During the nine months ended September 30, 2022, we completed several acquisitions which are further described below. We accounted for each of these acquisitions as business combinations using the acquisition method of accounting. In addition, the purchase accounting for each of these acquisitions reflects the adoption of Accounting Standards Update (ASU) 2021-08, Business Combinations (Topic 805) during the nine months ended September 30, 2022.

On October 25, 2021, we entered into a merger agreement to acquire Oasis Midstream Partners LP (Oasis Midstream) in an equity and cash transaction (the Oasis Merger). Oasis Midstream is a master limited partnership which operates a diversified portfolio of midstream assets located in the Williston and Delaware Basins and its operations include natural gas services (gathering, compression, processing and gas lift supply), crude oil services (gathering, terminalling and transportation), and water services (gathering and disposal of produced and flowback water and freshwater distribution).

On February 1, 2022, we completed the merger with Oasis Midstream, which was valued at approximately $1.8 billion. Pursuant to the merger agreement, Oasis Petroleum Inc. (Oasis Petroleum) received $150 million in cash plus approximately 20.9 million newly issued CEQP common units in exchange for its 33.8 million common units held in Oasis Midstream. In addition, Oasis Midstream’s public unitholders received approximately 12.9 million newly issued CEQP common units in exchange for the approximately 14.8 million Oasis Midstream common units held by them. Additionally, under the merger agreement Oasis Petroleum received a $10 million cash payment in exchange for its ownership of the general partner of Oasis Midstream.

The fair value of the assets acquired and liabilities assumed were determined primarily utilizing market related information and other projections on the performance of the assets acquired, including an analysis of discounted cash flows at a discount rate of approximately 12%. Certain fair values are Level 3 fair value measurements and were developed by management with the assistance of a third-party valuation firm. We estimated the fair value of the senior notes assumed based on quoted market prices for similar issuances which are considered Level 2 fair value measurements.


Cash	$	14.9
Other current assets	63.2
Property, plant and equipment	1,264.4
Intangible assets	464.0
Total assets acquired	1,806.5
Current liabilities	48.2
Long-term debt(1)	698.7
Other long-term liabilities(2)	25.8
Total liabilities assumed	772.7
Net assets acquired excluding goodwill	1,033.8
Goodwill	56.2
Net assets acquired	$	1,090.0

(1) Consists of approximately $218 million outstanding borrowings under the Oasis Midstream credit facility, which was immediately repaid upon the closing of the Oasis Merger and approximately $450 million of unsecured senior notes and the related fair value adjustment of approximately $30.7 million. For a further discussion of the long-term debt assumed in conjunction with the Oasis Merger, see Note 8.

The identifiable intangible assets primarily consist of customer relationships with Oasis Petroleum and other customers with a weighted-average remaining life of 20 years. The goodwill recognized relates primarily to the anticipated operating synergies between the assets acquired and our existing operations. We reflected approximately $48.8 million of goodwill in our gathering and processing north segment and approximately $7.4 million in our gathering and processing south segment.

The financial results of Oasis Midstream’s Williston Basin operations are included in our gathering and processing north segment and Oasis Midstream’s Delaware Basin operations are included in our gathering and processing south segment from the date of acquisition. During the nine months ended September 30, 2022, we recognized approximately $20.1 million of transaction costs related to the Oasis Merger, which are included in general and administrative expenses in our consolidated statements of operations. During the three and nine months ended September 30, 2022, we recognized approximately $110.8 million and $275.1 million of revenues and $37.7 million and $94.0 million of net income related to Oasis Midstream’s operations.

On July 11, 2022, we acquired Sendero Midstream Partners, LP (Sendero), a privately-held midstream company, for cash consideration of approximately $631.2 million (Sendero Acquisition). Sendero’s assets are located in Eddy County, New Mexico and its operations include natural gas gathering, compression and processing services.

The purchase price has been allocated to the assets acquired and liabilities assumed based on preliminary fair values. Certain preliminary fair values are Level 3 fair value measurements and were developed by management with the assistance of a third-party valuation firm. The preliminary fair values were estimated primarily utilizing market related information and other projections on the performance of the assets acquired, including an analysis of discounted cash flows at a discount rate of approximately 13%. The preliminary fair values of property, plant and equipment, intangible assets and liabilities and goodwill are subject to change pending a final determination of the fair values as more information is received about their respective values. We expect to finalize the purchase price allocation for the Sendero Acquisition in 2022.


Cash	$	28.5
Other current assets	77.9
Property, plant and equipment	440.2
Intangible assets	138.9
Other non-current assets	0.2
Total assets acquired	685.7
Current liabilities	64.1
Long-term liabilities(1)	17.8
Total liabilities assumed	81.9
Net assets acquired excluding goodwill	603.8
Goodwill	27.4
Total purchase price	$	631.2

The financial results of Sendero are included in our gathering and processing south segment from the date of acquisition. During the three and nine months ended September 30, 2022, we recognized approximately $8.4 million and $9.3 million of transaction costs related to the Sendero Acquisition, which are included in general and administrative expenses in our consolidated statements of operations. During both the three and nine months ended September 30, 2022, we recognized approximately $159.0 million of revenues and $18.1 million of net income related to Sendero’s operations.

On July 11, 2022, we acquired First Reserve Management, L.P.’s (First Reserve) 50% equity interest in Crestwood Permian Basin Holdings LLC (Crestwood Permian) in exchange for approximately $5.9 million in cash and approximately 11.3 million newly issued CEQP common units (CPJV Acquisition). Prior to the CPJV Acquisition, we owned a 50% equity interest in Crestwood Permian, which we accounted for under the equity method of accounting. As a result of this transaction, we control and own 100% of the equity interests in Crestwood Permian.

