPIC), which is owned by EPIC Pipeline LP and operated by EPIC Consolidated Operations, LLC; |
• | an approximate 26.7 percent equity interest in the Permian Highway Pipeline (PHP), which is also owned and operated by Kinder Morgan; and |
• | a 33 percent equity interest in the Shin Oak NGL Pipeline (Shin Oak), which is owned by Breviloba, LLC, and operated by Enterprise Products Operating LLC. |
• | Throughput volumes and associated revenues; |
• | Costs and expenses; and |
• | Adjusted EBITDA (as defined below). |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Reconciliation of net income (loss) including noncontrolling interests | |||||||||||||||
Net income (loss) including noncontrolling interests | $ | 17,662 | $ | (5,498 | ) | $ | (9,130 | ) | $ | 230 | |||||
Add: | |||||||||||||||
Financing costs, net of capitalized interest | 292 | 478 | 565 | 986 | |||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | |||||||||||
Unrealized derivative instrument loss | 10,585 | — | 72,569 | — | |||||||||||
Equity method interests Adjusted EBITDA | 28,231 | (60 | ) | 51,917 | 166 | ||||||||||
Other | — | — | 290 | — | |||||||||||
Less: | |||||||||||||||
Gain on sale of assets, net | 264 | — | 76 | — | |||||||||||
Interest income | 2 | 806 | 9 | 2,967 | |||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | |||||||||
Income tax benefit | — | 430 | 696 | 5 | |||||||||||
Other | 2 | — | 2 | — | |||||||||||
Adjusted EBITDA | $ | 43,641 | $ | 4,088 | $ | 90,183 | $ | 16,196 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
REVENUES: | |||||||||||||||
Midstream services revenue — affiliate | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 | |||||||
Total revenues | 31,616 | 24,139 | 72,383 | 57,985 | |||||||||||
COSTS AND EXPENSES: | |||||||||||||||
Operations and maintenance | 9,508 | 14,005 | 20,099 | 30,403 | |||||||||||
General and administrative | 2,988 | 2,081 | 7,166 | 5,072 | |||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | |||||||||||
Taxes other than income | 3,347 | 3,888 | 6,790 | 6,463 | |||||||||||
Total costs and expenses | 19,905 | 29,081 | 42,031 | 58,696 | |||||||||||
OPERATING INCOME (LOSS) | 11,711 | (4,942 | ) | 30,352 | (711 | ) | |||||||||
OTHER INCOME (LOSS): | |||||||||||||||
Unrealized derivative instrument loss | (10,585 | ) | — | (72,569 | ) | — | |||||||||
Interest income | 2 | 806 | 9 | 2,967 | |||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | |||||||||
Other | (97 | ) | (17 | ) | (274 | ) | (17 | ) | |||||||
Total other income (loss) | 6,243 | (508 | ) | (39,613 | ) | 1,922 | |||||||||
Financing costs, net of capitalized interest | 292 | 478 | 565 | 986 | |||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES | 17,662 | (5,928 | ) | (9,826 | ) | 225 | |||||||||
Current income tax benefit | — | — | (696 | ) | — | ||||||||||
Deferred income tax benefit | — | (430 | ) | — | (5 | ) | |||||||||
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 17,662 | (5,498 | ) | (9,130 | ) | 230 | |||||||||
Net income attributable to Preferred Unit limited partners | 18,764 | 4,143 | 37,026 | 4,143 | |||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | (1,102 | ) | (9,641 | ) | (46,156 | ) | (3,913 | ) | |||||||
Net loss attributable to Apache limited partner | (847 | ) | (7,348 | ) | (36,048 | ) | (2,720 | ) | |||||||
NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ | (255 | ) | $ | (2,293 | ) | $ | (10,108 | ) | $ | (1,193 | ) | |||
KEY PERFORMANCE METRICS: | |||||||||||||||
Adjusted EBITDA(1) | $ | 43,641 | $ | 4,088 | $ | 90,183 | $ | 16,196 | |||||||
OPERATING DATA: | |||||||||||||||
Average throughput volumes of natural gas (MMcf/d) | 434 | 363 | 505 | 463 | |||||||||||
Average volumes of natural gas processed (MMcf/d) | 429 | 363 | 500 | 463 | |||||||||||
(1) | Adjusted EBITDA is not defined by GAAP and should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), net cash provided by (used in) operating activities or any other measures prepared under GAAP. For the definition and reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, see the section entitled Adjusted EBITDA above. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
REVENUES: | ||||||||||||||||
Midstream services revenue — affiliate | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 | ||||||||
Total revenues | $ | 31,616 | $ | 24,139 | $ | 72,383 | $ | 57,985 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Operations and maintenance | $ | 9,508 | $ | 14,005 | $ | 20,099 | $ | 30,403 | |||||||
General and administrative | 2,988 | 2,081 | 7,166 | 5,072 | |||||||||||
Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | |||||||||||
Taxes other than income | 3,347 | 3,888 | 6,790 | 6,463 | |||||||||||
Total costs and expenses | $ | 19,905 | $ | 29,081 | $ | 42,031 | $ | 58,696 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Unrealized derivative instrument loss | $ | (10,585 | ) | $ | — | $ | (72,569 | ) | $ | — | |||||
Interest income | 2 | 806 | 9 | 2,967 | |||||||||||
Income (loss) from equity method interests, net | 16,923 | (1,297 | ) | 33,221 | (1,028 | ) | |||||||||
Other | (97 | ) | (17 | ) | (274 | ) | (17 | ) | |||||||
Total other income (loss) | $ | 6,243 | $ | (508 | ) | $ | (39,613 | ) | $ | 1,922 | |||||
Interest expense | $ | 2,007 | $ | 1,030 | $ | 5,365 | $ | 1,739 | |||||||
Amortization of deferred facility fees | 292 | 221 | 565 | 415 | |||||||||||
Capitalized interest | (2,007 | ) | (773 | ) | (5,365 | ) | (1,168 | ) | |||||||
Financing costs, net of capitalized interest | $ | 292 | $ | 478 | $ | 565 | $ | 986 | |||||||
• | A 16.0 percent interest in GCX, which delivers natural gas from the Waha area in West Texas to Agua Dulce near the Texas Gulf Coast. Full commercial service began at the end of September 2019, and the total capacity of 2.0 Bcf/d is fully subscribed under long-term contracts. |
• | A 15.0 percent interest in EPIC, which began full service during the second quarter of 2020. The pipeline has initial capacity of approximately 600 MBbl/d and transports crude oil from Orla, Texas to the Port of Corpus Christi, Texas. |
• | An approximate 26.7 percent interest in PHP, a long-haul pipeline under construction that is expected to have approximately 2.1 Bcf/d of natural gas transportation capacity. The pipeline will transport natural gas from the Waha area in northern Pecos County, Texas, to the Katy, Texas area, with connections to Texas Gulf Coast and other markets. PHP is anticipated to be in service in early 2021. |
• | A 33.0 percent interest in Shin Oak, which transports NGLs primarily from the Permian Basin to Mont Belvieu, Texas. Shin Oak, which was in-service when the Company acquired its equity interest in the pipeline during the third quarter of 2019, has capacity of approximately 550 MBbl/d. |
For the Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Sources of cash and cash equivalents: | ||||||||
Redeemable noncontrolling interest — Preferred Unit limited partners, net | $ | — | $ | 611,249 | ||||
Proceeds from revolving credit facility | 97,000 | — | ||||||
Proceeds from sale of assets | 6,773 | — | ||||||
Capital distributions from equity method interests | 4,211 | — | ||||||
Net cash provided by operating activities | 86,797 | 21,688 | ||||||
$ | 194,781 | $ | 632,937 | |||||
Uses of cash and cash equivalents: | ||||||||
Capital expenditures(1) | $ | (26,520 | ) | $ | (259,295 | ) | ||
Contributions to and acquisition of equity method interests | (154,386 | ) | (438,403 | ) | ||||
Finance lease payments | (11,789 | ) | (7,462 | ) | ||||
Deferred facility fees | (816 | ) | (792 | ) | ||||
Capitalized interest paid | (5,373 | ) | — | |||||
(198,884 | ) | (705,952 | ) | |||||
Decrease in cash and cash equivalents | $ | (4,103 | ) | $ | (73,015 | ) | ||
(1) | The table presents capital expenditures on a cash basis; therefore, the amounts may differ from those discussed elsewhere in this document, which include accruals. |
June 30, 2020 | December 31, 2019 | |||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 1,880 | $ | 5,983 | ||||
Total debt | 493,000 | 405,767 | ||||||
Available committed borrowing capacity | 307,000 | 404,000 | ||||||
EXHIBIT NO. | DESCRIPTION | |
2.1*** | – | |
3.1 | – | |
3.2 | – | |
3.3 | – | |
10.1* | – | |
10.2* | – | |
31.1* | – | |
31.2* | – | |
32.1** | – | |
101* | – | The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL: (i) Statement of Consolidated Operations, (ii) Statement of Consolidated Comprehensive Income (Loss), (iii) Consolidated Balance Sheet, (iv) Statement of Consolidated Cash Flows, (v) Statement of Consolidated Changes in Equity and Noncontrolling Interests and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
101.SCH* | – | Inline XBRL Taxonomy Schema Document. |
101.CAL* | – | Inline XBRL Calculation Linkbase Document. |
101.DEF* | – | Inline XBRL Definition Linkbase Document. |
101.LAB* | – | Inline XBRL Label Linkbase Document. |
101.PRE* | – | Inline XBRL Presentation Linkbase Document. |
104* | – | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith. |
** Furnished herewith. |
*** Schedules and exhibits to this Exhibit have been omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
ALTUS MIDSTREAM COMPANY | |||
Dated: | July 30, 2020 | /s/ Ben C. Rodgers | |
Ben C. Rodgers | |||
Chief Financial Officer and Treasurer | |||
(Principal Financial Officer) | |||
Dated: | July 30, 2020 | /s/ Rebecca A. Hoyt | |
Rebecca A. Hoyt | |||
Senior Vice President, Chief Accounting Officer, and Controller | |||
(Principal Accounting Officer) | |||
1. | Amendment. Section 4.01(b)(v) of the Existing Limited Partnership Agreement is hereby amended to add the following proviso at the end of such subsection: “; and provided further, that, the Partnership may at any time make payments of cash in lieu of the issuance of any fractional Units in connection with any subdivision or combination of Series A Junior Securities or Series A Parity Securities in accordance with Section 3.04.” |
2. | Approvals. Consistent with its sole power and authority pursuant to Section 16.03 of the Existing Limited Partnership Agreement, this First Amendment has been adopted and approved solely by the General Partner. |
3. | Continuing Effect. Except as modified by this First Amendment, the Existing Limited Partnership Agreement shall remain in full force and effect in all respects. |
4. | Governing Law. This First Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. |
GENERAL PARTNER: | |
ALTUS MIDSTREAM GP LLC | |
By: | /s/ Ben C. Rodgers |
Name: | Ben C. Rodgers, |
Title: | Chief Financial Officer and Treasurer |
1. | Undefined capitalized terms used herein, including Exhibit A hereto, have the meaning given them in the Lease. The Lease is amended as follows: |
a. | Effective upon Landlord’s sale and conveyance of all or any portion of the Shared Land, the Term and the Lease automatically shall terminate as to the portion of the Premises so sold and conveyed and neither Landlord nor Tenant shall have any further right or obligation under the Lease with respect thereto except (i) for those under provisions that expressly survive any expiration or termination of the Term or the Lease and (ii) Rent and other obligations accrued before, and remaining unpaid or unperformed on, the date of such termination. If less than all of the Shared Land is sold and conveyed, then thereupon (i) the Lease shall terminate only as to that portion of the Premises which is subject to any such partial sale and conveyance, and (ii) Rent shall be adjusted as set forth in Exhibit A attached hereto and incorporated herein by this reference. |
b. | Tenant’s rights to use the Man-Camp expire and cease as of the Amendment Effective Date. |
2. | The Lease remains in full force and effect in accordance with its terms as amended by Section 1 of this Amendment. If there is any conflict between the Lease and this Amendment, this Amendment shall control. |
3. | This Amendment shall be governed by, and construed in accordance with, the law of the State of Texas, without regard to any conflicts of law provisions that might require the application of the laws of any other jurisdiction. |
4. | The parties may execute this Amendment in multiple original counterparts, each of which shall have the full force and effect of an original, but constituting only one instrument. |
LANDLORD | |
APACHE CORPORATION | |
By: | /s/ Timothy R. Custer |
Timothy R. Custer | |
Senior Vice President, Commercial | |
TENANT | |
ALTUS MIDSTREAM LP | |
By: | Altus Midstream GP LLC, its General Partner |
By: | /s/ Clay Bretches |
Clay Bretches | |
Chief Executive Officer and President | |
Upon Closing of Sale of Less than 100% of Shared Land | ||||
Area Depicted on Exhibit A to Lease | Base Rent/Month for Remainder of Term | Operating Rent for Remainder of Term | ||
