FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As discussed in Note 11—Fair Value Measurements in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2022, certain assets and liabilities are reported at fair value on a recurring basis on the Partnership’s condensed consolidated balance sheets, including the Partnership’s derivative instruments. The fair values of the Partnership’s derivative contracts are measured internally using established commodity futures price strips for the underlying commodity provided by a reputable third party, the contracted notional volumes, and time to maturity. These valuations are Level 2 inputs in the fair value hierarchy. The net amounts are classified as current or noncurrent based on their anticipated settlement dates.

The following table provides (i) fair value measurement information for financial assets and liabilities measured at fair value on a recurring basis, (ii) the gross amounts of recognized derivative assets and liabilities, (iii) the amounts offset under master netting arrangements with counterparties and (iv) the resulting net amounts presented in the Partnership’s condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022:

	As of March 31, 2023
	Level 1		Level 2		Level 3		Total Gross Fair Value		Gross Amounts Offset in Balance Sheet		Net Fair Value Presented in Balance Sheet
	(In thousands)
Assets:
Current:
Derivative instruments	$	—	$	5,072	$	—	$	5,072	$	(3,715)	$	1,357
Liabilities:
Current:
Derivative instruments	$	—	$	5,814	$	—	$	5,814	$	(3,715)	$	2,099
Non-current:
Derivative instruments	$	—	$	2,383	$	—	$	2,383	$	—	$	2,383

	As of December 31, 2022
	Level 1		Level 2		Level 3		Total Gross Fair Value		Gross Amounts Offset in Balance Sheet		Net Fair Value Presented in Balance Sheet
	(In thousands)
Assets:
Current:
Derivative instruments	$	—	$	13,296	$	—	$	13,296	$	(3,968)	$	9,328
Non-current:
Derivative instruments	—		1,911		—		1,911		(1,469)		442
Liabilities:
Current:
Derivative instruments	$	—	$	3,968	$	—	$	3,968	$	(3,968)	$	—
Non-current:
Derivative instruments	$	—	$	1,476	$	—	$	1,476	$	(1,469)	$	7

Assets and Liabilities Not Recorded at Fair Value

The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets:

	March 31, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
Debt:
Revolving credit facility	$	270,000	$	270,000	$	152,000	$	152,000
5.375% senior notes due 2027(1)	$	425,154	$	416,041	$	424,895	$	411,634

(1) The carrying value includes associated deferred loan costs and any discount.

The fair value of the Operating Company’s revolving credit facility approximates the carrying value based on borrowing rates available to the Partnership for bank loans with similar terms and maturities and is classified as Level 2 in the fair value hierarchy. The fair value of the Notes was determined using the March 31, 2023 quoted market price, a Level 1 classification in the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include mineral and royalty interests acquired in asset acquisitions and subsequent write-downs of our proved oil and natural gas interests to fair value when they are impaired or held for sale.

Fair Value of Financial Assets

The Partnership has other financial instruments consisting of cash and cash equivalents, royalty income receivable, other current assets, accounts payable, accrued liabilities and income taxes payable. The carrying value of these instruments approximate their fair value because of the short-term nature of the instruments.