Acquisitions

VantaCore Acquisition

On October 1, 2014, the Partnership continued its effort to own a more diversified portfolio of natural resources by completing its acquisition of VantaCore for $200.6 million in cash and common units. At the time of acquisition, VantaCore operated three hard rock quarries, six sand and gravel plants, two asphalt plants, one underground limestone mine and one marine terminal. VantaCore is headquartered in Philadelphia, Pennsylvania and its current operations are located in Pennsylvania, West Virginia, Tennessee, Kentucky and Louisiana. This acquisition aligned the Partnership’s effort to own a more diversified portfolio of natural resources.

In the first quarter 2015, the purchase price allocation was adjusted as more detailed analysis was completed and additional information was obtained about the facts and circumstances for various items of VantaCore’s plant and equipment that existed as of acquisition date. As a result of this adjustment, plant and equipment was increased by $22.5 million with a corresponding decrease to goodwill. In the second quarter 2015, the purchase price allocation was adjusted as more detailed analysis was completed and additional information was obtained about the facts and circumstances for VantaCore’s right to mine and intangible assets that existed as of the acquisition date. As a result of this adjustment, Mineral rights, net and Intangible assets, net were increased by $24.7 million with a corresponding decrease to Goodwill. The purchase price allocation was further adjusted as more detailed analysis was completed for VantaCore’s asset retirement obligations that existed as of acquisition date. As a result of this adjustment, asset retirement obligations were decreased by $2.3 million with a corresponding decrease to the asset retirement cost that was capitalized as part of the related land, property and equipment. The accounting for the VantaCore acquisition was completed in the second quarter of 2015 with the exception of this asset retirement obligation adjustment that was recoded in the fourth quarter of 2015. Measurement-period adjustments were not material to prior period financial statements and were recorded during the period in which the amount of the adjustment was determined. The accounting for the VantaCore acquisition is summarized as follows (in thousands):



	October 1, 2014
Consideration
Cash	$	168,978
NRP common units	31,604
Total consideration given	$	200,582
Allocation of Purchase Price
Current assets	$	37,222
Land, property and equipment	59,946
Mineral rights	111,500
Other assets	4,347
Current liabilities	(16,953		)
Asset retirement obligation	(1,005		)
Goodwill	5,525
Fair value of net assets acquired	$	200,582

Included in the Consolidated Statements of Comprehensive Income was revenue of $42.1 million and operating income of $0.1 million for the year ended December 31, 2014. Transaction costs through December 31, 2014 associated with this acquisition were $2.9 million and were expensed as incurred. These expenses are reflected in Operating and maintenance expenses on the Consolidated Statements of Comprehensive Income.

Sanish Field Acquisition

On November 12, 2014, the Partnership continued its effort to own a more diversified portfolio of natural resources by completing its acquisition of non-operated oil and gas working interests in the Sanish Field of the Williston Basin from an affiliate of Kaiser-Francis Oil Company for $339.1 million.

The Partnership accounted for the transaction as a business combination under the acquisition method of accounting. Accordingly, the Partnership conducted assessments of net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated fair values on the acquisition date, while transaction and integration costs associated with the acquisitions were expensed as incurred. The fair value of these assets and liabilities was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement. Significant inputs used to determine the fair value include estimates of: (i) reserves, including estimated oil and natural gas reserves and risk-adjusted probable reserves; (ii) future commodity prices; (iii) production costs, (iv) capital expenditures, (v) production and (vi) discount rates. The results of operations of the acquisition have been included in our consolidated financial statements since the acquisition date. The accounting for the Sanish Field acquisition was completed in the second quarter of 2015 without significant changes during the measurement period and is summarized as follows (in thousands):



	November 12, 2014
Consideration
Cash	$	339,093
Allocation of Purchase Price
Mineral rights - proven oil and gas properties	298,293
Mineral rights - probable and possible oil and gas resources	40,800
Fair value of net assets acquired	$	339,093

Included in the Consolidated Statements of Comprehensive Income was revenue of $12.8 million and operating income of $3.7 million for the year ended December 31, 2014. The transaction costs incurred in connection with this acquisition were $1.8 million through December 31, 2014, and were expensed as incurred. These expenses are reflected in Operating and maintenance expenses on the Consolidated Statements of Comprehensive Income.

Pro Forma Financial Information (unaudited)

The following unaudited pro forma financial information (in thousands) presents a summary of the Partnership’s consolidated revenues, net income and net income per common unit for the twelve months ended December 31, 2014 and 2013 assuming the VantaCore and Sanish Field acquisitions had been completed as of January 1, 2013, including adjustments to reflect the values assigned to the net assets acquired:



	For the Years ended December 31,
	2014		2013
Total revenues and other income	$	533,517	$	579,933
Net income	$	122,319	$	197,164
Basic and diluted net income per common unit	$	9.90	$	16.00

Other Oil and Gas Aquisitions

During the year ended December 31, 2013, the Partnership also completed two smaller acquisitions of oil and natural gas properties located in the Williston Basin as described below:

Sundance Acquisition

In December, 2013, the Partnership completed the acquisition of non-operated working interests in oil and gas properties in the Williston Basin of North Dakota from Sundance Energy, Inc. for $29.4 million, following post-closing purchase price adjustments. The Partnership accounted for the transaction in accordance with the authoritative guidance for business combinations. During the third quarter of 2014, the Partnership finalized the determination of the fair value of the assets acquired and liabilities assumed in the acquisition, with no material adjustments. The assets acquired are included in Mineral rights in the accompanying Consolidated Balance Sheets.

Abraxas Acquisition

In August, 2013, the Partnership completed the acquisition of non-operated working interests in oil and gas properties in the Williston Basin of North Dakota and Montana from Abraxas Petroleum for $38.0 million, following post-closing purchase price adjustments. The Partnership accounted for the transaction in accordance with the authoritative guidance for business combinations. During the second quarter of 2014, the Partnership finalized the determination of the fair values of the assets acquired and liabilities assumed in the acquisition, with no material adjustments. The assets acquired are included in Mineral rights on the accompanying Consolidated Balance Sheets.

With respect to the Abraxas and Sundance acquisitions, revenues of $5.4 million and operating income of $2.5 million were included in the Consolidated Statements of Comprehensive Income and Consolidated Balance Sheet for the year ended December 31, 2013.