Transactions with Affiliates

6 Months Ended

Jun. 30, 2017

The late Mr. K. S. Adams, Jr., former Chairman of the Board, and certain of his family partnerships and affiliates have participated as working interest owners with AREC. Mr. Adams and the affiliates participated on terms similar to those afforded other non-affiliated working interest owners. While these affiliates have generally maintained their existing property interest, they have not participated in any such transactions originating after the death of Mr. Adams in October 2013.

In connection with the operation of certain oil and gas properties, we also charge such related parties for administrative overhead primarily as prescribed by the Council of Petroleum Accountants Society Bulletin 5. We also enter into certain transactions in the normal course of business with other affiliated entities including direct cost reimbursement for shared phone and administrative services. In addition, we lease our corporate office space from an affiliated entity.

We utilize our former affiliate, Bencap, to administer certain of our employee medical benefit programs including a detail audit of individual medical claims. See Note 2 for further discussion. Bencap earns a fee from us for providing such services at a discounted amount from its standard charge to non-affiliates. In February 2017, Bencap requested additional funding of approximately $0.5 million from us. We declined the additional funding request and forfeited our 30% member interest in Bencap. At June 30, 2017, we have no further ownership interest in Bencap.

Activities with affiliates were as follows for the periods indicated (in thousands):



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016

Overhead recoveries	$	—	$	7	$	—	$	28
Affiliate billings to us	24		27		36		38
Billings to affiliates	1		1		2		2
Rentals paid to affiliate	158		155		325		318
Fees paid to Bencap (1)	—		94		108		130

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(1)	Amount represents fees paid to Bencap through the forfeiture of our investment during the first quarter of 2017. As a result of the investment forfeiture, Bencap is no longer an affiliate.

DIP Financing

In connection with its voluntary bankruptcy filing, AREC entered into a DIP Credit Agreement with AE. At June 30, 2017, approximately $0.4 million was outstanding under the DIP Credit Agreement. We earned interest income of approximately $0.1 million under the DIP Credit Agreement through June 30, 2017. See Note 3 for further discussion.