Attached files

file filename
EX-99.3 - EX-99.3 - Kimbell Royalty Partners, LPa18-16342_2ex99d3.htm
EX-99.5 - EX-99.5 - Kimbell Royalty Partners, LPa18-16342_2ex99d5.htm
EX-99.4 - EX-99.4 - Kimbell Royalty Partners, LPa18-16342_2ex99d4.htm
EX-99.1 - EX-99.1 - Kimbell Royalty Partners, LPa18-16342_2ex99d1.htm
EX-23.2 - EX-23.2 - Kimbell Royalty Partners, LPa18-16342_2ex23d2.htm
EX-23.1 - EX-23.1 - Kimbell Royalty Partners, LPa18-16342_2ex23d1.htm
8-K/A - 8-K/A - Kimbell Royalty Partners, LPa18-16342_28ka.htm

Exhibit 99.2

 

HAYMAKER MINERALS & ROYALTIES, LLC

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

March 31, 2018

 

December 31, 2017

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

8,984,849

 

$

4,535,578

 

Accounts receivable

 

 

 

 

 

Oil, natural gas and natural gas liquids

 

1,469,232

 

2,174,365

 

Other

 

166,767

 

199,262

 

Receivables from affiliates

 

89,441

 

123,755

 

Prepaid expenses

 

109,561

 

99,488

 

Short-term derivative asset

 

1,289,745

 

2,031,116

 

Total current assets

 

12,109,595

 

9,163,564

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT

 

 

 

 

 

Oil and natural gas properties, full cost method of accounting

 

 

 

 

 

Proved properties

 

142,968,188

 

137,909,769

 

Unevaluated properties

 

49,093,644

 

54,152,062

 

Total oil and natural gas properties, at cost

 

192,061,832

 

192,061,831

 

Accumulated depletion and impairment

 

(101,708,952

)

(100,523,400

)

Total oil and natural gas properties, net

 

90,352,880

 

91,538,431

 

Other property and equipment, net

 

255,205

 

272,298

 

Total property and equipment, net

 

90,608,085

 

91,810,729

 

 

 

 

 

 

 

NONCURRENT ASSETS

 

 

 

 

 

Deferred loan costs

 

147,192

 

205,600

 

Total noncurrent assets

 

147,192

 

205,600

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

102,864,872

 

$

101,179,893

 

 

 

 

 

 

 

LIABILITIES AND MEMBERS’ CAPITAL

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable

 

$

281,747

 

$

137,094

 

Current income taxes payable

 

102,194

 

102,194

 

Accrued interest

 

14,402

 

134,282

 

Accrued expenses

 

132,383

 

721,702

 

Total current liabilities

 

530,726

 

1,095,272

 

 

 

 

 

 

 

NONCURRENT LIABILITIES

 

 

 

 

 

Deferred revenue

 

140,478

 

129,672

 

Deferred income taxes

 

9,643

 

9,643

 

Long term debt

 

15,510,991

 

15,510,991

 

Total noncurrent liabilities

 

15,661,112

 

15,650,306

 

Total liabilities

 

16,191,838

 

16,745,578

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (NOTE 7)

 

 

 

 

 

 

 

 

 

 

 

MEMBERS’ CAPITAL

 

86,673,034

 

84,434,315

 

 

 

 

 

 

 

TOTAL LIABILITIES AND MEMBERS’ CAPITAL

 

$

102,864,872

 

$

101,179,893

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

1



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

Three months ended March 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

OPERATING REVENUES

 

 

 

 

 

Crude oil and condensate sales

 

$

2,628,494

 

$

2,051,361

 

Natural gas sales

 

691,155

 

797,454

 

Natural gas liquids sales and other

 

442,777

 

181,976

 

Income from lease bonus

 

1,235,568

 

472,518

 

Total revenues

 

4,997,994

 

3,503,309

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

Production, ad valorem, and withholding taxes

 

310,767

 

220,187

 

Production expense

 

328,690

 

248,918

 

Depletion, depreciation and amortization

 

1,202,644

 

860,354

 

(Gain) loss on sale of assets

 

 

(12,804,551

)

General and administrative

 

464,324

 

2,078,200

 

Total costs and expenses

 

2,306,425

 

(9,396,892

)

 

 

 

 

 

 

INCOME ON OPERATIONS

 

