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Acquisitions and Dispositions | 6 Months Ended
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Jun. 30, 2014
Acquisitions and Dispositions | (4) ACQUISITIONS AND DISPOSITIONS Conger Exchange Transaction. In April 2014, we entered into an exchange agreement with EQT Corporation and certain of its affiliates (“collectively, EQT”) in which we sold our Conger assets in Glasscock and Sterling Counties, Texas in exchange for producing properties and other EQT assets in Virginia and $145.0 million in cash (“Conger Exchange”). We closed the exchange transaction on June 16, 2014. The assets exchanged meet the definition of a business under accounting standards and was recorded at fair value. We recognized a pre-tax gain of $275.2 million related to this exchange, before selling expenses of $5.0 million, which is recognized as a gain on sale of assets in our consolidated statement of operations for the three months and the six months ended June 30, 2014. The combined carrying amount of our Conger assets prior to the exchange was $271.8 million. We are in the process of identifying and determining the fair value of the assets acquired and liabilities assumed as part of the Conger Exchange. The following table presents a preliminary estimate of the fair value of assets acquired and liabilities assumed in the transaction, pending final closing adjustments (in thousands):
| Conger Exchange |
Consideration |  |  |
Fair value of net assets transferred | $ | 550,273 |
Fair value of assets acquired and liabilities assumed |  |  |
Cash | $ | 145,000 |
Working capital – Nora Gathering, LLC |  | 14,244 |
Natural gas and oil properties |  | 407,255 |
Transportation and field assets |  | 7,793 |
Other liabilities-firm transportation contract |  | (12,092 | )
Asset retirement obligations |  | (11,927 | )
Fair value of net assets acquired and liabilities assumed | $ | 550,273 |
In connection with the Conger Exchange, we acquired the remaining 50% interest held by EQT in Nora Gathering, LLC (“NGLLC”), a natural gas gathering operation, which we had previously accounted for using the equity method of accounting. As of June 16, 2014, we have consolidated NGLLC into our consolidated financial statements. Our previous 50% membership interest in NGLLC was remeasured to fair value on the acquisition date, resulting in a gain of $10.0 million which is recognized in gain on sale of assets in our consolidated statement of operations for the three months and the six months ended June 30, 2014. We assumed trade receivables as part of the acquisition of NGLLC of $5.5 million, all of which we expect to collect. For the period from June 16, 2014 through June 30, 2014, we recognized $2.8 million of natural gas, oil and NGLs sales from the property interests acquired in the Conger Exchange and we recognized $2.1 million of field net operating income (defined as natural gas, oil and NGLs sales less direct operating expenses, production and ad valorem taxes and transportation expenses). Conger Exchange Fair Value Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (often referred to as the “exit price”). The fair value measurement is based on the assumptions of market participants and not those of the reporting entity. Therefore, entity-specific intentions do not impact the measurement of fair value unless those assumptions are consistent with market participant views. The fair value of the Conger Exchange described above was based on an income approach which was supplemented by a market approach. For the natural gas and oil properties, the income approach uses significant inputs not observable in the market, which are Level 3 inputs. The significant inputs assumed include future production and capital, commodity prices, risk-adjusted discount rates, natural gas and oil pricing differentials, and projected reserve recovery factors. The market approach uses inputs such as recent market transactions in a similar geographic region and with similar production. The income approach for the natural gas gathering operations was based on a discounted future net cash flow model, which uses Level 3 inputs and was supplemented by a market approach. Other 2014 Dispositions In addition to the Conger Exchange above, in the six months ended June 30, 2014, we sold miscellaneous proved property and inventory for proceeds of $1.1 million resulting in a pre-tax gain of $1.6 million. 2013 Dispositions In April 2013, we completed the sale of certain of our Delaware and Permian Basin properties in southeast New Mexico and West Texas for a price of $275.0 million and we recognized pre-tax gain of $83.3 million, before selling expenses of $4.2 million. In addition, in the six months ended June 30, 2013, we sold miscellaneous proved and unproved properties and inventory for proceeds of $25.2 million resulting in a pre-tax gain of $3.7 million.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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