Discontinued Operations

12 Months Ended

Dec. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

The OMP Merger qualified for reporting as discontinued operations on February 1, 2022, in accordance with ASC 205-20. There were no discontinued operations for the year ended December 31, 2023.

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:


	Year Ended December 31,

	(In thousands)
	2022		2021
Revenues
Oil and gas revenues	$	—	$	1,013
Purchased oil and gas sales(1)	(13,364)		(131,369)
Midstream revenues	23,271		254,228
Total revenues	9,907		123,872
Operating expenses
Lease operating expenses(1)	(4,535)		(62,142)
Midstream expenses	13,224		122,040
Gathering, processing and transportation expenses (1)	(3,555)		(49,795)
Purchased oil and gas expenses(1)	(12,506)		(125,709)
Depreciation, depletion and amortization	—		31,868
Impairment	—		2
General and administrative expenses(1)	3,314		4,193
Total operating expenses	(4,058)		(79,543)
Gain on sale of assets	518,900		—
Operating income	532,865		203,415
Other expense
Interest expense, net of capitalized interest	(3,685)		(36,945)

Other expense	(93)		(115)
Total other expense, net	(3,778)		(37,060)
Income from discontinued operations before income taxes	529,087		166,355
Income tax expense(2)	(101,080)		(17)
Income from discontinued operations, net of income tax	428,007		166,338
Net income attributable to non-controlling interests	2,311		35,696
Income from discontinued operations attributable to Chord, net of income tax	$	425,696	$	130,642

__________________

(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 15—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 Statements of Cash Flows

There was no DD&A from discontinued operations included in “Cash flows from operating activities” for the year ended December 31, 2022. DD&A from discontinued operations of $31.9 million was included in “Cash flows from operating activities” for the year ended December 31, 2021. Capital expenditures attributable to discounted operations included in “Cash flows used in investing activities” were $6.1 million for the year ended December 31, 2022 and $38.5 million for the year ended December 31, 2021. There were no significant non-cash activities from discontinued operations for the periods presented.