Investment in Laramie Energy, LLC

As of March 31, 2019, we had a 46.0% ownership interest in Laramie Energy. Laramie Energy is focused on producing natural gas in Garfield, Mesa, and Rio Blanco Counties, Colorado.

Laramie Energy has a $400 million revolving credit facility with a borrowing base currently set at $240 million that is secured by a lien on its natural gas and crude oil properties and related assets. As of March 31, 2019, the balance outstanding on the revolving credit facility was approximately $192.8 million. We are guarantors of Laramie Energy’s credit facility, with recourse limited to the pledge of our equity interest of 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.

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



	Three Months Ended March 31, 2019
Beginning balance	$	136,656
Equity earnings from Laramie Energy	(1,372		)
Accretion of basis difference	1,673
Ending balance	$	136,957

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



	March 31, 2019		December 31, 2018
Current assets	$	23,886	$	28,569
Non-current assets	771,958		788,515
Current liabilities	40,016		41,681
Non-current liabilities	276,420		293,084



	Three Months Ended March 31,
	2019			2018
Natural gas and oil revenues	$	67,924		$	46,681
Income from operations	13,743			6,044
Net (loss) income	(2,983		)	7,290

Laramie Energy’s net loss for the three months ended March 31, 2019 includes $21.4 million of depreciation, depletion, and amortization (“DD&A”) and $2.7 million of unrealized gains on derivative instruments. Laramie Energy’s net income for the three months ended March 31, 2018 includes $14.9 million of DD&A and $4.6 million of unrealized gains on derivative instruments.

At March 31, 2019 and December 31, 2018, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $83.6 million and $85.2 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.