Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregation of Revenues

The following table presents revenues associated with contracts with customers for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019(1)		2020		2019(1)
	(In thousands)
Service revenues
Crude oil, natural gas and NGL revenues	$	43,137	$	49,624	$	138,226	$	143,556
Produced and flowback water revenues	26,217		33,400		79,155		93,694
Total service revenues	69,354		83,024		217,381		237,250
Product revenues
Crude oil, natural gas and NGL revenues	13,863		15,388		31,165		42,246
Freshwater revenues	1,338		5,138		8,699		18,309
Total product revenues	15,201		20,526		39,864		60,555
Total revenues	$	84,555	$	103,550	$	257,245	$	297,805

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(1)Retrospectively adjusted for the transfer of net assets between entities under common control. See Note 2 to our unaudited condensed consolidated financial statements.

Prior Period Performance Obligations

The Partnership records revenue when the performance obligations under the terms of its customer contracts are satisfied. The Partnership measures the satisfaction of its performance obligations using the output method based upon the volumes of crude oil, natural gas or water that flow through its systems. In certain cases, the Partnership is required to estimate these volumes during a reporting period and record any differences between the estimated volumes and actual volumes in the following reporting period. Such differences have historically not been significant. For the three and nine months ended September 30, 2020 and 2019, revenue recognized related to performance obligations satisfied in prior reporting periods was not material.

Contract Balances

Contract balances are the result of timing differences between revenue recognition, billings and cash collections. Contract assets relate to revenue recognized for accrued deficiency fees associated with minimum volume commitments where the Partnership believes it is probable there will be a shortfall payment and that a significant reversal of revenue recognized will not occur once the related performance period is completed and the customer is billed. Revenue recognized for accrued deficiency fees associated with minimum volume commitments is recorded under midstream services – third parties on the Partnership’s Condensed Consolidated Statement of Operations. Contract liabilities relate to aid in construction payments received from customers, which are recognized as revenue over the expected period of future benefit. The Partnership does not recognize contract assets or contract liabilities under its customer contracts for which invoicing occurs once the Partnership’s performance obligations have been satisfied and payment is unconditional. Contract balances are classified as current or long-term based on the timing of when the Partnership expects to receive cash for contract assets or recognize revenue for contract liabilities. Contract assets are recorded under other current assets on the Partnership’s Condensed Consolidated Balance Sheet. Contract liabilities are recorded under other current liabilities and other liabilities on the Partnership’s Condensed Consolidated Balance Sheet.

The following table summarizes the changes in contract assets for the nine months ended September 30, 2020:

	(In thousands)
Balance as of December 31, 2019	$	—
Revenue recognized	1,538
Balance as of September 30, 2020	$	1,538

The following table summarizes the changes in contract liabilities for the nine months ended September 30, 2020:

	(In thousands)
Balance as of December 31, 2019	$	3,681
Cash received	1,793
Revenue recognized	(449)
Balance as of September 30, 2020	$	5,025

Remaining Performance Obligations

The following table presents estimated revenue allocated to remaining performance obligations for contracted revenues that are unsatisfied (or partially satisfied) as of September 30, 2020:

	(In thousands)
2020 (excluding nine months ended September 30, 2020)	$	6,067
2021	16,921
2022	17,175
2023	10,896
2024	11,089
Thereafter	2,768
Total	$	64,916

The partially and wholly unsatisfied performance obligations presented in the table above are generally limited to customer contracts which have fixed pricing and fixed volume terms and conditions, which generally include customer contracts with minimum volume commitment payment obligations.

The Partnership has elected practical expedients, pursuant to Accounting Standards Codification 606, Revenue from Contracts with Customers, to exclude from the presentation of remaining performance obligations: (i) contracts with index-based pricing or variable volume attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a series of distinct services and (ii) contracts with an original expected duration of one year or less.