SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy)	12 Months Ended
Dec. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Basis of Presentation	Basis of Presentation The consolidated financial statements for the Successor and Predecessor include the operations of the Company and all of its wholly owned subsidiaries and the operations of the Partnership and all of its wholly owned subsidiaries, respectively. All intercompany accounts and transactions have been eliminated in consolidation.
Bankruptcy Accounting	Bankruptcy Accounting The consolidated financial statements have been prepared as if the Company is a going concern and reflect the application of Accounting Standards Codification 852 Reorganizations (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Restructuring, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred related to the bankruptcy proceedings are recorded in “Reorganization items, net” in the Company’s consolidated statements of operations. Upon emergence from bankruptcy on June 4, 2018, the Company elected to adopt and apply the relevant guidance provided in GAAP (as defined below) with respect to the accounting and financial statement disclosures for entities that have emerged from Chapter 11 (“fresh start accounting”) effective May 31, 2018 to coincide with the timing of the Company’s normal accounting period close. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the consolidated financial statements as of or after May 31, 2018, are not comparable with the consolidated financial statements prior to that date. To facilitate the financial statement presentations, the Company refers to the reorganized company in these consolidated financial statements and notes as the “Successor” for periods subsequent to May 31, 2018 and “Predecessor” for periods prior to June 1, 2018. Furthermore, the consolidated financial statements and notes have been presented with a “black line” division to delineate the lack of comparability between the Predecessor and Successor. See Note 2 and Note 3 for additional information.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent 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 and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While the Company believes that the estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. All of its cash and cash equivalents are maintained with several major financial institutions in the United States. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, the Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant default risk.
Accounts Receivable	Accounts Receivable Accounts receivable from oil, natural gas and natural gas liquids sales are recorded at the invoiced amount and do not bear interest. The Company routinely assesses the financial strength of its customers and bad debts are recorded based on an account–by–account review after all means of collection have been exhausted and the potential recovery is considered remote. The Company did not have any reserves for doubtful accounts as of December 31, 2019 and 2018, and did not incur any expense related to bad debts for the years ended December 31, 2019, 2018 and 2017.
Property and Depreciation	Property and Depreciation Oil, natural gas and natural gas liquids producing activities are accounted for under the successful efforts method of accounting. Under this method, exploration costs, other than the costs of drilling exploratory wells, are charged to expense as incurred. Costs that are associated with the drilling of successful exploration wells are capitalized if proved reserves are found. Lease acquisition costs are capitalized when incurred. Capitalized costs associated with unproved properties totaled $0.5 million and $8.5 million as of December 31, 2019 and 2018, respectively. Costs associated with the drilling of exploratory wells that do not find proved reserves, geological and geophysical costs and costs of certain non–producing leasehold costs are expensed as incurred. Sales proceeds are credited to the carrying value of the properties, and no gains or losses are recognized upon the disposition of proved oil and natural gas properties except in transactions such as the significant disposition of an amortizable base that significantly affects the unit–of–production amortization rate. The capitalized costs of producing oil and natural gas properties are depreciated and depleted by the units–of–production method based on the ratio of current production to estimated total net proved reserves as estimated by independent petroleum engineers. Proved developed reserves are used in computing unit rates for drilling and development costs and total proved reserves are used for depletion rates of leasehold and pipeline costs. Other property is stated at cost less accumulated depreciation, which is computed using the straight–line method based on estimated economic lives ranging from three to 25 years. The Company expenses costs for maintenance and repairs in the period incurred. Significant improvements and betterments are capitalized if they extend the useful life of the asset.
Impairment of Oil and Natural Gas Properties	Impairment of Oil and Natural Gas Properties The Company evaluates its proved oil and natural gas properties and related equipment and facilities for impairment whenever events or changes in circumstances indicate that the carrying amounts of such properties may not be recoverable. The determination of recoverability is made based upon estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related asset. For the years ended December 31, 2019, 2018 and 2017, the Company and the Predecessor recorded several impairments either as a result of asset sales or because assets were not recoverable (see Notes 8 and 10 for further information). If commodity prices significantly decrease in future quarters, the Company could have additional impairments of oil and natural gas properties. See “Subsequent Events” below for additional information regarding current commodity pricing environment. Unproved oil and natural gas properties are assessed periodically on a property–by–property basis, and any impairment in value is recognized. For the year ended December 31, 2019, and for the seven months ended December 31, 2018, the Company did not record any impairment expense related to unproved oil and natural gas properties. For the five months ended May 31, 2018, the Predecessor recorded an insignificant amount of impairment expense related to unproved oil and natural gas properties. For 2017, the Predecessor recorded impairment expense of $23.7 million related to unproved oil and natural gas properties where it had a change in development plans for the acreage.
