Note 3—Property Acquisitions and Dispositions

2016 Acquisitions

In December 2016, the Company acquired undeveloped acreage and oil and gas producing properties located in Reeves County, Texas from Silverback Exploration, LLC. for an aggregate price of approximately $855.0 million, subject to customary purchase price adjustments. Approximately $116.7 million was recorded as proved oil and natural gas properties with the remaining recorded to unproved oil and natural gas properties. Approximately $32.3 million of the purchase price is included in accounts payable on the consolidated balance sheet as of December 31, 2016. This remaining amount will be paid when all the title issues related to the acquisition have been satisfied. The assets include 31 operated producing horizontal wells and approximately 35,500 net acres that directly offset the Company’s existing acreage in Reeves County, Texas. Of the net acres acquired, 1,250 net acres are subject to consents to assign, which are expected to be assigned in the first quarter of 2017. The Company operates approximately 90% of, and has an approximate 90% working interest in, this acreage. The Wolfcamp A and Wolfcamp C are producing horizons on this acreage and the Company believes that this acreage may be prospective for the Wolfcamp C and Avalon and Bone Spring shale formations.

In June 2016, the Company acquired undeveloped acreage and oil and gas producing properties located in Reeves County, Texas. Total cash consideration paid by the Company was $33.0 million, including usual and customary post-closing adjustments. Approximately $15.4 million was recorded as proved oil and natural gas properties. The assets include four operated producing horizontal wells and approximately 1,580 net acres that directly offset the Company’s existing acreage in Reeves County, Texas.



	Predecessor
(in thousands)	June 3, 2016
Cash consideration	$	32,979
Fair value of assets and liabilities acquired:
Proved oil and natural gas properties	15,374
Unproved oil and natural gas properties	18,071
Total fair value of oil and natural gas properties acquired	33,445
Revenue Suspense	(400		)
Asset retirement obligation	(66		)
Total fair value of net assets acquired	$	32,979

In May 2016, the Company acquired unproved acreage in close proximity to its operating area in Reeves County, Texas and wellbore only rights in an uncompleted horizontal wellbore for approximately $9.8 million from Caird DB, LLC. The assets included approximately 875 net acres that directly offset the Company’s existing acreage.

2015 Acquisitions

On September 1, 2015, the Company acquired additional interests in proved and unproved oil and natural gas properties in the Delaware Basin. Total cash consideration paid by the Company was $16.0 million, net of closing adjustments.

On September 3, 2015, the Company acquired a non-operated interest in 1,804 net acres in the Delaware Basin from an unrelated third party. Total cash consideration paid by the Company was $6.4 million, net of closing adjustments.

The Company allocated the final purchase prices to the acquired assets and liabilities based on fair value as of the respective acquisition dates, as summarized in the table below.



	Predecessor
	Acquisition #1			Acquisition #2
(in thousands)	September 1, 2015			September 3, 2015
Cash consideration	$	16,006		$	6,369
Fair value of assets and liabilities acquired:
Proved oil and natural gas properties	7,731			6,491
Unproved oil and natural gas properties	8,312			—
Total fair value of oil and natural gas properties acquired	16,043			6,491
Asset retirement obligation	(37		)	(122		)
Total fair value of net assets acquired	$	16,006		$	6,369

2014 Acquisitions

In June 2014, the Company acquired 2,400 net acres in the Delaware Basin from an unrelated third party, for approximately $11.0 million, net of customary closing adjustments.

2014 Dispositions

In December 2014, the Company sold its interest in approximately 1,845 net acres in Ward County, Texas, including 18 vertical wells, to an NGP-controlled entity for proceeds of $12.5 million, which resulted in a gain of $1.5 million and was recorded as an equity contribution due to the entities being under common control.

In May 2014, the Company sold its Caprock field to an unrelated third party for $59.3 million, net of customary closing adjustments. A net loss of $2.2 million was recognized on the sale during the second quarter of 2014.

In February 2014, the Company sold its 98.5% interest in Atlantic Midstream to PennTex Permian, an NGP-controlled entity for net proceeds of $71.8 million, which resulted in a gain of $20.0 million and was recorded as an equity contribution due to the entities being under common control.