Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2014

Open Oil and Natural Gas Commodity Derivative Contracts

At June 30, 2014, the Company’s open commodity derivative contracts consisted of the following:

Oil Price Swaps

Natural Gas Price Swaps

Oil Collars - Three-way



	Notional (MBbls)	Sold Put	Purchased Put	Sold Call
July 2014 - December 2014	4,140	$70.00	$90.20	$100.00
January 2015 - December 2015	3,656	$74.83	$90.35	$103.50

Natural Gas Collars



	Notional (MMcf)	Collar Range
July 2014 - December 2014	472	$4.00	—	$7.78
January 2015 - December 2015	1,010	$4.00	—	$8.55

Royalty Trusts

Variable Interest Entity

Royalty Trust Units

The following table summarizes information about each Royalty Trust:



	Mississippian Trust I	Permian Trust	Mississippian Trust II
Total outstanding common units	21,000,000	39,375,000	37,293,750
Total outstanding subordinated units	7,000,000	13,125,000	12,431,250
Liquidation date(1)	12/31/2030	3/31/2031	12/31/2031

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(1)	At the time each Royalty Trust terminates, 50% of the royalty interests conveyed to the Royalty Trust will automatically revert to the Company, and the remaining 50% will be sold with the proceeds distributed to the Royalty Trust unitholders.

Royalty Trusts Distributions

The Royalty Trusts declared and paid quarterly distributions during the three and six-month periods ended June 30, 2014 and 2013 as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2014(1)		2013		2014(2)		2013
Total distributions	$	59,672	$	68,449	$	127,985	$	144,810
Distributions to third-party unitholders	$	50,024	$	47,459	$	103,142	$	98,716

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(1)	Subordination thresholds were not met for the Mississippian Trust I’s and Mississippian Trust II’s distributions, resulting in reduced distributions to the Company on its subordinated units for this period.


(2)	Subordination thresholds were not met for the Mississippian Trust I’s distributions, resulting in reduced distributions to the Company on its subordinated units for this period.

Open Oil and Natural Gas Commodity Derivative Contracts

The tables below present the open oil and natural gas commodity derivative contracts at June 30, 2014 underlying the derivatives agreements. The combined volume in the tables below reflects the total volume of the Royalty Trusts’ open oil and natural gas commodity derivative contracts.

Oil Price Swaps Underlying the Royalty Trust Derivatives Agreements

Natural Gas Collars Underlying the Royalty Trust Derivatives Agreements



	Notional (MMcf)	Collar Range
July 2014 - December 2014	472	$	4.00	—	$	7.78
January 2015 - December 2015	1,010	$	4.00	—	$	8.55

Oil Price Swaps Underlying the Derivatives Agreements and Novated to the Royalty Trusts

Assets and Liabilities Included in Unaudited Condensed Consolidated Balance Sheets

The Royalty Trusts’ assets and liabilities, after considering the effects of intercompany eliminations, included in the accompanying unaudited condensed consolidated balance sheets at June 30, 2014 and December 31, 2013 consisted of the following (in thousands):



	June 30, 2014			December 31, 2013
Cash and cash equivalents(1)	$	6,722		$	7,912
Accounts receivable, net	18,887			22,540
Derivative contracts	—			4,983
Total current assets	25,609			35,435
Investment in royalty interests(2)	1,325,942			1,325,942
Less: accumulated depletion and impairment(3)	(258,186		)	(186,095		)
	1,067,756			1,139,847
Derivative contracts	—			1,476
Total assets	$	1,093,365		$	1,176,758
Accounts payable and accrued expenses	$	2,318		$	3,393
Derivative contracts, current	968			—
Total liabilities	$	3,286		$	3,393

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(1)	Includes $3.0 million held by the trustee at June 30, 2014 and December 31, 2013 as reserves for future general and administrative expenses.


(2)	Investment in royalty interests is included in oil and natural gas properties in the accompanying unaudited condensed consolidated balance sheets.


(3)	Accumulated depletion and impairment at June 30, 2014 includes full cost ceiling limitation impairment allocated to the Royalty Trusts of $42.3 million. There was no full cost ceiling limitation impairment allocated to the Royalty Trusts as of December 31, 2013.

Royalty Trusts Ownership Interest

The Company’s beneficial interests in the Royalty Trusts at June 30, 2014 and December 31, 2013 were as follows:



	June 30, 2014		December 31, 2013
Mississippian Trust I	26.9	%	26.9	%
Permian Trust	25.0	%	28.5	%
Mississippian Trust II	37.6	%	37.6	%

Grey Ranch Plant, L.P

Variable Interest Entity

Assets and Liabilities Included in Unaudited Condensed Consolidated Balance Sheets

GRLP’s assets and liabilities, after considering the effects of intercompany eliminations, included in the accompanying unaudited condensed consolidated balance sheet at December 31, 2013 consisted of the following (in thousands):



	December 31, 2013
Cash and cash equivalents	$	132
Accounts receivable, net	16
Prepaid expenses	32
Other current assets	109
Total current assets	289
Other property, plant and equipment, net	1,163
Total assets	$	1,452

Accounts payable and accrued expenses	$	129
Total liabilities	$	129

Pinon Gathering Company LLC

Variable Interest Entity

Schedule Of Amounts Due To/From Variable Interest Entities

Amounts due from and due to PGC as of June 30, 2014 and December 31, 2013 included in the accompanying unaudited condensed consolidated balance sheets are as follows (in thousands):



	June 30, 2014		December 31, 2013
Accounts receivable due from PGC	$	1,672	$	741
Accounts payable due to PGC	$	4,486	$	3,634

Notional (MBbls)

Weighted Average
Fixed Price

July 2014 - December 2014

January 2015 - December 2015