Inventory

Crude oil inventory includes oil in tanks. Equipment and materials consist primarily of proppant, chemicals, tubular goods, well equipment to be used in future drilling or repair operations and well fracturing equipment. Crude oil inventory and equipment and materials are included in inventory on the Company’s Condensed Consolidated Balance Sheets.

The minimum volume of product in a pipeline system that enables the system to operate is known as linefill and is generally not available to be withdrawn from the pipeline system until the expiration of the transportation contract. The Company owns oil linefill in third-party pipelines, which is included in long-term inventory on the Company’s Condensed Consolidated Balance Sheets.

Inventory, including long-term inventory, is stated at the lower of cost and net realizable value with cost determined on an average cost method. The Company assesses the carrying value of inventory and uses estimates and judgment when making any adjustments necessary to reduce the carrying value to net realizable value. Among the uncertainties that impact the Company’s estimates are the applicable quality and location differentials to include in the Company’s net realizable value analysis. Additionally, the Company estimates the upcoming liquidation timing of the inventory. Changes in assumptions made as to the timing of a sale can materially impact net realizable value.

Total inventory consists of the following:



	March 31, 2018		December 31, 2017
	(In thousands)
Inventory
Crude oil inventory	$	10,390	$	10,427
Equipment and materials	12,649		8,940
Total inventory	$	23,039	$	19,367

Long-term inventory
Linefill in third-party pipelines	$	12,506	$	12,200
Long-term inventory	$	12,506	$	12,200

Total	$	35,545	$	31,567