Upon sale of less than 100% of Shared Land, sold Shared Land is excluded from Lease. | Reduced by product of $1,750 multiplied by Tenant’s Share (after giving effect to any adjustments in column 3 of this table) (“Shared Land Rent Adjustment”) | Addressed below in respect of specific sales. | ||
Upon sale of Shared Land upon which Field Office 100% Midstream is located, Field Office 100% Midstream is excluded from Lease. | Reduced by sum of $21,382.67 plus Shared Land Rent Adjustment | Tenant’s Share adjusted to exclude Field Office 100% Midstream | ||
Upon sale of Shared Land upon which Warehouse is located, Warehouse is excluded from Lease. | Reduced by sum of $16,493.17 plus Shared Land Rent Adjustment | Tenant’s Share adjusted to exclude Warehouse | ||
Upon sale of Shared Land upon which Shop is located, Shop is excluded from Lease. | Reduced by sum of $3,850.28 plus Shared Land Rent Adjustment | Tenant’s Share adjusted to exclude Shop | ||
Upon sale of Shared Land upon which Storage Yard is located, Storage Yard (or sold portion) is excluded from Lease. | Reduced by sum of $1,976.21 plus Shared Land Rent Adjustment (“Whole Reduction”); if sell less than 100% of Shared Land upon which Storage Yard is located, reduction is Whole Reduction multiplied by a fraction, numerator of which is acres sold and denominator of which is 8.25. | No change | ||
Upon sale of Shared Land upon which Field Office 100% Upstream is located, Field Office 100% Upstream remains excluded from Lease. | No change | No change | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of Altus Midstream Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Clay Bretches | ||
Clay Bretches | ||
Chief Executive Officer and President (Principal Executive Officer) | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of Altus Midstream Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Ben C. Rodgers | |||
Ben C. Rodgers | |||
Chief Financial Officer and Treasurer (Principal Financial Officer) | |||
ALTUS MIDSTREAM COMPANY |
Certification of Principal Executive Officer and Principal Financial Officer |
/s/ Clay Bretches | |||
By: | Clay Bretches | ||
Title: | Chief Executive Officer and President (Principal Executive Officer) | ||
/s/ Ben C. Rodgers | |||
By: | Ben C. Rodgers | ||
Title: | Chief Financial Officer and Treasurer (Principal Financial Officer) | ||
STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) - 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 revenue — affiliate (Note 2) | $ 31,616 | $ 24,139 | $ 72,383 | $ 57,985 | ||||||
| COSTS AND EXPENSES: | ||||||||||
| Operations and maintenance | [1] | 9,508 | 14,005 | 20,099 | 30,403 | |||||
| General and administrative | [2] | 2,988 | 2,081 | 7,166 | 5,072 | |||||
| Depreciation and accretion | 4,062 | 9,107 | 7,976 | 16,758 | ||||||
| Taxes other than income | 3,347 | 3,888 | 6,790 | 6,463 | ||||||
| Total costs and expenses | 19,905 | 29,081 | 42,031 | 58,696 | ||||||
| OPERATING INCOME (LOSS) | 11,711 | (4,942) | 30,352 | (711) | ||||||
| OTHER INCOME (LOSS): | ||||||||||
| Unrealized derivative instrument loss | (10,585) | 0 | (72,569) | 0 | ||||||
| Interest income | 2 | 806 | 9 | 2,967 | ||||||
| Income (loss) from equity method interests, net | 16,923 | (1,297) | 33,221 | (1,028) | ||||||
| Other | (97) | (17) | (274) | (17) | ||||||
| Total other income (loss) | 6,243 | (508) | (39,613) | 1,922 | ||||||
| Financing costs, net of capitalized interest | 292 | 478 | 565 | 986 | ||||||
| NET INCOME (LOSS) BEFORE INCOME TAXES | 17,662 | (5,928) | (9,826) | 225 | ||||||
| Current income tax benefit | 0 | 0 | (696) | 0 | ||||||
| Deferred income tax benefit | 0 | (430) | 0 | (5) | ||||||
| NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 17,662 | (5,498) | (9,130) | 230 | ||||||
| Net income attributable to Preferred Unit limited partners | 18,764 | 4,143 | 37,026 | 4,143 | ||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | (1,102) | (9,641) | (46,156) | (3,913) | ||||||
| Net loss attributable to Apache limited partner | (847) | (7,348) | (36,048) | (2,720) | ||||||
| NET LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | $ (255) | $ (2,293) | $ (10,108) | $ (1,193) | ||||||
| NET LOSS ATTRIBUTABLETO CLASS A COMMON SHAREHOLDERS, PER SHARE | ||||||||||
| Basic (in USD per share) | [3] | $ (0.07) | $ (0.61) | $ (2.70) | $ (0.32) | |||||
| Diluted (in USD per share) | [3] | $ (0.07) | $ (0.61) | $ (2.84) | $ (0.32) | |||||
| WEIGHTED AVERAGE SHARES | ||||||||||
| Basic (in shares) | [3] | 3,746 | 3,746 | 3,746 | 3,746 | |||||
| Diluted (in shares) | [3] | 3,746 | 3,746 | 16,246 | 3,746 | |||||
| ||||||||||
STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
| Gathering, processing, and transmission | [1] | $ 9,508 | $ 14,005 | $ 20,099 | $ 30,403 | |||
| General and administrative | [2] | 2,988 | 2,081 | 7,166 | 5,072 | |||
| Affiliated Entity | Service Agreements | Apache | ||||||||
| Gathering, processing, and transmission | 1,300 | 2,000 | 2,800 | 4,900 | ||||
| General and administrative | $ 1,600 | $ 1,000 | $ 3,600 | $ 2,600 | ||||
| ||||||||
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | $ 17,662 | $ (5,498) | $ (9,130) | $ 230 |
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||
| Share of equity method interests other comprehensive income (loss) | 390 | (1,043) | (794) | (1,043) |
| COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS | 18,052 | (6,541) | (9,924) | (813) |
| COMPREHENSIVE LOSS ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS | (165) | (2,493) | (10,291) | (1,393) |
| Preferred Unit limited partners | ||||
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||
| Comprehensive income (loss) attributable to noncontrolling interest | 18,764 | 4,143 | 37,026 | 4,143 |
| Apache limited partner | ||||
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||
| Comprehensive income (loss) attributable to noncontrolling interest | $ (547) | $ (8,191) | $ (36,659) | $ (3,563) |
CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Class A Common Stock | ||
| Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
| Common stock, shares issued (in shares) | 3,746,460 | 3,746,460 |
| Common stock, shares outstanding (in shares) | 3,746,460 | 3,746,460 |
| Class C Common Stock | ||
| Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized (in shares) | 1,500,000,000 | 1,500,000,000 |
| Common stock, shares issued (in shares) | 12,500,000 | 12,500,000 |
| Common stock, shares outstanding (in shares) | 12,500,000 | 12,500,000 |
STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) - USD ($) $ in Thousands |
6 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) including noncontrolling interests | $ (9,130) | $ 230 | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Unrealized derivative instrument loss | 72,569 | 0 | ||||||
| Depreciation and accretion | 7,976 | 16,758 | ||||||
| Deferred income tax benefit | 0 | (5) | ||||||
| Income (loss) from equity method interests, net | (33,221) | 1,028 | ||||||
| Distributions from equity method interests | 37,536 | 0 | ||||||
| Other | 489 | (564) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in inventories | 256 | (484) | ||||||
| Increase in prepaid assets and other | (642) | (311) | ||||||
| Decrease in revenue receivables (Note 2) | 1,889 | 1,930 | ||||||
| (Increase) decrease in account receivables from/payable to affiliate | 1,301 | (3,347) | ||||||
| Increase in accrued expenses | 6,392 | 6,453 | ||||||
| Increase deferred credits and noncurrent liabilities | 1,382 | 0 | ||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 86,797 | 21,688 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | [1] | (26,520) | (259,295) | |||||
| Proceeds from sale of assets | 6,773 | 0 | ||||||
| Contributions to equity method interests | (154,386) | (210,238) | ||||||
| Distributions from equity method interests | 4,211 | 0 | ||||||
| Acquisition of equity method interests | 0 | (228,165) | ||||||
| Capitalized interest paid | (5,373) | 0 | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | (175,295) | (697,698) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Redeemable noncontrolling interest — Preferred Unit limited partners, net | 0 | 611,249 | ||||||
| Proceeds from revolving credit facility | 97,000 | 0 | ||||||
| Finance lease | (11,789) | (7,462) | ||||||
| Deferred facility fees | (816) | (792) | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 84,395 | 602,995 | ||||||
| DECREASE IN CASH AND CASH EQUIVALENTS | (4,103) | (73,015) | ||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 5,983 | 449,935 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,880 | 376,920 | ||||||
| SUPPLEMENTAL CASH FLOW DATA: | ||||||||
| Accrued capital expenditures | [2] | 1,409 | 30,330 | |||||
| Finance lease liability | [3] | 0 | 29,000 | |||||
| Interest paid, net of capitalized interest | 0 | 1,493 | ||||||
| Cash received for income tax refunds | $ 696 | $ 0 | ||||||
| ||||||||
STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
6 Months Ended | |||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
| Accrued capital expenditures | [1] | $ 1,409 | $ 30,330 | |
| Affiliated Entity | Apache | ||||
| Accrued capital expenditures | $ 700 | $ 3,600 | ||
| ||||
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS (Unaudited) - USD ($) $ in Thousands |
Total |
Additional Paid-in Capital |
Retained Earnings (Accumulated Deficit) |
Accumulated Other Comprehensive Income (Loss) |
Preferred Unit limited partners |
Redeemable Noncontrolling Interest — Apache Limited Partner |
Class A Common Stock |
Class A Common Stock
Common Stock
|
Class C Common Stock |
Class C Common Stock
Common Stock
|
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Beginning balance at Dec. 31, 2018 | $ 0 | [1] | $ 1,940,500 | ||||||||||||||
| Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
| Issuance of Series A Cumulative Redeemable Preferred Units | 516,790 | ||||||||||||||||
| Net income (loss) | (2,720) | ||||||||||||||||
| Accretion of redeemable noncontrolling interest | $ 779 | $ 779 | 779 | ||||||||||||||
| Change in redemption value of noncontrolling interests | 664,285 | $ 473,502 | 190,783 | (664,285) | |||||||||||||
| Accumulated other comprehensive income (loss) | (843) | ||||||||||||||||
| Ending balance at Jun. 30, 2019 | 520,933 | [1] | 1,272,652 | ||||||||||||||
| Beginning balance, shares (in shares) at Dec. 31, 2018 | 3,746,000 | 12,500,000 | |||||||||||||||
| Beginning balance at Dec. 31, 2018 | (213,714) | 30 | (213,746) | $ 0 | $ 1 | $ 1 | |||||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
| Net income (loss) | (414) | (414) | 3,364 | ||||||||||||||
| Accretion of redeemable noncontrolling interest | 779 | 779 | 779 | ||||||||||||||
| Change in redemption value of noncontrolling interests | 664,285 | 473,502 | 190,783 | (664,285) | |||||||||||||
| Accumulated other comprehensive income (loss) | (200) | (200) | |||||||||||||||
| Ending balance, shares (in shares) at Jun. 30, 2019 | [2] | 3,746,000 | 12,500,000 | ||||||||||||||
| Ending balance at Jun. 30, 2019 | 449,178 | 473,532 | (24,156) | (200) | $ 1 | $ 1 | |||||||||||
| Beginning balance at Mar. 31, 2019 | 0 | [1] | 1,504,500 | ||||||||||||||
| Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
| Issuance of Series A Cumulative Redeemable Preferred Units | 0 | 516,790 | |||||||||||||||
| Net income (loss) | 3,364 | (7,348) | |||||||||||||||
| Accretion of redeemable noncontrolling interest | 779 | 779 | 779 | ||||||||||||||
| Change in redemption value of noncontrolling interests | 223,657 | 32,874 | 190,783 | (223,657) | |||||||||||||
| Accumulated other comprehensive income (loss) | (843) | ||||||||||||||||
| Ending balance at Jun. 30, 2019 | 520,933 | [1] | 1,272,652 | ||||||||||||||
| Beginning balance, shares (in shares) at Mar. 31, 2019 | [2] | 3,746,000 | 12,500,000 | ||||||||||||||
| Beginning balance at Mar. 31, 2019 | 228,014 | 440,658 | (212,646) | 0 | $ 1 | $ 1 | |||||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
| Net income (loss) | (1,514) | (1,514) | |||||||||||||||
| Accretion of redeemable noncontrolling interest | 779 | 779 | 779 | ||||||||||||||
| Change in redemption value of noncontrolling interests | 223,657 | 32,874 | 190,783 | (223,657) | |||||||||||||
| Accumulated other comprehensive income (loss) | (200) | (200) | |||||||||||||||
| Ending balance, shares (in shares) at Jun. 30, 2019 | [2] | 3,746,000 | 12,500,000 | ||||||||||||||
| Ending balance at Jun. 30, 2019 | 449,178 | 473,532 | (24,156) | (200) | $ 1 | $ 1 | |||||||||||
| Beginning balance at Dec. 31, 2019 | 555,599 | [1] | 701,000 | ||||||||||||||
| Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
| Net income (loss) | 37,026 | [1] | (36,048) | ||||||||||||||
| Change in redemption value of noncontrolling interests | 433,710 | 433,710 | (433,710) | ||||||||||||||
| Accumulated other comprehensive income (loss) | (611) | ||||||||||||||||
