SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Cash Distribution

On April 30, 2020, the board of directors of the General Partner approved a cash distribution for the first quarter of 2020 of $0.10 per common unit, payable on May 21, 2020, to eligible unitholders of record at the close of business on May 14, 2020. This distribution represents 25% of total cash available for distribution with the remaining cash flow expected to be retained to strengthen the Partnership’s balance sheet. The board of directors of the General Partner intends to review this distribution policy quarterly.

The Partnership’s Credit Facility

In connection with the Partnership’s regularly scheduled (semi-annual) spring 2020 redetermination, the administrative agent has recommended that the Partnership’s borrowing base be decreased to $580.0 million, which is expected to be effective mid May 2020. The decrease is subject to approval by the requisite lenders under the Operating Company’s revolving credit facility. Under the new expected borrowing base, the Operating Company would have $406.5 million of availability for future borrowings under the revolving credit facility as of March 31, 2020.

Current Commodity Environment

Oil prices dropped sharply in early March 2020 and then continued to decline reaching levels below zero dollars per barrel. This was a result of multiple factors affecting supply and demand in global oil and natural gas markets, including the announcement of price reductions and production increases by OPEC members and other oil exporting nations and the ongoing COVID-19 pandemic. Oil and natural gas prices are expected to continue to be volatile as a result of changes in oil and natural gas production, inventories and demand, as well as national and international performance. The Partnership cannot predict when prices will improve and stabilize.