Inventory

6 Months Ended

Jun. 30, 2019

Crude oil inventory includes crude oil in tanks and linefill. Linefill that represents the minimum volume of product in a pipeline system that enables the system to operate is generally not available to be withdrawn from the pipeline system until the expiration of the transportation contract. Crude oil linefill in third party pipelines that is not expected to be withdrawn within one year is included in long-term inventory on the Company’s Condensed Consolidated Balance Sheets.

Equipment and materials consist primarily of proppant, chemicals, tubular goods, well equipment to be used in future drilling or repair operations, well fracturing equipment and spare parts and equipment for the Company’s midstream assets.

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:


	June 30, 2019		December 31, 2018

	(In thousands)
Inventory
Crude oil inventory	$	11,923	$	14,933
Equipment and materials	18,133		18,195
Total inventory	$	30,056	$	33,128

Long-term inventory
Linefill in third party pipelines	$	13,286	$	12,260
Total long-term inventory	$	13,286	$	12,260

Total	$	43,342	$	45,388