RICE MIDSTREAM PARTNERS LP, 10-Q filed on 5/4/2017
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2017
May 2, 2017
Entity Common Units Outstanding
May 2, 2017
Entity Subordinated Units Outstanding
Document and Entity Information [Line Items]
 
 
 
Entity Registrant Name
Rice Midstream Partners LP 
 
 
Trading Symbol
RMP 
 
 
Entity Central Index Key
0001620928 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-Q 
 
 
Document Period End Date
Mar. 31, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
Q1 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
73,519,133 
28,753,623 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Current assets:
 
 
Cash
$ 12,990 
$ 21,834 
Accounts receivable
7,126 
8,758 
Accounts receivable - affiliate
15,035 
11,838 
Prepaid expenses, deposits and other
115 
64 
Total current assets
35,266 
42,494 
Property and equipment, net
830,039 
805,027 
Deferred financing costs, net
11,542 
12,591 
Goodwill
494,580 
494,580 
Intangible assets, net
44,124 
44,525 
Total assets
1,415,551 
1,399,217 
Current liabilities:
 
 
Accounts payable
6,848 
4,172 
Accrued capital expenditures
11,951 
9,074 
Other accrued liabilities
7,139 
8,376 
Total current liabilities
25,938 
21,622 
Long-term liabilities:
 
 
Long-term debt
190,000 
190,000 
Other long-term liabilities
5,967 
5,189 
Total liabilities
221,905 
216,811 
Partners’ capital:
 
 
Total partners’ capital
1,193,646 
1,182,406 
Total liabilities and partners’ capital
1,415,551 
1,399,217 
Common
 
 
Partners’ capital:
 
 
Common and subordinated units
1,283,901 
1,276,036 
Subordinated
 
 
Partners’ capital:
 
 
Common and subordinated units
$ (90,255)
$ (93,630)
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
Mar. 31, 2017
Dec. 31, 2016
Common
 
 
Common and Subordinated units issued
73,519,133 
73,519,133 
Common and Subordinated units outstanding
73,519,133 
73,519,133 
Subordinated
 
 
Common and Subordinated units issued
28,753,623 
28,753,623 
Common and Subordinated units outstanding
28,753,623 
28,753,623 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Operating revenues:
 
 
Affiliate
$ 52,797,000 
$ 44,385,000 
Third-party
9,953,000 
10,158,000 
Total operating revenues
62,750,000 
54,543,000 
Operating expenses:
 
 
Operation and maintenance expense
8,179,000 
8,611,000 
General and administrative expense
5,839,000 1
4,676,000 1
Depreciation expense
7,621,000 
5,370,000 
Acquisition costs
0 
73,000 
Amortization of intangible assets
402,000 
408,000 
Other expense (income)
113,000 
(212,000)
Total operating expenses
22,154,000 
18,926,000 
Operating income
40,596,000 
35,617,000 
Other income
11,000 
0 
Interest expense
(1,943,000)
(1,047,000)
Amortization of deferred finance costs
(1,049,000)
(144,000)
Net income
37,615,000 
34,426,000 
Calculation of limited partner interest in net income:
 
 
Less: General partner interest in net income attributable to incentive distribution rights
1,239,000 
0 
Limited partner net income
36,376,000 
34,426,000 
Net income per limited partner unit:
 
 
Net income per limited partner unit - basic (in dollars per unit)
$ 0.36 
$ 0.49 
Net income per limited partner unit - diluted (in dollars per unit)
$ 0.36 
$ 0.48 
Cash distributions declared per limited partner unit:
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 2
$ 0.21 2
Rice Energy
 
 
Cash distributions declared per limited partner unit:
 
 
General and administrative expenses from Rice Energy
4,900,000 
4,300,000 
Common
 
 
Calculation of limited partner interest in net income:
 
 
Limited partner net income
26,149,000 
20,468,000 
Net income per limited partner unit:
 
 
Net income per limited partner unit - basic (in dollars per unit)
$ 0.36 
$ 0.49 
Net income per limited partner unit - diluted (in dollars per unit)
$ 0.36 
$ 0.48 
Cash distributions declared per limited partner unit:
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 
$ 0.2100 
Subordinated
 
 
Calculation of limited partner interest in net income:
 
 
Limited partner net income
$ 10,227,000 
$ 13,958,000 
Net income per limited partner unit:
 
 
Net income per limited partner unit - basic (in dollars per unit)
$ 0.36 
$ 0.49 
Net income per limited partner unit - diluted (in dollars per unit)
$ 0.36 3
$ 0.49 3
Subordinated units (basic and diluted) (in dollars per unit)
$ 0.36 
$ 0.49 
Cash distributions declared per limited partner unit:
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 
$ 0.2100 2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Cash flows from operating activities:
 
 
Net income
$ 37,615 
$ 34,426 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation expense
7,621 
5,370 
Amortization of intangibles
402 
408 
Amortization of deferred financing costs
1,049 
144 
Equity compensation expense
132 
919 
Changes in operating assets and liabilities:
 
 
Accounts receivable and receivable from affiliate
(1,566)
(7,775)
Prepaid expenses and other assets
(52)
(47)
Accounts payable and payable to affiliate
1,863 
(102)
Accrued liabilities and other
(855)
3,092 
Net cash provided by operating activities
46,209 
36,435 
Cash flows from investing activities:
 
 
Capital expenditures
(28,506)
(36,243)
Net cash used in investing activities
(28,506)
(36,243)
Cash flows from financing activities:
 
 
Proceeds from borrowings
0 
28,000 
Repayments of borrowings
0 
(12,000)
Additions to deferred financing costs
(40)
(82)
Contributions from parent
0 
39 
Distributions to related parties
(8,091)
(5,650)
Distributions to public unitholders
(18,416)
(8,284)
Net cash (used in) provided by financing activities
(26,547)
2,023 
Net (decrease) increase in cash
(8,844)
2,215 
Cash at the beginning of the year
21,834 
7,597 
Cash at the end of the period
12,990 
9,812 
Supplemental disclosure of cash flow information:
 
 
Capital expenditures financed by accounts payable
3,008 
8,612 
Capital expenditures financed by accrued capital expenditures
$ 11,951 
$ 13,716 
Condensed Consolidated Statements of Partners' Capital (Unaudited) (USD $)
In Thousands, unless otherwise specified
Total
Limited Partners
Common
Limited Partners
Subordinated & Incentive Distribution Right Holders
Balance at Dec. 31, 2015
$ 511,834 
$ 624,557 
$ (112,723)
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
 
Contributions from parent
39 
 
39 
Equity compensation expense
1,032 
1,032 
 
Distributions to unitholders
(13,934)
(8,284)
(5,650)
Net income
34,426 
20,468 
13,958 
Balance at Mar. 31, 2016
533,397 
637,773 
(104,376)
Balance at Dec. 31, 2016
1,182,406 
1,276,036 
(93,630)
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
 
