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Related Parties
12 Months Ended
Dec. 31, 2018
Related Parties [Abstract]  
Related Parties

Note 17 - Related Parties

 

During the years ended December 31, 2018 and 2017, we were engaged in the following transactions with related parties:

 

Carbon California

 

In 2017, we received 5,077 Class B Units of Carbon California, representing 17.81% of the voting and profits interest.

 

On February 1, 2018, we received 11,000 Class A Units of Carbon California upon Yorktown’s exercise of the California Warrant.

 

On May 1, 2018, we received 5,000 Class A Units of Carbon California in connection with our equity contribution of $5.0 million.

 

On February 15, 2017, we entered into a management service agreement with Carbon California whereby we provide general management and administrative services.  We initially received $600,000 annually, payable in four equal quarterly installments.  We also received a one-time reimbursement of $500,000 in connection with the CRC and Mirada Acquisitions. Effective May 1, 2018, concurrent with the closing of the Seneca Acquisition, we receive $1.2 million annually. Carbon California reimburses us for all management related expenses such as travel, required third-party geological and/or accounting consulting, and other necessary expenses incurred by us in the normal course of managing Carbon California.

 

In our role as manager of Carbon California we received reimbursements for the provision of management services from Carbon California of $50,000 for the one month ended January 31, 2018. These reimbursements are included in general and administrative - related party reimbursement on our consolidated statements of operations. Effective February 1, 2018, the management reimbursement received from Carbon California is eliminated at consolidation. This elimination was approximately $950,000 for the period February 1, 2018 through December 31, 2018. In addition to the management reimbursements, approximately $14,000 in general and administrative expenses were reimbursed for the one month ended January 31, 2018. General and administrative expenses reimbursed by Carbon California and eliminated in consolidation were approximately $42,000 for the period February 1, 2018, through December 31, 2018.

 

Carbon California Operating Company (“CCOC”) is our subsidiary and the operator of Carbon California through an operating agreement. The operating agreement includes reimbursements and allocations made under the agreement. As of December 31, 2018, and 2017, approximately zero and $300,000, respectively, is due from Carbon California and included in accounts receivable - due from related party on the consolidated balance sheets.

 

Carbon Appalachia

 

During 2017, we received 1,000 Class B Units of Carbon Appalachia, representing a future profits interest after certain return thresholds to Class A Units are met. We also received 121 Class C Units of Carbon Appalachia, representing an approximate 1.0% profits interest, in exchange for unevaluated property in Tennessee.

 

On November 1, 2017, we received 2,940 Class A units of Carbon Appalachia upon Yorktown’s exercise of the Appalachia Warrant.

 

On December 31, 2018, we closed the OIE Membership Acquisition, whereby we acquired 100% of all outstanding interests in Carbon Appalachia owned by Old Ironside.

 

On April 3, 2017, we entered into a management service agreement with Carbon Appalachia whereby we provide general management and administrative services.  We initially received a quarterly reimbursement of $75,000; however, after the Enervest Acquisition in August 2017, the amount of the reimbursement varies quarterly based upon the percentage of our production in relation to the total of our production and Carbon Appalachia. During 2017, we also received a one-time reimbursement of $300,000 in connection with the CNX Acquisition.

 

In our role as manager of Carbon Appalachia, prior to the completion of the OIE Membership Acquisition in December 2018, we received reimbursements for the provision of management services from Carbon Appalachia of approximately $3.0 million for the year ended December 31, 2018. These reimbursements are included in general and administrative - related party reimbursement on our consolidated statements of operations. In addition to the management reimbursements, approximately $1.5 million in general and administrative expenses were reimbursed for the year ended December 31, 2018 from Carbon Appalachia.

 

Nytis LLC is the operator of Carbon Appalachia through an operating agreement. The operating agreement includes reimbursements and allocations made under the agreement. As of December 31, 2018, and 2017, approximately zero and $1.8 million, respectively, is due from Carbon Appalachia and included in accounts receivable – due from related party on the consolidated balance sheets.

 

Ohio Basic Minerals

 

During 2017, we received $96,000 in management reimbursements from Ohio Basic Minerals. There were no such reimbursements in 2018.

 

Total Management Reimbursements

 

Total management reimbursements recorded by us for the year ended December 31, 2018 and 2017 and described in detail above, were approximately $4.5 million and $1.6 million, respectively, of which approximately zero and $579,000 was included in accounts receivable – due from related party on the consolidated balance sheets as of December 31, 2018 and 2017.