2,691,569

 

12,900,201

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

Gain (loss) on derivatives

 

(280,885

)

1,043,111

 

Interest expense

 

(212,589

)

(569,992

)

Loss on debt extinguishment

 

 

(256,979

)

Total other income (expense)

 

(493,474

)

216,140

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

2,198,095

 

$

13,116,341

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

CONDENSED CONSOLIDATED STATEMENTS OF MEMBERS’ CAPITAL (UNAUDITED)

 

BALANCE AT DECEMBER 31, 2017

 

$

84,434,315

 

Net income

 

2,198,095

 

Contributions

 

40,624

 

Distributions

 

 

BALANCE AT MARCH 31, 2018

 

$

86,673,034

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

Three months ended March 31,

 

 

 

2018

 

2017

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

2,198,095

 

$

13,116,341

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation, depletion and amortization

 

1,202,644

 

860,354

 

(Gain) loss on sale of assets

 

 

(12,804,551

)

Mark-to-market commodity derivative contracts

 

 

 

 

 

(Gain) loss on derivatives, net of settlements

 

280,885

 

(1,043,111

)

Net cash received from settlements of commodity derivative contracts

 

492,981

 

673,834

 

Loss on debt extinguishment

 

 

256,979

 

Amortization of deferred loan costs

 

58,408

 

57,781

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

705,133

 

(167,365

)

Accounts payable and accrued expenses

 

(564,546

)

1,175,731

 

Prepaid expenses and other current assets

 

(10,073

)

25,802

 

Receivables/payables from affiliates

 

34,314

 

29,463

 

Deferred revenue

 

10,806

 

 

Net cash provided by operating activities

 

4,408,647

 

2,181,258

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Acquisitions of oil and natural gas properties

 

 

(130,000

)

Divestitures of oil and natural gas properties

 

 

32,033,810

 

Net cash provided by investing activities

 

 

31,903,810

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Repayments of debt

 

 

(15,499,364

)

Contributions

 

40,624

 

 

Net cash provided by (used in) financing activities

 

40,624

 

(15,499,364

)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

$

4,449,271

 

$

18,585,704

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of year

 

4,535,578

 

1,052,713

 

Cash and cash equivalents, end of year

 

$

8,984,849

 

$

19,638,417

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

Cash paid for interest

 

$

274,061

 

$

543,431

 

Cash paid for income taxes

 

$

 

$

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

 

1.              Organization and Basis of Presentation

 

Organization

 

Haymaker Minerals & Royalties, LLC a Delaware limited liability company (“the Company”), was formed in May 2013 by Haymaker Management Company, LLC and Kayne Anderson Energy Fund VI, LP (“Kayne’’) to own and continually acquire mineral and royalty interests in many of North America’s leading resource plays.  The Company’s headquarters are located in Houston, Texas.

 

The Company has a contractual right to receive a fixed percentage of the oil and gas production coming from any acreage in which we own a mineral or royalty interest. The Company does not own or invest in any working interests or net profit interests which allows for the receipt of royalty revenues without having to pay any of the associated operating or capital costs related to the resource development.

 

In April 2016, the Company entered into a master services agreement with Haymaker Services, LLC (the “Manager”) to provide portfolio management and administrative services to the Company.

 

Basis of Presentation

 

The unaudited interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end balance sheet data was derived from audited financial statements but does not include disclosures required by GAAP for annual periods. The information furnished herein reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of financial position and results of operations for the respective interim periods.

 

Our financial results for the three months ended March 31, 2018 are unaudited and are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These unaudited financial statements should be read in conjunction with our audited annual financial statements as of and for the year ended December 31, 2017 and notes thereto.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Haymaker Holding Company, LLC (“Haymaker Holding”), Haymaker Greenfield, LLC, (“Greenfield”), and the Company. Haymaker Holding and Greenfield are both wholly owned subsidiaries of the Company. Intercompany transactions and balances have been eliminated in the consolidation.

 

2.              Summary of Significant Accounting Policies

 

Significant accounting policies are described in Note 2 in the Company’s audited annual financial statements as of and for the year ended December 31, 2017. There have been no changes in such policies or the application of such policies since December 31, 2017, other than the recently adopted accounting pronouncement described below.

