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Property, Plant and Equipment | 9 Months Ended
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Sep. 30, 2022
Property, Plant and Equipment. |
Property, Plant and Equipment | 4.Property, Plant and Equipment Property, plant and equipment (“PP&E”) is stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful service life of the asset. PP&E consists of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | September 30, | ​ | December 31,
​ |  | 2022 | ​ | 2021
Wells, Facilities, Water Ponds, and Related Equipment | ​ | $ | 407,608 | ​ | $ | 329,935
Pipelines | ​ | ​ | 340,817 | ​ | ​ | 327,140
Land | ​ | ​ | 2,063 | ​ | ​ | 2,063
Vehicles, Equipment, Computers and Office Furniture | ​ | ​ | 18,196 | ​ | ​ | 17,359
Assets Subject to Depreciation | ​ | ​ | 768,684 | ​ | ​ | 676,497
Projects and Construction in Progress | ​ | ​ | 112,319 | ​ | ​ | 24,259
Total Property, Plant and Equipment | ​ | ​ | 881,003 | ​ | ​ | 700,756
Accumulated Depreciation | ​ | ​ | (81,019) | ​ | ​ | (67,749)
Total Property, Plant and Equipment, Net | ​ | $ | 799,984 | ​ | $ | 633,007
​ Asset Exchanges During the nine months ended September 30, 2022, we completed multiple nonmonetary transactions. The transactions included exchanges of wells, facilities, permits and other assets. The total net book value of the divested assets and liabilities was $3.8 million. The acquired assets were recorded at a total fair value of $3.2 million, which resulted in a total pre-tax loss of $0.6 million. Assets Sold During the first quarter of 2022, management committed to a plan to sell certain of our assets located in the Midland Basin and determined that these assets met all the criteria for classification as assets held for sale. These assets were re-measured at their fair values less costs to sell, which resulted in the recognition of pre-tax impairment expense of $15.6 million during the first quarter of 2022. We estimated the fair value of the assets using indicative bids, which were representative of a Level 2 fair value measurement, and we ceased recording depreciation on the assets. During the third quarter of 2022, we closed the sale of these assets for proceeds of $7.4 million and recorded a gain of $0.1 million. Abandoned Assets In June 2022, management determined that two previously acquired saltwater disposal wells (“SWD wells”) were no longer economically beneficial to the operations of the Company due to required workover costs and determined that the SWD wells should be shut-in and taken out of service. Accordingly, we removed the cost and the associated accumulated depreciation and recognized a charge of $4.2 million for the remaining book value of the SWD wells. The charge has been reflected in abandoned well costs in the condensed consolidated statements of operations for the nine months ended September 30, 2022. In late second quarter 2022, management removed the cost of a SWD well that was under construction in Texas. The well had encountered technical difficulties during the drilling phase and progress on the well was stopped. Management’s evaluation of the well determined that abandoning the asset was the most prudent course of action. Accordingly, we removed the cost of the asset and recognized a charge of $1.6 million, which is reflected in abandoned well costs in the condensed consolidated statements of operations for the nine months ended September 30, 2022. In the third quarter of 2022, we recognized a charge of $9.2 million related to a stand-alone SWD well that has been taken out of service. The charge is reflected in abandoned well costs in the condensed consolidated statements of operations for the three and nine months ended September 30, 2022. During the first nine months of 2021, we re-entered a SWD well bore to address anomalies. After technical testing, management concluded that it was probable that abandoning the asset was the most prudent course of action as the well was unable to remain in service in its current condition, and we recognized abandoned well cost of $27.4. Delaware Energy Asset Acquisition On August 1, 2022, we acquired from Delaware Energy, LLC certain saltwater gathering and disposal facilities, disposal wells and other related assets and rights in Lea County and Eddy County, New Mexico. In connection with the closing and as consideration for the assets, we issued to the seller 3,365,907 shares of our Class A common stock and included volumetric-based contingent consideration. We estimated the fair value of the contingent consideration using a discounted cash flow model based on estimated royalty payments to be made over a five-year contractual period. Allocation of the purchase price to the acquired assets was based on relative fair values. The following table sets forth our purchase price allocation. ​
​ | ​ | ​ | ​
(in thousands, except share and per share amounts) | ​ | ​ | ​
Equity Consideration | ​ | ​ | ​
Number of Class A Shares Issued | ​ | ​ | 3,365,907
Fair Value Per Share on Transaction Closing Date | ​ | $ | 21.16
Total Fair Value of Equity Consideration | ​ | $ | 71,223
Fair Value of Contingent Consideration (1) | ​ | ​ | 3,899
Total Fair Value of Consideration | ​ | $ | 75,122
​ | ​ | ​ | ​
Purchase Price Allocation | ​ | ​ | ​
Saltwater Disposal Wells | ​ | $ | 72,620
Gathering Systems and Pipelines | ​ | ​ | 2,716
Total Fair Value of Property Acquired | ​ | ​ | 75,336
Less: ARO Liabilities Assumed | ​ | ​ | (214)
Total Purchase Price Allocation | ​ | $ | 75,122
(1) | As of September 30, 2022, liabilities for contingent consideration of $1.1 million and $2.8 million are included in Accrued and Other Current Liabilities and Other Long-Term Liabilities, respectively.
Contemporaneously with the issuance of such shares of Class A common stock, Solaris LLC issued 3,365,907 Solaris LLC units to Aris Inc. Other Asset Acquisition During the third quarter of 2022, we purchased five ponds from ConocoPhillips, a related party, for a cash purchase price of $3.4 million.

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- Definition The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 958 -SubTopic 360 -Section 50 -Paragraph 6 -URI https://asc.fasb.org/extlink&oid=126982197&loc=d3e99893-112916 Reference 2: 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 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 958 -SubTopic 360 -Section 50 -Paragraph 7 -URI https://asc.fasb.org/extlink&oid=126982197&loc=SL120174063-112916 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 958 -SubTopic 360 -Section 50 -Paragraph 1 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126982197&loc=d3e99779-112916 + Details
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