| Ending balance at Jun. 30, 2020 | 592,625 | [1] | 230,631 | ||||||||||||||
| Beginning balance, shares (in shares) at Dec. 31, 2019 | 3,746,460 | 3,746,000 | 12,500,000 | 12,500,000 | |||||||||||||
| Beginning balance at Dec. 31, 2019 | (353,075) | 39,822 | (392,633) | (266) | $ 1 | $ 1 | |||||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
| Net income (loss) | (10,108) | (10,108) | |||||||||||||||
| Change in redemption value of noncontrolling interests | 433,710 | 433,710 | (433,710) | ||||||||||||||
| Accumulated other comprehensive income (loss) | (183) | (183) | |||||||||||||||
| Ending balance, shares (in shares) at Jun. 30, 2020 | 3,746,460 | 3,746,000 | [2] | 12,500,000 | 12,500,000 | [2] | |||||||||||
| Ending balance at Jun. 30, 2020 | 70,344 | 473,532 | (402,741) | (449) | $ 1 | $ 1 | |||||||||||
| Beginning balance at Mar. 31, 2020 | 573,861 | [1] | 231,178 | ||||||||||||||
| Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
| Net income (loss) | 18,764 | [1] | (847) | ||||||||||||||
| Accumulated other comprehensive income (loss) | 300 | ||||||||||||||||
| Ending balance at Jun. 30, 2020 | $ 592,625 | [1] | $ 230,631 | ||||||||||||||
| Beginning balance, shares (in shares) at Mar. 31, 2020 | [2] | 3,746,000 | 12,500,000 | ||||||||||||||
| Beginning balance at Mar. 31, 2020 | 70,509 | 473,532 | (402,486) | (539) | $ 1 | $ 1 | |||||||||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
| Net income (loss) | (255) | (255) | |||||||||||||||
| Accumulated other comprehensive income (loss) | 90 | 90 | |||||||||||||||
| Ending balance, shares (in shares) at Jun. 30, 2020 | 3,746,460 | 3,746,000 | [2] | 12,500,000 | 12,500,000 | [2] | |||||||||||
| Ending balance at Jun. 30, 2020 | $ 70,344 | $ 473,532 | $ (402,741) | $ (449) | $ 1 | $ 1 | |||||||||||
| |||||||||||||||||
NATURE OF OPERATIONS AND ORGANIZATION |
6 Months Ended |
|---|---|
Jun. 30, 2020 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| NATURE OF OPERATIONS AND ORGANIZATION | Nature of Operations Through its consolidated subsidiaries, the Company owns gas gathering, processing and transmission assets in the Permian Basin of West Texas. Construction on the assets began in the fourth quarter of 2016, and operations commenced in the second quarter of 2017. Additionally, the Company owns equity interests in four separate Permian Basin pipeline entities that have or will have access to various points along the Texas Gulf Coast. The Company’s operations consist of one reportable segment. Organization The Company originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp. (KAAC), for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. KAAC completed its initial public offering in the second quarter of 2017. On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of KAAC. On August 8, 2018, KAAC and Altus Midstream LP entered into a contribution agreement (the Contribution Agreement) with certain wholly-owned subsidiaries of Apache , including the Altus Midstream Entities. The Altus Midstream Entities comprise four Delaware limited partnerships (collectively, Altus Midstream Operating) and their general partner (Altus Midstream Subsidiary GP LLC, a Delaware limited liability company), formed by Apache between May 2016 and January 2017 for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play and surrounding areas (Alpine High). On November 9, 2018 (the Closing Date) and pursuant to the terms of the Contribution Agreement, KAAC acquired from Apache the entire equity interests of the Altus Midstream Entities and options to acquire equity interests in five separate third-party pipeline projects (the Pipeline Options). The acquisition of the entities and the Pipeline Options is referred to herein as the Business Combination. In exchange, the consideration provided to Apache included economic voting and non-economic voting shares in KAAC and common units representing limited partner interests in Altus Midstream LP (Common Units). Following the Closing Date and in connection with the completion of the Business Combination, KAAC changed its name to Altus Midstream Company. Ownership of Altus Midstream LP Following the Closing Date and in connection with the completion of the Business Combination, the Company’s wholly-owned subsidiary, Altus Midstream GP LLC, a Delaware limited liability company (Altus Midstream GP), is the sole general partner of Altus Midstream LP. The Company operates its business through Altus Midstream LP and its subsidiaries, which include Altus Midstream Operating. The Company holds approximately 23.1 percent of the outstanding Common Units, and a controlling interest in Altus Midstream, while Apache holds the remaining 76.9 percent.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
|---|---|
Jun. 30, 2020 | |
| Accounting Policies [Abstract] | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). Principles of Consolidation The consolidated financial results of Altus Midstream are included in the Company’s consolidated financial statements due to the Company’s 100 percent ownership interest in Altus Midstream GP, and Altus Midstream GP’s control of Altus Midstream. The Company has no independent operations or material assets other than its partnership interests in Altus Midstream, which constitutes all of its business. Additionally, the Company’s balance sheet reflects the presentation of noncontrolling interest ownership attributable to the limited partner interests in Altus Midstream held by Apache and the Series A Cumulative Redeemable Preferred Units holders (the Preferred Units). Refer to Note 9—Equity and Note 10—Series A Cumulative Redeemable Preferred Units for further information. Variable Interest Entity Altus Midstream is a variable interest entity (VIE) because the partners in Altus Midstream with equity at risk lack the power, through voting or similar rights, to direct the activities that most significantly impact Altus Midstream’s economic performance. A reporting entity that concludes it has a variable interest in a VIE must evaluate whether it has a controlling financial interest in the VIE, such that it is the VIE’s primary beneficiary and should consolidate. The Company is the primary beneficiary of Altus Midstream, and therefore should consolidate Altus Midstream because (i) the Company has the ability to direct the activities of Altus Midstream that most significantly affect its economic performance, and (ii) the Company has the right to receive benefits or the obligation to absorb losses that could be potentially significant to Altus Midstream. Redeemable Noncontrolling Interest — Apache Limited Partner The Company’s redeemable noncontrolling interest presented in the consolidated financial statements consists of Common Units representing limited partner interests in Altus Midstream held by Apache. Pursuant to certain provisions of the partnership agreement of Altus Midstream (as amended in connection with the Business Combination, and subsequent issuance of Preferred Units, the Amended LPA), the limited partner interests held by Apache are equal to the number of shares of the Company’s Class C common stock, $0.0001 par value (Class C Common Stock), held by Apache. The Company initially recorded the redeemable noncontrolling interest upon the issuance of the Common Units to Apache as part of the Business Combination and based on the recapitalization value ascribed at the Closing Date to the limited partner interest. All or a portion of these Common Units may be redeemed at Apache’s option. The Company has the ability to settle the redemption option either (i) in shares of Class A common stock, $0.0001 par value (Class A Common Stock), on a one-for-one basis or (ii) in cash (based on the fair market value of the Class A Common Stock as determined pursuant to the Contribution Agreement), subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock will be cancelled. The Company’s policy is to record the redeemable noncontrolling interest represented by the Common Units held by Apache at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the redemption value as of the balance sheet date. Redeemable Noncontrolling Interest — Preferred Unit Limited Partners On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. The Preferred Units are accounted for on the Company’s consolidated balance sheets as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s consolidated balance sheet as a long-term liability embedded derivative. See discussion and additional detail further discussed in Note 10—Series A Cumulative Redeemable Preferred Units. Equity Method Interests The Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity interests are carried originally at acquisition cost, increased by Altus’ proportionate share of the equity interest’s net income and contributions made by Altus, and decreased by Altus’ proportionate share of the equity interest’s net losses and distributions received by Altus. Please refer to Note 8—Equity Method Interests, for further details of the Company’s equity method interests. Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements, and changes in these estimates are recorded when known. Fair Value Measurements Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority. The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Embedded features identified within the Company’s agreements are bifurcated and measured at fair value at the end of each period on the Company’s consolidated balance sheet. Such recurring fair value measurements are presented in further detail in Note 13—Fair Value Measurements. The Company also uses fair value measurements on a nonrecurring basis when certain qualitative assessments of its assets indicate a potential impairment. Accounts Receivable From/Payable To Apache The accounts receivable from or payable to Apache represent the net result of Altus Midstream’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache as provided under the COMA between the two entities. Generally, cash in this amount will be transferred to or from Apache in the month after the Company’s transactions are processed and the net results of operations are determined. However, from time to time, the Company may estimate and transfer the cash settlement amount in the month the transactions are processed, in order to minimize related-party working capital balances. See discussion and additional detail in Note 2—Transactions with Affiliates. Change in Accounting Policy Historically, the Company reported income and loss from equity method interests on a one-month reporting lag. Effective October 1, 2019, the Company eliminated this one-month reporting lag. In accordance with ASC 810-10-45-13, “A Change in the Fiscal Year-End Lag Between Subsidiary and Parent” (ASC 810), the elimination of this previously existing reporting lag is considered a voluntary change in accounting principle in accordance with ASC 250-10-50, “Change in Accounting Principle.” The Company believes that this change in accounting principle is preferable as it provides the Company with the ability to present the results of its equity method interests for the same period as all other consolidated results of the Company, which improves overall financial reporting to investors by providing the most current information available. The Company has not retrospectively applied the change in accounting principle since its impact to the consolidated balance sheet and related statements of operations and cash flows was immaterial for all periods. For more information on equity method interests owned by the Company, please refer to Note 8—Equity Method Interests. Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, “Financial Instruments-Credit Losses.” The standard changes the impairment model for trade receivables, held-to-maturity debt securities, net investments in leases, loans, and other financial assets measured at amortized cost. This ASU requires the use of a new forward-looking “expected loss” model compared to the current “incurred loss” model, resulting in accelerated recognition of credit losses. The Company adopted this standard in the first quarter of 2020 with no material impact on its financial statements. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” This pronouncement is part of the Simplification Initiative and simplifies the accounting for income taxes by removing certain exceptions to the general principles of ASC Topic 740 “Income Taxes.” In addition, the amendment improves consistent application of and simplifies GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. This update is effective for the Company beginning in the first quarter of 2021, with early adoption permitted. The Company early adopted this standard in the first quarter of 2020 with no material impact on its financial statements.