Equity compensation expense
132 
132 
0 
Distributions to unitholders
(26,507)
(18,416)
(8,091)
Net income
37,615 
26,149 
11,466 
Balance at Mar. 31, 2017
$ 1,193,646 
$ 1,283,901 
$ (90,255)
Basis of Presentation
Basis of Presentation
Basis of Presentation
Rice Midstream Partners LP (the “Partnership”) is a Delaware limited partnership formed by Rice Energy Inc. (“Rice Energy”) in August 2014. References in these unaudited condensed consolidated financial statements to Rice Energy refer collectively to “Rice Energy” and its consolidated subsidiaries, other than the Partnership and its consolidated subsidiaries.
The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared by the Partnership’s management in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments which are, in the opinion of management, necessary to present fairly the Partnership’s financial position as of March 31, 2017 and December 31, 2016 and its condensed consolidated statements of operations, cash flows and partners’ capital for the three months ended March 31, 2017 and 2016.
Acquisitions
Acquisitions
Acquisitions
On September 26, 2016, the Partnership entered into a Purchase and Sale Agreement by and between the Partnership and Rice Energy (the “Midstream Purchase Agreement”). Pursuant to the terms of the Midstream Purchase Agreement, and following the close of Rice Energy’s acquisition of Vantage Energy, LLC and Vantage Energy II, LLC (collectively, “Vantage”) and their subsidiaries (the “Vantage Acquisition”), on October 19, 2016, the Partnership acquired from Rice Energy all of the outstanding membership interests of Vantage Energy II Access, LLC and Vista Gathering, LLC (the “Vantage Midstream Entities”). The Vantage Midstream Entities own midstream assets, including approximately 30 miles of dry gas gathering and compression assets and water assets. In consideration for the acquisition of the Vantage Midstream Entities (the “Vantage Midstream Asset Acquisition”), the Partnership paid Rice Energy $600.0 million in aggregate consideration, which the Partnership paid in cash with the net proceeds of its private placement of common units (the “2016 Private Placement”) of $441.0 million and borrowings under its revolving credit facility (defined in Note 3) of $159.0 million. The preliminary purchase price allocation ascribed approximately $144.6 million to property and equipment and $455.4 million to goodwill. The Partnership’s acquisition of the Vantage Midstream Entities from Rice Energy is accounted for as a combination of entities under common control at historical cost. As the Vantage Midstream Asset Acquisition occurred concurrently with the Vantage Acquisition, no predecessor period existed which would warrant retrospective recast of our financial statements. In connection with the Vantage Midstream Asset Acquisition, the Partnership acquired a 67.5% interest in the Wind Ridge gathering system previously owned by Access Midstream Partners for approximately $14.3 million, of which $10.9 million was ascribed to property and equipment and $3.4 million to goodwill.
The preliminary purchase price allocation was performed by Rice Energy. Rice Energy expects to complete the purchase price allocation once it has received all of the necessary information, during which time the value of the assets may be revised as appropriate. The fair values of the assets acquired were determined using various valuation techniques, including the cost approach. The assumed purchase price and fair values have been prepared with the assistance of external specialists, and represent Rice Energy’s best estimate of the fair values of the assets acquired as of this date. Goodwill of $455.4 million related to the value attributed to additional growth opportunities, synergies and operating leverage within the Partnership’s gathering and compression segment.
Post-Acquisition Operating Results
The Vantage Midstream Entities contributed the following to the Partnership’s consolidated operating results for the three months ended March 31, 2017.
(in thousands)
 
 
Operating revenues
 
$
12,180

Net income
 
$
7,694


Unaudited Pro Forma Information

The following unaudited pro forma combined financial information presents the Partnership’s results as though the acquisition of the Vantage Midstream Entities and the 2016 Private Placement had been completed at January 1, 2016.
 
 
Pro Forma
(in thousands, except per share data)
 
Three Months Ended March 31, 2016
Operating revenues
 
$
73,150

Limited partner net income
 
$
45,088

Earnings per common unit (basic)
 
$
0.49

Earnings per common unit (diluted)
 
$
0.49

Earnings per subordinated units
 
$
0.49

Long-Term Debt
Long-Term Debt
Long-Term Debt
On December 22, 2014, Rice Midstream OpCo LLC, the Partnership’s wholly-owned subsidiary (“Rice Midstream OpCo”), entered into a revolving credit agreement (as amended, the “revolving credit facility”) with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of lenders.
As of March 31, 2017, the revolving credit facility provided for lender commitments of $850.0 million, with an additional $200.0 million of commitments available under an accordion feature, subject to lender approval. As of March 31, 2017, Rice Midstream OpCo had $190.0 million borrowings outstanding and no letters of credit outstanding under this facility, resulting in availability of $660.0 million as of March 31, 2017. The average daily outstanding balance of the credit facility was approximately $190.0 million and interest was incurred on the facility at a weighted average annual interest rate of 2.8% during the three months ended March 31, 2017. The revolving credit facility is available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions, to repurchase units and for general partnership purposes. The Partnership and its restricted subsidiaries are the guarantors of the obligations under the revolving credit facility, which matures on December 22, 2019.
Principal amounts borrowed are payable on the maturity date, and interest is payable quarterly for base rate loans and at the end of the applicable interest period for Eurodollar loans. Rice Midstream OpCo may elect to borrow in Eurodollars or at the base rate. Eurodollar loans bear interest at a rate per annum equal to the applicable LIBOR Rate plus an applicable margin ranging from 200 to 300 basis points, depending on the leverage ratio then in effect, and base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent bank’s reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one month Eurodollar loans plus 100 basis points, plus an applicable margin ranging from 100 to 200 basis points, depending on the leverage ratio then in effect. The carrying amount of the revolving credit facility is comprised of borrowings for which interest accrues under a fluctuating interest rate structure. Accordingly, the carrying value approximates fair value as of March 31, 2017 and represents a Level 1 measurement. Rice Midstream OpCo also pays a commitment fee based on the undrawn commitment amount ranging from 37.5 to 50 basis points.
The Partnership’s revolving credit facility also contains certain financial covenants and customary events of default. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the revolving credit facility to be immediately due and payable. The Partnership was in compliance with such covenants and ratios effective as of March 31, 2017.
Interest paid in cash was approximately $1.9 million for the three months ended March 31, 2017.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
From time to time the Partnership is party to various legal and/or regulatory proceedings arising in the ordinary course of business. While the ultimate outcome and impact to the Partnership cannot be predicted with certainty, the Partnership believes that all such matters are without merit and involve amounts which, if resolved unfavorably, either individually or in the aggregate, will not have a material adverse effect on its financial condition, results of operations or cash flows.
Lease Obligations
The Partnership has lease obligations for compression equipment under existing contracts with third parties. Rent expense included in operation and maintenance expense for the three months ended March 31, 2017 and 2016 was $0.4 million and $0.4 million, respectively. Future payments for this equipment as of March 31, 2017 totaled $4.7 million (remainder of 2017: $1.1 million; 2018: $1.2 million; 2019: $1.2 million; 2020: $0.6 million; 2021: $0.3 million and thereafter: $0.3 million).
Water Assets Conveyance
In consideration for the acquisition of Rice Energy’s Pennsylvania and Ohio fresh water distribution systems and related facilities (the “Water Assets”), the Partnership paid Rice Energy $200.0 million in cash plus an additional amount, if certain of the conveyed systems’ capacities increased by 5.0 MMgal/d on or prior to December 31, 2017, equal to $25.0 million less the capital expenditures expended by the Partnership to achieve such increase, in accordance with the terms of the Purchase and Sale Agreement, by and between the Partnership and Rice Energy dated November 4, 2015. The Partnership has not recorded a contingent liability associated with the additional consideration as the required capacity increases were not considered probable as of March 31, 2017.
Partners' Capital
Partners' Capital
Partners’ Capital
The following table presents the Partnership’s common and subordinated units issued from January 1, 2016 through March 31, 2017:
 
