Investment in Unconsolidated Affiliate

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

On February 1, 2022, the Company completed the OMP Merger. As of March 31, 2022, the Company owned 20,985,668 common units of Crestwood, representing approximately 21% of Crestwood’s issued and outstanding common units.

The carrying amount of the Company’s investment in Crestwood was recorded to investment in unconsolidated affiliate on the Condensed Consolidated Balance Sheet. The fair value of the Company’s investment in Crestwood was $568.3 million as of February 1, 2022 and $615.3 million as of March 31, 2022.

During the three months ended March 31, 2022, the Company recorded an unrealized gain for the change in the fair value of its investment in Crestwood for the period from February 1, 2022 to March 31, 2022 of $47.0 million and a realized gain for a cash distribution from Crestwood of $13.1 million.

Related Party Transactions

The Company has determined that Crestwood is a related party due to its ownership of approximately 21% of Crestwood’s issued and outstanding common units and its appointment of two directors to the Board of Directors of Crestwood GP. In connection with the closing of the OMP Merger, certain contracts were assigned to Crestwood for midstream services and the Company has continuing cash outflows to Crestwood for these services.

The following table presents, on a net basis, the lease operating expenses and gathering, processing and transportation expenses incurred with Crestwood for the period presented:


	Three Months Ended March 31, 2022
	(In thousands)

Lease operating expenses	$	11,951
Gathering, processing and transportation expenses	10,138

As of March 31, 2022, amounts due to Crestwood were $53.6 million.

Summarized Financial Information

The following table presents summarized financial information of Crestwood for the period presented:


	Three Months Ended March 31, 2022
	(In millions)

Revenues	$	1,583.8
Costs of products/services sold	1,364.4
Net income	22.2
Net income attributable to Crestwood Equity Partners LP	12.0