Asset Retirement Obligations	Asset Retirement Obligations An asset retirement obligation (“ARO”) represents the future abandonment costs of tangible assets, such as wells, service assets, and other facilities. The Company records an ARO and capitalizes the asset retirement cost in oil and natural gas properties in the period in which the retirement obligation is incurred based upon the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells. After recording these amounts, the ARO is accreted to its future estimated value using an assumed cost of funds and the additional capitalized costs are depreciated on a unit–of–production basis. If the ARO is settled for an amount other than the recorded amount, a gain or loss is recognized.
Revenue Recognition	Revenue Recognition Oil, natural gas and natural gas liquids revenues are recognized upon the transfer of control of the products to a purchaser. Transfer of control typically occurs when the products are delivered to the purchaser, title and/or risk of loss has transferred and collectability of the revenue is reasonably assured. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange for those products. The Company’s oil production is primarily sold under market-sensitive contracts that are typically priced at a differential to the NYMEX price or at purchaser posted prices for the producing area. For oil contracts, the Company generally records sales based on the net amount received. The Company’s natural gas production is primarily sold under market-sensitive contracts that are typically priced at a differential to the published natural gas index price for the producing area due to the natural gas quality and the proximity to major consuming markets. For natural gas contracts, the Company generally records wet gas sales at the wellhead or inlet of the gas processing plant as revenues net of transportation, gathering and processing expenses if the processor is the customer and there is no redelivery of commodities to the Company at the tailgate of the plant. Conversely, the Company generally records residual natural gas and natural gas liquids sales at the tailgate of the plant on a gross basis along with the associated transportation, gathering and processing expenses if the processor is a service provider and there is redelivery of commodities to the Company at the tailgate of the plant. All facts and circumstances of an arrangement are considered and judgment is often required in making this determination. In addition, the Company recognizes processing expenses for commodities paid as noncash consideration in exchange for processing services and recognizes the associated revenues for those same commodities. This recognition results in an increase to revenues and expenses with no impact on net income. The Company follows the sales method of accounting for natural gas revenues. Under this method of accounting, revenues are recognized based on volumes sold, which may differ from the volume to which the Company is entitled based on its working interest. An imbalance is recognized as a liability only when the estimated remaining reserves will not be sufficient to enable the under–produced owner(s) to recoup its entitled share through future production. Under the sales method, no receivables are recorded where the Company has taken less than its share of production. There were no significant gas imbalances at December 31, 2019 or 2018. Harvest owns and operates a network of natural gas gathering systems in the Appalachian Basin which gather and transport owned natural gas and a small amount of third party natural gas to intrastate, interstate and local distribution pipelines. Natural gas gathering and transportation revenue is recognized when the natural gas has been delivered to a custody transfer point. See Note 5 for additional information regarding revenue recognition.
Income Taxes	Income Taxes Effective June 4, 2018, pursuant to the Plan, the Successor became a corporation subject to federal and state income taxes. Prior to the Plan being effective, the Predecessor was a limited partnership and organized as a pass-through entity for federal and most state income tax purposes. As a result, the Predecessor’s limited partners were responsible for federal and state income taxes on their share of taxable income. The Predecessor was subject to the Texas margin tax for partnership activity in the state of Texas. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Potential uncertain tax positions are assessed and, if required, an estimate and accrual is established for such amounts. In addition, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. See Note 16 for additional information regarding income taxes.
Earnings per Share / Limited Partner Unit	Earnings per Share / Limited Partner Unit Basic earnings (loss) per share is computed by dividing net earnings attributable to stockholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by adjusting the average number of shares outstanding for the dilutive effect, if any, of potential common shares. The Company uses the treasury stock method to determine the dilutive effect. The Predecessor used the two–class method to compute earnings per limited partner unit. The two–class method is an earnings allocation formula that determines earnings per unit for common units and participating securities as if all earnings for the period had been distributed. As the unvested phantom units and the earned but unvested performance units participated in dividends on an equal basis with the common units, they were considered to be participating securities. Earnings used in the determination of earnings per limited partner unit for the reporting period were reduced by the amount of earnings allocated to the general partner and available cash that would be distributed to the limited partners and the participating securities. The undistributed earnings, if any, were then allocated to the limited partners and the participating securities in accordance with the terms of the partnership agreement. Basic and diluted earnings per limited partner unit were then calculated by dividing earnings, after deducting the amount allocated to the general partner and the earnings attributable to the participating securities, by the weighted average number of outstanding limited partner units during the period.
Derivatives	Derivatives The Company monitors its exposure to various business risks, including commodity price and interest rate risks, and uses derivatives to manage the impact of certain of these risks. The Company’s policies do not permit the use of derivatives for speculative purposes. Harvest uses energy derivatives for the purpose of mitigating risk resulting from fluctuations in the market price of oil, natural gas and natural gas liquids. The Company has elected not to designate its derivatives as hedging instruments. Changes in the fair value of derivatives are recorded immediately to earnings as “Gain on derivatives, net” in the consolidated statements of operations.