Limited Partners
 
 
 
Common
 
Subordinated
 
Total
Balance, January 1, 2016
42,163,749

 
28,753,623

 
70,917,372

Equity offering in June 2016
9,200,000

 
—

 
9,200,000

Equity offering in October 2016
20,930,233

 
—

 
20,930,233

Common units issued under ATM program
944,700

 
—

 
944,700

Vested phantom units, net
280,451

 
—

 
280,451

Balance, December 31, 2016
73,519,133

 
28,753,623

 
102,272,756

 
 
 
 
 
 
Balance, March 31, 2017
73,519,133

 
28,753,623

 
102,272,756


As of March 31, 2017, GP Holdings owned approximately 28% of the Partnership consisting of 3,623 common units, 28,753,623 subordinated units and all of the incentive distribution rights.
Net Income per Limited Partner Unit and Cash Distributions
Net Income per Limited Partner Unit and Cash Distributions
Net Income per Limited Partner Unit and Cash Distributions
The Partnership’s net income is allocated to the limited partners, including subordinated unitholders, in accordance with their respective ownership percentages, and when applicable, giving effect to the incentive distribution rights held by GP Holdings. The allocation of undistributed earnings, or net income in excess of distributions, to the incentive distribution rights is limited to cash available for distribution for the period. The Partnership’s net income allocable to the limited partners is allocated between common and subordinated unitholders by applying the provisions of the Partnership’s partnership agreement that govern actual cash distributions as if all earnings for the period had been distributed. Any common units issued during the period are included on a weighted-average basis for the days in which they were outstanding.
Diluted net income per limited partner unit reflects the potential dilution that could occur if securities or agreements to issue common units, such as awards under the Rice Midstream Partners LP 2014 Long-Term Incentive Plan (the “LTIP Plan”), were exercised, settled or converted into common units. When it is determined that potential common units should be included in diluted net income per limited partner unit calculation, the impact is reflected by applying the treasury stock method.

The following table presents Partnership’s calculation of net income per limited partner unit for common and subordinated limited partner units.
 
Three Months Ended March 31,
(in thousands, except unit data)
2017
 
2016
Net income
$
37,615

 
$
34,426

Less: General partner interest in net income attributable to incentive distribution rights
1,239

 
—

Limited partner net income
$
36,376

 
$
34,426

 
 
 
 
Net income allocable to common units
$
26,149

 
$
20,468

Net income allocable to subordinated units
10,227

 
13,958

Limited partner net income
$
36,376

 
$
34,426

 
 
 
 
Weighted-average limited partner units outstanding - basic:
 
 
 
Common units
73,519,133

 
42,163,749

Subordinated units
28,753,623

 
28,753,623

Total
102,272,756

 
70,917,372

 
 
 
 
Weighted-average limited partner units outstanding - diluted:
 
 
 
Common units (1)
73,542,881

 
42,387,313

Subordinated units
28,753,623

 
28,753,623

Total
102,296,504

 
71,140,936

 
 
 
 
Net income per limited partner unit - basic:
 
 
 
Common units
$
0.36

 
$
0.49

Subordinated units
0.36

 
0.49

Total
$
0.36


$
0.49

 
 
 
 
Net income per limited partner unit - diluted:
 
 
 
Common units
$
0.36

 
$
0.48

Subordinated units (2)
0.36

 
0.49

Total
$
0.36


$
0.48

 
 
 
 
Cash distributions declared per limited partner unit: (3)
 
 
 
Common units
$
0.2608

 
$
0.2100

Subordinated units
0.2608

 
0.2100

Total
$
0.2608

 
$
0.2100


(1)
Diluted weighted-average limited partner common units includes the effect of 23,748 units for the three months ended March 31, 2017, and 223,564 units for the three months ended March 31, 2016, in each case related to the LTIP Plan.
(2)
Basic and diluted income per limited partner unit is presented as if all earnings for the period had been distributed. While it appears that more income is allocated to the subordinated unitholders than the common unitholders for the three months ended March 31, 2016, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders.
(3)
See below for further discussion of cash distributions declared for the period presented.
Within 60 days after the end of each quarter, it is the Partnership’s intent to distribute to the holders of common and subordinated units on a quarterly basis the minimum quarterly distribution of $0.1875 per unit (or $0.75 on an annualized basis) to the extent it has sufficient cash after the establishment of cash reserves and the payment of its expenses, including payments to its general partner and affiliates.
Subordinated Units
GP Holdings owns all of the Partnership’s subordinated units. The principal difference between the Partnership’s common units and subordinated units is that, for any quarter during the “subordination period,” holders of the subordinated units will not be entitled to receive any distribution from operating surplus until the common units have received the minimum quarterly distribution for such quarter plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages. When the subordination period ends, each outstanding subordinated unit will convert into one common unit, which will then participate pro rata with the other common units in distributions.
Incentive Distribution Rights
All of the incentive distribution rights are held by GP Holdings. Incentive distribution rights represent the right to receive increasing percentages (15%, 25% and 50%) of quarterly distributions from operating surplus after the minimum quarterly distribution and the target distribution levels (described below) have been achieved.
For any quarter in which the Partnership has distributed cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum distribution, then the Partnership will distribute any additional available cash from operating surplus for that quarter among the unitholders and the incentive distribution rights holders in the following manner:
 
 
 
