Note 3—Investment in Laramie Energy, LLC

We have a 46.0% ownership interest in Laramie Energy, a joint venture entity focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco Counties, Colorado. Laramie Energy has a $400 million revolving credit facility secured by a lien on its natural gas and crude oil properties and related assets with a borrowing base currently set at $240 million. As of December 31, 2018 and 2017, the balance outstanding on the revolving credit facility was approximately $210.8 million and $171.5 million, respectively. We are guarantors of Laramie Energy’s credit facility, with recourse limited to the pledge of our equity interest in our wholly owned subsidiary, Par Piceance Energy Equity, LLC. Under the terms of its credit facility, Laramie Energy is generally prohibited from making future cash distributions to its owners, including us.

On March 1, 2016, Laramie Energy acquired and assumed operatorship of certain properties in the Piceance Basin for$152.1 million, subject to customary purchase price adjustments (“Laramie Purchase”). In connection with the Laramie Purchase, we acquired additional membership interests of Laramie Energy for an aggregate cash purchase price of $55.0 million. As a result of this transaction, our ownership interest in Laramie Energy increased from 32.4% to 42.3%.

On February 28, 2018, Laramie Energy closed on a purchase and contribution agreement with an unaffiliated third party that contributed all of its oil and gas properties located in the Piceance Basin and a $20.0 million cash payment, collectively with a fair market value of $28.1 million, into Laramie Energy in exchange for 70,227 of Laramie Energy’s newly issued Class A Units. The unaffiliated third party also contributed a $3.5 million cash payment for asset reclamation liabilities related to the properties conveyed. As a result of this transaction, our ownership interest in Laramie Energy decreased from 42.3% to 39.1%.

On October 18, 2018, Laramie Energy repurchased 138,795 of its Class A Units from certain unitholders for an aggregate purchase price of $14.8 million. As a result of this transaction, our ownership interest in Laramie Energy increased from 39.1% to 46.0%.

The change in our equity investment in Laramie Energy is as follows (in thousands):



	Year Ended December 31,
	2018		2017		2016
Beginning balance	$	127,192	$	108,823	$	76,203
Equity earnings (losses) from Laramie Energy	4,487		13,043		(28,198		)
Accretion of basis difference	4,977		5,326		5,818
Investments	—		—		55,000
Ending balance	$	136,656	$	127,192	$	108,823

Summarized financial information for Laramie Energy is as follows (in thousands):



	December 31,
	2018		2017
Current assets	$	28,569	$	18,757
Non-current assets	788,515		720,444
Current liabilities	41,681		42,149
Non-current liabilities	293,084		237,497



	Year Ended December 31,
	2018		2017		2016
Natural gas and oil revenues	$	226,974	$	157,879	$	104,826
Income (loss) from operations	34,206		6,019		(27,325		)
Net income (loss)	6,347		30,837		(61,849		)

Laramie Energy’s net income for the year ended December 31, 2018 includes $66.6 million and $4.1 million of DD&A expense and unrealized losses on derivative instruments, respectively. Laramie Energy’s net income for the year ended December 31, 2017 includes $50.3 million and $46.2 million of DD&A expense and unrealized gains on derivative instruments, respectively. Laramie Energy’s net loss for the year ended December 31, 2016 includes $42.7 million and $34.5 million of DD&A expense and unrealized losses on derivative instruments, respectively.

At December 31, 2018 and 2017, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $85.2 million and $67.2 million, respectively. This difference arose primarily due to lack of control and marketability discounts and an other-than-temporary impairment of our equity investment in Laramie Energy. We attributed this difference to natural gas and crude oil properties and are amortizing the difference over 15 years based on the estimated timing of production of proved reserves.