Equity Method Investment	Equity Method Investment In 2011, EVEP and certain institutional partnerships managed by EnerVest carved out 7.5% overriding royalty interests from certain acres in Ohio (the “Underlying Properties”), which EVEP believed may be prospective for the Utica Shale, and contributed the ORRI to a newly formed limited partnership. EnerVest is the general partner of this partnership. The ORRI entitles the partnership to an average approximate 5.64% of the gross revenues from the Underlying Properties. The Company owns a 48% limited partner interest in the partnership and accounts for the investment using the equity method of accounting, as it does not constitute a controlling interest. Accordingly, the Company recognizes its proportionate share of the partnership’s income included in “Other income, net” in the consolidated statement of operations rather than when realized through limited partner distributions. Distributions by the partnership decrease the Company’s investment. As of December 31, 2019 and 2018, the Company’s investment in the partnership, which is included in “Other assets” on the consolidated balance sheets was $1.4 million and $0.1 million, respectively. The Company recognized equity earnings from the partnership of $2.9 million, $0.2 million, $0.1 million and $0.5 million, in the year ended December 31, 2019, the seven months ended December 31, 2018, the five months ended May 31, 2018 and the year ended December 31, 2017, respectively.
Concentration of Credit Risk	Concentration of Credit Risk All of the Company’s derivative contracts are with a major financial institution who is also a lender under the New Credit Facility (as defined in Note 12). Should this financial counterparty not perform, Harvest may not realize the benefit of some of its derivative contracts and could incur a loss. As of December 31, 2019, the Company’s counterparty has performed pursuant to their derivative contracts. Oil, natural gas and natural gas liquids revenues are derived principally from uncollateralized sales to numerous companies in the oil and natural gas industry; therefore, Harvest customers may be similarly affected by changes in economic and other conditions within the industry. The Company has experienced no significant credit losses on such sales in the past. During 2019, three customers accounted for 17.4%, 11.4%, and 10.1% of the consolidated oil, natural gas and natural gas liquids revenues. During 2018, one customer accounted for 15.5% of the consolidated oil, natural gas and natural gas liquids revenues. In 2017, two customers accounted for 15.5% and 11.0%, respectively, of the Predecessor’s consolidated oil, natural gas and natural gas liquids revenues. Harvest believes that the loss of a major customer would have a temporary effect on its revenues but, that over time, the Company would be able to replace its major customers.
Recent Accounting Standards	Recent Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”). The main objective of ASU 2016-02 is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous GAAP and Topic 842 (“Topic 842”) is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. ASU 2016-02 requires lessees to recognize assets and liabilities arising from leases on the balance sheet. ASU 2016-02 further defines a lease as a contract that conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Control over the use of the identified asset means that the customer has both (1) the right to obtain substantially all of the economic benefit from the use of the asset and (2) the right to direct the use of the asset. The Company adopted this new standard as of January 1, 2019 using a modified retrospective approach. The Company elected the package of practical expedients within ASU 2016‑02 that allows an entity to not reassess prior to the effective date (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases or (iii) initial direct costs for any existing leases. Additionally, the Company elected the practical expedient under ASU 2018‑01 that allows an entity to not evaluate existing or expired land easements not previously accounted for as leases prior to the effective date. The adoption of this standard resulted in an increase in the assets and liabilities on the Company’s condensed consolidated balance sheet. The quantitative impacts of the new standard were dependent on the leases in force at the time of adoption. See Note 13 for additional details about the impact upon adoption and related disclosures. In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). The new guidance eliminates the probable recognition threshold and broadens the information to consider past events, current conditions and forecasted information in estimating credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact of this ASU on its consolidated financial statements for the upcoming year of implementation and does not expect that adopting this ASU will have a material impact on its consolidated financial statements. No other new accounting pronouncements issued or effective during the year ended December 31, 2019 have had or are expected to have a material impact on the Company’s consolidated financial statements.
Subsequent Events	Subsequent Events Harvest evaluated subsequent events for appropriate accounting and disclosure through the date these consolidated financial statements were issued. On March 11, 2020, the World Health Organization recognized the novel strain of coronavirus ("COVID-19") as a global pandemic. This recent outbreak has adversely impacted global commercial activity, including the energy industry, and the industries in which several of the Company’s customers operate. The impacts of the global emergence on the Company’s business are currently unknown. In an effort to contain COVID-19 or slow its spread, governments around the world have also enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities. The Company anticipates that these actions and the global health crisis caused by COVID-19 will negatively impact business activity across the globe. It is not clear what the potential effects any such alterations or modifications may have on the Company’s business, including the effects on interactions with governmental agencies, customers, vendors and employees. Due to the rapidly evolving developments regarding the pandemic, the Company’s future results of operations, financial condition and cash flows may be impacted. However, the Company cannot reasonably estimate the ultimate impact of COVID-19.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy)

