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Note 5 - Discontinued Operations

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

5.	DISCONTINUED OPERATIONS

On December 21, 2020, the Partnership announced executed agreements to sell its crude oil trucking services, crude oil pipeline services, and crude oil terminalling services segments. These segments are reported as discontinued operations in the results of operations and financial position for all periods presented. The crude oil trucking services agreement closed in two phases, one on December 15, 2020, and one on February 2, 2021. The crude oil pipeline services agreement closed on February 1, 2021. Loss recognized on the disposal and classification of held for sale of these assets is reflected in the Statement of Operations for Discontinued Operations for the year ended December 31, 2020 below. The transaction related to the crude oil terminalling services segment closed on March 1, 2021. The Partnership has allocated interest on debt that was required to be repaid as a result of the sales of the crude oil pipeline and terminalling services segment for the years ended December 31, 2020 and 2021.

As part of the crude oil pipeline sale, $1.4 million of the gross sale proceeds are currently being held in escrow, subject to post-closing settlement terms and conditions. The Partnership expects to receive the majority of this in increments over the two years following the date of sale.

Exit and disposal costs related to these sales, in the form of employee severance payments, totaled $1.9 million. The Partnership provided limited transition services to both of the buyers of the crude oil pipeline and terminalling services segments, with the final transition services being completed during the third quarter of 2021. The contracts were designed to recover the costs of providing services, so there is minimal income statement impact for these services.

During the year ended December 31, 2020, prior to entering into the executed agreements, the Partnership recorded a $1.3 million impairment on the crude oil trucking segment based on the expected future cash flows and market interest of the segment compared to the carrying value of its assets. In addition, an impairment of $4.9 million was recognized in the first quarter of 2020 to write-down the value of the Partnership's crude oil linefill based on the market price of crude oil as of March 31, 2020.

Assets and Liabilities of Discontinued Operations (in thousands)		*As of December 31, 2020*
		*Crude Oil Trucking Services*				*Crude Oil Pipeline Services*				*Crude Oil Terminalling Services*				*Total*
ASSETS
Accounts receivable, net		$	81			$	13,711			$	167			$	13,959
Plant, property, and equipment			442				23,541				52,854				76,837
Other assets			331				547				5,271				6,149
Total assets of discontinued operations		$	854			$	37,799			$	58,292			$	96,945

LIABILITIES
Current liabilities		$	1,017			$	14,921			$	1,310			$	17,248
Total liabilities of discontinued operations		$	1,017			$	14,921			$	1,310			$	17,248

Assets and Liabilities of Discontinued Operations (in thousands)		*As of December 31, 2021*
		*Crude Oil Trucking Services*				*Crude Oil Pipeline Services*				*Crude Oil Terminalling Services*				*Total*
ASSETS
Other Assets		$	-			$	1			$	1			$	2
Total assets of discontinued operations		$	-			$	1			$	1			$	2

LIABILITIES
Current liabilities		$	12			$	218			$	10			$	240
Total liabilities of discontinued operations		$	12			$	218			$	10			$	240

Statement of Operations for Discontinued Operations (in thousands)
		*Year ended December 31, 2020*
		*Crude Oil Trucking Services*				*Crude Oil Pipeline Services*				*Crude Oil Terminalling Services*				*Total*
Revenue:
Third-party service revenue		$	5,293			$	1,689			$	16,856			$	23,838
Intercompany service revenue			5,587				-				-				5,587
Third-party product sales revenue			-				157,544				-				157,544
Costs and expenses:
Operating expense			12,386				13,427				8,561				34,374
Intercompany operating expense			-				5,587				-				5,587
Cost of product sales			-				52,624				-				52,624
Cost of product sales from related party			-				86,247				-				86,247
General and administrative expense			284				385				-				669
Asset impairment expense			1,330				2,821				2,266				6,417
Gain on sale of assets			(11	)			(445	)			(734	)			(1,190	)
Interest expense			11				960				4,348				5,319
Loss on disposal/classification as held for sale⁽¹⁾			1,847				37,249				-				39,096
Income (loss) before income taxes			(4,967	)			(39,622	)			2,415				(42,174	)
Provision for income taxes			3				(2	)			-				1
Net income (loss) from discontinued operations		$	(4,970	)		$	(39,620	)		$	2,415			$	(42,175	)

(1)

Included in the crude oil trucking services segment is a loss on disposal recorded during December 2020 for the first phase closing of $1.1 million, and a loss on the classification on assets held for sale as of December 31, 2020, for the second phase closing on February 2, 2021, of $0.7 million.

Statement of Operations for Discontinued Operations (in thousands)		*Year ended December 31, 2021*
		*Crude Oil Trucking Services*				*Crude Oil Pipeline Services*				*Crude Oil Terminalling Services*				*Total*
Revenue:
Third-party service revenue		$	9			$	535			$	5,097			$	5,641
Intercompany service revenue			409				-				-				409
Third-party product sales revenue			-				15,591				-				15,591
Costs and expenses:
Operating expense			1,416				1,564				2,189				5,169
Intercompany operating expense			-				409				-				409
Cost of product sales			-				4,994				-				4,994
Cost of product sales from related party			-				9,461				-				9,461
General and administrative expense			61				112				-				173
Tangible asset impairment expense			92				40				23				155
(Gain) loss on disposal of assets			23				(1,720	)			(73,499	)			(75,196	)
Interest expense			-				72				635				707
Income (loss) before income taxes			(1,174	)			1,194				75,749				75,769
Provision for income taxes			(3	)			-				-				(3	)
Net income (loss) from discontinued operations		$	(1,171	)		$	1,194			$	75,749			$	75,772

Select Cash Flow Information (in thousands)
		*Crude Oil Trucking Services*				*Crude Oil Pipeline Services*				*Crude Oil Terminalling Services*				*Total*
		*Year ended December 31, 2020*
Depreciation and amortization		$	719			$	4,550			$	4,383			$	9,652
Capital expenditures		$	2,074			$	4,555			$	720			$	7,349

		*Year ended December 31, 2021*
Amortization		$	3			$	14			$	41			$	58
Capital expenditures		$	-			$	30			$	106			$	136