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Discontinued Operations | 12 Months Ended
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Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations The OMP Merger represented a strategic shift for the Company and qualified for reporting as a discontinued operation in accordance with ASC 205-20. Accordingly, the results of operations of OMP were classified as discontinued operations in the Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 (Successor), and the assets and liabilities of OMP were classified as held for sale in the Consolidated Balance Sheet as of December 31, 2021. Prior periods were recast so that the basis of presentation is consistent with that of the 2022 consolidated financial statements. The Company has continuing involvement with Crestwood following the completion of the OMP Merger for midstream services pursuant to contractual arrangements between the Company and OMP that were assigned to Crestwood at closing. These contracts include “evergreen” provisions that provide for renewal on a periodic basis if not terminated by either party. The Company depends on Crestwood as a core provider of midstream services to support its production and marketing activities and expects to have continuing involvement with Crestwood for these services for the foreseeable future. Intercompany transactions between the Company and OMP have historically been eliminated in consolidation within lease operating expenses and gathering, processing and transportation expenses for operated properties and within oil and gas revenues for non-operated properties. In addition, the intercompany purchases and sales of residue gas and NGLs between the Company and OMP, which was historically eliminated in consolidation, were reclassified to purchased oil and gas expenses and purchased oil and gas sales, respectively. Consolidated Statements of Operations The results of operations reported as discontinued operations in connection with the OMP Merger were as follows for the periods presented (in thousands):
| Successor |  |  | Predecessor
| Year Ended December 31, |  | Period from November 20, 2020 through December 31, 2020 |  |  | Period from January 1, 2020 through November 19, 2020
| 2022 |  | 2021 |  |  |
Revenues |  |  |  |  |  |  |  |
Oil and gas revenues | $ | — |  |  | $ | 1,013 |  |  | $ | 297 |  |  |  | $ | 2,075 |
Purchased oil and gas sales(1) | (13,364) |  |  | (131,369) |  |  | (13,406) |  |  |  | (50,744) |
Midstream revenues | 23,271 |  |  | 254,228 |  |  | 26,031 |  |  |  | 166,631 |
Total revenues | 9,907 |  |  | 123,872 |  |  | 12,922 |  |  |  | 117,962 |
Operating expenses |  |  |  |  |  |  |  |
Lease operating expenses(1) | (4,535) |  |  | (62,142) |  |  | (4,676) |  |  |  | (42,034) |
Midstream expenses | 13,224 |  |  | 122,040 |  |  | 10,572 |  |  |  | 42,987 |
Gathering, processing and transportation expenses (1) | (3,555) |  |  | (49,795) |  |  | (4,074) |  |  |  | (31,988) |
Purchased oil and gas expenses(1) | (12,506) |  |  | (125,709) |  |  | (12,921) |  |  |  | (43,163) |
Depreciation, depletion and amortization | — |  |  | 31,868 |  |  | 2,305 |  |  |  | 20,113 |
Impairment | — |  |  | 2 |  |  | — |  |  |  | 111,613 |
General and administrative expenses(1) | 3,314 |  |  | 4,193 |  |  | (579) |  |  |  | 594 |
Total operating expenses | (4,058) |  |  | (79,543) |  |  | (9,373) |  |  |  | 58,122 |
Gain on sale of assets | 518,900 |  |  | — |  |  | — |  |  |  | — |
Operating income | 532,865 |  |  | 203,415 |  |  | 22,295 |  |  |  | 59,840 |
Other income (expense) |  |  |  |  |  |  |  |
Interest expense, net of capitalized interest | (3,685) |  |  | (36,945) |  |  | (1,148) |  |  |  | (39,648) |
Reorganization items, net |  |  | — |  |  | — |  |  |  | 120,915 |
Other income (expense) | (93) |  |  | (115) |  |  | (1) |  |  |  | 136 |
Total other income (expense), net | (3,778) |  |  | (37,060) |  |  | (1,149) |  |  |  | 81,403 |
Income from discontinued operations before income taxes | 529,087 |  |  | 166,355 |  |  | 21,146 |  |  |  | 141,243 |
Income tax expense(2) | (101,080) |  |  | (17) |  |  | — |  |  |  | — |
