The third party acquisitions discussed below were accounted for under the acquisition method of accounting. Accordingly, we conducted assessments of net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while acquisition costs associated with the acquisitions were expensed as incurred. The operating revenues and expenses of acquired properties are included in the accompanying financial statements from their respective closing dates forward. The transactions were financed through capital contributions and borrowings under our revolving credit facility and our Predecessor revolving credit facility.

The fair values of oil and natural gas properties are measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural properties include estimates of: (i) economic reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital.

Acquisition and divestiture related expenses for third party transactions are included in general and administrative expenses in the accompanying statements of operations for the periods indicated below (in thousands):

Successor

Predecessor

For the

Period from

Year Ended

May 5, 2017

January 1, 2017

December 31,

through

2019

2018

December 31, 2017

May 4, 2017

17,305

205

609

—

Acquisitions qualifying as a business combination are accounted for under the acquisition method of accounting, which requires, among other items, that assets acquired, and liabilities assumed be recognized on the condensed consolidated balance sheet at their fair values as of the acquisition date. The fair value measurements of the oil and natural gas properties acquired, and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs represent Level 3 measurements in the fair value hierarchy and include, but are not limited to, estimates of reserves, future operating and development costs, estimated future cash flows and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation.

On May 5, 2019, Midstates, Legacy Amplify and Merger Sub entered into the Merger Agreement pursuant to which, Merger Sub merged with and into Legacy Amplify, with Legacy Amplify surviving the Merger as a wholly owned subsidiary of Midstates. At the effective time of the Merger, each share of Legacy Amplify common stock issued and outstanding immediately prior to the effective time (other than excluded shares) were cancelled and converted into the right to receive 0.933 shares of Midstates common stock, par value $0.01 per share. On August 6, 2019, the effective date of the Merger, Midstates changed its name to “Amplify Energy Corp.”

The Merger has been accounted for using the acquisition method, with Legacy Amplify treated as the acquirer for accounting purposes. The following table represents the allocation of the total purchase price of Midstates to the identifiable assets acquired and the liabilities assumed based on the fair values as of the acquisition date.

	Purchase Price Allocation
	(In thousands)
Consideration:
Fair value of Midstates common stock issued in the Merger (a)	$	90,150
Fair value of Midstates warrants issued in the Merger		2
Value of shares to be issued		90,152
Fair value of Legacy Amplify restricted share consideration		832
Fair value of Legacy Amplify PSU consideration		557
Total consideration	$	91,541

Fair value of liabilities assumed:
Current liabilities	$	24,135
Long-term debt		76,559
Long-term asset retirement obligation		9,440
Other long-term liabilities		5,067
Amounts attributable to liabilities assumed	$	115,201

Fair value of assets acquired:
Cash and cash equivalents	$	19,250
Other current assets		17,862
Oil and natural gas properties		149,421
Other property and equipment		1,694
Long-term asset retirement cost		9,440
Other non-current assets		9,075
Amounts attributable to assets acquired	$	206,742

Total identifiable net assets	$	91,541

(a)

Based on 20,415,005 Midstates common shares issued at closing at $4.12 per share (closing price as of August 6, 2019).

We included in our Condensed Consolidated Statements of Operations revenues of $31.8 million, direct operating expense of $34.0 million and other expenses of $0.4 million for our Oklahoma properties for the period after the Merger closed.

During the three months ended September 30, 2019, the Company completed an analysis of Midstates’ asset retirement obligations as of the acquisition date. Based on this analysis, the Company recorded a measurement period adjustment of $0.9 million to increase the asset retirement obligations liability.

During the quarter ended September 30, 2019, the Company completed an analysis of Midstates’ leases under ASC 842 as of the acquisition date. Based on this analysis, the Company recorded an operating lease right of use asset and liability of approximately $0.3 million.

The following unaudited pro forma financial information for the year ended December 31, 2019 and 2018, respectively, is based on our historical consolidated financial statements adjusted to reflect as if the Merger had occurred on January 1, 2018. The information below reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including adjustments to conform the classification of expenses in Midstates statements of operations to our classification for similar expenses and the estimated tax impact of pro forma adjustments. The unaudited pro forma financial information is not necessarily indicative of what actually would have occurred if the acquisition had been completed as of the beginning of the periods presented, nor is it necessarily indicative of future results.

	For the Year Ended
	December 31,
	2019			2018
(Unaudited)	(In thousands, except per unit amounts)
Revenues	$	336,326		$	545,226
Net income (loss)		(22,926	)		146,845
Earnings per share:
Basic	$	(0.78	)	$	3.18
Diluted	$	(0.78	)	$	3.18

On May 30, 2018, we closed a transaction to divest certain of our non-core assets located in South Texas (the “South Texas Divestiture”) for total proceeds of approximately $17.1 million, including post-closing adjustments, which includes $18.6 million in cash, $0.5 million in accounts payable and $0.9 million paid in legal and advisor expenses. We recorded a loss on sale of properties of approximately $3.6 million for the year ended December 31, 2018, in “(gain) loss on sale of properties” in the accompanying Statements of Consolidated Operations. The net proceeds from the sale were used to reduce outstanding borrowings under our Emergence Credit Facility (as defined below). This disposition did not qualify as a discontinued operation.

There were no material acquisitions or divestitures the period from January 1, 2017 through May 4, 2017 or for the period from May 5, 2017 through December 31, 2017.