|
TRANSACTIONS WITH AFFILIATES |
6 Months Ended |
|---|---|
Jun. 30, 2020 | |
| Related Party Transactions [Abstract] | |
| TRANSACTIONS WITH AFFILIATES | TRANSACTIONS WITH AFFILIATES Revenues The Company has contracted to provide services including gas gathering, compression, processing, transmission, and NGL transmission, pursuant to acreage dedications provided by Apache, comprising the entire Alpine High acreage. In accordance with the terms of these agreements, the Company receives prescribed fees based on the type and volume of product for which the services are provided. For the periods presented, the Company’s only significant customer was Apache. Revenues generated under these agreements are presented on the Company’s statement of consolidated operations as “Midstream services revenue — affiliate.” Revenues earned that have not yet been invoiced to Apache are presented on the Company’s consolidated balance sheet as “Revenue receivables.” Refer to Note 3—Revenue Recognition for further discussion. Cost and Expenses The Company has no employees, and prior to the Business Combination, the Company had no banking or cash management facilities. As such, the Company has contracted with Apache to receive certain operational, maintenance, and management services. In accordance with the terms of these agreements, the Company incurred operations and maintenance expenses of $1.3 million and $2.0 million for the three months ended June 30, 2020 and 2019, respectively, and $2.8 million and $4.9 million for the six months ended June 30, 2020 and 2019, respectively. The Company incurred general and administrative (G&A) expenses of $1.6 million and $1.0 million for the three months ended June 30, 2020 and 2019, respectively, and $3.6 million and $2.6 million for the six months ended June 30, 2020 and 2019, respectively, including expenses related to the operational services agreement and the COMA as further described below. Further information on the related-party operating lease agreement in place during the period is also provided below. Construction, Operations and Maintenance Agreement At the closing of the Business Combination, the Company entered into the COMA with Apache. Under the terms of the COMA, Apache provides certain services related to the design, development, construction, operation, management and maintenance of certain gathering, processing and other midstream assets, on behalf of the Company. In return, the Company paid or will pay fees to Apache of (i) $3.0 million for the period beginning on the execution of the COMA at the closing of the Business Combination through December 31, 2019, (ii) $5.0 million for the period of January 1, 2020 through December 31, 2020, (iii) $7.0 million for the period of January 1, 2021 through December 31, 2021 and (iv) $9.0 million annually thereafter, adjusted based on actual internal overhead and general and administrative costs incurred, until terminated. The annual fee was negotiated as part of the Business Combination to reimburse Apache for indirect costs of performing administrative corporate functions for the Company, including services for information technology, risk management, corporate planning, accounting, cash management, and others. In addition, Apache may be reimbursed for certain internal costs and third-party costs incurred in connection with its role as service provider under the COMA. Costs incurred by Apache directly associated with midstream activity, where substantially all the services are rendered for Altus Midstream, are charged to Altus Midstream on a monthly basis. The COMA stipulates that the Company shall provide reimbursement of amounts owing to Apache attributable to a particular month by no later than the last day of the immediately following month. Unpaid amounts accrue interest until settled. The COMA will continue to be effective until terminated (i) upon the mutual consent of Altus and Apache, (ii) by either of Altus and Apache, at its option, upon 30 days’ prior written notice in the event Apache or an affiliate no longer owns a direct or indirect interest in at least 50 percent of the voting or other equity securities of Altus, or (iii) by Altus if Apache fails to perform any of its covenants or obligations due to willful misconduct of certain key personnel and such failure has a material adverse financial impact on Altus. Lease Agreement Concurrent with the closing of the Business Combination, Altus Midstream entered into an operating lease agreement with Apache (the Lease Agreement) relating to the use of certain office buildings, warehouse and storage facilities located in Reeves County, Texas. Under the terms of the Lease Agreement, Altus Midstream shall pay to Apache on a monthly basis the sum of (i) a base rental charge of $44,500 and (ii) an amount based on Apache’s estimate of the annual costs it expects to incur in connection with the ownership, operation, repair, and/or maintenance of the facilities. The Company incurred total expenses of $0.2 million and $0.3 million for the three months ended June 30, 2020 and 2019, respectively, and $0.4 million and $0.5 million for the six months ended June 30, 2020 and 2019, respectively, in relation to the Lease Agreement, which are included within operations and maintenance expenses. Unpaid amounts accrue interest until settled. The initial term of the Lease Agreement is four years and may be extended by Altus Midstream for three additional, consecutive periods of twenty-four months.
|
REVENUE RECOGNITION |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REVENUE RECOGNITION | REVENUE RECOGNITION Revenue Recognition The following table presents a disaggregation of the Company’s midstream services revenue by service type.
The Company generates revenue from its contracts with customers for the gathering, compression, processing, and transmission of natural gas and NGLs in exchange for a fee per unit of volumes processed during a given month. For all periods presented, revenues with affiliates recorded on the Company’s consolidated statement of operations were attributable to services performed by Altus Midstream for Apache pursuant to separate long-term commercial midstream agreements comprising acreage dedications in Apache’s entire Alpine High resource play. As part of these agreements, substantially all of Apache’s natural gas production from its existing and future owned or controlled properties within the dedicated area is provided to the Company, so long as Apache has the right to market such product. There are no provisions for minimum volume commitments under the existing agreements, and the Company does not own or take title to the volumes it services under these agreements. Altus Midstream, in return for its performance, receives a fee per unit of natural gas or NGLs received during a given month. The service fee charged per unit is set forth for each contract year, subject to yearly fee escalation recalculations. Providing the related service on each volumetric unit represents a single, distinct performance obligation that is satisfied over time as services are rendered. As the amount of volumes serviced are not subject to minimum commitments and each midstream service agreement contains provisions for fee recalculations, substantially all of the transaction price is variable at inception of each contract term. Revenue is measured using the output method based on the amount of volumes serviced each month and the applicable service fee and recognized over time in the amount to which Altus Midstream has the right to invoice, as performance completed to date corresponds directly with the value to its customers. The transaction price is not constrained as variability is resolved prior to the recognition of revenue. Payment under the midstream service agreements are due the month immediately following the month of service. Amounts settled with Apache each month are based on the net amount owed to Altus Midstream or owed to Apache. Revenue receivables from the Company’s contracts with Apache totaled $13.6 million and $15.5 million as of June 30, 2020 and December 31, 2019, respectively, as presented on the Company’s consolidated balance sheet. In accordance with the provisions of ASC Topic 606, “Revenue from Contracts with Customers,” a variable transaction price for each short-term sale is allocated to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.
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PROPERTY, PLANT AND EQUIPMENT |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, at carrying value, is as follows:
The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective balance sheet date. Property, plant, and equipment are evaluated for potential impairment when events or changes in circumstances indicate a possible significant deterioration in future cash flows expected to be generated by an asset group. In conjunction with Apache’s decision in the fourth quarter of 2019 to materially reduce funding to Alpine High, Altus management assessed its long-lived infrastructure assets for impairment given the expected reduction to future throughput volumes. As a result of this assessment, Altus recorded impairments totaling $1.3 billion on its gathering, processing, and transmission assets in the fourth quarter of 2019. The fair values of the impaired assets were determined to be $203.6 million as of the time of the impairment and were estimated using the income approach. Altus has classified these nonrecurring fair value measurements as Level 3 in the fair value hierarchy. No impairments were recorded for the six months ended June 30, 2020 and 2019.