Marginal Percentage Interest in Distributions
 
Total Quarterly Distribution Per Unit
 
Unitholders
 
Incentive Distribution Rights Holders
Minimum Quarterly Distribution
$0.1875
 
100%
 
—%
First Target Distribution
above $0.1875 up to $0.2156
 
100%
 
—%
Second Target Distribution
above $0.2156 up to $0.2344
 
85%
 
15%
Third Target Distribution
above $0.2344 up to $0.2813
 
75%
 
25%
Thereafter
above $0.2813
 
50%
 
50%

On February 16, 2017, a cash distribution of $0.2505 per common and subordinated unit was paid to the Partnership’s unitholders related to the fourth quarter of 2016. On April 20, 2017, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the first quarter of 2017 of $0.2608 per common and subordinated unit. The cash distribution will be paid on May 18, 2017 to unitholders of record at the close of business on May 9, 2017. Also on May 18, 2017, a cash distribution of $1.2 million will be made to GP Holdings related to its incentive distribution rights in the Partnership based upon the level of distribution paid per common and subordinated unit.
Financial Information by Business Segment
Financial Information by Business Segment
Financial Information by Business Segment
The Partnership operates in two business segments: (i) gathering and compression and (ii) water services. The gathering and compression segment provides natural gas gathering and compression services for Rice Energy and third parties in the Appalachian Basin. The water services segment is engaged in the provision of water services to support well completion activities and to collect and recycle or dispose of flowback and produced water for Rice Energy and third parties in the Appalachian Basin.
Business segments are evaluated for their contribution to the Partnership’s consolidated results based on operating income, which is defined as segment operating revenues less operating expenses. Other income and expenses, interest and income taxes are managed on a consolidated basis. The segment accounting policies are the same as those described in Note 1 to the Partnership’s 2016 Annual Report.
The operating results and assets of the Partnership’s reportable segments were as follows for the three months ended March 31, 2017.
 
Three Months Ended March 31, 2017
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Total operating revenues
$
42,002

 
$
20,748

 
$
62,750

Total operating expenses
11,465

 
10,689

 
22,154

Operating income
$
30,537

 
$
10,059

 
$
40,596

 
 
 
 
 
 
Depreciation expense
$
3,270

 
$
4,351

 
$
7,621

Capital expenditures for segment assets
$
26,621

 
$
1,885

 
$
28,506

Segment assets
$
1,281,567

 
$
133,984

 
$
1,415,551

Goodwill
$
494,580

 
$
—

 
$
494,580

The operating results of the Partnership’s reportable segments were as follows for the three months ended March 31, 2016.
 
Three Months Ended March 31, 2016
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Total operating revenues
$
26,800

 
$
27,743

 
$
54,543

Total operating expenses
7,691

 
11,235

 
18,926

Operating income
$
19,109

 
$
16,508

 
$
35,617

 
 
 
 
 
 
Depreciation expense
$
1,935

 
$
3,435

 
$
5,370

Capital expenditures for segment assets
$
34,861

 
$
1,382

 
$
36,243


The assets of the Partnership’s reportable segments were as follows as of December 31, 2016.
 
As of December 31, 2016
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Segment assets
$
1,260,681

