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PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS | 9 Months Ended
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Sep. 30, 2016
PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS |
PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS | 7. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS Property, plant and equipment, net Property, plant and equipment, net is comprised of the following as of each period presented:
|  | Estimated |  |  |  |  |  |  |
|  | Useful |  | September 30, |  | December 31, |
In thousands |  | Lives (Years) |  | 2016 |  | 2015 |
Gathering pipelines and related equipment |  | 45 |  | $ | 285,154 |  | $ | 319,058 |
Gas processing and compression facilities |  | 20 |  |  | 94,962 |  |  | 173,679 |
Buildings |  | 30 |  |  | 2,104 |  |  | 2,175 |
Other depreciable assets |  | 3 - 15 |  |  | 5,563 |  |  | 5,589 |
Land and rights of way |  |  |  |  | 3,137 |  |  | 9,027 |
Construction in progress |  |  |  |  | 473 |  |  | 277 |
Total property, plant and equipment |  |  |  |  | 391,393 |  |  | 509,805 |
Accumulated depreciation |  |  |  |  | (33,160) |  |  | (24,650) |
Total property, plant and equipment, net |  |  |  | $ | 358,233 |  | $ | 485,155 |
With the recent decline in commodity prices negatively affecting the level of natural gas and crude oil production as well as the terms of the AES Agreement, we concluded that a triggering event had occurred which required a test for impairment of our assets. The fair value of our long-lived assets was below the carrying value for our gathering and processing assets. As a result, we recorded an impairment of $78.3 million to adjust the processing assets to their net realizable value in the first quarter of 2016. The net realizable value for the processing assets was determined based upon third party valuations and recent market transactions which are considered Level 2 and Level 3 inputs in accordance with the accounting guidance. On August 4, 2016, we sold our 100 MMcf/d Panola I processing plant and our Murvaul pipeline to Align. See Note 1 “Disposition of Assets”. Depreciation expense was $3.4 million and $11.4 million for the three and nine months periods ended September 30, 2016 and $4.3 million and $11.2 million for the three and nine months periods ended September 30, 2015. Intangible assets, net As part of the AES Agreement executed on March 31, 2016, the gathering and processing agreement and the logistics contracts, with AES, were terminated effective January 1, 2016. Accordingly, the intangible assets which represented the existing customer relationship with AES were impaired. The intangible assets were identified as part of the purchase price allocation to the Partnership's assets acquired by the Azure System. The Partnership recorded an intangible asset impairment of $29.2 million during the first quarter of 2016. The remaining balance of the intangible asset, of $28.7 million, was eliminated in the second quarter of 2016 as part of the assignment of common and subordinated units and IDR Units from NuDevco to the Partnership. The intangible impairment recorded in the first quarter of 2016 was calculated based upon the fair value of the NuDevco units that were surrendered on April 1, 2016. The fair value of the common shares were determined based upon the unit price as of March 31, 2016 which is considered a Level 1 input. The fair values of the subordinated units and IDR Units were derived from the common unit price as of March 31, 2016 and was determined using the purchase price valuation performed in connection with the Transactions which is considered a Level 2 input. Due to the elimination of the remaining intangible asset balance, per the terms of the AES Agreement, no amortization expense associated with the intangible assets was recorded in the three months ended September 30, 2016. The amortization expense associated with the customer contracts and customer relationships intangible assets, which is included within depreciation and amortization expense within the statement of operations was $1.6 million for the nine months ended September 30, 2016 and $1.6 million and $3.8 million for the three and nine months periods ended September 30, 2015.

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