Income from discontinued operations, net of income tax | 428,007 |  |  | 166,338 |  |  | 21,146 |  |  |  | 141,243 |
Net income (loss) attributable to non-controlling interests | 2,311 |  |  | 35,696 |  |  | 3,950 |  |  |  | (84,283) |
Income from discontinued operations attributable to Chord, net of income tax | $ | 425,696 |  |  | $ | 130,642 |  |  | $ | 17,196 |  |  |  | $ | 225,526 |
__________________ (1)Includes discontinued intercompany eliminations. (2)The Company applied the intraperiod tax allocation rules in accordance with FASB ASC 740-20, Intraperiod Tax Allocation (“ASC 740-20”) to determine the allocation of tax expense between continuing operations and discontinued operations. ASC 740-20 generally requires the allocation of tax expense to be based on a comparative calculation of tax expense with and without income from discontinued operations. During the year ended December 31, 2022, the Company released a portion of its valuation allowance (see Note 17—Income Taxes for additional information) and allocated the majority of the income tax benefit associated with this valuation allowance release to continuing operations. The total tax expense associated with the OMP Merger was partially offset by the release of the Company’s valuation allowance allocated to discontinued operations, resulting in a tax expense of $101.1 million attributable to discontinued operations during the year ended December 31, 2022. Consolidated Balance Sheets The carrying amounts of the major classes of assets and liabilities related to the OMP Merger are as follows for the period presented:
| December 31, 2021
| (In thousands)
ASSETS |
Current assets |
Cash and cash equivalents | $ | 2,669 |
Accounts receivable, net | 6,509 |
Inventory | 8,541 |
Prepaid expenses | 456 |
Total current assets of discontinued operations | 18,175 |
Property, plant and equipment |
Oil and gas properties (successful efforts method)(1) | (3,207) |
Other property and equipment | 933,667 |
Less: accumulated depreciation, depletion and amortization | (32,102) |
Total property, plant and equipment, net | 898,358 |
Operating right-of-use assets | 671 |
Intangible assets | 40,277 |
Goodwill | 70,534 |
Other assets | 1,303 |
Total non-current assets of discontinued operations | 1,011,143 |
Total assets of discontinued operations | $ | 1,029,318 |
LIABILITIES |
Current liabilities |
Accounts payable | $ | 43 |
Revenues and production taxes payable | 1,635 |
Accrued liabilities | 36,183 |
Accrued interest payable | 9,296 |
Current operating lease liabilities | 733 |
Other current liabilities | 564 |
Total current liabilities of discontinued operations | 48,454 |
Long-term debt | 644,078 |
Asset retirement obligations | 904 |
Other liabilities | 6,217 |
Total non-current liabilities of discontinued operations | 651,199 |
Total liabilities of discontinued operations | $ | 699,653 |
_______________________ (1)Includes discontinued intercompany eliminations. Consolidated Statements of Cash Flows There was no depreciation, depletion and amortization contained in “Cash flows from operating activities” from discontinued operations for the year ended December 31, 2022 (Successor). DD&A contained in “Cash flows from operating activities” from discontinued operations was $31.9 million for the year ended December 31, 2021 (Successor), $2.3 million for the period from November 20, 2020 through December 31, 2020 (Successor) and $20.1 million for the period from January 1, 2020 through November 19, 2020 (Predecessor). Capital expenditures contained in “Cash flows used in investing activities” that were attributable to discontinued operations were $6.1 million for the year ended December 31, 2022 (Successor), $38.5 million for the year ended December 31, 2021 (Successor), $2.5 million for the period from November 20, 2020 through December 31, 2020 (Successor) and $54.8 million for the period from January 1, 2020 through November 19, 2020 (Predecessor). There were no significant non-cash activities from discontinued operations for the periods presented.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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