 
$
138,536

 
$
1,399,217

Goodwill
$
494,580

 
$
—

 
$
494,580

Income Taxes
Income Taxes
Income Taxes
The Partnership is not subject to federal and state income taxes as a result of its limited partner structure. For federal and state income tax purposes, all income, expenses, gains, losses and tax credits generated by the Partnership flow through to its unitholders. As such, the Partnership does not record a provision for income taxes in the current period. Prior to the Partnership’s initial public offering in December 2014 (the “IPO”), the Partnership’s income was included as part of Rice Energy’s consolidated federal tax return.
Related Party Transactions
Related Party Transactions
Related Party Transactions
In the ordinary course of business, the Partnership has transactions with affiliated companies. During the three months ended March 31, 2017 and 2016, related parties included Rice Energy and certain of its subsidiaries. Prior to the IPO, the push-down impact of the transactions was recorded in the consolidated statements of operations, and, as no cash settlement occurred, all transactions with Rice Energy and its subsidiaries were recorded in parent net equity. On December 22, 2014, upon completion of the IPO, the Partnership entered into an omnibus agreement (the “Omnibus Agreement”) with its general partner, Rice Energy, Rice Poseidon Midstream LLC and Rice Midstream Holdings LLC. Pursuant to the Omnibus Agreement, Rice Energy performs centralized corporate and general and administrative services for the Partnership, such as financial and administrative, information technology, legal, health, safety and environmental, human resources, procurement, engineering, business development, investor relations, insurance and tax. In exchange, the Partnership reimburses Rice Energy for the expenses incurred in providing these services, except for any expenses associated with Rice Energy’s long-term incentive programs.
The expenses for which the Partnership reimburses Rice Energy and its subsidiaries related to corporate and general and administrative services may not necessarily reflect the actual expenses that the Partnership would incur on a stand-alone basis. The Partnership is unable to estimate what the costs would have been with an unrelated third party.
Also upon completion of the IPO, the Partnership entered into a fixed-fee gas gathering and compression agreement that runs until December 22, 2029 (the “Gas Gathering and Compression Agreement”) with Rice Drilling B LLC, a subsidiary of Rice Energy, and Alpha Shale Resources LP, pursuant to which the Partnership gathers Rice Energy’s natural gas and provides compression services on the Partnership’s gathering systems located in Washington and Greene Counties, Pennsylvania. As of March 31, 2017, the Partnership charges Rice Energy a gathering fee of $0.30 per Dth and a compression fee of $0.07 per Dth per stage of compression, each subject to annual adjustment for inflation based on the Consumer Price Index. The Gas Gathering and Compression Agreement covers substantially all of Rice Energy’s acreage position in the dry gas core of the Marcellus Shale in southwestern Pennsylvania as of March 31, 2017 and any future acreage it acquires within Washington and Greene Counties, Pennsylvania, excluding certain production subject to a pre-existing third-party dedication.
In connection with the closing of the acquisition of the Water Assets, the Partnership entered into amended and restated water services agreements with Rice Energy (the “Water Services Agreements”), whereby the Partnership has agreed to provide certain fluid handling services to Rice Energy, including the exclusive right to provide fresh water for well completions operations in the Marcellus and Utica Shales and to collect and recycle or dispose of flowback and produced water for Rice Energy within areas of dedication in defined service areas in Pennsylvania and Ohio. The initial terms of the Water Services Agreements are until December 22, 2029 and from month to month thereafter. Under the agreements, Rice Energy will pay the Partnership (i) a variable fee, based on volumes of water supplied, for freshwater deliveries by pipeline directly to the well site, subject to annual Consumer Price Index (“CPI”) adjustments and (ii) a produced water hauling fee of actual out-of-pocket cost incurred by the Partnership, plus a 2% margin.
New Accounting Pronouncements
New Accounting Pronouncements
New Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. The FASB created Topic 606 which supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the Codification. The FASB and International Accounting Standards Board initiated this joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for both U.S. GAAP and International Financial Reporting Standards. ASU 2014-09 will enhance comparability of revenue recognition practices across entities, industries and capital markets compared to existing guidance. Additionally, ASU 2014-09 will reduce the number of requirements which an entity must consider in recognizing revenue, as this update will replace multiple locations for guidance. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing.” In May 2016, the FASB issued ASU 2016-11, “Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients.” These updates do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather provide further guidance with respect to the implementation of ASU 2014-09. The effective date for ASU 2016-10, 2016-11, 2016-12 and ASU 2014-09, as amended by ASU 2015-14, is for annual reporting periods beginning after December 15, 2017, including interim periods within those years. In preparation for the adoption of the new standard in the fiscal year beginning January 2018, the Partnership continues to evaluate contract terms and potential impacts of the five-step model specified by the new guidance. That five-step model includes: (1) determination of whether a contract between two or more parties that creates legally enforceable rights and obligations exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. The Company anticipates adopting the standard using the modified retrospective approach. The Partnership will be evaluating individual customer contracts within each of its business segments and documenting changes to its accounting policies and controls as it continues to evaluate the impact of adoption of this standard. 
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Partnership is currently evaluating a representative sample of agreements, including existing leases, to assess the impact of the new guidance on its financial statements.
In March 2016, FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of accounting for share-based payment award transactions, including: (a) income tax consequences, (b) classification of awards as either equity or liabilities, (c) classification on the statement of cash flows and (d) forfeiture rate calculations. The Partnership adopted ASU 2016-09 on January 1, 2017 and determined that the standard did not have a material impact on the condensed consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard introduces a screen for determining when assets acquired are not a business and clarifies that a business must include, at a minimum, an input and a substantive process that contribute to an output to be considered a business. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Partnership adopted this ASU on January 1, 2017, and has determined that the new ASU could potentially have a material impact on future consolidated financial statements for acquisitions that are not considered to be businesses.
In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test of Goodwill Impairment.” ASU 2017-04 simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill (Step 2 of the current goodwill impairment test). Instead, a company would record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value (measured in Step 1 of the current goodwill impairment test). This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Entities will apply the standard’s provisions prospectively. The Partnership adopted ASU 2017-04 on January 1, 2017 and determined that this standard will not have a material quantitative effect on the financial statements in the future, unless an impairment charge is necessary.
Subsequent Events
Subsequent Events
Subsequent Events
On April 20, 2017, the Board of Directors of the Partnership’s general partner declared a cash distribution to the Partnership’s unitholders for the first quarter of 2017 of $0.2608 per common and subordinated unit. The cash distribution will be paid on May 18, 2017 to unitholders of record at the close of business on May 9, 2017. Also on May 18, 2017, a cash distribution of $1.2 million will be made to GP Holdings related to its incentive distribution rights in the Partnership based upon the level of distribution paid per common and subordinated unit.
Basis of Presentation (Policies)
Basis of Presentation 
The accompanying unaudited condensed consolidated financial statements of the Partnership have been prepared by the Partnership’s management in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. The unaudited condensed consolidated financial statements included herein contain all adjustments which are, in the opinion of management, necessary to present fairly the Partnership’s financial position as of March 31, 2017 and December 31, 2016 and its condensed consolidated statements of operations, cash flows and partners’ capital for the three months ended March 31, 2017 and 2016.
Commitments and Contingencies 
From time to time the Partnership is party to various legal and/or regulatory proceedings arising in the ordinary course of business. While the ultimate outcome and impact to the Partnership cannot be predicted with certainty, the Partnership believes that all such matters are without merit and involve amounts which, if resolved unfavorably, either individually or in the aggregate, will not have a material adverse effect on its financial condition, results of operations or cash flows.
Financial Information by Business Segment 
The Partnership operates in two business segments: (i) gathering and compression and (ii) water services. The gathering and compression segment provides natural gas gathering and compression services for Rice Energy and third parties in the Appalachian Basin. The water services segment is engaged in the provision of water services to support well completion activities and to collect and recycle or dispose of flowback and produced water for Rice Energy and third parties in the Appalachian Basin.
Business segments are evaluated for their contribution to the Partnership’s consolidated results based on operating income, which is defined as segment operating revenues less operating expenses. Other income and expenses, interest and income taxes are managed on a consolidated basis. The segment accounting policies are the same as those described in Note 1 to the Partnership’s 2016 Annual Report.
New Accounting Pronouncements 
New Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. The FASB created Topic 606 which supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the Codification. The FASB and International Accounting Standards Board initiated this joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for both U.S. GAAP and International Financial Reporting Standards. ASU 2014-09 will enhance comparability of revenue recognition practices across entities, industries and capital markets compared to existing guidance. Additionally, ASU 2014-09 will reduce the number of requirements which an entity must consider in recognizing revenue, as this update will replace multiple locations for guidance. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing.” In May 2016, the FASB issued ASU 2016-11, “Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” and ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients.” These updates do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather provide further guidance with respect to the implementation of ASU 2014-09. The effective date for ASU 2016-10, 2016-11, 2016-12 and ASU 2014-09, as amended by ASU 2015-14, is for annual reporting periods beginning after December 15, 2017, including interim periods within those years. In preparation for the adoption of the new standard in the fiscal year beginning January 2018, the Partnership continues to evaluate contract terms and potential impacts of the five-step model specified by the new guidance. That five-step model includes: (1) determination of whether a contract between two or more parties that creates legally enforceable rights and obligations exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. The Company anticipates adopting the standard using the modified retrospective approach. The Partnership will be evaluating individual customer contracts within each of its business segments and documenting changes to its accounting policies and controls as it continues to evaluate the impact of adoption of this standard. 
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Partnership is currently evaluating a representative sample of agreements, including existing leases, to assess the impact of the new guidance on its financial statements.
In March 2016, FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of accounting for share-based payment award transactions, including: (a) income tax consequences, (b) classification of awards as either equity or liabilities, (c) classification on the statement of cash flows and (d) forfeiture rate calculations. The Partnership adopted ASU 2016-09 on January 1, 2017 and determined that the standard did not have a material impact on the condensed consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard introduces a screen for determining when assets acquired are not a business and clarifies that a business must include, at a minimum, an input and a substantive process that contribute to an output to be considered a business. This standard is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Partnership adopted this ASU on January 1, 2017, and has determined that the new ASU could potentially have a material impact on future consolidated financial statements for acquisitions that are not considered to be businesses.
In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test of Goodwill Impairment.” ASU 2017-04 simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill (Step 2 of the current goodwill impairment test). Instead, a company would record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value (measured in Step 1 of the current goodwill impairment test). This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. Entities will apply the standard’s provisions prospectively. The Partnership adopted ASU 2017-04 on January 1, 2017 and determined that this standard will not have a material quantitative effect on the financial statements in the future, unless an impairment charge is necessary.
Acquisitions (Tables)
Business Acquisition, Pro Forma Information
The following unaudited pro forma combined financial information presents the Partnership’s results as though the acquisition of the Vantage Midstream Entities and the 2016 Private Placement had been completed at January 1, 2016.
 