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DEBT AND FINANCING COSTS |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT AND FINANCING COSTS | DEBT AND FINANCING COSTS In November 2018, Altus Midstream entered into a revolving credit facility for general corporate purposes that matures in November 2023 (subject to Altus Midstream’s two, one year extension options). The agreement for this revolving credit facility, as amended (the Amended Credit Agreement), provides aggregate commitments from a syndicate of banks of $800.0 million. The aggregate commitments include a letter of credit subfacility of up to $100.0 million and a swingline loan subfacility of up to $100.0 million. Altus Midstream may increase commitments up to an aggregate $1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. As of June 30, 2020 and December 31, 2019, total outstanding borrowings were $493.0 million and $396.0 million, respectively, and no letters of credit were outstanding under this facility. Altus Midstream’s revolving credit facility is unsecured and is not guaranteed by the Company, Apache, or any of their respective subsidiaries. At Altus Midstream’s option, the interest rate per annum for borrowings under this facility is either a base rate, as defined, plus a margin, or the London Interbank Offered Rate (LIBOR), plus a margin. Altus Midstream also pays quarterly a facility fee at a rate per annum on total commitments. The margins and the facility fee vary based upon (i) the Leverage Ratio (as defined below) until Altus Midstream has a senior long-term debt rating and (ii) such senior long-term debt rating once it exists. The Leverage Ratio is the ratio of (1) the consolidated indebtedness of Altus Midstream and its restricted subsidiaries to (2) EBITDA (as defined in the Amended Credit Agreement) of Altus Midstream and its restricted subsidiaries for the 12-month period ending immediately before the determination date. At June 30, 2020, the base rate margin was 0.05 percent, the LIBOR margin was 1.05 percent, and the facility fee was 0.20 percent. In addition, a commission is payable quarterly to the lenders on the face amount of each outstanding letter of credit at a per annum rate equal to the LIBOR margin then in effect. Customary letter of credit fronting fees and other charges are payable to issuing banks. The Amended Credit Agreement contains restrictive covenants that may limit the ability of Altus Midstream and its restricted subsidiaries to, among other things, incur additional indebtedness or guaranty indebtedness, sell assets, make investments in unrestricted subsidiaries, enter into mergers, make certain payments and distributions, incur liens on certain property securing indebtedness, and engage in certain other transactions without the prior consent of the lenders. Altus Midstream also is subject to a financial covenant under the Amended Credit Agreement, which requires it to maintain a Leverage Ratio not exceeding 5.00:1.00 at the end of any fiscal quarter, starting with the quarter ended December 31, 2019 except that during the period of up to one year following a qualified acquisition, the Leverage Ratio cannot exceed 5.50:1.00 at the end of any fiscal quarter. Unless the Leverage Ratio is less than or equal to 4.00:1.00, the Amended Credit Agreement limits distributions in respect of Altus Midstream LP’s capital to $30 million per calendar year until either (i) the consolidated net income of Altus Midstream LP and its restricted subsidiaries, as adjusted pursuant to the Amended Credit Agreement, for three consecutive calendar months equals or exceeds $350.0 million on an annualized basis or (ii) Altus Midstream LP has a specified senior long-term debt rating; in addition, before the occurrence of one of those events, the Leverage Ratio must be less than or equal to 5.00:1.00. In no event can any distribution be made that would, after giving effect to it on a pro forma basis, result in a Leverage Ratio greater than (i) 5.00:1.00 or (ii) for a specified period after a qualifying acquisition, 5.50:1.00. The Leverage Ratio as of June 30, 2020 was less than 4.00:1.00. The terms of Altus Midstream’s Preferred Units also contain certain restrictions on distributions on Altus Midstream LP’s Common Units, including the Common Units held by the Company, and any other units that rank junior to the Preferred Units with respect to distributions or distributions upon liquidation. Refer to Note 10—Series A Cumulative Redeemable Preferred Units for further information. In addition, the amount of any cash distributions to Altus Midstream LP by any entity in which it has an interest accounted for by the equity method is subject to such entity’s compliance with the terms of any debt or other agreements by which it may be bound, which in turn may impact the amount of funds available for distribution by Altus Midstream LP to its partners. There are no clauses in the Amended Credit Agreement that permit the lenders to accelerate payments or refuse to lend based on unspecified material adverse changes. The Amended Credit Agreement has no drawdown restrictions or prepayment obligations in the event of a decline in credit ratings. However, the agreement allows the lenders to accelerate payment maturity and terminate lending and issuance commitments for nonpayment and other breaches, and if Altus Midstream or any of its restricted subsidiaries defaults on other indebtedness in excess of the stated threshold, is insolvent, or has any unpaid, non-appealable judgment against it for payment of money in excess of the stated threshold. Lenders may also accelerate payment maturity and terminate lending and issuance commitments if Altus Midstream undergoes a specified change in control or has specified pension plan liabilities in excess of the stated threshold. Altus Midstream was in compliance with the terms of the Amended Credit Agreement as of June 30, 2020. As of June 30, 2020 and December 31, 2019, the Company had debt outstanding totaling $493.0 million and $405.8 million, respectively. At December 31, 2019, $9.8 million of debt outstanding was related to a finance lease obligation for which the term ended in the first quarter of 2020. Interest Income and Financing Costs, Net of Capitalized Interest The following table presents the components of Altus Midstream’s interest income and financing costs, net of capitalized interest:
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OTHER CURRENT LIABILITIES |
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| Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES The following table provides detail of the Company’s other current liabilities at June 30, 2020 and December 31, 2019:
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COMMITMENTS AND CONTINGENCIES |
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| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of June 30, 2020 and December 31, 2019, there were no accruals for loss contingencies. Litigation The Company is subject to governmental and regulatory controls arising in the ordinary course of business. The Company is not aware of any pending or threatened legal proceedings against it at the time of the filing of this Quarterly Report on Form 10-Q. On April 30, 2020, a case styled Sierra Club v. US Army Corp of Engineers et al. was filed in the United States District Court, Western District of Texas. Plaintiff seeks to invalidate verifications issued by the Army Corps of Engineers allowing Permian Highway Pipeline LLC to conduct dredging and filling activities and to enjoin certain further dredging and other ground disturbing activities in jurisdictional waters. Permian Highway Pipeline LLC has intervened in the suit in defense of the verifications and in opposition to any injunctive relief. The Company has a minority equity interest in Permian Highway Pipeline LLC. Environmental Matters As an owner of infrastructure assets and with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages. In some instances, Altus Midstream may be directed to suspend or cease operations. The Company maintains insurance coverage, which management believes is customary in the industry, although insurance does not fully cover against all environmental risks. Additionally, there can be no assurance that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered. The Company is not aware of any environmental claims existing as of June 30, 2020, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity. Contractual Obligations Altus Midstream’s existing fee-based midstream services agreements, which have no minimum volume commitments or firm transportation commitments, are underpinned by acreage dedications covering Alpine High. Pursuant to these agreements, Altus Midstream is obligated to perform low and high pressure gathering, processing, dehydration, compression, treating, conditioning, and transportation on all volumes produced from the dedicated acreage, so long as Apache has the right to market such gas. At the closing of the Business Combination, the Company entered into the COMA and the Lease Agreement with Apache, which include contractual obligations for the Company to pay certain management and lease rental fees, respectively, to Apache over the term of the agreements. Refer to Note 2—Transactions with Affiliates for further discussion. In the second quarter of 2019, Altus Midstream issued and sold the Preferred Units. Under the terms of the Amended LPA, the Preferred Unit holders are entitled to receive quarterly distributions until such time as the Preferred Units are redeemed or exchanged. Refer to Note 10—Series A Cumulative Redeemable Preferred Units for further discussion regarding the terms of the Preferred Units and the rights of the holders thereof. Additionally, the Company is required to fund its pro-rata portion of any future capital expenditures for the development of the pipeline projects as referenced in Note 8—Equity Method Interests. At June 30, 2020 and December 31, 2019, there were no other material contractual obligations related to the entities included in the consolidated financial statements other than the performance of asset retirement obligations and required credit facility fees discussed in Note 5—Debt and Financing Costs.
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| Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY METHOD INTERESTS | EQUITY METHOD INTERESTS As of June 30, 2020, the Company owned the following equity method interests in Permian Basin long-haul pipeline entities. For each of the equity method interests, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the equity method interests. The table below presents the ownership percentage held by the Company for each entity:
As of June 30, 2020 and December 31, 2019, unamortized basis differences included in the equity method interest balances were $34.7 million and $29.7 million, respectively. These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into net income over the useful lives of the underlying pipeline assets when they are placed into service. The following table presents the activity in the Company’s equity method interests for the six months ended June 30, 2020:
Summarized Financial Information The following table represents aggregated selected income statement data for the Company’s equity method interests (on a 100 percent basis):
(1) Although the Company’s interests in EPIC Crude Holdings, LP, Permian Highway Pipeline LLC, and Breviloba, LLC were acquired in March, May, and July of 2019, respectively, the financial results are presented for the six months ended June 30, 2019 for comparability.
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EQUITY |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY | EQUITY Reverse Stock Split On June 30, 2020, the Company effected a reverse stock split of the Company’s Class A Common Stock and Class C Common Stock by a ratio of one-for-twenty. The par value and number of authorized shares of common stock and preferred stock were not affected by the reverse stock split. A corresponding number of Altus Midstream Common Units were also restated as part of the reverse stock split. All per-share and share amounts have been retroactively restated in this Quarterly Report on Form 10-Q for all periods presented to reflect the reverse stock split. Redeemable Noncontrolling Interest — Apache Limited Partner In conjunction with the Class C Common Stock, Apache owns 12,500,000 Altus Midstream Common Units, approximately 76.9 percent of the total Common Units issued and outstanding. The financial results of Altus Midstream and its subsidiaries are included in the Company’s consolidated financial statements as detailed in Note 1—Summary of Significant Accounting Policies, under the section titled “Principles of Consolidation.” Apache has the right, at any time, to cause Altus Midstream to redeem all or a portion of the Common Units issued to Apache, in exchange for shares of the Company’s Class A Common Stock on a one-for-one basis or, at Altus Midstream’s option, an equivalent amount of cash; provided that the Company may, at its option, effect a direct exchange of cash or Class A Common Stock for such Common Units in lieu of such a redemption by Altus Midstream. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock held by Apache will be cancelled. Apache’s limited partner interest associated with the Common Units issued with the Class C Common Stock is reflected as a redeemable noncontrolling interest in the Company. The redeemable noncontrolling interest is recognized at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest and (ii) the maximum redemption value as of the balance sheet date. The redemption value is determined based on a 5-day volume weighted average closing price of the Class A Common Stock (5-day VWAP) as defined in the Amended LPA, a Level 1 non-recurring fair value measurement. At June 30, 2020, the redeemable noncontrolling interest of $230.6 million was recorded based on the initial fair value plus accumulated earnings and losses to date. The maximum redemption value at June 30, 2020 based on the 5-day VWAP was $151 million. At December 31, 2019, the redeemable noncontrolling interest was recorded at the maximum redemption value based on the 5-day VWAP of $701.0 million. For further discussion of Apache’s right to receive additional shares of Class A Common Stock, and other outstanding equity instruments that may impact ownership interests and the limited partner interests of Altus Midstream in future periods, see Note 12—Net Income (Loss) Per Share. Redeemable Noncontrolling Interest — Preferred Unit Limited Partners On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing (as defined below) or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. Refer to Note 10—Series A Cumulative Redeemable Preferred Units for further discussion. SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITSOn June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the Closing). The Closing occurred pursuant to a Preferred Unit Purchase Agreement among Altus Midstream, the Company, and the purchasers party thereto, dated as of May 8, 2019. A total of 625,000 Preferred Units were sold at a price of $1,000 per Preferred Unit, for an aggregate issue price of $625.0 million. Altus Midstream received approximately $611.2 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers. Accounting for the Preferred Units Classification The Preferred Units are accounted for on the Company’s consolidated balance sheets as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units, including the redemption rights with respect thereto. Initial Measurement The net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs.
Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows:
Subsequent Measurement The Company applies a two-step approach to subsequently measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the net income of Altus Midstream in accordance with the terms of the Amended LPA described above. After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Redemption Price calculated at the seventh anniversary of Closing. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price. Activity related to the Preferred Units during the six months ended June 30, 2020 is as follows:
N/A - not applicable.
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SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | EQUITY Reverse Stock Split On June 30, 2020, the Company effected a reverse stock split of the Company’s Class A Common Stock and Class C Common Stock by a ratio of one-for-twenty. The par value and number of authorized shares of common stock and preferred stock were not affected by the reverse stock split. A corresponding number of Altus Midstream Common Units were also restated as part of the reverse stock split. All per-share and share amounts have been retroactively restated in this Quarterly Report on Form 10-Q for all periods presented to reflect the reverse stock split. Redeemable Noncontrolling Interest — Apache Limited Partner In conjunction with the Class C Common Stock, Apache owns 12,500,000 Altus Midstream Common Units, approximately 76.9 percent of the total Common Units issued and outstanding. The financial results of Altus Midstream and its subsidiaries are included in the Company’s consolidated financial statements as detailed in Note 1—Summary of Significant Accounting Policies, under the section titled “Principles of Consolidation.” Apache has the right, at any time, to cause Altus Midstream to redeem all or a portion of the Common Units issued to Apache, in exchange for shares of the Company’s Class A Common Stock on a one-for-one basis or, at Altus Midstream’s option, an equivalent amount of cash; provided that the Company may, at its option, effect a direct exchange of cash or Class A Common Stock for such Common Units in lieu of such a redemption by Altus Midstream. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock held by Apache will be cancelled. Apache’s limited partner interest associated with the Common Units issued with the Class C Common Stock is reflected as a redeemable noncontrolling interest in the Company. The redeemable noncontrolling interest is recognized at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest and (ii) the maximum redemption value as of the balance sheet date. The redemption value is determined based on a 5-day volume weighted average closing price of the Class A Common Stock (5-day VWAP) as defined in the Amended LPA, a Level 1 non-recurring fair value measurement. At June 30, 2020, the redeemable noncontrolling interest of $230.6 million was recorded based on the initial fair value plus accumulated earnings and losses to date. The maximum redemption value at June 30, 2020 based on the 5-day VWAP was $151 million. At December 31, 2019, the redeemable noncontrolling interest was recorded at the maximum redemption value based on the 5-day VWAP of $701.0 million. For further discussion of Apache’s right to receive additional shares of Class A Common Stock, and other outstanding equity instruments that may impact ownership interests and the limited partner interests of Altus Midstream in future periods, see Note 12—Net Income (Loss) Per Share. Redeemable Noncontrolling Interest — Preferred Unit Limited Partners On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing (as defined below) or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. Refer to Note 10—Series A Cumulative Redeemable Preferred Units for further discussion. SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITSOn June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the Closing). The Closing occurred pursuant to a Preferred Unit Purchase Agreement among Altus Midstream, the Company, and the purchasers party thereto, dated as of May 8, 2019. A total of 625,000 Preferred Units were sold at a price of $1,000 per Preferred Unit, for an aggregate issue price of $625.0 million. Altus Midstream received approximately $611.2 million in cash proceeds from the sale after deducting transaction costs and discounts to certain purchasers. Accounting for the Preferred Units Classification The Preferred Units are accounted for on the Company’s consolidated balance sheets as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units, including the redemption rights with respect thereto. Initial Measurement The net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs.
Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows:
Subsequent Measurement The Company applies a two-step approach to subsequently measure the redeemable noncontrolling interest related to the Preferred Units, by first allocating a portion of the net income of Altus Midstream in accordance with the terms of the Amended LPA described above. After consideration of the foregoing, the Company records an additional adjustment to the carrying value of the Preferred Unit redeemable noncontrolling interest at each period end, if applicable. The amount of such adjustment is determined based upon the accreted value method to reflect the passage of time until the Preferred Units are exchangeable at the option of the holder. Pursuant to this method, the net transaction price is accreted using the effective interest method, to the Redemption Price calculated at the seventh anniversary of Closing. The total adjustment is limited to an amount such that the carrying amount of the Preferred Unit redeemable noncontrolling interest at each period end is equal to the greater of (a) the sum of (i) the carrying amount of the Preferred Units determined in accordance with ASC 810, plus (ii) the fair value of the embedded derivative liability and (b) the accreted value of the net transaction price. Activity related to the Preferred Units during the six months ended June 30, 2020 is as follows:
N/A - not applicable.
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INCOME TAXES |
6 Months Ended |
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Jun. 30, 2020 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES The Company is subject to U.S. federal income tax and the Texas margin tax. Altus Midstream LP is a partnership for federal income tax purposes and passes through its taxable income to its partners, the Company, Apache, and the Preferred Unit Holders. Thus, Altus Midstream LP does not record a federal income tax provision. Altus Midstream LP is subject to the Texas margin tax and as such, records a state income tax provision. On March 27, 2020, the President signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act) in response to the COVID-19 pandemic. Under the CARES Act, 100 percent of net operating losses arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five preceding tax years of such loss. In the first quarter of 2020, the Company recorded a current income tax benefit of $0.7 million associated with a net operating loss carryback claim. During the three and six months ended June 30, 2020, the Company’s effective income tax rate was primarily impacted by an increase in valuation allowance. During the three and six months ended June 30, 2019, the Company’s effective income tax rate was primarily impacted by net income attributable to the noncontrolling interest, income allocated to the Preferred Unit holders, accretion of the net transaction price, and the impact of state income taxes. In the first quarter of 2020, the Company early adopted ASU 2019-12, “Simplifying the Accounting for Income Taxes.” The Company’s early adoption of ASU 2019-12 during the quarter ended March 31, 2020 using the prospective transition approach did not result in a material impact on the consolidated financial statements. The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes,” which prescribes a minimum recognition threshold a tax position must meet before being recognized in the financial statements. Each quarter, the Company assesses the recognition amount and, as a result, may increase (expense) or reduce (benefit) the amount of interest and penalties. Interest and penalties are recorded as a component of income tax expense. The contributor of Altus Midstream’s operating assets, Apache, is currently under IRS audit for the 2014-2017 tax years as part of its normal course of business.
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NET LOSS PER SHARE |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET LOSS PER SHARE | NET LOSS PER SHARE Basic net loss per share is calculated by dividing net loss available to Class A common shareholders by the weighted average number of shares of Class A Common Stock outstanding during the period. Class C Common Stock is excluded from the weighted average shares outstanding immediately following the Closing Date for the calculation of basic net loss per share, as holders of Class C Common Stock are not entitled to any dividends or liquidating distributions. The Company uses the “if-converted method” to determine the potential dilutive effect of (i) an assumed exchange of outstanding Common Units of Altus Midstream (and the cancellation of a corresponding number of shares of outstanding Class C Common Stock) for shares of Class A Common Stock, (ii) earn-out consideration payable in shares of Class A Common Stock, and (iii) an assumed exchange of the outstanding Preferred Units of Altus Midstream for shares of Class A Common Stock. The treasury stock method is used to determine the potential dilutive effect of its outstanding warrants. The computation of basic and diluted net loss per share for the periods presented in the consolidated financial statements is shown in the tables below.
The diluted earnings per share calculation excludes the effects of the following, since the associated impacts would have been anti-dilutive for all relevant periods presented:
Further discussion of the Preferred Units and associated embedded features can be found in Note 10—Series A Cumulative Redeemable Preferred Units and Note 13—Fair Value Measurements, respectively. Earn-out consideration granting Apache the right to receive additional shares of Class A Common Stock is not included in the earnings per share calculation above, as the conditions for issuance were not satisfied as of June 30, 2020.
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FAIR VALUE MEASUREMENTS |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities measured at fair value on a recurring basis consist of: cash and cash equivalents; revenue receivables; accounts receivable from/payable to Apache; and an embedded derivative liability related to the issuance of Preferred Units (as further described above). This embedded derivative liability is recorded on the Company’s consolidated balance sheet at fair value. The carrying amount of Altus Midstream’s revolving credit facility approximates fair value because the interest rate is variable and reflective of market rates. The carrying amounts reported on the consolidated balance sheet for the Company’s remaining financial assets and liabilities approximate fair value due to their short-term nature. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the six months ended June 30, 2020 or year ended December 31, 2019. The Company bifurcated and recognized the embedded derivative associated with the Preferred Units related to the exchange option provided to the Preferred Unit holders under the terms of the Amended LPA. The valuation of the embedded derivative (using an income approach) was based on a range of factors including: expected future interest rates using the Black-Karasinski model, the Company’s imputed interest rate, the timing of periodic cash distributions and dividend yields of the Preferred Units. The Company recorded an unrealized loss of $10.6 million and $72.6 million for the three and six month periods ended June 30, 2020, respectively, which are recorded in “Unrealized derivative instrument loss” in the statement of consolidated operations. Altus has classified these recurring fair value measurements as Level 3 in the fair value hierarchy. As of the June 30, 2020 valuation date, the Company used the forward B-rated Energy Bond Yield curve to develop the following key unobservable inputs used to value this embedded derivative:
The Company’s comparative imputed interest rate at December 31, 2019 ranged from 9.60 percent to 12.68 percent, with an interest rate volatility assumption of 21.89 percent. A one percent increase in the imputed interest rate assumption would significantly increase the value of the embedded derivative at June 30, 2020, while a one percent decrease would have the directionally inverse affect as of June 30, 2020. The Company has additional embedded derivatives in the Preferred Units related to the exchange option and redemption features that are accounted for separately from the Preferred Units. Level 3 valuation of the embedded derivatives are based on a range of factors including the likelihood of the event occurring, and these factors are assessed quarterly. There was no value associated with these additional identified embedded derivatives for any applicable period presented.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
| Accounting Policies [Abstract] | |
| Principles of Consolidation | Principles of Consolidation The consolidated financial results of Altus Midstream are included in the Company’s consolidated financial statements due to the Company’s 100 percent ownership interest in Altus Midstream GP, and Altus Midstream GP’s control of Altus Midstream. The Company has no independent operations or material assets other than its partnership interests in Altus Midstream, which constitutes all of its business. Additionally, the Company’s balance sheet reflects the presentation of noncontrolling interest ownership attributable to the limited partner interests in Altus Midstream held by Apache and the Series A Cumulative Redeemable Preferred Units holders (the Preferred Units). Refer to Note 9—Equity and Note 10—Series A Cumulative Redeemable Preferred Units for further information.
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| Variable Interest Entity | Variable Interest Entity Altus Midstream is a variable interest entity (VIE) because the partners in Altus Midstream with equity at risk lack the power, through voting or similar rights, to direct the activities that most significantly impact Altus Midstream’s economic performance. A reporting entity that concludes it has a variable interest in a VIE must evaluate whether it has a controlling financial interest in the VIE, such that it is the VIE’s primary beneficiary and should consolidate. The Company is the primary beneficiary of Altus Midstream, and therefore should consolidate Altus Midstream because (i) the Company has the ability to direct the activities of Altus Midstream that most significantly affect its economic performance, and (ii) the Company has the right to receive benefits or the obligation to absorb losses that could be potentially significant to Altus Midstream.
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| Redeemable Noncontrolling Interest — Apache Limited Partner | Redeemable Noncontrolling Interest — Preferred Unit Limited Partners On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of Closing or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream. The Preferred Units are accounted for on the Company’s consolidated balance sheets as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s consolidated balance sheet as a long-term liability embedded derivative. Redeemable Noncontrolling Interest — Apache Limited Partner The Company’s redeemable noncontrolling interest presented in the consolidated financial statements consists of Common Units representing limited partner interests in Altus Midstream held by Apache. Pursuant to certain provisions of the partnership agreement of Altus Midstream (as amended in connection with the Business Combination, and subsequent issuance of Preferred Units, the Amended LPA), the limited partner interests held by Apache are equal to the number of shares of the Company’s Class C common stock, $0.0001 par value (Class C Common Stock), held by Apache. The Company initially recorded the redeemable noncontrolling interest upon the issuance of the Common Units to Apache as part of the Business Combination and based on the recapitalization value ascribed at the Closing Date to the limited partner interest. All or a portion of these Common Units may be redeemed at Apache’s option. The Company has the ability to settle the redemption option either (i) in shares of Class A common stock, $0.0001 par value (Class A Common Stock), on a one-for-one basis or (ii) in cash (based on the fair market value of the Class A Common Stock as determined pursuant to the Contribution Agreement), subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock will be cancelled. The Company’s policy is to record the redeemable noncontrolling interest represented by the Common Units held by Apache at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the redemption value as of the balance sheet date.
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| Equity Method Interests | Equity Method Interests The Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity interests are carried originally at acquisition cost, increased by Altus’ proportionate share of the equity interest’s net income and contributions made by Altus, and decreased by Altus’ proportionate share of the equity interest’s net losses and distributions received by Altus.
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| Use of Estimates | Use of Estimates Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements, and changes in these estimates are recorded when known.
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| Fair Value Measurements | Fair Value Measurements Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority. The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Embedded features identified within the Company’s agreements are bifurcated and measured at fair value at the end of each period on the Company’s consolidated balance sheet. Such recurring fair value measurements are presented in further detail in Note 13—Fair Value Measurements. The Company also uses fair value measurements on a nonrecurring basis when certain qualitative assessments of its assets indicate a potential impairment.
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| Accounts Receivable From/Payable To Apache | Accounts Receivable From/Payable To Apache The accounts receivable from or payable to Apache represent the net result of Altus Midstream’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache as provided under the COMA between the two entities. Generally, cash in this amount will be transferred to or from Apache in the month after the Company’s transactions are processed and the net results of operations are determined. However, from time to time, the Company may estimate and transfer the cash settlement amount in the month the transactions are processed, in order to minimize related-party working capital balances.
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| Revenue recognition | The Company generates revenue from its contracts with customers for the gathering, compression, processing, and transmission of natural gas and NGLs in exchange for a fee per unit of volumes processed during a given month. For all periods presented, revenues with affiliates recorded on the Company’s consolidated statement of operations were attributable to services performed by Altus Midstream for Apache pursuant to separate long-term commercial midstream agreements comprising acreage dedications in Apache’s entire Alpine High resource play. As part of these agreements, substantially all of Apache’s natural gas production from its existing and future owned or controlled properties within the dedicated area is provided to the Company, so long as Apache has the right to market such product. There are no provisions for minimum volume commitments under the existing agreements, and the Company does not own or take title to the volumes it services under these agreements. Altus Midstream, in return for its performance, receives a fee per unit of natural gas or NGLs received during a given month. The service fee charged per unit is set forth for each contract year, subject to yearly fee escalation recalculations. Providing the related service on each volumetric unit represents a single, distinct performance obligation that is satisfied over time as services are rendered. As the amount of volumes serviced are not subject to minimum commitments and each midstream service agreement contains provisions for fee recalculations, substantially all of the transaction price is variable at inception of each contract term. Revenue is measured using the output method based on the amount of volumes serviced each month and the applicable service fee and recognized over time in the amount to which Altus Midstream has the right to invoice, as performance completed to date corresponds directly with the value to its customers. The transaction price is not constrained as variability is resolved prior to the recognition of revenue. Payment under the midstream service agreements are due the month immediately following the month of service. Amounts settled with Apache each month are based on the net amount owed to Altus Midstream or owed to Apache. Revenue receivables from the Company’s contracts with Apache totaled $13.6 million and $15.5 million as of June 30, 2020 and December 31, 2019, respectively, as presented on the Company’s consolidated balance sheet. In accordance with the provisions of ASC Topic 606, “Revenue from Contracts with Customers,” a variable transaction price for each short-term sale is allocated to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.
