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INVESTMENTS

12 Months Ended

Dec. 31, 2019

12.INVESTMENTS

AllDale III

As discussed in Note 11 – Variable Interest Entities, we account for our ownership interest in the income or loss of AllDale III as an equity method investment. We record equity income or loss based on AllDale III's distribution structure. The changes in our equity method investment in AllDale III for each of the periods presented were as follows:


	Year Ended December 31,
	2019		2018		2017
	(in thousands)
Beginning balance	$	28,974	$	14,182	$	—
Contributions		—		15,600		14,400
Equity method investment income (loss)		2,203		547		(218)
Distributions received		(2,648)		(1,355)		—
Ending balance	$	28,529	$	28,974	$	14,182

Kodiak

On July 19, 2017, Alliance Minerals purchased $100 million of Series A-1 Preferred Interests from Kodiak, a privately-held company providing large-scale, high-utilization gas compression assets to customers operating primarily in the Permian Basin. This structured investment provided us with a quarterly cash or payment-in-kind return. On February 8, 2019, Kodiak redeemed our preferred interest for $135.0 million in cash resulting in an $11.5 million gain due to an early redemption premium. The gain is included in the Equity securities income line item. We no longer hold any ownership interests in Kodiak. Prior to the redemption, we accounted for our ownership interests in Kodiak as equity securities without readily determinable fair values.

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for investments.