12 Months Ended

Dec. 31, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

The consolidated financial statements for the Successor and Predecessor include the operations of the Company and all of its wholly owned subsidiaries and the operations of the Partnership and all of its wholly owned subsidiaries, respectively. All intercompany accounts and transactions have been eliminated in consolidation.

Bankruptcy Accounting

The consolidated financial statements have been prepared as if the Company is a going concern and reflect the application of Accounting Standards Codification 852 Reorganizations (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Restructuring, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred related to the bankruptcy proceedings are recorded in “Reorganization items, net” in the Company’s consolidated statements of operations.

Upon emergence from bankruptcy on June 4, 2018, the Company elected to adopt and apply the relevant guidance provided in GAAP (as defined below) with respect to the accounting and financial statement disclosures for entities that have emerged from Chapter 11 (“fresh start accounting”) effective May 31, 2018 to coincide with the timing of the Company’s normal accounting period close. As a result of the application of fresh start accounting and the effects of the implementation of the plan of reorganization, the consolidated financial statements as of or after May 31, 2018, are not comparable with the consolidated financial statements prior to that date. To facilitate the financial statement presentations, the Company refers to the reorganized company in these consolidated financial statements and notes as the “Successor” for periods subsequent to May 31, 2018 and “Predecessor” for periods prior to June 1, 2018. Furthermore, the consolidated financial statements and notes have been presented with a “black line” division to delineate the lack of comparability between the Predecessor and Successor. See Note 2 and Note 3 for additional information.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent 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 and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While the Company believes that the estimates and assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. All of its cash and cash equivalents are maintained with several major financial institutions in the United States. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, the Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant default risk.

Accounts Receivable

Accounts receivable from oil, natural gas and natural gas liquids sales are recorded at the invoiced amount and do not bear interest. The Company routinely assesses the financial strength of its customers and bad debts are recorded based on an account–by–account review after all means of collection have been exhausted and the potential recovery is considered remote.

The Company did not have any reserves for doubtful accounts as of December 31, 2019 and 2018, and did not incur any expense related to bad debts for the years ended December 31, 2019, 2018 and 2017.