 
Pro Forma
(in thousands, except per share data)
 
Three Months Ended March 31, 2016
Operating revenues
 
$
73,150

Limited partner net income
 
$
45,088

Earnings per common unit (basic)
 
$
0.49

Earnings per common unit (diluted)
 
$
0.49

Earnings per subordinated units
 
$
0.49

The Vantage Midstream Entities contributed the following to the Partnership’s consolidated operating results for the three months ended March 31, 2017.
(in thousands)
 
 
Operating revenues
 
$
12,180

Net income
 
$
7,694

Partners' Capital (Tables)
Schedule of Capital Units
The following table presents the Partnership’s common and subordinated units issued from January 1, 2016 through March 31, 2017:
 
Limited Partners
 
 
 
Common
 
Subordinated
 
Total
Balance, January 1, 2016
42,163,749

 
28,753,623

 
70,917,372

Equity offering in June 2016
9,200,000

 
—

 
9,200,000

Equity offering in October 2016
20,930,233

 
—

 
20,930,233

Common units issued under ATM program
944,700

 
—

 
944,700

Vested phantom units, net
280,451

 
—

 
280,451

Balance, December 31, 2016
73,519,133

 
28,753,623

 
102,272,756

 
 
 
 
 
 
Balance, March 31, 2017
73,519,133

 
28,753,623

 
102,272,756

Net Income per Limited Partner Unit and Cash Distributions (Tables)
Schedule of Earnings Per Share, Basic and Diluted 
The following table presents Partnership’s calculation of net income per limited partner unit for common and subordinated limited partner units.
 
Three Months Ended March 31,
(in thousands, except unit data)
2017
 
2016
Net income
$
37,615

 
$
34,426

Less: General partner interest in net income attributable to incentive distribution rights
1,239

 
—

Limited partner net income
$
36,376

 
$
34,426

 
 
 
 
Net income allocable to common units
$
26,149

 
$
20,468

Net income allocable to subordinated units
10,227

 
13,958

Limited partner net income
$
36,376

 
$
34,426

 
 
 
 
Weighted-average limited partner units outstanding - basic:
 
 
 
Common units
73,519,133

 
42,163,749

Subordinated units
28,753,623

 
28,753,623

Total
102,272,756

 
70,917,372

 
 
 
 
Weighted-average limited partner units outstanding - diluted:
 
 
 
Common units (1)
73,542,881

 
42,387,313

Subordinated units
28,753,623

 
28,753,623

Total
102,296,504

 
71,140,936

 
 
 
 
Net income per limited partner unit - basic:
 
 
 
Common units
$
0.36

 
$
0.49

Subordinated units
0.36

 
0.49

Total
$
0.36


$
0.49

 
 
 
 
Net income per limited partner unit - diluted:
 
 
 
Common units
$
0.36

 
$
0.48

Subordinated units (2)
0.36

 
0.49

Total
$
0.36


$
0.48

 
 
 
 
Cash distributions declared per limited partner unit: (3)
 
 
 
Common units
$
0.2608

 
$
0.2100

Subordinated units
0.2608

 
0.2100

Total
$
0.2608

 
$
0.2100


(1)
Diluted weighted-average limited partner common units includes the effect of 23,748 units for the three months ended March 31, 2017, and 223,564 units for the three months ended March 31, 2016, in each case related to the LTIP Plan.
(2)
Basic and diluted income per limited partner unit is presented as if all earnings for the period had been distributed. While it appears that more income is allocated to the subordinated unitholders than the common unitholders for the three months ended March 31, 2016, our partnership agreement prevents us from making a distribution to the subordinated unitholders in excess of those to the common unitholders.
(3)
See below for further discussion of cash distributions declared for the period presented.
Schedule of Incentive Distribution Rights 
For any quarter in which the Partnership has distributed cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum distribution, then the Partnership will distribute any additional available cash from operating surplus for that quarter among the unitholders and the incentive distribution rights holders in the following manner:
 
 
 
Marginal Percentage Interest in Distributions
 
Total Quarterly Distribution Per Unit
 
Unitholders
 
Incentive Distribution Rights Holders
Minimum Quarterly Distribution
$0.1875
 
100%
 
—%
First Target Distribution
above $0.1875 up to $0.2156
 
100%
 
—%
Second Target Distribution
above $0.2156 up to $0.2344
 
85%
 
15%
Third Target Distribution
above $0.2344 up to $0.2813
 
75%
 
25%
Thereafter
above $0.2813
 
50%
 
50%
Financial Information by Business Segment (Tables)
Schedule of Segment Reporting Information, by Segment 
The operating results and assets of the Partnership’s reportable segments were as follows for the three months ended March 31, 2017.
 
Three Months Ended March 31, 2017
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Total operating revenues
$
42,002

 
$
20,748

 
$
62,750

Total operating expenses
11,465

 
10,689

 
22,154

Operating income
$
30,537

 
$
10,059

 
$
40,596

 
 
 
 
 
 
Depreciation expense
$
3,270

 
$
4,351

 
$
7,621

Capital expenditures for segment assets
$
26,621

 
$
1,885

 
$
28,506

Segment assets
$
1,281,567

 
$
133,984

 
$
1,415,551

Goodwill
$
494,580

 
$
—

 
$
494,580

The operating results of the Partnership’s reportable segments were as follows for the three months ended March 31, 2016.
 
Three Months Ended March 31, 2016
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Total operating revenues
$
26,800

 
$
27,743

 
$
54,543

Total operating expenses
7,691

 
11,235

 
18,926

Operating income
$
19,109

 
$
16,508

 
$
35,617

 
 
 
 
 
 
Depreciation expense
$
1,935

 
$
3,435

 
$
5,370

Capital expenditures for segment assets
$
34,861

 
$
1,382

 
$
36,243

Reconciliation of Assets from Segment to Consolidated 
The assets of the Partnership’s reportable segments were as follows as of December 31, 2016.
 
As of December 31, 2016
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Segment assets
$
1,260,681

 
$
138,536

 
$
1,399,217

Goodwill
$
494,580

 
$
—

 
$
494,580

Reconciliation of Other Significant Reconciling Items from Segments to Consolidated 
The assets of the Partnership’s reportable segments were as follows as of December 31, 2016.
 