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| Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, “Financial Instruments-Credit Losses.” The standard changes the impairment model for trade receivables, held-to-maturity debt securities, net investments in leases, loans, and other financial assets measured at amortized cost. This ASU requires the use of a new forward-looking “expected loss” model compared to the current “incurred loss” model, resulting in accelerated recognition of credit losses. The Company adopted this standard in the first quarter of 2020 with no material impact on its financial statements. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” This pronouncement is part of the Simplification Initiative and simplifies the accounting for income taxes by removing certain exceptions to the general principles of ASC Topic 740 “Income Taxes.” In addition, the amendment improves consistent application of and simplifies GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. This update is effective for the Company beginning in the first quarter of 2021, with early adoption permitted. The Company early adopted this standard in the first quarter of 2020 with no material impact on its financial statements.
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REVENUE RECOGNITION (Tables) |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disaggregation of Revenue | The following table presents a disaggregation of the Company’s midstream services revenue by service type.
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Property, Plant and Equipment | Property, plant and equipment, at carrying value, is as follows:
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DEBT AND FINANCING COSTS - (Tables) |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Interest Income and Financing Costs Net of Capitalized Interest | The following table presents the components of Altus Midstream’s interest income and financing costs, net of capitalized interest:
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OTHER CURRENT LIABILITIES (Tables) |
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| Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Other Current Liabilities | The following table provides detail of the Company’s other current liabilities at June 30, 2020 and December 31, 2019:
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EQUITY METHOD INTERESTS (Tables) |
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| Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investments | As of June 30, 2020, the Company owned the following equity method interests in Permian Basin long-haul pipeline entities. For each of the equity method interests, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the equity method interests. The table below presents the ownership percentage held by the Company for each entity:
The following table presents the activity in the Company’s equity method interests for the six months ended June 30, 2020:
(2) As of June 30, 2020, the amount of consolidated retained earnings, net of amortized basis differences, which represents undistributed earnings, was $3.0 million from Breviloba, LLC.
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| Equity Method Investment, Summarized Financial Information | The following table represents aggregated selected income statement data for the Company’s equity method interests (on a 100 percent basis):
(1) Although the Company’s interests in EPIC Crude Holdings, LP, Permian Highway Pipeline LLC, and Breviloba, LLC were acquired in March, May, and July of 2019, respectively, the financial results are presented for the six months ended June 30, 2019 for comparability.
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SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS (Tables) |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Preferred Units | The net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs.
Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows:
(1) See Note 13—Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative. Activity related to the Preferred Units during the six months ended June 30, 2020 is as follows:
N/A - not applicable.
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NET LOSS PER SHARE (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Net Loss Per Share | The computation of basic and diluted net loss per share for the periods presented in the consolidated financial statements is shown in the tables below.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurement Inputs | As of the June 30, 2020 valuation date, the Company used the forward B-rated Energy Bond Yield curve to develop the following key unobservable inputs used to value this embedded derivative:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NATURE OF OPERATIONS AND ORGANIZATION (Details) |
6 Months Ended | ||
|---|---|---|---|
Nov. 09, 2018 |
Jun. 30, 2020
Segment
pipeline
partnership
$ / shares
|
Dec. 31, 2019
$ / shares
|
|
| Schedule Of Organization [Line Items] | |||
| Number of pipeline | pipeline | 4 | ||
| Number of reportable segments | Segment | 1 | ||
| Number of limited partnerships | partnership | 4 | ||
| Altus Midstream LP | |||
| Schedule Of Organization [Line Items] | |||
| General partner, ownership interest | 23.10% | ||
| Apache | Altus Midstream LP | |||
| Schedule Of Organization [Line Items] | |||
| Limited partners, ownership interest | 76.90% | 76.90% | |
| Class A Common Stock | |||
| Schedule Of Organization [Line Items] | |||
| Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
6 Months Ended | |
|---|---|---|
|
Jun. 30, 2020
$ / shares
|
Dec. 31, 2019
$ / shares
|
|
| Class C Common Stock | ||
| Class of Stock [Line Items] | ||
| Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
| Class A Common Stock | ||
| Class of Stock [Line Items] | ||
| Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
| Common stock, redemption ratio | 1 |
TRANSACTIONS WITH AFFILIATES (Details) |
3 Months Ended | 6 Months Ended | 12 Months Ended | 14 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jan. 01, 2022
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Nov. 09, 2018
contract
|
|||||
| Related Party Transaction [Line Items] | |||||||||||||
| Gathering, processing, and transmission | [1] | $ 9,508,000 | $ 14,005,000 | $ 20,099,000 | $ 30,403,000 | ||||||||
| General and administrative | [2] | 2,988,000 | 2,081,000 | 7,166,000 | 5,072,000 | ||||||||
| Affiliated Entity | Apache | Service Agreements | |||||||||||||
| Related Party Transaction [Line Items] | |||||||||||||
| Gathering, processing, and transmission | 1,300,000 | 2,000,000.0 | 2,800,000 | 4,900,000 | |||||||||
| General and administrative | 1,600,000 | 1,000,000.0 | $ 3,600,000 | 2,600,000 | |||||||||
| Affiliated Entity | Apache | Construction, Operations and Maintenance Agreement | |||||||||||||
| Related Party Transaction [Line Items] | |||||||||||||
| Expenses from transactions with related party | $ 3,000,000.0 | ||||||||||||
| Related party transaction, prior written notice period | 30 days | ||||||||||||
| Related party transaction, maximum direct or indirect interest ownership of voting or other equity securities | 50.00% | ||||||||||||
| Affiliated Entity | Apache | Construction, Operations and Maintenance Agreement | Forecast | |||||||||||||
| Related Party Transaction [Line Items] | |||||||||||||
| Expenses from transactions with related party | $ 9,000,000.0 | $ 7,000,000.0 | $ 5,000,000.0 | ||||||||||
| Affiliated Entity | Apache | Lease Agreements | |||||||||||||
| Related Party Transaction [Line Items] | |||||||||||||
| Base monthly rental charge | $ 44,500 | ||||||||||||
| Operating lease expense | $ 200,000 | $ 300,000 | $ 400,000 | $ 500,000 | |||||||||
| Initial term of lease agreement | 4 years | ||||||||||||
| Number of lease renewal term | contract | 3 | ||||||||||||
| Lessee renewal term | 24 months | ||||||||||||
| |||||||||||||
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Midstream services revenue - affiliate | $ 31,616 | $ 24,139 | $ 72,383 | $ 57,985 |
| Gas gathering and compression | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Midstream services revenue - affiliate | 4,394 | 2,697 | 10,114 | 6,310 |
| Gas processing | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Midstream services revenue - affiliate | 23,184 | 18,395 | 53,080 | 43,679 |
| Transmission | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Midstream services revenue - affiliate | 3,226 | 2,977 | 7,401 | 7,831 |
| NGL transmission | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Midstream services revenue - affiliate | 587 | $ 70 | 1,413 | 165 |
| Other | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Midstream services revenue - affiliate | $ 225 | $ 375 | $ 0 | |
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||
| Revenue receivables | $ 13,572 | $ 15,461 |
PROPERTY, PLANT AND EQUIPMENT - Schedule of Property, Plant and Equipment (Details) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment | $ 214,389,000 | $ 207,270,000 |
| Less: accumulated depreciation and amortization | (7,085,000) | (1,468,000) |
| Total property, plant and equipment, net | 207,304,000 | 205,802,000 |
| Gathering, processing and transmission systems and facilities | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment | 210,738,000 | 198,133,000 |
| Construction in progress | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment | 328,000 | 5,443,000 |
| Capitalized interest | 0 | 600,000 |
| Other property and equipment | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment | $ 3,323,000 | $ 3,694,000 |
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - Gathering, processing and transmission systems and facilities - USD ($) |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Dec. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Property, Plant and Equipment [Line Items] | |||
| Impairments | $ 1,300,000,000 | $ 0 | $ 0 |
| Fair value of property, plant and equipment | $ 203,600,000 | ||
DEBT AND FINANCING COSTS - Additional Information (Details) |
1 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
|
Nov. 30, 2018
contract
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Feb. 28, 2019
USD ($)
|
|
| Debt Instrument [Line Items] | ||||
| Outstanding borrowings | $ 493,000,000 | $ 396,000,000 | ||
| Letters of credit outstanding | 0 | 0 | ||
| Debt outstanding | $ 493,000,000.0 | 405,800,000 | ||
| Finance lease liability | $ 9,800,000 | |||
| Line of Credit | ||||
| Debt Instrument [Line Items] | ||||
| Debt covenant term, maximum leverage ratio | 5.00 | |||
| Debt covenant term, distributions limits | $ 30,000,000 | |||
| Debt covenant term, adjustment of consolidated net income limit for three consecutive calendar months on annualized basis | $ 350,000,000.0 | |||
| Debt actual leverage ratio | 4.00 | |||
| Line of Credit | Maximum | ||||
| Debt Instrument [Line Items] | ||||
| Debt covenant term, maximum leverage ratio | 5.50 | |||
| Line of Credit | Minimum | ||||
| Debt Instrument [Line Items] | ||||
| Debt covenant term, maximum leverage ratio | 4.00 | |||
| Line of Credit | Revolving Credit Facility | ||||
| Debt Instrument [Line Items] | ||||
| Number of extension options | contract | 2 | |||
| Extended financing agreement term | 1 year | |||
| Debt maximum borrowing capacity | $ 1,500,000,000 | $ 800,000,000.0 | ||
| Debt facility fee percentage | 0.20% | |||
| Line of Credit | Revolving Credit Facility | Base Rate | ||||
| Debt Instrument [Line Items] | ||||
| Debt instrument, basis spread on variable rate | 0.05% | |||
| Line of Credit | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||
| Debt Instrument [Line Items] | ||||
| Debt instrument, basis spread on variable rate | 1.05% | |||
| Line of Credit | Letter of Credit | ||||
| Debt Instrument [Line Items] | ||||
| Debt maximum borrowing capacity | 100,000,000.0 | |||
| Line of Credit | Swingline Loan Subfacility | ||||
| Debt Instrument [Line Items] | ||||
