Investment in Unconsolidated Affiliate

6 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

On February 1, 2022, the Company completed the OMP Merger. The Company owns 20,985,668 common units of Crestwood, representing approximately 19% of Crestwood’s issued and outstanding common units as of July 22, 2022.

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 $505.3 million as of June 30, 2022.

During the three and six months ended June 30, 2022, the Company recorded an unrealized loss for the change in the fair value of its investment in Crestwood of $110.0 million and $63.0 million, respectively, and a realized gain for a cash distribution from Crestwood of $13.7 million and $26.9 million, respectively.

Related Party Transactions

The Company has determined that Crestwood is a related party due to its ownership percentage 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 periods presented:


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(In thousands)

Lease operating expenses	$	20,124	$	32,075
Gathering, processing and transportation expenses	13,250		22,907

As of June 30, 2022, amounts due to Crestwood were $60.2 million.

Summarized Financial Information

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


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
	(In millions)

Revenues	$	1,448.0	$	3,031.8
Costs of products/services sold	1,213.2		2,577.6
Net income	39.4		61.6
Net income attributable to Crestwood Equity Partners LP	29.1		41.1