Property and Depreciation

Oil, natural gas and natural gas liquids producing activities are accounted for under the successful efforts method of accounting. Under this method, exploration costs, other than the costs of drilling exploratory wells, are charged to expense as incurred. Costs that are associated with the drilling of successful exploration wells are capitalized if proved reserves are found. Lease acquisition costs are capitalized when incurred. Capitalized costs associated with unproved properties totaled $0.5 million and $8.5 million as of December 31, 2019 and 2018, respectively. Costs associated with the drilling of exploratory wells that do not find proved reserves, geological and geophysical costs and costs of certain non–producing leasehold costs are expensed as incurred.

Sales proceeds are credited to the carrying value of the properties, and no gains or losses are recognized upon the disposition of proved oil and natural gas properties except in transactions such as the significant disposition of an amortizable base that significantly affects the unit–of–production amortization rate.

The capitalized costs of producing oil and natural gas properties are depreciated and depleted by the units–of–production method based on the ratio of current production to estimated total net proved reserves as estimated by independent petroleum engineers. Proved developed reserves are used in computing unit rates for drilling and development costs and total proved reserves are used for depletion rates of leasehold and pipeline costs.

Other property is stated at cost less accumulated depreciation, which is computed using the straight–line method based on estimated economic lives ranging from three to 25 years. The Company expenses costs for maintenance and repairs in the period incurred. Significant improvements and betterments are capitalized if they extend the useful life of the asset.

Impairment of Oil and Natural Gas Properties

The Company evaluates its proved oil and natural gas properties and related equipment and facilities for impairment whenever events or changes in circumstances indicate that the carrying amounts of such properties may not be recoverable. The determination of recoverability is made based upon estimated undiscounted future net cash flows. The amount of impairment loss, if any, is determined by comparing the fair value, as determined by a discounted cash flow analysis, with the carrying value of the related asset. For the years ended December 31, 2019, 2018 and 2017, the Company and the Predecessor recorded several impairments either as a result of asset sales or because assets were not recoverable (see Notes 8 and 10 for further information). If commodity prices significantly decrease in future quarters, the Company could have additional impairments of oil and natural gas properties. See “Subsequent Events” below for additional information regarding current commodity pricing environment.

Unproved oil and natural gas properties are assessed periodically on a property–by–property basis, and any impairment in value is recognized. For the year ended December 31, 2019, and for the seven months ended December 31, 2018, the Company did not record any impairment expense related to unproved oil and natural gas properties. For the five months ended May 31, 2018, the Predecessor recorded an insignificant amount of impairment expense related to unproved oil and natural gas properties. For 2017, the Predecessor recorded impairment expense of $23.7 million related to unproved oil and natural gas properties where it had a change in development plans for the acreage.

Asset Retirement Obligations

An asset retirement obligation (“ARO”) represents the future abandonment costs of tangible assets, such as wells, service assets, and other facilities. The Company records an ARO and capitalizes the asset retirement cost in oil and natural gas properties in the period in which the retirement obligation is incurred based upon the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells. After recording these amounts, the ARO is accreted to its future estimated value using an assumed cost of funds and the additional capitalized costs are depreciated on a unit–of–production basis. If the ARO is settled for an amount other than the recorded amount, a gain or loss is recognized.

Revenue Recognition

Oil, natural gas and natural gas liquids revenues are recognized upon the transfer of control of the products to a purchaser. Transfer of control typically occurs when the products are delivered to the purchaser, title and/or risk of loss has transferred and collectability of the revenue is reasonably assured. Revenue is recognized net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange for those products.

The Company’s oil production is primarily sold under market-sensitive contracts that are typically priced at a differential to the NYMEX price or at purchaser posted prices for the producing area. For oil contracts, the Company generally records sales based on the net amount received.

