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Discontinued operations | 12 Months Ended
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Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Assets held for sale and discontinued operations | Assets Held for Sale and Discontinued Operations Assets held for sale The assets of Pronghorn were classified as held for sale in the fourth quarter of 2016. Pronghorn's results of operations for 2016 were included in the pipeline and midstream segment. Pronghorn On November 21, 2016, WBI Energy Midstream announced it had entered into a purchase and sale agreement to sell its 50 percent non-operating ownership interest in Pronghorn to Andeavor Field Services LLC. The transaction closed on January 1, 2017, which generated approximately $100 million of proceeds for the Company. The sale of Pronghorn further reduced the Company's risk exposure to commodity prices. The carrying amounts of the major classes of assets classified as held for sale associated with Pronghorn on the Company's Consolidated Balance Sheets at December 31 were as follows:
| 2016 |
| (In thousands)
Assets |
Current assets: |
Prepayments and other current assets | $ | 68 |
Total current assets held for sale | 68 |
Noncurrent assets: |
Net property, plant and equipment | 93,424 |
Goodwill | 9,737 |
Less allowance for impairment of assets held for sale | 2,311 |
Total noncurrent assets held for sale | 100,850 |
Total assets held for sale | $ | 100,918 |
The Company performed a fair value assessment of the assets and liabilities classified as held for sale. In the fourth quarter of 2016, the fair value assessment was determined using the market approach based on the purchase and sale agreement with Andeavor Field Services LLC. The fair value assessment indicated an impairment based on the carrying value exceeding the fair value, which resulted in the Company recording an impairment of $2.3 million ($1.4 million after tax) in the quarter ended December 31, 2016. The fair value of Pronghorn's assets have been categorized as Level 3 in the fair value hierarchy. The impairment was recorded in operation and maintenance expense on the Consolidated Statement of Income. Discontinued operations The assets and liabilities of the Company's discontinued operations have been classified as held for sale and the results of operations are shown in loss from discontinued operations, other than certain general and administrative costs and interest expense which do not meet the criteria for income (loss) from discontinued operations. At the time the assets were classified as held for sale, depreciation, depletion and amortization expense was no longer recorded. Dakota Prairie Refining On June 24, 2016, WBI Energy entered into a membership interest purchase agreement with Tesoro to sell all of the outstanding membership interests in Dakota Prairie Refining to Tesoro. WBI Energy and Calumet each previously owned 50 percent of the Dakota Prairie Refining membership interests and were equal members in building and operating Dakota Prairie Refinery. To effectuate the sale, WBI Energy acquired Calumet's 50 percent membership interest in Dakota Prairie Refining on June 27, 2016. The sale of the membership interests to Tesoro closed on June 27, 2016. The sale of Dakota Prairie Refining reduced the Company's risk by decreasing exposure to commodity prices. Centennial continues to guarantee certain debt obligations of Dakota Prairie Refining; however, Tesoro has agreed to indemnify Centennial for any losses and litigation expenses arising for the guarantee. For more information related to the guarantee, see Note 17. The carrying amounts of the major classes of assets and liabilities classified as held for sale, related to the operations of and activity associated with Dakota Prairie Refining, on the Company's Consolidated Balance Sheets at December 31 were as follows:
| 2017 |  |  | 2016 |
| (In thousands)
Assets |  |  |
Current assets: |  |  |
Income taxes receivable | $ | 1,778 |  |  | $ | 13,987 |
Total current assets held for sale | 1,778 |  |  | 13,987 |
Total assets held for sale | $ | 1,778 |  | (a) | $ | 13,987 |
Liabilities |  |  |
Current liabilities: |  |  |
Accounts payable | $ | — |  |  | $ | 7,425 |
Total current liabilities held for sale | — |  |  | 7,425 |
Noncurrent liabilities: |  |  |
Deferred income taxes (b) | 37 |  |  | 14 |
Total noncurrent liabilities held for sale | 37 |  |  | 14 |
Total liabilities held for sale | $ | 37 |  |  | $ | 7,439 |
(a) | On the Company's Consolidated Balance Sheets, these amounts were reclassified to current income taxes payable and are reflected in current liabilities held for sale.
(b) | On the Company's Consolidated Balance Sheets, these amounts were reclassified to noncurrent deferred income tax assets
and are reflected in noncurrent assets held for sale.
