Organization

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Note 1 – Organization

Carbon Energy Corporation (formerly known as Carbon Natural Gas Company) and its subsidiaries (referred to herein as “we”, “us”, the “Company” or “Carbon”) business is comprised of the assets and properties of us and our subsidiaries.

An illustrative organizational chart as of March 31, 2019, is below:

 

Appalachian and Illinois Basin Operations

In the Appalachian and Illinois Basins, operations are conducted by Nytis Exploration Company, LLC (“Nytis LLC”). The following organizational chart illustrates this relationship as of March 31, 2019.

 

In December 2018, we completed the acquisition of all of the Class A Units of Carbon Appalachian Company, LLC, a Delaware limited liability company (“Carbon Appalachia”), owned by Old Ironside Fund II-A Portfolio Holding Company, LLC, a Delaware limited liability company (“OIE II-A”), and Old Ironside Fund II-B Portfolio Holding Company, LLC, a Delaware limited liability company (“OIE II-B”), collectively (“Old Ironsides”) for a purchase price of $58.1 million subject to customary and standard purchase price adjustments (“OIE Membership Acquisition”). As a result of the OIE Membership Acquisition, we now hold all of the issued and outstanding ownership interests of Carbon Appalachia, along with its direct and indirect subsidiaries (Carbon Appalachia Group, LLC, Carbon Tennessee Mining Company, LLC, Carbon Appalachia Enterprises, LLC, Carbon West Virginia Company, LLC, Cranberry Pipeline Corporation, Knox Energy, LLC, Coalfield Pipeline Company and Appalachia Gas Services Company, LLC).

Ventura Basin Operations

In California, Carbon California Operating Company, LLC (“CCOC”) conducts operations on behalf of Carbon California Company, LLC’s (“Carbon California”) operations. On February 1, 2018, Yorktown Energy Partners XI, L.P. (“Yorktown”) exercised the California Warrant, resulting in our aggregate sharing percentage in Carbon California increasing from 17.81% to 56.40%. On May 1, 2018, Carbon California closed the Seneca Acquisition. Following the exercise of the California Warrant by Yorktown and the Seneca Acquisition, we own 53.92% of the voting and profits interests and Prudential Legacy Insurance Company of New Jersey and Prudential Insurance Company of America or its affiliates (collectively, “Prudential”) owns 46.08% of the voting and profits interest in Carbon California. As of February 1, 2018, we consolidate Carbon California for financial reporting purposes. The following organizational chart illustrates this relationship as of March 31, 2019.

 

Collectively, references to “us” include Carbon California, CCOC, Nytis Exploration (USA) Inc. (“Nytis USA”), Nytis LLC, and Carbon Appalachia.