The Company’s natural gas production is primarily sold under market-sensitive contracts that are typically priced at a differential to the published natural gas index price for the producing area due to the natural gas quality and the proximity to major consuming markets. For natural gas contracts, the Company generally records wet gas sales at the wellhead or inlet of the gas processing plant as revenues net of transportation, gathering and processing expenses if the processor is the customer and there is no redelivery of commodities to the Company at the tailgate of the plant. Conversely, the Company generally records residual natural gas and natural gas liquids sales at the tailgate of the plant on a gross basis along with the associated transportation, gathering and processing expenses if the processor is a service provider and there is redelivery of commodities to the Company at the tailgate of the plant. All facts and circumstances of an arrangement are considered and judgment is often required in making this determination.

In addition, the Company recognizes processing expenses for commodities paid as noncash consideration in exchange for processing services and recognizes the associated revenues for those same commodities. This recognition results in an increase to revenues and expenses with no impact on net income.

The Company follows the sales method of accounting for natural gas revenues. Under this method of accounting, revenues are recognized based on volumes sold, which may differ from the volume to which the Company is entitled based on its working interest. An imbalance is recognized as a liability only when the estimated remaining reserves will not be sufficient to enable the under–produced owner(s) to recoup its entitled share through future production. Under the sales method, no receivables are recorded where the Company has taken less than its share of production. There were no significant gas imbalances at December 31, 2019 or 2018.

Harvest owns and operates a network of natural gas gathering systems in the Appalachian Basin which gather and transport owned natural gas and a small amount of third party natural gas to intrastate, interstate and local distribution pipelines. Natural gas gathering and transportation revenue is recognized when the natural gas has been delivered to a custody transfer point.

See Note 5 for additional information regarding revenue recognition.

Income Taxes

Effective June 4, 2018, pursuant to the Plan, the Successor became a corporation subject to federal and state income taxes. Prior to the Plan being effective, the Predecessor was a limited partnership and organized as a pass-through entity for federal and most state income tax purposes. As a result, the Predecessor’s limited partners were responsible for federal and state income taxes on their share of taxable income. The Predecessor was subject to the Texas margin tax for partnership activity in the state of Texas.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Potential uncertain tax positions are assessed and, if required, an estimate and accrual is established for such amounts.

In addition, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

See Note 16 for additional information regarding income taxes.

Earnings per Share / Limited Partner Unit

Basic earnings (loss) per share is computed by dividing net earnings attributable to stockholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by adjusting the average number of shares outstanding for the dilutive effect, if any, of potential common shares. The Company uses the treasury stock method to determine the dilutive effect.

The Predecessor used the two–class method to compute earnings per limited partner unit. The two–class method is an earnings allocation formula that determines earnings per unit for common units and participating securities as if all earnings for the period had been distributed. As the unvested phantom units and the earned but unvested performance units participated in dividends on an equal basis with the common units, they were considered to be participating securities. Earnings used in the determination of earnings per limited partner unit for the reporting period were reduced by the amount of earnings allocated to the general partner and available cash that would be distributed to the limited partners and the participating securities. The undistributed earnings, if any, were then allocated to the limited partners and the participating securities in accordance with the terms of the partnership agreement. Basic and diluted earnings per limited partner unit were then calculated by dividing earnings, after deducting the amount allocated to the general partner and the earnings attributable to the participating securities, by the weighted average number of outstanding limited partner units during the period.

Derivatives

The Company monitors its exposure to various business risks, including commodity price and interest rate risks, and uses derivatives to manage the impact of certain of these risks. The Company’s policies do not permit the use of derivatives for speculative purposes. Harvest uses energy derivatives for the purpose of mitigating risk resulting from fluctuations in the market price of oil, natural gas and natural gas liquids.

The Company has elected not to designate its derivatives as hedging instruments. Changes in the fair value of derivatives are recorded immediately to earnings as “Gain on derivatives, net” in the consolidated statements of operations.

Equity Method Investment

In 2011, EVEP and certain institutional partnerships managed by EnerVest carved out 7.5% overriding royalty interests from certain acres in Ohio (the “Underlying Properties”), which EVEP believed may be prospective for the Utica Shale, and contributed the ORRI to a newly formed limited partnership. EnerVest is the general partner of this partnership. The ORRI entitles the partnership to an average approximate 5.64% of the gross revenues from the Underlying Properties. The Company owns a 48% limited partner interest in the partnership and accounts for the investment using the equity method of accounting, as it does not constitute a controlling interest. Accordingly, the Company recognizes its proportionate share of the partnership’s income included in “Other income, net” in the consolidated statement of operations rather than when realized through limited partner distributions. Distributions by the partnership decrease the Company’s investment.

