Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Schedule of 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 September 30, 2019 (in thousands):

	Fair Value Measurements at September 30, 2019
	Active Markets for		Observable
	Identical Assets		Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Fair Value
Commodity derivative instrument
Derivative assets	$	—	$	976	$	—	$	976
Midstream derivative instrument
Earnout derivative liability		—		—		(5,762)		(5,762)
Other liabilities
Warrant		—		(774)		—		(774)
Total	$	—	$	202	$	(5,762)	$	(5,560)

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, 2018 (in thousands):

	Fair Value Measurements at December 31, 2018
	Active Markets for		Observable
	Identical Assets		Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Fair Value
Commodity derivative instrument
Derivative assets	$	—	$	3,914	$	—	$	3,914
Midstream derivative instrument
Earnout derivative liability		—		—		(5,856)		(5,856)
Total	$	—	$	3,914	$	(5,856)	$	(1,942)

Schedule of reconciliation of changes in fair value of derivatives

The following table sets forth a reconciliation of changes in the fair value of the Partnership’s earnout derivative liability classified as Level 3 in the fair value hierarchy (in thousands):

	Nine Months Ended		Year Ended
	September 30, 2019		December 31, 2018
Beginning balance	$	(5,856)	$	(6,402)
Gain on earnout derivative		94		546
Ending balance	$	(5,762)	$	(5,856)
Gain included in earnings related to derivatives still held as of September 30, 2019 and December 31, 2018, respectively	$	94	$	546