Divestitures and Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS

Appalachian Basin. In December 2013, we divested our shallow Upper Devonian (non-Marcellus Shale) Appalachian Basin crude oil and natural gas properties previously owned directly by us, as well as through our proportionate share of PDCM, for aggregate consideration of approximately $20.6 million, of which our share of the proceeds was approximately $5.1 million. We received our proportionate share of cash proceeds and a note receivable. Concurrent with the closing of the transaction, our $6.7 million irrevocable standby letter of credit and an agreement for firm transportation services was released and novated to the buyer.

In July 2014, we signed a definitive agreement pursuant to which we agreed to sell our entire 50% ownership interest in PDCM to an unrelated third-party for aggregate consideration of approximately $250 million, subject to certain purchase price adjustments. The transaction includes the buyer's assumption of our share of the firm transportation obligations related to the assets owned by PDCM as well as our share of certain of PDCM's natural gas hedging positions for the years 2014 through 2017 and the repayment of outstanding PDCM debt. Our proportionate share of PDCM's assets and liabilities have been classified as held for sale in the condensed consolidated balance sheets for all periods presented. In addition, because the divestiture represents a strategic shift that will have a major effect on our operations, our proportionate share of PDCM's Marcellus Shale results of operations have been separately reported as discontinued operations in the condensed consolidated statement of operations for all periods presented. In October 2014, this divestiture closed for total consideration, after our share of PDCM's debt repayment and other working capital adjustments, of approximately $190 million, comprised of approximately $150 million in cash and a promissory note due in 2020 of approximately $40 million, subject to customary post-closing adjustments. See Note 15, Subsequent Event, for additional information regarding the closing of this divestiture.

Piceance Basin and NECO. In June 2013, we divested our Piceance Basin, NECO and certain other non-core Colorado oil and gas properties, leasehold mineral interests and related assets for total consideration of approximately $177.6 million, with an additional $17.0 million paid to our non-affiliated investor partners in our affiliated partnerships. Following the sale, we do not have significant continuing involvement in the operations of, or cash flows from, the Piceance Basin and NECO oil and gas properties. Accordingly, the results of operations related to these assets have been separately reported as discontinued operations in the condensed consolidated statement of operations for the nine months ended September 30, 2013.

Selected Financial Information Related to Divested and Discontinued Operations. The tables below set forth selected financial information related to net assets held for sale and operating results related to discontinued operations. Net assets held for sale represent the assets that were expected to be sold, net of liabilities that were expected to be assumed by the purchaser.

The following table presents condensed consolidated balance sheet data related to net assets held for sale:

Condensed consolidated balance sheet	As of September 30, 2014		As of December 31, 2013
	(in thousands)
Assets
Current assets
Cash and cash equivalents	$	496	$	601
Other current assets	4,879		7,060
Assets held for sale - current	5,375		7,661
Non-current assets
Properties and equipment, net	169,672		171,592
Other assets	7,022		6,892
Assets held for sale - non-current	176,694		178,484
Liabilities
Liabilities held for sale - current	3,070		12,069
Non-current liabilities
Long-term debt	59,750		52,000
Asset retirement obligation	273		2,234
Other liabilities	1,520		1,681
Liabilities held for sale - non-current	61,543		55,915
Net Assets	$	117,456	$	118,161

The following table presents condensed consolidated statement of operations data related to our discontinued operations:

	Three Months Ended September 30,						Nine Months Ended September 30,
Condensed consolidated statements of operations - discontinued operations	2014			2013			2014			2013
	(in thousands)
Revenues
Crude oil, natural gas and NGLs sales	$	5,411		$	4,738		$	24,149		$	32,525
Sales from natural gas marketing	—			1,789			—			2,825
Commodity price risk management gain (loss), net	1,929			500			(1,085		)	806
Well operations, pipeline income and other	—			36			48			918
Total revenues	7,340			7,063			23,112			37,074
Costs, expenses and other
Production costs	1,020			2,039			7,120			13,375
Cost of natural gas marketing	—			1,679			—			2,673
Impairment of crude oil and natural gas properties	273			236			433			642
Depreciation, depletion and amortization	1,272			3,913			9,128			11,001
Other	1,061			1,299			3,445			6,092
(Gain) loss on sale of properties and equipment	(1		)	642			(193		)	1,702
Total costs, expenses and other	3,625			9,808			19,933			35,485
Interest expense	(709		)	(552		)	(2,222		)	(1,072		)
Interest income	62			—			194			—
Income (loss) from discontinued operations	3,068			(3,297		)	1,151			517
Provision for income taxes	(3,148		)	1,204			(759		)	(108		)
Income (loss) from discontinued operations, net of tax	$	(80	)	$	(2,093	)	$	392		$	409

The following table presents supplemental cash flows information related to our 50% ownership interest in PDCM, which is classified as discontinued operations:

	Nine Months Ended September 30,
Supplemental cash flows information - discontinued operations	2014			2013
	(in thousands)
Cash flows from investing activities:
Capital expenditures	$	(17,253	)	$	(29,793	)
Significant non-cash investing items:
Change in accounts payable related to purchases of properties and equipment	(5,727		)	4,834