As of December 31, 2019 and 2018, the Company’s investment in the partnership, which is included in “Other assets” on the consolidated balance sheets was $1.4 million and $0.1 million, respectively. The Company recognized equity earnings from the partnership of $2.9 million, $0.2 million, $0.1 million and $0.5 million, in the year ended December 31, 2019, the seven months ended December 31, 2018, the five months ended May 31, 2018 and the year ended December 31, 2017, respectively.

Concentration of Credit Risk

All of the Company’s derivative contracts are with a major financial institution who is also a lender under the New Credit Facility (as defined in Note 12). Should this financial counterparty not perform, Harvest may not realize the benefit of some of its derivative contracts and could incur a loss. As of December 31, 2019, the Company’s counterparty has performed pursuant to their derivative contracts.

Oil, natural gas and natural gas liquids revenues are derived principally from uncollateralized sales to numerous companies in the oil and natural gas industry; therefore, Harvest customers may be similarly affected by changes in economic and other conditions within the industry. The Company has experienced no significant credit losses on such sales in the past.

During 2019, three customers accounted for 17.4%, 11.4%, and 10.1% of the consolidated oil, natural gas and natural gas liquids revenues. During 2018, one customer accounted for 15.5% of the consolidated oil, natural gas and natural gas liquids revenues. In 2017, two customers accounted for 15.5% and 11.0%, respectively, of the Predecessor’s consolidated oil, natural gas and natural gas liquids revenues. Harvest believes that the loss of a major customer would have a temporary effect on its revenues but, that over time, the Company would be able to replace its major customers.

Recent Accounting Standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”). The main objective of ASU 2016-02 is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous GAAP and Topic 842 (“Topic 842”) is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. ASU 2016-02 requires lessees to recognize assets and liabilities arising from leases on the balance sheet. ASU 2016-02 further defines a lease as a contract that conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Control over the use of the identified asset means that the customer has both (1) the right to obtain substantially all of the economic benefit from the use of the asset and (2) the right to direct the use of the asset. The Company adopted this new standard as of January 1, 2019 using a modified retrospective approach. The Company elected the package of practical expedients within ASU 2016‑02 that allows an entity to not reassess prior to the effective date (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases or (iii) initial direct costs for any existing leases. Additionally, the Company elected the practical expedient under ASU 2018‑01 that allows an entity to not evaluate existing or expired land easements not previously accounted for as leases prior to the effective date. The adoption of this standard resulted in an increase in the assets and liabilities on the Company’s condensed consolidated balance sheet. The quantitative impacts of the new standard were dependent on the leases in force at the time of adoption. See Note 13 for additional details about the impact upon adoption and related disclosures.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). The new guidance eliminates the probable recognition threshold and broadens the information to consider past events, current conditions and forecasted information in estimating credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact of this ASU on its consolidated financial statements for the upcoming year of implementation and does not expect that adopting this ASU will have a material impact on its consolidated financial statements.

No other new accounting pronouncements issued or effective during the year ended December 31, 2019 have had or are expected to have a material impact on the Company’s consolidated financial statements.

Subsequent Events

Harvest evaluated subsequent events for appropriate accounting and disclosure through the date these consolidated financial statements were issued.

On March 11, 2020, the World Health Organization recognized the novel strain of coronavirus ("COVID-19") as a global pandemic. This recent outbreak has adversely impacted global commercial activity, including the energy industry, and the industries in which several of the Company’s customers operate. The impacts of the global emergence on the Company’s business are currently unknown. In an effort to contain COVID-19 or slow its spread, governments around the world have also enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities.

The Company anticipates that these actions and the global health crisis caused by COVID-19 will negatively impact business activity across the globe. It is not clear what the potential effects any such alterations or modifications may have on the Company’s business, including the effects on interactions with governmental agencies, customers, vendors and employees.

Due to the rapidly evolving developments regarding the pandemic, the Company’s future results of operations, financial condition and cash flows may be impacted. However, the Company cannot reasonably estimate the ultimate impact of COVID-19.