As of December 31, 2016
(in thousands)
Gathering and Compression
 
Water Services
 
Consolidated Total
Segment assets
$
1,260,681

 
$
138,536

 
$
1,399,217

Goodwill
$
494,580

 
$
—

 
$
494,580

Acquisitions (Narrative) (Details) (USD $)
3 Months Ended 0 Months Ended 0 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Mar. 31, 2017
Gathering and Compression
Dec. 31, 2016
Gathering and Compression
Oct. 19, 2016
Vantage Midstream Entities
Revolving Credit Facility
Oct. 19, 2016
Vantage Midstream Entities
Private Placement
Oct. 19, 2016
Vantage Midstream Entities
Subsidiary of Common Parent
Oct. 19, 2016
Vantage Midstream Entities
Subsidiary of Common Parent
mi
Oct. 19, 2016
Vantage Midstream Entities
Subsidiary of Common Parent
Gathering and Compression
Oct. 19, 2016
Vantage Midstream Entities
Subsidiary of Common Parent
Gas gathering and compression assets
Oct. 19, 2016
Wind Ridge Gathering System
Oct. 19, 2016
Wind Ridge Gathering System
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of miles of dry gas gathering and compression assets
 
 
 
 
 
 
 
 
30 
 
 
 
 
Aggregate purchase price
 
 
 
 
 
 
 
$ 600,000,000 
 
 
 
$ 14,300,000 
 
Net proceeds from private placement
 
 
 
 
 
 
441,000,000 
 
 
 
 
 
 
Proceeds from borrowings
0 
28,000,000 
 
 
 
159,000,000 
 
 
 
 
 
 
 
Gas gathering and compression assets
 
 
 
 
 
 
 
 
 
 
144,600,000 
 
10,900,000 
Goodwill
$ 494,580,000 
 
$ 494,580,000 
$ 494,580,000 
$ 494,580,000 
 
 
 
 
$ 455,400,000 
 
 
$ 3,400,000 
Percentage of voting interests acquired
 
 
 
 
 
 
 
 
 
 
 
 
67.50% 
Acquisitions (Schedule of Post-Acquisition Operating Results and Pro Forma Information) (Details) (Subsidiary of Common Parent, Vantage Midstream Entities, USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Business Acquisition [Line Items]
 
 
Operating revenues
$ 12,180 
 
Net income
7,694 
 
Pro Forma
 
 
Operating revenues
 
73,150 
Limited partner net income
 
$ 45,088 
Entity Common Units Outstanding
 
 
Pro Forma
 
 
Earnings per common unit (basic) (in dollars per unit)
 
$ 0.49 
Earnings per common unit (diluted) (in dollars per unit)
 
$ 0.49 
Entity Subordinated Units Outstanding
 
 
Pro Forma
 
 
Earnings per subordinated units (in dollars per unit)
 
$ 0.49 
Long-Term Debt (Narrative) (Details) (USD $)
3 Months Ended 0 Months Ended 3 Months Ended
Mar. 31, 2017
Oct. 19, 2016
Revolving Credit Facility
Minimum
Oct. 19, 2016
Revolving Credit Facility
Maximum
Oct. 19, 2016
Revolving Credit Facility
London Interbank Offered Rate (LIBOR)
Minimum
Oct. 19, 2016
Revolving Credit Facility
London Interbank Offered Rate (LIBOR)
Maximum
Oct. 19, 2016
Revolving Credit Facility
Federal Funds Rate
Oct. 19, 2016
Revolving Credit Facility
One Month Eurodollar
Oct. 19, 2016
Revolving Credit Facility
One Month Eurodollar, Additional Margin
Minimum
Oct. 19, 2016
Revolving Credit Facility
One Month Eurodollar, Additional Margin
Maximum
Mar. 31, 2017
Revolving Credit Facility
Wells Fargo Bank, N.A.
Mar. 31, 2017
Revolving Credit Facility
Wells Fargo Bank, N.A.
Letter of Credit
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Maximum credit amount
 
 
 
 
 
 
 
 
 
$ 850,000,000 
 
Additional commitments available under accordion feature
 
 
 
 
 
 
 
 
 
200,000,000.0 
 
Borrowings outstanding
 
 
 
 
 
 
 
 
 
190,000,000 
0 
Amount of availability
 
 
 
 
 
 
 
 
 
660,000,000 
 
Average daily outstanding balance of credit facility
 
 
 
 
 
 
 
 
 
190,000,000 
 
Weighted average interest rate percentage
 
 
 
 
 
 
 
 
 
2.80% 
 
Applicable margin (basis points)
 
 
 
2.00% 
3.00% 
0.50% 
1.00% 
1.00% 
2.00% 
 
 
Commitment fee based on undrawn commitment (basis points)
 
0.375% 
0.50% 
 
 
 
 
 
 
 
 
Interest paid in cash
$ 1,900,000 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended
Nov. 4, 2015
Water Assets
Subsidiary of Common Parent
gal
Nov. 4, 2015
Water Assets
Subsidiary of Common Parent
Mar. 31, 2017
Compression equipment
Mar. 31, 2016
Compression equipment
Other Commitments [Line Items]
 
 
 
 
Rent expense
 
 
$ 0.4 
$ 0.4 
Future payments for equipment
 
 
4.7 
 
Remainder of 2017
 
 
1.1 
 
2018
 
 
1.2 
 
2019
 
 
1.2 
 
2020
 
 
0.6 
 
2021
 
 
0.3 
 
Thereafter
 
 
0.3 
 
Amount of consideration
200.0 
 
 
 
Increase in conveyed systems' capacities
5,000,000 
 
 
 
Amount of earn out provision
 
$ 25.0 
 
 
Partners' Capital (Details)
Mar. 31, 2017
Dec. 31, 2016
Subsidiary, Sale of Stock [Line Items]
 
 
Equity interest retained in partnership (percentage)
28.00% 
 
Common
 
 
Subsidiary, Sale of Stock [Line Items]
 
 
Equity interests assigned (number of units)
73,519,133 
73,519,133 
Subordinated
 
 
Subsidiary, Sale of Stock [Line Items]
 
 
Equity interests assigned (number of units)
28,753,623 
28,753,623 
GP Holdings |
Partnership Interest |
Common |
Limited Partners
 
 
Subsidiary, Sale of Stock [Line Items]
 
 
Equity interests assigned (number of units)
3,623 
 
GP Holdings |
Partnership Interest |
Subordinated |
Limited Partners
 
 
Subsidiary, Sale of Stock [Line Items]
 
 
Equity interests assigned (number of units)
28,753,623 
 
Partners' Capital (Schedule of Common and Subordinated Units Issued) (Details)
12 Months Ended
Dec. 31, 2016
Mar. 31, 2017
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Balance (in units)
70,917,372 
102,272,756 
Vested phantom units, net (in units)
280,451 
 
Balance (in units)
102,272,756 
102,272,756 
Balance (in units)
102,272,756 
102,272,756 
Limited Partners |
Common
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Balance (in units)
42,163,749 
73,519,133 
Vested phantom units, net (in units)
280,451 
 
Balance (in units)
73,519,133 
73,519,133 
Balance (in units)
73,519,133 
73,519,133 
Limited Partners |
Subordinated
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Balance (in units)
28,753,623 
28,753,623 
Vested phantom units, net (in units)
0 
 
Balance (in units)
28,753,623 
28,753,623 
Balance (in units)
28,753,623 
28,753,623 
Equity offering in June 2016
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
9,200,000 
 
Equity offering in June 2016 |
Limited Partners |
Common
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
9,200,000 
 
Equity offering in June 2016 |
Limited Partners |
Subordinated
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
0 
 
Equity offering in October 2016
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
20,930,233 
 
Equity offering in October 2016 |
Limited Partners |
Common
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
20,930,233 
 
