2. ACQUISITIONS AND DIVESTITURES

The following table presents the acquisitions completed by WES during 2017, 2016 and 2015, and identifies the funding sources for such acquisitions:



thousands except unit and percent amounts	Acquisition Date	Percentage Acquired		Borrowings		Cash On Hand		WES Common Units Issued	WES Series A Preferred Units Issued
DBJV system ⁽¹⁾	03/02/2015	50	%	$	—	$	—	—	—
Springfield system ⁽²⁾	03/14/2016	50.1	%	247,500		—		2,089,602	14,030,611
DBJV system ⁽³⁾	03/17/2017	50	%	—		155,000		—	—

⁽¹⁾

WES acquired Delaware Basin JV Gathering LLC (“DBJV”) from Anadarko. At the time of acquisition, DBJV owned a 50% interest in a gathering system and related facilities (the “DBJV system”) located in the Delaware Basin in Loving, Ward, Winkler and Reeves Counties, Texas. At the acquisition date, WES estimated the future payment would be $282.8 million, the estimated net present value of which was $174.3 million. For further information, see DBJV acquisition—deferred purchase price obligation - Anadarko below.

⁽²⁾

WES acquired Springfield Pipeline LLC (“Springfield”) from Anadarko for $750.0 million, consisting of $712.5 million in cash and the issuance of 1,253,761 of WES common units. Springfield owns a 50.1% interest in an oil gathering system and a gas gathering system. The Springfield oil and gas gathering systems (collectively, the “Springfield system”) are located in Dimmit, La Salle, Maverick and Webb Counties in South Texas. WES financed the cash portion of the acquisition through: (i) borrowings of $247.5 million on the WES RCF, (ii) the issuance of 835,841 of WES common units to WGP and (iii) the issuance of WES Series A Preferred units to private investors. See Note 4 for further information regarding WES’s Series A Preferred units. WGP financed the purchase of the WES common units by borrowing $25.0 million under the WGP RCF. See Note 12.


⁽³⁾	WES acquired the Additional DBJV System Interest from a third party. See Property exchange below.

Property exchange. On March 17, 2017, WES acquired the Additional DBJV System Interest from a third party in exchange for (a) WES’s 33.75% non-operated interest in two natural gas gathering systems located in northern Pennsylvania (the “Non-Operated Marcellus Interest”), commonly referred to as the Liberty and Rome systems, and (b) $155.0 million of cash consideration (collectively, the “Property Exchange”). WES previously held a 50% interest in, and operated, the DBJV system.

The Property Exchange is reflected as a nonmonetary transaction whereby the acquired Additional DBJV System Interest is recorded at the fair value of the divested Non-Operated Marcellus Interest plus the $155.0 million of cash consideration. The Property Exchange resulted in a net gain of $125.7 million recorded as Gain (loss) on divestiture and other, net in the consolidated statements of operations. Results of operations attributable to the Property Exchange were included in the consolidated statements of operations beginning on the acquisition date in the first quarter of 2017.

2. ACQUISITIONS AND DIVESTITURES (CONTINUED)

DBJV acquisition - Deferred purchase price obligation - Anadarko. Prior to WES’s agreement with Anadarko to settle its deferred purchase price obligation early, the consideration that would have been paid by WES for the March 2015 acquisition of DBJV from Anadarko consisted of a cash payment to Anadarko due on March 31, 2020. The cash payment would have been equal to (a) eight multiplied by the average of WES’s share of Net Earnings (as defined below) of DBJV for the calendar years 2018 and 2019, less (b) WES’s share of all capital expenditures incurred for DBJV between March 1, 2015, and February 29, 2020. Net Earnings was defined as all revenues less cost of product, operating expenses and property taxes, in each case attributable to DBJV on an accrual basis. In May 2017, WES reached an agreement with Anadarko to settle this obligation with a cash payment to Anadarko of $37.3 million, which was equal to the estimated net present value of the obligation at March 31, 2017.

The following table summarizes the financial statement impact of the Deferred purchase price obligation - Anadarko:



	Deferred purchase price obligation - Anadarko			Estimated future payment obligation ⁽¹⁾
Balance at December 31, 2015	$	188,674		$	282,807
Accretion revision ⁽²⁾	(7,747		)
Revision to Deferred purchase price obligation – Anadarko ⁽³⁾	(139,487		)
Balance at December 31, 2016	41,440			56,455
Accretion expense⁽⁴⁾	71
Revision to Deferred purchase price obligation – Anadarko ⁽³⁾	(4,165		)
Settlement of the Deferred purchase price obligation – Anadarko	(37,346		)
Balance at December 31, 2017	$	—		$	—


⁽¹⁾	Calculated using Level 3 inputs.


⁽²⁾	Financing-related accretion revisions were recorded in Interest expense in the consolidated statements of operations.


⁽³⁾	Recorded as revisions within Common units in the consolidated balance sheets and consolidated statements of equity and partners’ capital.


⁽⁴⁾	Accretion expense was recorded as a charge to Interest expense in the consolidated statements of operations.

Helper and Clawson systems divestiture. During the second quarter of 2017, the Helper and Clawson systems, located in Utah, were sold to a third party, resulting in a net gain on sale of $16.3 million recorded as Gain (loss) on divestiture and other, net in the consolidated statements of operations.

Hugoton system divestiture. During the fourth quarter of 2016, the Hugoton system, located in Southwest Kansas and Oklahoma, was sold to a third party, resulting in a net loss on sale of $12.0 million recorded as Gain (loss) on divestiture and other, net in the consolidated statements of operations. WES allocated $1.6 million in goodwill to this divestiture.

Dew and Pinnacle systems divestiture. During the third quarter of 2015, the Dew and Pinnacle systems in East Texas were sold to a third party, resulting in a net gain on sale of $77.3 million recorded as Gain (loss) on divestiture and other, net in the consolidated statements of operations. WES allocated $5.1 million in goodwill to this divestiture.