 

Recently Adopted Accounting Pronouncement

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The guidance requires entities to recognize revenue using the following five step model: identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognized revenue as the entity satisfies each performance obligation. Adoption of this standard could result in retrospective application, either in the form of recasting all prior periods presented or a cumulative adjustment to equity in the period of adoption. The guidance is effective for annual and interim periods beginning after December 15, 2017.

 

5



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

 

On January 1, 2018 the Company adopted ASU 2014-09 using the modified retrospective method. The Company completed its review of a representative sample of revenue contracts covering its material revenue streams and determined that there is no impact to its consolidated financial statements, results of operations or liquidity. When comparing the Company’s historical revenue recognition to the newly applied revenue recognition under ASC 606, there was no change to the amount or timing of revenue recognized. Therefore, no quantitative adjustment was required to be made to the prior periods presented in the unaudited consolidated financial statements after the adoption of ASC 606.

 

Accounting Policy — Revenue from Contracts with Customers

 

Royalty income represents the right to receive revenues from oil, natural gas and natural gas liquids sales obtained from the operator of the wells in which the Partnership owns a royalty interest. The Partnership’s oil, natural gas and natural gas liquids sales contracts are generally structured whereby the producer of the properties sells the Partnership’s proportionate share of oil, natural gas and natural gas liquids production to a purchaser and the Partnership records revenue based on its proportionate interest when control transfers from the operator to the purchaser.  The Partnership’s royalty income pricing provisions are tied to a market index.

 

Revenues from mineral and royalty interests in properties are recorded under the cash receipts approach as directly received from the operator’s statement accompanying the revenue check. Since revenue checks are generally received one to four months after the production month, the Partnership accrues for revenue earned but not received by estimated production volumes and product prices.  The difference between the Partnership’s estimates and the actual amounts received for oil and natural gas sales is recorded in the month that payment is received from the operator. The Partnership’s royalty interests represent the right to receive royalty income from the producer once production and delivery has occurred, at which point payment is unconditional. Accordingly, the Partnership’s royalty income contracts do not give rise to contract assets or liabilities and there are no remaining performance obligations.

 

The Partnership also earns revenue from mineral lease bonuses. The Partnership generates lease bonus revenue by leasing its mineral interests to exploration and production companies. A lease agreement represents the Partnership’s contract with a customer and generally transfers the rights to any oil or natural gas discovered, grants the Partnership a right to a specified royalty interest, and requires that drilling and completion operations commence within a specified time period. Control is transferred to the lessee and the Partnership has satisfied its performance obligation when the lease agreement is executed, such that revenue is recognized when the lease bonus payment is received. At the time the Partnership executes the lease agreement, the Partnership expects to receive the lease bonus payment within a reasonable time, though in no case more than one year, such that the Partnership has not adjusted the expected amount of consideration for the effects of any significant financing component per the practical expedient provision in ASC 606.

 

3.              Acquisitions & Divestitures

 

Acquisitions

 

In January 2017, the Company completed an acquisition of minerals and royalty interests in in Texas from an unaffiliated individual for consideration of $0.1 million. This acquisition was deemed to be an asset acquisition.

 

6



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

 

Divestitures

 

In February 2017, the Company disposed of certain assets in the Delaware basin for approximately $20.1 million, subject to customary post-closing adjustments. The divestiture resulted in a gain of $12.5 million. Total oil and natural gas properties decreased by $7.6 million, of which $4.3 million was related to proved properties and $3.3 million was related to unevaluated properties. The Company utilized the proceeds from the disposal of the assets in the Delaware basin to completely pay off its balance under the Second Lien. See Note 5—Debt for details of the Company’s extinguishment of the Second Lien.

 

In March 2017, the Company disposed of certain assets in the Midland basin for approximately $12.0 million, subject to customary post-closing adjustments. The divestiture resulted in a gain of approximately $0.4 million. Total oil and natural gas properties decreased by $11.6 million, of which $1.0 million was related to proved properties and $10.6 million was related to unevaluated properties.

 

4.              Derivative Contracts

 

The Company enters into crude oil and natural gas swap contracts as part of its strategy to economically hedge against changes in crude oil and natural gas prices and to achieve more predictable cash flows in an environment of volatile oil and gas prices. While the use of these commodity derivative instruments limits the downside risk of adverse price movements, such use may also limit the Company’s ability to benefit from favorable price movements. The Company may, from time to time, add incremental derivatives to hedge additional production, restructure existing derivative contracts or enter into new transactions to modify the terms of current contracts in order to realize the current value of the Company’s existing positions.

