Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Certain property, equipment and operating facilities are leased under various operating leases. Costs are also incurred associated with leased land, rights-of-way, permits and regulatory fees, the contracts for which generally extend beyond one year but can be cancelled at any time should they not be required for operations.

From time to time, the Partnership is involved in legal, tax, regulatory and other proceedings in various forums regarding performance, contracts and other matters that arise in the ordinary course of business. Management is not aware of any such proceedings for which a final disposition could have a material effect on the Partnership’s results of operations, cash flows or financial position. Once information pertaining to a legal proceeding indicates that it is probable that a liability has been incurred, an accrual is established equal to the estimate of the Partnership’s likely exposure.  There were no accruals for legal contingencies as of September 30, 2014 or December 31, 2013.

Chesapeake and other customers of the Partnership have been named in various lawsuits alleging underpayment of royalty.  In certain of these cases, the Partnership has also been named as a defendant based on allegations that the Partnership improperly participated with Chesapeake in causing the alleged royalty underpayments.  Management believes that the claims asserted to date are subject to indemnity obligations owed to the Partnership by Chesapeake.  While no assurance can be given as to the ultimate outcome of these cases, management currently believes that the final resolution of these cases will not have a material adverse effect on the Partnership’s results of operations, financial position or liquidity.