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Subsequent Events
12 Months Ended
Dec. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events
On February 22, 2019, the Partnership entered into a memorandum of understanding (the “MOU”) with Oasis Petroleum regarding the funding of Bobcat DevCo’s expansion capital expenditures for the 2019 calendar year (the “2019 Capital Expenditures Arrangement”). As of December 31, 2018, the Partnership indirectly owned a 25% interest in Bobcat DevCo and Oasis Petroleum owned the remaining 75% interest. Pursuant to the Amended and Restated Limited Liability Company Agreement of Bobcat DevCo LLC, as amended (the “First A&R Bobcat LLCA”), the Partnership and Oasis Petroleum are each required to make pro-rata capital contributions to Bobcat DevCo in accordance with their respective percentage ownership interests in Bobcat DevCo.
Pursuant to the MOU, the Partnership has agreed to make up to $80 million of capital contributions to Bobcat DevCo that Oasis Petroleum would otherwise be required to contribute under the First A&R Bobcat LLCA. In connection with execution of the MOU, the Partnership and Oasis Petroleum have amended the First A&R Bobcat LLCA and entered into the Second Amended and Restated Limited Liability Company Agreement of Bobcat DevCo (the “Second A&R Bobcat LLCA”). The Second A&R Bobcat LLCA includes provisions applicable to the disproportionate capital contributions that the Partnership will make to Bobcat DevCo in connection with the 2019 Capital Expenditures Arrangement.
Pursuant to the Second A&R Bobcat LLCA, upon the occurrence of a disproportionate capital contribution, the Partnership’s percentage interest and Oasis Petroleum’s percentage interest in Bobcat DevCo will be adjusted to take into account the amount of the disproportionate capital contribution and the fair market value of Bobcat DevCo’s assets. Under the MOU, the Partnership has also agreed to a fair market value of Bobcat DevCo’s assets that will be used for the purposes of redetermining percentage interests in connection with the 2019 Capital Expenditures Arrangement. While the Second A&R Bobcat LLCA also contains provisions allowing a member to convert a disproportionate capital contribution to a pro-rata contribution in certain circumstances, Oasis Petroleum has agreed to waive its right to make such an election during the 2019 calendar year in the MOU. As a result of the 2019 Capital Expenditures Arrangement, the Partnership expects its percentage interest ownership in Bobcat DevCo to increase from 25% as of December 31, 2018 to between approximately 34% to 36% during the 2019 calendar year.
Separate from the 2019 Capital Expenditures Arrangement and the agreements contained in the MOU, the Partnership and Oasis Petroleum may from time to time agree to fund certain special projects of Bobcat DevCo (“Bobcat Special Projects”) at ratios other than that reflected by their respective percentage interest ownership in Bobcat DevCo and without readjustments to their respective percentage interests. In general, the Partnership might agree to fund a Bobcat Special Project in excess of its pro-rata share of the relevant capital expenditures to the extent it expects to receive a disproportionate benefit from such capital expenditures. The Second A&R Bobcat LLCA also amends the First A&R Bobcat LLCA to include provisions related to the funding of any Bobcat Special Projects.
The terms of the 2019 Capital Expenditures Arrangement were approved by the Board of Directors of the General Partner following a unanimous recommendation for approval from the conflicts committee of the Board of Directors of the General Partner, which consists entirely of independent directors.