The purchase price has been allocated to the assets acquired and liabilities assumed based on preliminary fair values. Certain preliminary fair values are Level 3 fair value measurements and were developed by management with the assistance of a third-party valuation firm. The preliminary fair values were estimated primarily utilizing market related information and other projections on the performance of the assets acquired, including an analysis of discounted cash flows at a discount rate of approximately 15%. The preliminary fair values of property, plant and equipment, intangible assets and liabilities, goodwill and an investment in an unconsolidated affiliate are subject to change pending a final determination of the fair values as more information is received about their respective values. We expect to finalize the purchase price allocation for the CPJV Acquisition in 2022.


Cash	$	149.4
Other current assets	83.3
Property, plant and equipment	453.4
Intangible assets	16.5
Investment in unconsolidated affiliate	78.6
Goodwill	29.1
Other non-current assets	4.9
Total assets acquired	815.2
Current liabilities	80.4
Long-term debt	140.2
Other long-term liabilities(1)	47.9
Total liabilities assumed	268.5
Estimated fair value of 100% of interest in Crestwood Permian	546.7
Less:
Elimination of equity interest in Crestwood Permian	194.7
Gain on acquisition of Crestwood Permian	75.3
Total purchase price	$	276.7

The identifiable intangible assets primarily consist of customer relationships with a weighted-average remaining life of 20 years and the identifiable intangible liabilities primarily consist of revenue contracts with a remaining life of 10 years. The goodwill recognized relates primarily to the anticipated operating synergies between the assets acquired and our existing operations. As shown in the table above, the fair value of the assets acquired and liabilities assumed in the CPJV Acquisition exceeded the sum of the cash consideration paid, the fair value of the common units issued and the historical book value of our 50% equity interest in Crestwood Permian (which was remeasured at fair value and derecognized) and, as a result, we recognized a gain of approximately $75.3 million, which is included in gain on acquisition in our consolidated statements of operations.

The consolidated financial results of Crestwood Permian are included in our gathering and processing south segment from the date of acquisition. During the three and nine months ended September 30, 2022, we recognized approximately $0.1 million and $0.3 million of transaction costs related to the CPJV Acquisition, which are included in general and administrative expenses in our consolidated statements of operations. During both the three and nine months ended September 30, 2022, we recognized approximately $157.0 million of revenues and $8.4 million of net income related to Crestwood Permian’s operations.

The tables below present selected unaudited pro forma information as if the acquisitions described above had occurred on January 1, 2021 (in millions). The pro forma information is not necessarily indicative of the financial results that would have occurred if the acquisitions had been completed as of the date indicated. The pro forma amounts were calculated after applying our accounting policies and adjusting the results to reflect the depreciation, amortization and accretion expense that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets and liabilities had been made at the beginning of the reporting period. The pro forma net income (loss) also includes the net effects of interest expense on incremental borrowings, repayments of long-term debt and amortization of the fair value adjustment to long-term debt.

Our consolidated statements of operations for the three and nine months ended September 30, 2022 reflect the results of the Sendero and Crestwood Permian for the period from July 11, 2022 to September 30, 2022. The historical results for Sendero and Crestwood Permian for the period from July 1, 2022 to July 10, 2022 were not material and as a result, the tables below do not reflect selected unaudited pro forma information for the three months ended September 30, 2022.

On July 1, 2022, we sold our assets in the Barnett Shale to EnLink Midstream, LLC (EnLink) for approximately $290 million, including working capital adjustments. During the nine months ended September 30, 2022, Crestwood Midstream recorded a loss on the sale of approximately $53 million, which is included in loss on long-lived assets, net on its consolidated statement of operations. Crestwood Equity’s historical carrying value of the property, plant and equipment related to the Barnett Shale assets was less than the sales proceeds due to historical impairments previously recorded on the property, plant and equipment by Crestwood Equity and as a result, during the three months ended September 30, 2022, Crestwood Equity recorded a gain on the sale of approximately $72 million, which is included in gain (loss) on long-lived assets, net on its consolidated statement of operations. The sale of the Barnett assets resulted in a decrease of approximately $346.9 million and $221.9 million of property, plant and equipment, net at CMLP and CEQP, respectively, and a decrease of approximately $18.9 million in asset retirement obligations at both CMLP and CEQP. For a further description of our assets in the Barnett Shale, which were previously included in our gathering and processing south segment, see our 2021 Annual Report on Form 10-K.

On October 25, 2022, we sold our assets in the Marcellus Shale for approximately $206 million. As a result of the sale, we reflected these assets as current assets held for sale, net, on our consolidated balance sheets at September 30, 2022, and recorded a loss on long-lived assets of approximately $248.2 million during the three months ended September 30, 2022 for the difference between the historical carrying value of the net assets and liabilities to be sold and the proceeds received from the sale. The current assets held for sale, net, were recorded at fair value based on the sales proceeds, which is a Level 3 fair value measurement, and consist primarily of property, plant and equipment and intangible assets.

During the three months ended September 30, 2021, we recorded a loss on long-lived assets of approximately $19 million related to the abandonment and dismantlement of certain of our Marcellus West Union compressor station assets, which were located in West Virginia and provided compression and dehydration services to our customers. For a further description of our assets in the Marcellus Shale, which are included in our gathering and processing south segment, see our 2021 Annual Report on Form 10-K.