The Company retained certain liabilities of Dakota Prairie Refining which were reflected in current liabilities held for sale on the Consolidated Balance Sheet at December 31, 2016. In the first quarter of 2017, the Company recorded a reversal of a previously accrued liability of $7.0 million ($4.3 million after tax) due to the resolution of a legal matter. As of December 31, 2017, Dakota Prairie Refining had not incurred any material exit and disposal costs, and does not expect to incur any material exit and disposal costs. The Company performed a fair value assessment of the assets and liabilities classified as held for sale. In the second quarter of 2016, the fair value assessment was determined using the market approach based on the sale transaction to Tesoro. The fair value assessment indicated an impairment based on the carrying value exceeding the fair value, which resulted in the Company recording an impairment of $251.9 million ($156.7 million after tax) in the quarter ended June 30, 2016. The impairment was included in operating expenses from discontinued operations. The fair value of Dakota Prairie Refining's assets have been categorized as Level 3 in the fair value hierarchy. Fidelity In the second quarter of 2015, the Company began the marketing and sale process of Fidelity with an anticipated sale to occur within one year. Between September 2015 and March 2016, the Company entered into purchase and sale agreements to sell substantially all of Fidelity's oil and natural gas assets. The completion of these sales occurred between October 2015 and April 2016. The sale of Fidelity was part of the Company's strategic plan to grow its capital investments in the remaining business segments and to focus on creating a greater long-term value. The carrying amounts of the major classes of assets and liabilities classified as held for sale, related to the operations of Fidelity, on the Company's Consolidated Balance Sheets at December 31 were as follows:
| 2017 |  |  | 2016 |  |
| (In thousands) |
Assets |  |  |  |
Current assets: |  |  |  |
Receivables, net | $ | 479 |  |  | $ | 355 |  |
Total current assets held for sale | 479 |  |  | 355 |  |
Noncurrent assets: |  |  |  |
Net property, plant and equipment | 1,631 |  |  | 5,507 |  |
Deferred income taxes | 2,637 |  |  | 91,098 |  |
Other | 161 |  |  | 161 |  |
Less allowance for impairment of assets held for sale | — |  |  | 938 |  |
Total noncurrent assets held for sale | 4,429 |  |  | 95,828 |  |
Total assets held for sale | $ | 4,908 |  |  | $ | 96,183 |  |
Liabilities |  |  |  |
Current liabilities: |  |  |  |
Accounts payable | $ | 30 |  |  | $ | 141 |  |
Taxes payable | 10,857 |  |  | 19 |  | (a)
Other accrued liabilities | 2,884 |  |  | 2,358 |  |
Total current liabilities held for sale | 13,771 |  |  | 2,518 |  |
Total liabilities held for sale | $ | 13,771 |  |  | $ | 2,518 |  |
(a) | On the Company's Consolidated Balance Sheets, this amount was reclassified to prepayments and other current assets and
is reflected in current assets held for sale.
At December 31, 2017 and 2016, the Company’s deferred tax assets included in assets held for sale were largely comprised of $2.6 million and $89.3 million, respectively, of federal and state net operating loss carryforwards. The Company realized substantially all of the outstanding net operating loss carryforwards in 2017. The Company had federal income tax net operating loss carryforwards of $4.4 million and $297.2 million at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, the Company had various state income tax net operating loss carryforwards of $13.8 million and $189.1 million, respectively. The federal net operating loss carryforwards expire in 2036 and 2037 if not utilized. The state net operating loss carryforwards are due to expire between 2023 and 2037. It is likely a portion of the benefit from the state carryforwards will not be realized; therefore, valuation allowances of $349,000 and $500,000 have been provided in 2017 and 2016, respectively. The Company performed a fair value assessment of the assets and liabilities classified as held for sale. In the first quarter of 2016, the fair value assessment was determined using the market approach largely based on a purchase and sale agreement. The estimated fair value exceeded the carrying value and the Company recorded an impairment reversal of $1.4 million ($900,000 after tax) in the first quarter of 2016. In the second quarter of 2016, the fair value assessment was determined using the income and market approaches. The income approach was determined by using the present value of future estimated cash flows. The market approach was based on market transactions of similar properties. The estimated carrying value exceeded the fair value and the Company recorded an impairment of $900,000 ($600,000 after tax) in the second quarter of 2016. In the second quarter of 2015, the estimated fair value was determined using the income and the market approaches. The income approach was determined by using the present value of future estimated cash flows. The income approach considered management's views on current operating measures as well as assumptions pertaining to market forces in the oil and gas industry including estimated reserves, estimated prices, market differentials, estimates of well operating and future development costs and timing of operations. The estimated cash flows were discounted using a rate believed to be consistent with those used by principal market participants. The market approach was provided by a third party and based on market transactions involving similar interests in oil and natural gas properties. The fair value assessment indicated an impairment based on the carrying value exceeding the estimated fair value, which is resulted in the Company writing down Fidelity's assets at June 30, 2015, and recording an impairment of $400.0 million ($252.0 million after tax) during the second quarter of 2015. In the third quarter of 2015, the estimated fair value of Fidelity was