 

The fair value of open swaps reported in the condensed consolidated balance sheets may differ from that which would be realized in the event the Company terminated its position in the contract. Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the aggregate of the unrealized gain/loss on the swap contracts in an unrealized gain position. Therefore, the Company considers the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. A derivative counterparty of the Company is also a lender or an affiliate of a lender participating in the Company’s credit facility agreement. Additionally, risks may arise from unanticipated movements in the fair value of the underlying commodities.

 

Volume of Derivative Activities

 

At March 31, 2018, the volume of the Company’s derivative activities based on their notional amounts is as follows:

 

Period

 

Type of Contract

 

Volume

 

Weighted
Average Strike
Price ($)

 

April — December 2018

 

Crude Swaps

 

51,225 (BBls)

 

$

79.55

 

 

 

Gas Swaps

 

365,030 (MMBtu)

 

4.13

 

 

7



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The following tables summarize the location and amounts of the Company’s assets and liabilities measured at fair value on a recurring basis as presented in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017, respectively. Balances are presented on a gross basis, prior to the application of the impact of counterparty netting. Total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of master netting arrangements. All items included in the tables below are Level 2 inputs within the fair value hierarchy:

 

As of March 31, 2018

 

 

 

Measurement
Inputs

 

Gross Fair Value

 

Effect of
Counterparty
Netting

 

Net Carrying
Value on Balance
Sheet

 

Derivative assets

 

 

 

 

 

 

 

 

 

Derivative assets (current)

 

Level 2

 

$

1,289,745

 

$

 

$

1,289,745

 

Derivative assets (noncurrent)

 

Level 2

 

 

 

 

Derivative liabilities

 

 

 

 

 

 

 

 

 

Derivative liabilities (current)

 

Level 2

 

 

 

 

Derivative liabilities (noncurrent)

 

Level 2

 

 

 

 

Total

 

 

 

$

1,289,745

 

$

 

$

1,289,745

 

 

As of December 31, 2017

 

 

 

Measurement
Inputs

 

Gross Fair Value

 

Effect of
Counterparty
Netting

 

Net Carrying
Value on Balance
Sheet

 

Derivative assets

 

 

 

 

 

 

 

 

 

Derivative assets (current)

 

Level 2

 

$

2,031,116

 

$

 

$

2,031,116

 

Derivative assets (noncurrent)

 

Level 2

 

 

 

 

Derivative liabilities

 

 

 

 

 

 

 

 

 

Derivative liabilities (current)

 

Level 2

 

 

 

 

Derivative liabilities (noncurrent)

 

Level 2

 

 

 

 

Total

 

 

 

$

2,031,116

 

$

 

$

2,031,116

 

 

The fair value of the Company’s derivative assets and liabilities is based on a third-party industry-standard pricing model that uses market data obtained from third-party sources, including quoted forward prices for oil and gas, discount rates and volatility factors. The fair value is also compared to the values provided by the counterparty for reasonableness and is adjusted for the counterparties’ credit quality for derivative assets and the Company’s credit quality for derivative liabilities. To date, adjustments for credit quality have not had a material impact on the fair value.

 

The derivative asset and liability fair values reported in the condensed consolidated balance sheets are as of a particular point in time and subsequently change as these estimates are revised to reflect actual results, changes in market conditions and other factors. The Company typically has numerous hedge positions that span several time periods and often result in both derivative assets and liabilities with the same counterparty, which positions are all offset to a single current and as single noncurrent derivative asset or liability in the condensed consolidated balance sheets. The Company nets the fair values of its derivative assets and liabilities associated with derivative instruments executed with the same counterparty pursuant to ISDA master agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract.

 

8



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

 

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

 

The Company applies the provisions of the fair value measurement standard on a nonrecurring basis to its nonfinancial assets and liabilities. These assets and liabilities are not measured at fair value on a recurring basis, but are subject to fair value adjustments when facts and circumstances arise that indicate a need for measurement.

