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Business Combination (Tables) | 12 Months Ended
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Dec. 31, 2016
Business Combinations [Abstract] |
Schedule of Business Acquisitions, by Acquisition | The purchase consideration for the Business Combination was as follows:
(in thousands) | October 11, 2016
Preliminary purchase consideration: |
Cash | $ | 1,186,744 |
Repayment of CRP long-term debt(1) | 189,000 |
Total purchase price consideration | 1,375,744 |
Fair value of non-controlling interest(2) | 184,779 |
Total purchase price consideration and fair value of non-controlling interest | $ | 1,560,523 |
(1) | Represents the additional contribution made by Silver Run to CRP in exchange for units representing common membership interest in CRP ("CRP Common Units"), to repay CRP's outstanding indebtedness at the Closing Date.
(2) | Represents the fair value of the non-controlling interest (NCI) attributable to the Centennial Contributors. NCI is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly to Silver Run. In a business combination the NCI is recognized at its acquisition date fair value in accordance with ASC 805. The fair value of the NCI represents a 11% membership interest in CRP.
| Predecessor
(in thousands) | June 3, 2016
Cash consideration | $ | 32,979 |
Fair value of assets and liabilities acquired: |
Proved oil and natural gas properties | 15,374 |
Unproved oil and natural gas properties | 18,071 |
Total fair value of oil and natural gas properties acquired | 33,445 |
Revenue Suspense | (400 | )
Asset retirement obligation | (66 | )
Total fair value of net assets acquired | $ | 32,979 |
The Company allocated the final purchase prices to the acquired assets and liabilities based on fair value as of the respective acquisition dates, as summarized in the table below.
| Predecessor
| Acquisition #1 |  | Acquisition #2
(in thousands) | September 1, 2015 |  | September 3, 2015
Cash consideration | $ | 16,006 |  |  | $ | 6,369 |
Fair value of assets and liabilities acquired: |  |  |
Proved oil and natural gas properties | 7,731 |  |  | 6,491 |
Unproved oil and natural gas properties | 8,312 |  |  | — |
Total fair value of oil and natural gas properties acquired | 16,043 |  |  | 6,491 |
Asset retirement obligation | (37 | ) |  | (122 | )
Total fair value of net assets acquired | $ | 16,006 |  |  | $ | 6,369 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase consideration to the assets acquired and liabilities assumed:
(in thousands) | October 11, 2016
Fair value of assets acquired: |
Other current assets | $ | 13,341 |
Derivative instruments | 1,052 |
Oil and gas properties(1): |
Proved properties | 444,551 |
Unproved properties | 1,138,423 |
Other property, plant and equipment | 1,764 |
Goodwill | — |
Total fair value of assets acquired | 1,599,131 |
Fair value of liabilities assumed: |
Accounts payable and accrued expenses | 30,156 |
Other current liabilities | 63 |
Derivative instruments(2) | 3,400 |
Asset retirement obligation | 4,989 |
Fair value of net assets acquired | $ | 1,560,523 |
(1) | The fair value measurements of oil and natural gas properties and asset retirement obligations are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties included estimates of: (i) recoverable reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices; and (v) a market-based weighted average cost of capital rate. These inputs required significant judgments and estimates by management at the time of the valuation and are the most sensitive and may be subject to change. The reduction in the carrying cost of the proved properties was impacted by all of these factors, but most notably, the assumptions with respect to future commodity prices as of the valuation date.
(2) | The fair value measurements of derivative instruments assumed were determined based on published forward commodity price curves as of the date of the merger and represent Level 2 inputs. Derivative instruments in an asset position include a measure of counterparty nonperformance risk, and the fair values of commodity derivative instruments in a liability position include a measure of the Company’s own nonperformance risk, each based on the current published credit default swap rates.
Business Acquisition, Pro Forma Information | The following unaudited pro forma combined financial information has been prepared as if the Business Combination and other related transactions had taken place on January 1, 2015. The unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting in accordance with GAAP. The information reflects pro forma adjustments based on available information and certain assumptions that the Company believes are reasonable, including depletion of CRP’s fair-valued proved oil and gas properties, and the estimated tax impacts of the pro forma adjustments. Additionally, pro forma earnings for the year ended December 31, 2016, were adjusted to exclude $18.7 million of transaction-related costs and $165.4 million of incentive unit compensation incurred by CRP. The pro forma condensed combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Business Combination taken place on January 1, 2015; furthermore, the financial information is not intended to be a projection of future results.
| (Unaudited Pro Forma)
| Year Ended December 31,
(in thousands) | 2016 |  | 2015
Total revenues | $ | 98,833 |  |  | $ | 90,460 |
Total operating expenses | 86,490 |  |  | 123,702 |
Net income (loss) attributable to common shareholders of Centennial Resource Development, Inc. | 1,666 |  |  | (6,397 | )
Basic and diluted net loss per share | 0.01 |  |  | (0.04 | )

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- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)-(3) -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 + Details
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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1486-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65885119&loc=d3e1392-128463 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=73530397&loc=d3e4845-128472 + Details
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