Gathering And Transportation Assets

3 Months Ended

Mar. 31, 2022

Gathering And Transportation Asset

Gathering And Transportation Assets

8. GATHERING AND TRANSPORTATION ASSETS

Gathering and transportation assets consisted of the following (in thousands):

	March 31,		December 31,
	2022		2021
Gathering and transportation assets
Midstream assets	$	185,181	$	188,952
Less: Accumulated depreciation and impairment		(91,075)		(90,717)
Total gathering and transportation assets, net	$	94,106	$	98,235

Depreciation and Amortization. – Gathering and transportation assets, are stated at historical acquisition cost, net of any impairments, and are depreciated using the straight-line method over the useful lives of the assets, which range from three to 15 years for furniture and equipment, up to 36 years for gathering facilities, and up to 40 years for transportation assets.

Depreciation and amortization consisted of the following (in thousands):

	Three Months Ended
	March 31,
	2022		2021
Depreciation and amortization of gathering and transportation related assets	$	1,774	$	1,781
Amortization of intangible assets		3,365		3,363
Total depreciation and amortization	$	5,139	$	5,144

Impairment of Gathering and Transportation Assets. – We perform a periodic review of gathering and transportation assets to identify facts and circumstances, or triggering events, that indicate the carrying value may not be recoverable. Asset recoverability is measured by comparing the carrying value of the asset or asset group with its expected future pre-tax undiscounted cash flows. These cash flow estimates require us to make projections and assumptions for many years into the future for pricing, demand, competition, operating cost and other factors. If the carrying amount exceeds the expected future undiscounted cash flows, we recognize an impairment equal to the excess of net book value over fair value. The determination of the fair value using present value techniques requires us to make projections and assumptions regarding the probability of a range of outcomes and the rates of interest used in the present value calculations. Any changes we make to these projections and assumptions could result in significant revisions to our evaluation of recoverability of our gathering and transportation assets and the recognition of additional impairments. Upon disposition or retirement of gathering and transportation assets, any gain or loss is recorded to operations.