Note 10. Related Party Transactions

Agreements with Affiliates

The following agreements were negotiated among affiliated parties and, consequently, are not the result of arm’s length negotiations. The following is a description of those agreements that have been entered into with the affiliates of our general partner and with our general partner.

Services Agreement

We are party to a services agreement with our affiliate, Mid-Con Energy Operating, pursuant to which Mid-Con Energy Operating provides certain services to us, including management, administrative and operational services. The operational services include marketing, geological and engineering services. Under the services agreement, we reimburse Mid-Con Energy Operating, on a monthly basis, for the allocable expenses it incurs in its performance under the services agreement. These expenses include, among other things, salary, bonus, incentive compensation and other amounts paid to persons who perform services for us or on our behalf and other expenses allocated by Mid-Con Energy Operating to us. These expenses are included in G&A in our unaudited condensed consolidated statements of operations.

Operating Agreements

We, various third parties with an ownership interest in the same property and our affiliate, Mid-Con Energy Operating, are parties to standard oil and natural gas joint operating agreements, pursuant to which we and those third parties pay Mid-Con Energy Operating overhead associated with operating our properties. We and those third parties also pay Mid-Con Energy Operating for its direct and indirect expenses that are chargeable to the wells under their respective operating agreements. The majority of these expenses are included in lease operating expenses (“LOE”) in our unaudited condensed consolidated statements of operations.

Oilfield Services

We are party to operating agreements, pursuant to which our affiliate, Mid-Con Energy Operating, bills us for oilfield services performed by our affiliate, ME3 Oilfield Service. These amounts are either included in LOE in our unaudited condensed consolidated statements of operations or are capitalized as part of oil and natural gas properties in our unaudited condensed consolidated balance sheets.

The following table summarizes the affiliates’ transactions for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(in thousands)
Amounts paid for:
Services agreement	$	652	$	706	$	1,293	$	1,526
Operating agreements		1,613		1,616		3,016		3,281
Oilfield services		857		825		1,667		1,496
	$	3,122	$	3,147	$	5,976	$	6,303

At June 30, 2017, we had a payable to our affiliate, Mid-Con Energy Operating, of approximately $1.4 million, comprised of a joint interest billing payable of approximately $1.2 million and a payable for operating services of approximately $0.2 million. At December 31, 2016, we had a payable to our affiliate, Mid-Con Energy Operating, of approximately $3.4 million, comprised of a joint interest billing payable of approximately $2.8 million and a payable for operating services of approximately $0.6 million. These amounts were included in accounts payable-related parties in our unaudited condensed consolidated balance sheets.