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Related Party Transactions
3 Months Ended
Mar. 31, 2020
Related Party Transactions  
Related Party Transactions

12. RELATED PARTY TRANSACTIONS

Please read the disclosure under the headings “Sanchez-Related Agreements” and “Sanchez-Related Transactions” in Note 14 “Related Party Transactions” of our Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2019 for a more complete description of certain related party transactions that were entered into prior to 2020. The following is an update to such disclosure:

In conjunction with the acquisition of Western Catarina Midstream, we entered into a 15-year gas gathering agreement with Sanchez Energy pursuant to which Sanchez Energy agreed to tender all of its crude oil, natural gas and other hydrocarbon-based product volumes on approximately 35,000 dedicated acres in the Western Catarina area of the Eagle Ford Shale in Texas for processing and transportation through Western Catarina Midstream, with the potential to tender additional volumes outside of the dedicated acreage (the “Gathering Agreement”). During the first five years of the term of the Gathering Agreement, Sanchez Energy is required to meet a minimum quarterly volume delivery commitment of 10,200 Bbls per day of oil and condensate and 142,000 Mcf per day of natural gas, subject to certain adjustments. Sanchez Energy is required to pay gathering and processing fees of $0.96 per Bbl for crude oil and condensate and $0.74 per Mcf for natural gas that are tendered through Western Catarina Midstream, in each case, subject to an annual escalation for a positive increase in the consumer price index. On June 30, 2017, we and Sanchez Energy amended the Gathering Agreement to add an incremental infrastructure fee to be paid by Sanchez Energy based on water that is delivered through the gathering system through March 31, 2018 and we and Sanchez Energy subsequently agreed to continue the incremental infrastructure fee on a month-to-month basis.

As of March 31, 2020 and December 31, 2019, the Partnership had a net receivable from related parties of approximately $7.7 million, and $6.7 million, respectively, which are included in accounts receivable – related entities on the condensed consolidated balance sheets. This includes past due receivables from Sanchez Energy related to revenue earned on the Seco Pipeline of $1.9 million, and $1.1 million, as of March 31, 2020 and December 31, 2019, respectively. We believe these receivables are valid and will be collected, and as such have recorded no reserves for uncollectable receivables. As of March 31, 2020 and December 31, 2019, the Partnership also had a net payable to related parties of approximately $7.0 million, and $5.5 million, respectively, which are included in the accounts payable and accrued liabilities – related entities and long term accrued liabilities – related entities on the condensed consolidated balance sheets. The net receivable/payable as of March 31, 2020 and December 31, 2019 consist primarily of revenues receivable from oil and natural gas production and transportation, offset by costs associated with that production and transportation and obligations for general and administrative costs.