Intangible Assets

9 Months Ended

Sep. 30, 2016

9. INTANGIBLE ASSETS

Intangible assets are comprised of customer and marketing contracts. The intangible assets balance includes $189.2 million related to the customer contract with SN that was entered into as part of the Western Catarina Midstream Acquisition. Pursuant to the 15-year agreement, SN tenders all of its crude petroleum, natural gas and other hydrocarbon-based product volumes on 35,000 dedicated acres in the Western Catarina of the Eagle Ford Shale in Texas for processing and transportation through the gathering system, with a right to tender additional volumes outside of the dedicated acreage. These intangible assets are being amortized using the straight-line method over the 15 year life of the agreement. As of September 30, 2016, the intangible asset balance was reduced by $0.2 million due to marketing contracts from the 2007 Newfield acquisition which were included in the Mid-Continent Divestiture.

Amortization expense for the nine months ended September 30, 2016 and 2015 was $10.3 million and $0.3 million, respectively. Intangible assets as of September 30, 2016 and December 31, 2015 are detailed below (in thousands):


	September 30,		December 31,
	2016		2015
Beginning balance	$	199,741	$	1,033
Additions		—		201,888
Disposals		(219)		—
Amortization		(10,345)		(3,180)
Ending balance	$	189,177	$	199,741