 

Fair Value of Other Financial Instruments

 

The Company’s other financial instruments consist of cash, receivables and payables which are classified as Level 1 under the fair value hierarchy and long-term debt, which is classified as Level 2 under the fair value hierarchy. The carrying amounts of cash, receivables, and payables approximate fair value due to the highly liquid or short-term nature of these instruments. The fair value of the long-term debt approximates its carrying value as the interest rates are variable and reflective of market rates.

 

5.              Debt

 

At March 31, 2018, the borrowing base and principal balance outstanding under the First Lien were $22.0 million and $15.5 million, respectively. At December 31, 2017, the borrowing base and principal balance outstanding under the First Lien were $22.0 million and $15.5 million, respectively.

 

Concurrent with the First Lien, the Company entered into a Second Lien Term Loan Credit Agreement with Wells Fargo Energy Capital, Inc. as the administrative agent (the “Second Lien”). The Second Lien provides for a maximum borrowing of $20.0 million. In February 2017, the Company paid in full the outstanding balance under the Second Lien and terminated such loan. The Company recorded a $0.3 million loss on debt extinguishment related to the repayment and termination of the Second Lien.

 

The interest rates elected for the First Lien at March 31, 2018 and December 31, 2017 were 3.88% and 3.57%, respectively, based on LIBOR plus the applicable margin. Accrued interest is payable at the end of each interest period and reported in the Company’s condensed consolidated balance sheets as a current payable. In addition to interest, the Company also pays a quarterly commitment fee of 0.50% per annum on the unused portion of the commitments.

 

All borrowings are collateralized by substantially all of the assets of the Company, and are subject to certain nonfinancial and financial covenants. At March 31, 2018 and at December 31, 2017, the most restrictive financial covenants require the Company to maintain a current ratio greater than 1.0:1.0 and a ratio of total debt to EBITDAX less than 4.0:1.0. At March 31, 2018 and December 31, 2017, the Company was in compliance with all covenants.

 

9



 

HAYMAKER MINERALS & ROYALTIES, LLC

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

 

6.              Members’ Capital

 

In accordance with the terms of the Company’s Limited Liability Company Agreement, the net profits and losses of the Company, and all other items of income, gain, loss, deduction, and credit of the Company, shall be allocated to each of the members for capital account and federal income tax purposes. Moreover, the Company may make distributions of available cash or other properties from time to time, as determined by the Company in its sole discretion. Pursuant to the Company’s LLC agreement (and as is customary for limited liability companies), the liabilities of the members is limited to their contributed capital.

 

During the three months ended March 31, 2018, members’ capital contributions totaled $40 thousand. During the three months ended March 31, 2018, there were no distributions.

 

At March 31, 2018 and December 31, 2017, unfunded capital commitments totaled $42.8 million, respectively.

 

7.              Commitments and Contingencies

 

The Company could be subject to various possible loss contingencies which arise primarily from interpretation of federal and state laws and regulations affecting the natural gas and crude oil industry. Such contingencies include differing interpretations as to the prices at which natural gas and crude oil sales may be made, the prices at which royalty owners may be paid for production from their leases, environmental issues and other matters. Management believes it has complied with the various laws and regulations, administrative rulings and interpretations.

 

Litigation

 

The Company is involved in disputes or legal actions arising in the ordinary course of business. Management does not believe the outcome of such disputes or legal actions will have a material adverse effect on the Company’s condensed consolidated financial statements, and no amounts have been accrued at March 31, 2018 or December 31, 2017, respectively.

 

8.              Subsequent Events

 

In March 2018, the Company elected to remove all remaining PUD locations.  There were no impairment expenses as a result of this PUD removal.

 

In April 2018, the Company distributed $8.0 million to Kayne.

 

On May 29, 2018, the Company and certain affiliates entered into a definitive agreement with Kimbell Royalty Partners, LP (“Kimbell) to divest substantially all of the Company’s oil and gas mineral and royalty interests and other related assets for $84 million in cash and 4 million common units representing limited partner interests in Kimbell.  The effective date of the transaction is April 1, 2018.  The transaction closed on July 12, 2018

 

Pursuant to terms of the agreement, the Company terminated all outstanding hedge positions in June 2018 and paid in full the outstanding balance under the First Lien Loan at close.

 

On July 13, 2018, the Company distributed $56.8 million to Kayne and $0.2 million to Haymaker Management.

 

The Company has evaluated subsequent events through July 27, 2018, the date of issuance, and has concluded that no other events need to be reported in relation to this period.

 

10