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Note 3 - Net Profits Interests Divestiture

9 Months Ended

Sep. 30, 2020

Net Profits Interests Divestiture [Text Block]

3.	Net Profits Interests Divestiture

On September 30, 2020, the Partnership and affiliates of its General Partner closed the divestiture of our Hugoton net profits interests located in Texas County, Oklahoma and Stevens County, Kansas to a third party. In accordance with the full cost method of accounting, as the divestiture did not represent a significant portion of the Partnership’s reserves, gross divestiture proceeds of $5.7 million were credited to the oil and natural gas properties full cost pool as of September 30, 2020. Transaction costs of $0.5 million are included in general and administrative expenses on the condensed consolidated income statements for the three and nine month periods ended September 30, 2020. Holdbacks of $0.2 million are included in trade and other receivables on the condensed consolidated balance sheet as of September 30, 2020. Final net proceeds from the sale are subject to customary adjustments 120 days after the closing date.