| Debt maximum borrowing capacity | $ 100,000,000.0 |
DEBT AND FINANCING COSTS - Schedule of Interest Income and Financing Costs Net of Capitalized Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Debt Disclosure [Abstract] | ||||
| Interest income | $ 2 | $ 806 | $ 9 | $ 2,967 |
| Interest expense | 2,007 | 1,030 | 5,365 | 1,739 |
| Amortization of deferred facility fees | 292 | 221 | 565 | 415 |
| Capitalized interest | (2,007) | (773) | (5,365) | (1,168) |
| Financing costs, net of capitalized interest | $ 292 | $ 478 | $ 565 | $ 986 |
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Other Liabilities Disclosure [Abstract] | ||
| Accrued taxes other than income | $ 6,974 | $ 689 |
| Accrued operations and maintenance expense | 1,339 | 1,520 |
| Accrued incentive compensation | 733 | 1,425 |
| Accrued professional and consulting fees | 692 | 158 |
| Accrued capital costs | 686 | 17,035 |
| Accrued finance lease liability | 0 | 1,989 |
| Other | 1,517 | 1,109 |
| Total other current liabilities | $ 11,941 | $ 23,925 |
| Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Loss contingency accrual | $ 0 | $ 0 |
EQUITY METHOD INTERESTS - Information of Equity Method Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
| Schedule of Equity Method Investments [Line Items] | ||||||
| Equity method interests | $ 1,408,479 | $ 1,408,479 | $ 1,408,479 | $ 1,258,048 | ||
| Difference between carrying amount and underlying equity | 34,700 | 29,700 | ||||
| Movement In Equity Method Interests [Roll Forward] | ||||||
| Balance at December 31, 2019 | 1,258,048 | |||||
| Contributions | 154,386 | $ 210,238 | ||||
| Distributions | (41,747) | |||||
| Capitalized interest | 5,365 | |||||
| Equity income (loss), net | 16,923 | $ (1,297) | 33,221 | $ (1,028) | ||
| Accumulated other comprehensive loss | (794) | |||||
| Balance at June 30, 2020 | 1,408,479 | 1,408,479 | ||||
| Retained earnings, undistributed earnings | $ 3,000 | |||||
| Gulf Coast Express Pipeline LLC | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Ownership percentage | 16.00% | |||||
| Equity method interests | 286,833 | 291,628 | $ 286,833 | 291,628 | ||
| Movement In Equity Method Interests [Roll Forward] | ||||||
| Balance at December 31, 2019 | 291,628 | |||||
| Contributions | 919 | |||||
| Distributions | (26,171) | |||||
| Capitalized interest | 0 | |||||
| Equity income (loss), net | 20,457 | |||||
| Accumulated other comprehensive loss | 0 | |||||
| Balance at June 30, 2020 | 286,833 | 286,833 | ||||
| EPIC Crude Holdings, LP | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Ownership percentage | 15.00% | |||||
| Equity method interests | 175,051 | 175,051 | $ 175,051 | 163,199 | ||
| Movement In Equity Method Interests [Roll Forward] | ||||||
| Balance at December 31, 2019 | 163,199 | |||||
| Contributions | 15,000 | |||||
| Distributions | 0 | |||||
| Capitalized interest | 0 | |||||
| Equity income (loss), net | (2,354) | |||||
| Accumulated other comprehensive loss | (794) | |||||
| Balance at June 30, 2020 | 175,051 | 175,051 | ||||
| Permian Highway Pipeline LLC | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Ownership percentage | 26.70% | |||||
| Equity method interests | 454,381 | 310,421 | $ 454,381 | 310,421 | ||
| Movement In Equity Method Interests [Roll Forward] | ||||||
| Balance at December 31, 2019 | 310,421 | |||||
| Contributions | 138,467 | |||||
| Distributions | 0 | |||||
| Capitalized interest | 5,365 | |||||
| Equity income (loss), net | 128 | |||||
| Accumulated other comprehensive loss | 0 | |||||
| Balance at June 30, 2020 | 454,381 | 454,381 | ||||
| Breviloba, LLC | ||||||
| Schedule of Equity Method Investments [Line Items] | ||||||
| Ownership percentage | 33.00% | |||||
| Equity method interests | 492,214 | 492,800 | $ 492,214 | $ 492,800 | ||
| Movement In Equity Method Interests [Roll Forward] | ||||||
| Balance at December 31, 2019 | 492,800 | |||||
| Contributions | 0 | |||||
| Distributions | (15,576) | |||||
| Capitalized interest | 0 | |||||
| Equity income (loss), net | 14,990 | |||||
| Accumulated other comprehensive loss | 0 | |||||
| Balance at June 30, 2020 | $ 492,214 | $ 492,214 | ||||
EQUITY METHOD INTERESTS - Summarized Financial Information of Equity Method Investments (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 [Line Items] | ||||
| Operating income (loss) | $ 11,711 | $ (4,942) | $ 30,352 | $ (711) |
| Net income (loss) | $ 17,662 | $ (5,498) | (9,130) | 230 |
| Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
| Schedule of Equity Method Investments [Line Items] | ||||
| Revenues | 46,928 | |||
| Operating expenses | 14,744 | |||
| Operating income (loss) | 32,184 | |||
| Net income (loss) | 32,184 | |||
| Equity Method Investment, Nonconsolidated Investee or Group of Investees | Gulf Coast Express Pipeline LLC | ||||
| Schedule of Equity Method Investments [Line Items] | ||||
| Revenues | 182,231 | 4,974 | ||
| Operating expenses | 53,359 | 512 | ||
| Operating income (loss) | 128,872 | 4,462 | ||
| Net income (loss) | 128,470 | 5,382 | ||
| Other comprehensive loss | 0 | 0 | ||
| Equity Method Investment, Nonconsolidated Investee or Group of Investees | EPIC Crude Holdings, LP | ||||
| Schedule of Equity Method Investments [Line Items] | ||||
| Revenues | 85,971 | 0 | ||
| Operating expenses | 83,508 | 7,728 | ||
| Operating income (loss) | 2,463 | (7,728) | ||
| Net income (loss) | (16,263) | (16,653) | ||
| Other comprehensive loss | (5,037) | (9,337) | ||
| Equity Method Investment, Nonconsolidated Investee or Group of Investees | Permian Highway Pipeline LLC | ||||
| Schedule of Equity Method Investments [Line Items] | ||||
| Revenues | 0 | 0 | ||
| Operating expenses | 46 | 35 | ||
| Operating income (loss) | (46) | (35) | ||
| Net income (loss) | 480 | 422 | ||
| Other comprehensive loss | 0 | $ 0 | ||
| Equity Method Investment, Nonconsolidated Investee or Group of Investees | Breviloba, LLC | ||||
| Schedule of Equity Method Investments [Line Items] | ||||
| Revenues | 83,120 | |||
| Operating expenses | 31,831 | |||
| Operating income (loss) | 51,289 | |||
| Net income (loss) | 46,345 | |||
| Other comprehensive loss | $ 0 | |||
EQUITY (Details) |
6 Months Ended | ||
|---|---|---|---|
|
Nov. 09, 2018
shares
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
| Class of Stock [Line Items] | |||
| Redemption value measurement period | 5 days | ||
| Maximum redemption value | $ 151,000,000 | ||
| Redeemable noncontrolling interest — Apache limited partner | $ 230,631,000 | $ 701,000,000 | |
| Class A Common Stock | |||
| Class of Stock [Line Items] | |||
| Stock split, conversion ratio | 20 | ||
| Common stock, redemption ratio | 1 | ||
| Class C Common Stock | |||
| Class of Stock [Line Items] | |||
| Stock split, conversion ratio | 20 | ||
| Altus Midstream LP | Apache | |||
| Class of Stock [Line Items] | |||
| Number of common units received | shares | 12,500,000 | ||
| Limited partners, ownership interest | 76.90% | 76.90% |
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | ||
|---|---|---|---|
Jun. 12, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Class of Stock [Line Items] | |||
| Redeemable noncontrolling interest — Preferred Unit limited partners, net | $ 0 | $ 611,249 | |
| Preferred Unit limited partners | |||
| Class of Stock [Line Items] | |||
| Number of Preferred Units sold (in shares) | 625,000 | ||
| Preferred Units sold, price per share (in USD per share) | $ 1,000 | ||
| Aggregate issue price of Preferred Units | $ 625,000 | ||
| Redeemable noncontrolling interest — Preferred Unit limited partners, net | $ 611,249 | ||
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Schedule of Preferred Units (Details) - USD ($) $ in Thousands |
6 Months Ended | |||
|---|---|---|---|---|
Jun. 12, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
| Class of Stock [Line Items] | ||||
| Transaction price, net | $ 0 | $ 611,249 | ||
| Redeemable noncontrolling interest - Preferred Units | $ 516,790 | 592,625 | $ 555,599 | |
| Embedded derivative | 94,459 | 175,498 | $ 102,929 | |
| Transaction price, net | 611,249 | |||
| Preferred Unit limited partners | ||||
| Class of Stock [Line Items] | ||||
| Transaction price, gross | 625,000 | |||
| Issue discount | (3,675) | |||
| Transaction costs to other third parties | (10,076) | |||
| Transaction price, net | $ 611,249 | |||
| Redeemable noncontrolling interest - Preferred Units | $ 592,625 | |||
SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS - Activity Related to Preferred Units (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 12, 2019 |
|
| Increase (Decrease) in Temporary Equity [Roll Forward] | |||
| Beginning balance | $ 555,599 | ||
| Ending balance | 592,625 | ||
| Embedded derivative liability | 175,498 | $ 102,929 | $ 94,459 |
| Redeemable noncontrolling interest, including embedded derivative liability | 768,123 | ||
| Preferred Units, redemption price | $ 700,800 | ||
| Preferred Units, redemption terms, internal rate of return | 11.50% | ||
| Preferred Unit limited partners | |||
| Movement In Preferred Units [Roll Forward] | |||
| Redeemable noncontrolling interest - Preferred Units: beginning of period (in shares) | 638,163,000 | ||
| Distribution of in-kind additional Preferred Units (in shares) | 22,531,000 | ||
| Redeemable noncontrolling interest - Preferred Units: end of period (in shares) | 660,694,000 | ||
| Increase (Decrease) in Temporary Equity [Roll Forward] | |||
| Allocation of Altus Midstream net income | $ 37,026 | ||
| Ending balance | $ 592,625 |
INCOME TAXES (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Income Tax Disclosure [Abstract] | |||||
| Current income tax benefit | $ 0 | $ 700 | $ 0 | $ 696 | $ 0 |
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
| Basic: | ||||||
| Net income (loss) attributable to Class A common shareholders | $ (255) | $ (2,293) | $ (10,108) | $ (1,193) | ||
| Net income (loss) attributable to Class A common shareholders (in shares) | [1] | 3,746,000 | 3,746,000 | 3,746,000 | 3,746,000 | |
| Net income (loss) attributable to Class A common shareholders (in USD per share) | [1] | $ (0.07) | $ (0.61) | $ (2.70) | $ (0.32) | |
| Effective of dilutive securities: | ||||||
| Redeemable noncontrolling interest — Apache limited partner | $ 0 | $ 0 | $ (36,048) | $ 0 | ||
| Redeemable noncontrolling interest — Apache limited partner (in shares) | 0 | 0 | 12,500,000 | 0 | ||
| Diluted(2): | ||||||
| Net income (loss) attributable to Class A common shareholders | $ (255) | $ (2,293) | $ (46,156) | $ (1,193) | ||
| Net income (loss) attributable to Class A common shareholders (in shares) | [1] | 3,746,000 | 3,746,000 | 16,246,000 | 3,746,000 | |
| Net loss attributable to Class A common shareholders (in USD per share) | [1] | $ (0.07) | $ (0.61) | $ (2.84) | $ (0.32) | |
| Warrant | ||||||
| Diluted(2): | ||||||
| Antidilutive securities excluded from computation of earnings per share (in shares) | 947,082 | 947,082 | 947,082 | 947,082 | ||
| ||||||
FAIR VALUE MEASUREMENTS (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
Jun. 12, 2019
USD ($)
|
|
| Fair Value Disclosures [Abstract] | ||||||
| Unrealized derivative instrument loss | $ (10,585) | $ 0 | $ (72,569) | $ 0 | ||
| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
| Embedded derivative liability | $ 175,498 | $ 175,498 | $ 102,929 | $ 94,459 | ||
| Interest Rate Volatility | Level 3 | ||||||
| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
| Embedded derivative liability, measurement input | 0.3556 | 0.3556 | 0.2189 | |||
| Minimum | Altus Midstream Company’s Imputed Interest Rate | Level 3 | ||||||
| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
| Embedded derivative liability, measurement input | 0.1416 | 0.1416 | 0.0960 | |||
| Maximum | Altus Midstream Company’s Imputed Interest Rate | Level 3 | ||||||
| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
| Embedded derivative liability, measurement input | 0.1557 | 0.1557 | 0.1268 | |||
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