Significant Accounting Policy (Policies)

6 Months Ended

Jun. 30, 2012

Policy Text Block [Abstract]

Basis of Presentation

(a) Basis of Presentation

The accompanying condensed consolidated financial statements are prepared in accordance with the instructions to Form 10-Q, are unaudited and do not include all the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the consolidated financial statements for the prior year to conform to the current presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2011.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates.

Investment in Limited Liability Company

(b) Investment in Limited Liability Company

On June 22, 2011, the Partnership entered into a limited liability agreement with Howard Energy Partners (“HEP”) for an initial capital contribution of $35.0 million in exchange for an individual ownership interest in HEP. In 2012, the Partnership made an additional capital contribution of $52.3million to HEP related to HEP's acquisition of substantially all of Meritage Midstream Services' natural gas gathering assets in south Texas. HEP owns midstream assets and provides midstream and construction services to Eagle Ford Shale producers. The Partnership owns 30.6 percent of HEP and accounts for this investment under the equity method of accounting. This investment is reflected on the balance sheet as “Investment in limited liability company.”

Potential Changes

(c) Potential Changes in use of Sabine Plant during 2012

Currently, the Partnership's Sabine plant has a contract with a third-party to fractionate the raw-make NGLs produced by the Sabine plant. The primary term of the contract expiredon June30, 2012 and is currently renewed on a month-to-month basis. The Partnership will negotiate with this third-party to try to establish a long-term fractionation agreement.If this third-party ceases to fractionate the produced NGLs from the Sabine plant and the Partnershipis unsuccessful in determining another alternative for its Sabine customers, the Partnership will cease operation of the Sabine plant. Although the Partnership does not have specific plans at this time to relocate the Sabine plant if it is idled, the Partnership may utilize it elsewhere in its operations. The net book value of the Sabine plant was $46.4 million (including $13.3million of intangible assets attributable to customer relationships) as of June 30, 2012. If the plant is idled on a long-term basis, an impairment may be recorded to expense the non-recoverable costs associated with the plant's current location, which are estimated to be approximately $27.0million based on the net book value as of June 30, 2012.

Clearfield Acquisition

(d) Clearfield Acquisition

On July 2, 2012, the Partnership, through a wholly-owned subsidiary, completed its previously announced acquisition of all of the issued and outstanding common stock of Clearfield Energy, Inc. and Clearfield Energy's wholly-owned subsidiaries (collectively, “Clearfield”). Clearfield is a well-established crude oil, condensate and water services company with operations in Ohio, Kentucky and West Virginia. Clearfield's business includes crude oil pipelines, a barge loading terminal on the Ohio River, a rail loading terminal on the Ohio Central Railroad network, a trucking fleet, and brine water disposal wells.

The Partnership paid approximately $210.0 million in cash for the acquisition and the purchase was funded from restricted cash that resulted from the senior notes offering in May 2012. The assets associated with this acquisition will be included in a new reporting segment that will be referred to as Ohio River Valley. Pro-forma financial statements for the Clearfield acquisition are available on our amended Current Report on Form 8-K/A filed on August 1, 2012.