SIGNIFICANT ACQUISITIONS AND DIVESTITURES (Tables)

12 Months Ended

Dec. 31, 2019

Pursuant to the Contribution Agreements, until February 2025, the Contributors were entitled to receive additional SRII Opco Common Units as earn-out consideration if the 20-day volume-weighted average price (“20-Day VWAP”) of our Class A Common Stock equals or exceeds the following prices (each such payment, an “Earn-Out Payment”):

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20-Day VWAP	Earn-Out Consideration Payable to AM Contributor	Earn-Out Consideration Payable to KFM Holdco, LLC
$14.00	10,714,285 SRII Opco Common Units	7,142,857 SRII Opco Common Units
$16.00	9,375,000 SRII Opco Common Units	6,250,000 SRII Opco Common Units
$18.00	13,888,889 SRII Opco Common Units	—
$20.00	12,500,000 SRII Opco Common Units	—

Alta Mesa

Business Acquisition [Line Items]

Purchase Consideration

Purchase Price for Alta Mesa



(in thousands)	February 9, 2018
Purchase Consideration: ⁽¹⁾
SRII Opco Common Units issued ⁽²⁾	$	1,261,249
Estimated fair value of contingent earn-out purchase consideration ⁽³⁾	284,109
Settlement of preexisting working capital	5,476
Total purchase price consideration	$	1,550,834

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(1)	The purchase price consideration was for 100% of the limited partner interests in Alta Mesa and 100% of the economic interests and 90% of the voting interests in Alta Mesa GP.

(2)

At closing, the Riverstone Contributor received 20,000,000 SRII Opco Common Units and High Mesa received 138,402,398 SRII Opco Common Units. Pursuant to a final closing statement during the second quarter of 2018, High Mesa received an additional 1,197,934 SRII Opco Common Units and an equivalent number of shares of our Class C Common Stock. The estimated fair value of an SRII Opco Common Unit was approximately $7.90 per unit and reflects discounts for holding requirements and liquidity.

(3)

For a period of seven years following Closing, High Mesa was to be entitled to receive earn-out consideration in the form of SRII Opco Common Units. We determined that the fair value of the earn-out consideration was approximately $284.1 million, which was classified as equity. The fair value of the contingent earn-out was determined using the Monte Carlo simulation valuation method based on Level 3 inputs as defined in the fair value hierarchy. The key inputs included the listed market price for Class A Common Stock, market volatility of a peer group of companies similar to the Company (due to the lack of trading activity in the Class A Common Stock), no dividend yield, an expected life of each earn-out threshold based on the remaining term of the earn-out period and a risk-free rate based on U.S. dollar overnight indexed swaps with a maturity equivalent to the earn-out’s expected life.

KFM Credit Facility

Business Acquisition [Line Items]

Purchase Consideration

Purchase Price for KFM



(in thousands)	February 9, 2018
Purchase Consideration:
Cash ⁽¹⁾	$	809,812
SRII Opco Common Units issued ⁽²⁾	433,931
Estimated fair value of contingent earn-out purchase consideration ⁽³⁾	88,105
Settlement of preexisting working capital	(5,476		)
Total purchase price consideration	$	1,326,372

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(1)	The cash consideration paid at February 9, 2018 was net of estimated net working capital adjustments, transaction expenses, capital expenditures and banking fees. Pursuant to a final closing statement during the second quarter of 2018, KFM Holdco remitted back to the Company $5.0 million in cash.


(2)	At closing, KFM Holdco, LLC received 55,000,000 SRII Opco Common Units. Pursuant to a final closing statement during the second quarter of 2018, KFM Holdco remitted back 89,680 SRII Opco Common Units and an equivalent number of shares of our Class C Common Stock. The SRII Common Units were valued at approximately $7.90 per unit, reflecting discounts for holding requirements and liquidity.

(3)

The KFM earn-out consideration was recognized at fair value and has been classified in stockholders’ equity. The fair value of the earn-out was determined using the Monte Carlo simulation valuation method based on Level 3 inputs. The key inputs included the quoted market price for the Company’s Class A Common Stock, market volatility of a peer group of companies similar to the Company (due to the lack of trading activity in the Company’s Class A Common Stock), no dividend yield, an expected life of each earn-out threshold based on the remaining term of the earn-out period and a risk-free rate based on U.S. dollar overnight indexed swaps.