determined by agreed upon pricing in the purchase and sale agreements for the assets subject to the agreements, the majority of which closed during the fourth quarter of 2015, including customary purchase price adjustments. The values received in the bid proposals were lower than originally anticipated due to lower commodity prices than those projected in the second quarter of 2015. For those assets for which a purchase and sale agreement had not been entered into at that time, the fair value was based on the market approach utilizing multiples based on similar interests in oil and natural gas properties. The fair value assessment indicated an impairment based on the carrying value exceeding the estimated fair value, which resulted in the Company writing down Fidelity's assets at September 30, 2015, and recording an impairment of $356.1 million ($224.4 million after tax). In the fourth quarter of 2015, the fair value assessment was determined using the market approach based on purchase and sale agreements. The estimated fair value exceeded the carrying value and the Company recorded an impairment reversal of $1.6 million ($1.0 million after tax) in the fourth quarter of 2015. The impairments were included in operating expenses from discontinued operations. The estimated fair value of Fidelity's assets have been categorized as Level 3 in the fair value hierarchy. The Company incurred transaction costs of approximately $300,000 in the first quarter of 2016 and $2.5 million in 2015. In addition to the transaction costs, and due in part to the change in plans to sell the assets of Fidelity rather than sell Fidelity as a company, Fidelity incurred and expensed approximately $5.6 million of exit and disposal costs in 2016, and has incurred $10.5 million of exit and disposal costs to date. The Company does not expect to incur any additional material exit and disposal costs. The exit and disposal costs are associated with severance and other related matters and exclude the office lease expiration discussed in the following paragraph. Fidelity vacated its office space in Denver, Colorado in 2016. The Company incurred lease payments of approximately $900,000 in 2016. Lease termination payments of $3.2 million and $3.3 million were made during the second quarter of 2016 and fourth quarter of 2015, respectively. Existing office furniture and fixtures were relinquished to the lessor in the second quarter of 2016. Historically, the company used the full-cost method of accounting for its oil and natural gas production activities. Under this method, all costs incurred in the acquisition, exploration and development of oil and natural gas properties are capitalized and amortized on the units-of-production method based on total proved reserves. Prior to the oil and natural gas properties being classified as held for sale, capitalized costs were subject to a "ceiling test" that limits such costs to the aggregate of the present value of future net cash flows from proved reserves discounted at 10 percent, as mandated under the rules of the SEC, plus the cost of unproved properties not subject to amortization, plus the effects of cash flow hedges, less applicable income taxes. Proved reserves and associated future cash flows are determined based on SEC Defined Prices and exclude cash outflows associated with asset retirement obligations that have been accrued on the balance sheet. If capitalized costs, less accumulated amortization and related deferred income taxes, exceed the full-cost ceiling at the end of any quarter, a permanent noncash write-down is required to be charged to earnings in that quarter regardless of subsequent price changes. The Company's capitalized cost under the full-cost method of accounting exceeded the full-cost ceiling at March 31, 2015. SEC Defined Prices, adjusted for market differentials, were used to calculate the ceiling test. Accordingly, the Company was required to write down its oil and natural gas producing properties. The Company recorded a $500.4 million ($315.3 million after tax) noncash write-down in operating expenses from discontinued operations in the first quarter of 2015. Fidelity previously held commodity derivatives that were not designated as hedging instruments. The amount of loss recognized in discontinued operations, before tax, was $18.3 million in the year ended December 31, 2015. Dakota Prairie Refining and Fidelity The reconciliation of the major classes of income and expense constituting pretax income (loss) from discontinued operations, which includes Dakota Prairie Refining and Fidelity, to the after-tax loss from discontinued operations on the Company's Consolidated Statements of Income for the years ended December 31 were as follows:
| 2017 |  | 2016 |  | 2015 |
| (In thousands)
Operating revenues | $ | 465 |  | $ | 123,024 |  | $ | 363,115 |
Operating expenses | (4,607 | ) | 513,813 |  | 1,666,941 |
Operating income (loss) | 5,072 |  | (390,789 | ) | (1,303,826 | )
Other income (expense) | (13 | ) | 306 |  | 3,149 |
Interest expense | 250 |  | 1,753 |  | 2,124 |
Income (loss) from discontinued operations before income taxes | 4,809 |  | (392,236 | ) | (1,302,801 | )
Income taxes* | 8,592 |  | (91,882 | ) | (468,721 | )
Loss from discontinued operations | (3,783 | ) | (300,354 | ) | (834,080 | )
Loss from discontinued operations attributable to noncontrolling interest | — |  | (131,691 | ) | (35,256 | )
Loss from discontinued operations attributable to the Company | $ | (3,783 | ) | $ | (168,663 | ) | $ | (798,824 | )
* | Includes eliminations for the presentation of income tax adjustments between continuing and discontinued operations.
The pretax income (loss) from discontinued operations attributable to the Company, related to the operations of and activity associated with Dakota Prairie Refining, was $6.9 million, $(253.5) million and $(31.5) million for the years ended December 31, 2017, 2016 and 2015, respectively.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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