Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Of Assets And Liabilities On A Recurring Basis

The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2018 (in thousands):


	Fair Value Measurements at March 31, 2018
	Active Markets for		Observable
	Identical Assets		Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Fair Value
Commodity derivative instrument
Derivative liability	$	—	$	(477)	$	—	$	(477)
Midstream derivative instrument
Earnout derivative liability		—		—		(6,672)		(6,672)
Total	$	—	$	(477)	$	(6,672)	$	(7,149)

The following table summarizes the fair value of our assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2017 (in thousands):


	Fair Value Measurements at December 31, 2017
	Active Markets for		Observable
	Identical Assets		Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Fair Value
Commodity derivative instrument
Derivative assets	$	—	$	1,231	$	—	$	1,231
Midstream derivative instrument
Earnout derivative liability		—		—		(6,402)		(6,402)
Total	$	—	$	1,231	$	(6,402)	$	(5,171)

Non-Recurring Fair Value Measurements Of Assets And Liabilities

The following table summarizes the non-recurring fair value measurements of our assets as of March 31, 2018 (in thousands):


	Fair Value Measurements at March 31, 2018
	Active Markets for		Observable
	Identical Assets		Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Impairment	$	—	$	—	$	—
Total net assets	$	—	$	—	$	—

The following table summarizes the non-recurring fair value measurements of our assets as of December 31, 2017 (in thousands):


	Fair Value Measurements at December 31, 2017
	Active Markets for		Observable
	Identical Assets		Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)
Impairment(a)	$	—	$	—	$	7,277
Total net assets	$	—	$	—	$	7,277

During the year ended December 31, 2017, we recorded a non-cash impairment charge of $4.7 million to impair our producing oil and natural gas properties acquired in the Production Acquisition (defined in Note 8 “Oil and Natural Gas Properties”). The carrying values of the impaired properties were reduced to a fair value of $7.3 million, estimated using inputs characteristic of a Level 3 fair value measurement.

Reconciliation Of Changes In Fair Value Of Derivatives Classified As Level 3

The following table sets forth a reconciliation of changes in the fair value of the Partnership's earnout derivative classified as Level 3 in the fair value hierarchy for the three months ended March 31, 2018 and year ended December 31, 2017 (in thousands):


	Three Months Ended		Year Ended
	March 31, 2018		December 31, 2017
Beginning balance	$	(6,402)	$	(4,270)
Initial fair value of earnout derivative		—		221
Loss on earnout derivative		(270)		(2,353)
Ending balance	$	(6,672)	$	(6,402)

Loss included in earnings related to derivatives still held as of March 31, 2018 and December 31, 2017, respectively	$	(270)	$	(2,353)