XML 26 R14.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Equity Method Investment
 6 Months Ended
Jun. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investment Equity Method Investment
In January 2023, the Company formed a joint venture, RPC Power LLC, a Delaware limited liability company ("RPC Power"), for the purpose of constructing, owning and operating power generation assets which are expected to be fully operational in the third quarter of 2024. These assets will use the Company’s produced natural gas to power its oilfield operations in Yoakum County, Texas. In May 2024, the Company entered into the Second Amended and Restated Limited Liability Company Agreement (“A&R LLC Agreement”) to expand the scope of its joint venture to include the constructing, owning, and operating of additional new power generation and storage assets which are expected to be operational in 2025, for the sale of energy and ancillary services to ERCOT ("Merchant Deal"). Upon signing the A&R LLC Agreement, the Company invested an additional $9.5 million and also increased its equity ownership in RPC Power from 35% to 50%. The Company also committed to invest up to an additional $21.5 million, if required, to fund its portion of the capital budget for 2024 and 2025 for the RPC Power joint venture. As the Company has significant influence due to its ownership percentage, but lacks control, RPC Power is accounted for as an equity method investment. As of June 30, 2024, the Company had invested $21 million in the joint venture, comprised of $18.7 million in cash and $2.3 million of contributed assets, which was reduced by the Company's share of losses and increased by its share of income in the joint venture.
See Note 9 - Transactions with Related Parties for further discussion of the contractual agreements between the Company and RPC Power and its affiliates and Note 14 - Commitments and Contingencies for additional information on future commitments.
The following table presents the Company's equity method investment activity:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
(In thousands)
Equity method investment, beginning balance
$11,406 $3,880 $5,620 $— 
Contributions
9,543 1,726 15,162 5,838 
Loss from equity method investment(192)(4)(25)(236)
Equity method investment, ending balance
$20,757 $5,602 $20,757 $5,602