Investment in Laramie Energy, LLC

We have a 39.1% ownership interest in Laramie Energy. Laramie Energy is focused on producing natural gas in Garfield, Mesa, and Rio Blanco Counties, Colorado. On February 28, 2018, Laramie Energy closed on a purchase and contribution agreement with an unaffiliated third party that contributed all of its oil and gas properties located in the Piceance Basin and a $23.5 million cash payment, collectively with a fair market value of $28.1 million, into Laramie Energy in exchange for 70,227 of Laramie Energy's newly issued Class A Units. As a result of this transaction, our ownership interest in Laramie Energy decreased from 42.3% to 39.1%.

Laramie Energy has a $400 million revolving credit facility with a borrowing base currently set at $230 million that is secured by a lien on its natural gas and crude oil properties and related assets. As of March 31, 2018, the balance outstanding on the revolving credit facility was approximately $172.5 million. We are guarantors of Laramie Energy’s credit facility, with recourse limited to the pledge of our equity interest of our wholly owned subsidiary, Par Piceance Energy Equity, LLC. Under the terms of its credit facility, Laramie Energy is generally prohibited from making future cash distributions to its owners, including us.

The change in our equity investment in Laramie Energy is as follows (in thousands):



	Three Months Ended March 31, 2018
Beginning balance	$	127,192
Equity earnings from Laramie Energy	4,303
Accretion of basis difference	1,273
Ending balance	$	132,768

Summarized financial information for Laramie Energy is as follows (in thousands):



	March 31, 2018		December 31, 2017
Current assets	$	23,626	$	18,757
Non-current assets	776,181		720,444
Current liabilities	33,218		42,149
Non-current liabilities	270,150		237,497



	Three Months Ended March 31,
	2018		2017
Natural gas and oil revenues	$	46,681	$	40,612
Income from operations	6,044		1,163
Net income	7,290		17,528

Laramie Energy's net income for the three months ended March 31, 2018 includes $14.9 million of depreciation, depletion, and amortization (“DD&A”) and $4.6 million of unrealized gain on derivative instruments. Laramie Energy’s net income for the three months ended March 31, 2017 includes $13.3 million of DD&A and $24.2 million of unrealized gain on derivative instruments.

At March 31, 2018 and December 31, 2017, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $61.5 million and $67.2 million, respectively. This difference arose due to lack of control and marketability discounts and an other-than-temporary impairment of our equity investment in Laramie Energy in 2015. We attributed this difference to natural gas and crude oil properties and are amortizing the difference over 15 years based on the estimated timing of production of proved reserves.