3. Acquisition

Sanchez Acquisition

On December 14, 2016, the Company completed its initial closing of the acquisition of oil and gas properties in the Eagle Ford Shale from Sanchez Energy Corporation and SN Cotulla Assets, LLC, a subsidiary of Sanchez Energy Corporation (the “Sanchez Acquisition”). The Sanchez Acquisition was accounted for under the acquisition method of accounting whereby the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated acquisition date fair values based on then available information.

At the time of the initial close, an adjustment to the purchase price of $16.8 million was made for leases that were not conveyed to the Company. On January 9, 2017, the Company paid $7.0 million of the $16.8 million for certain of the outstanding leases which were conveyed to the Company. See the updated purchase price allocation presented below.

The purchase price allocation for the Sanchez Acquisition is preliminary and subject to change based on closings subsequent to March 31, 2017, related to the remaining leases that were not conveyed to the Company at the initial closing on December 14, 2016 or the subsequent closing on January 9, 2017 and final updates to purchase price adjustments primarily relate to net cash flows from the acquired wells from the effective date to the closing date. The following presents the purchase price and the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date. The Company currently expects these amounts will be finalized during the fourth quarter of 2017.



	Preliminary Purchase Price Allocation
	(In thousands)
Assets
Other current assets		$477
Oil and gas properties
Proved properties	94,664
Unproved properties	70,309
Total oil and gas properties	164,973
Total assets acquired		$165,450

Liabilities
Revenues and royalties payable		$1,442
Other current liabilities	323
Asset retirement obligations	2,054
Other liabilities	1,078
Total liabilities assumed		$4,897
Net Assets Acquired		$160,553

On April 13, 2017, the final payment of $9.8 million was made for the leases that were not conveyed to the Company at the initial closing or the subsequent closing on January 9, 2017. This amount has not been reflected in the preliminary purchase price allocation presented above.