Significant Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2018

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(in thousands)	February 9, 2018 (As initially reported)		Measurement Period Adjustment ⁽¹⁾		February 9, 2018 (As adjusted)
Purchase Consideration: ⁽²⁾
SRII Opco Common Units issued ⁽³⁾	$	1,251,782	$	9,467	$	1,261,249
Estimated fair value of contingent earn-out purchase consideration ⁽⁴⁾	284,109		—		284,109
Total purchase price consideration	$	1,535,891	$	9,467	$	1,545,358

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(1)	The measurement period adjustment relates to the issuance of 1,197,934 of additional SRII Opco Common Units, valued at approximately $7.90 per unit, to the AM Contributor based on a final closing statement agreed to by the parties during the three months ended June 30, 2018 (Successor).


(2)	The purchase price consideration was for 100% of the limited partner interests in us and 100% of the economic interests and 90% of the voting interests in AMH GP.


(3)	At closing, the Riverstone Contributor received consideration of 20,000,000 SRII Opco Common Units and the AM Contributor received consideration of 138,402,398 SRII Opco Common Units. The estimated fair value of an SRII Opco Common Unit was approximately $7.90 per unit and reflects discounts for holding requirements and liquidity.

(4)

For a period of seven years following Closing, the AM Contributor will be entitled to receive an earn-out consideration to be paid in the form of SRII Opco Common Units (and a corresponding number of shares of AMR Class C Common Stock) if the 20-day VWAP of the Class A Common Stock of AMR equals or exceeds the specified prices pursuant to the AM Contribution Agreement. Pursuant to ASC 805 and ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), we have determined that the fair value of the earn-out consideration was approximately $284.1 million, which was classified as equity. The fair value of the contingent equity earn-out consideration was determined using the Monte Carlo simulation valuation method based on Level 3 inputs as defined in the fair value hierarchy. The key inputs included the listed market price for Class A Common Stock, market volatility of a peer group of companies similar to AMR (due to the lack of trading activity in the Class A Common Stock), no dividend yield, an expected life of each earn-out threshold based on the remaining contractual term of the contingent liability earn-out period and a risk-free rate based on U.S. dollar overnight indexed swaps with a maturity equivalent to the earn-out’s expected life.

Alta Mesa RBL

Business Acquisition [Line Items]

Allocation of purchase consideration



(in thousands)	February 9, 2018 (As initially reported)		Measurement Period Adjustment (1)			February 9, 2018 (As adjusted)
Estimated Fair Value of Assets Acquired ⁽²⁾
Cash, cash equivalents and restricted cash	$	10,345	$	—		$	10,345
Accounts receivable	101,745		—			101,745
Other receivables	1,222		840			2,062
Receivables due from related party	907		—			907
Prepaid expenses and other	1,405		—			1,405
Derivatives	352		—			352
Property and equipment: ⁽³⁾
Oil and gas properties, successful efforts	2,314,858		(4,879		)	2,309,979
Other property and equipment, net	43,318		—			43,318
Notes receivable due from related party	12,454		—			12,454
Deposits and other long-term assets	10,286		—			10,286
Total fair value of assets acquired	2,496,892		(4,039		)	2,492,853
Estimated Fair Value of Liabilities Assumed ⁽²⁾
Accounts payable and accrued liabilities	210,867		(13,506		)	197,361
Accounts payable — affiliate	5,476		—			5,476
Advances from non-operators	6,803		—			6,803
Advances from related party	47,506		—			47,506
Asset retirement obligations ⁽³⁾	5,998		—			5,998
Derivatives	11,585		—			11,585
Long-term debt ⁽⁴⁾	667,700		—			667,700
Other long-term liabilities	5,066		—			5,066
Total fair value of liabilities assumed	961,001		(13,506		)	947,495
Total consideration and fair value	$	1,535,891	$	9,467		$	1,545,358

_________________


(1)	The measurement period adjustments were recognized in the reporting period in which the adjustments were determined. The measurement period adjustments relate to a change in the purchase consideration based on a final closing statement agreed to by the parties during the three months ended June 30, 2018 and certain adjustments to beginning balances.


(2)	The assets acquired and liabilities assumed relate to Alta Mesa’s STACK assets.

(3)

The estimated fair value of oil and gas properties and asset retirement obligations were determined using valuation techniques that convert future cash flows to a single discounted amount and involve the use of certain inputs that are not observable in the market (Level 3 inputs). Significant inputs include, but are not limited to recoverable reserves, production rates, future operating and development costs, future commodity prices, appropriate risk-adjusted discount rates, and other relevant data. These inputs required significant judgments and estimates by management at the time of the valuation. Actual results may vary from these estimates.


(4)	Represents the approximate fair value as of the acquisition date of (i) Alta Mesa’s $500.0 million aggregate principal amount of 7.875% senior unsecured notes due December 15, 2024, totaling approximately $533.6 million, based on Level 1 inputs, and (ii) outstanding borrowings under the Alta Mesa Predecessor Credit Facility of approximately $134.1 million as of the acquisition date.