Equity offering in October 2016 |
Limited Partners |
Subordinated
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
0 
 
Common units issued under ATM program
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
944,700 
 
Common units issued under ATM program |
Limited Partners |
Common
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
944,700 
 
Common units issued under ATM program |
Limited Partners |
Subordinated
 
 
Increase (Decrease) in Partners' Capital [Roll Forward]
 
 
Equity offering (in units)
0 
 
Net Income per Limited Partner Unit and Cash Distributions (Schedule of Calculation of Net Income per Limited Partner Unit) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Net income
$ 37,615 
$ 34,426 
Less: General partner interest in net income attributable to incentive distribution rights
1,239 
0 
Limited partner net income
36,376 
34,426 
Weighted-average limited partner units outstanding - basic:
 
 
Weighted-average limited partner units outstanding - basic (in units)
102,272,756 
70,917,372 
Weighted-average limited partner units outstanding - diluted:
 
 
Weighted-average limited partner units outstanding - diluted (in units)
102,296,504 
71,140,936 
Net income per limited partner unit - basic:
 
 
Net income per limited partner unit - basic (in dollars per unit)
$ 0.36 
$ 0.49 
Net income per limited partner unit - diluted:
 
 
Net income per limited partner unit - diluted (in dollars per unit)
$ 0.36 
$ 0.48 
Unitholders
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 1
$ 0.21 1
Period after the end of each quarter in which the partnership intends to distribute the minimum quarterly distribution
60 days 
 
Minimum quarterly distribution per unit
$ 0.1875 
 
Annualized distribution per unit
$ 0.75 
 
Phantom unit
 
 
Unitholders
 
 
Shares considered anti-dilutive
23,748 
223,564 
Common
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Limited partner net income
26,149 
20,468 
Weighted-average limited partner units outstanding - basic:
 
 
Weighted-average limited partner units outstanding - basic (in units)
73,519,133 
42,163,749 
Weighted-average limited partner units outstanding - diluted:
 
 
Weighted-average limited partner units outstanding - diluted (in units)
73,542,881 2
42,387,313 2
Net income per limited partner unit - basic:
 
 
Net income per limited partner unit - basic (in dollars per unit)
$ 0.36 
$ 0.49 
Net income per limited partner unit - diluted:
 
 
Net income per limited partner unit - diluted (in dollars per unit)
$ 0.36 
$ 0.48 
Unitholders
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 
$ 0.2100 
Subordinated
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Limited partner net income
$ 10,227 
$ 13,958 
Weighted-average limited partner units outstanding - basic:
 
 
Weighted-average limited partner units outstanding - basic (in units)
28,753,623 
28,753,623 
Weighted-average limited partner units outstanding - diluted:
 
 
Weighted-average limited partner units outstanding - diluted (in units)
28,753,623 
28,753,623 
Net income per limited partner unit - basic:
 
 
Net income per limited partner unit - basic (in dollars per unit)
$ 0.36 
$ 0.49 
Net income per limited partner unit - diluted:
 
 
Net income per limited partner unit - diluted (in dollars per unit)
$ 0.36 3
$ 0.49 3
Unitholders
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 
$ 0.2100 1
Net Income per Limited Partner Unit and Cash Distributions (Incentive Distribution Rights) (Details)
0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended
Feb. 16, 2017
Mar. 31, 2017
Mar. 31, 2016
Apr. 20, 2017
Subsequent Event
Mar. 31, 2017
Minimum
Mar. 31, 2017
Maximum
Incentive Distribution Made to Managing Member or General Partner [Line Items]
 
 
 
 
 
 
Common Unit, Conversion Ratio of Subordinated Units to Common Units after Subordination Period
 
1 
 
 
 
 
Minimum Quarterly Distribution, Total Quarterly Distribution Per Unit
 
$ 0.1875 
 
 
 
 
First Target Distribution, Total Quarterly Distribution Per Unit
 
 
 
 
$ 0.1875 
$ 0.2156 
Second Target Distribution, Total Quarterly Distribution Per Unit
 
 
 
 
$ 0.2156 
$ 0.2344 
Third Target Distribution, Total Quarterly Distribution Per Unit
 
 
 
 
$ 0.2344 
$ 0.2813 
Thereafter, Total Quarterly Distribution Per Unit
 
 
 
 
$ 0.2813 
 
Unitholders
 
 
 
 
 
 
Minimal Quarterly Distribution, Marginal Percentage Interest in Distributions, Unitholders
 
100.00% 
 
 
 
 
First Target Distribution, Marginal Percentage Interest in Distributions, Unitholders
 
100.00% 
 
 
 
 
Second Target Distribution, Marginal Percentage Interest in Distributions, Unitholders
 
85.00% 
 
 
 
 
Third Target Distribution, Marginal Percentage Interest in Distributions, Unitholders
 
75.00% 
 
 
 
 
Thereafter, Marginal Percentage Interest in Distributions, Unitholders
 
50.00% 
 
 
 
 
Incentive Distribution Rights Holders
 
 
 
 
 
 
Minimal Quarterly Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders
 
0.00% 
 
 
 
 
First Target Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders
 
0.00% 
 
 
 
 
Second Target Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders
 
15.00% 
 
 
 
 
Third Target Distribution, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders
 
25.00% 
 
 
 
 
Thereafter, Marginal Percentage Interest in Distributions, Incentive Distribution Rights Holders
 
50.00% 
 
 
 
 
Cash distribution paid per common and subordinated unit (in dollars per unit)
$ 0.2505 
 
 
 
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
 
$ 0.2608 1
$ 0.21 1
$ 0.2608 
 
 
Financial Information by Business Segment (Narrative) (Details)
3 Months Ended
Mar. 31, 2017
business_segment
Segment Reporting [Abstract]
 
Number of business segments
2 
Financial Information by Business Segment (Schedule of Operating Results and Assets) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
 
Total operating revenues
$ 62,750 
$ 54,543 
Total operating expenses
22,154 
18,926 
Operating income
40,596 
35,617 
Depreciation expense
7,621 
5,370 
Capital expenditures for segment assets
28,506 
36,243 
Gathering and Compression
 
 
Segment Reporting Information [Line Items]
 
 
Total operating revenues
42,002 
26,800 
Total operating expenses
11,465 
7,691 
Operating income
30,537 
19,109 
Depreciation expense
3,270 
1,935 
Capital expenditures for segment assets
26,621 
34,861 
Water Services
 
 
Segment Reporting Information [Line Items]
 
 
Total operating revenues
20,748 
27,743 
Total operating expenses
10,689 
11,235 
Operating income
10,059 
16,508 
Depreciation expense
4,351 
3,435 
Capital expenditures for segment assets
$ 1,885 
$ 1,382 
Financial Information by Business Segment (Schedule of Assets of Reportable Segments) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Segment assets
$ 1,415,551 
$ 1,399,217 
Gathering and Compression
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Segment assets
1,281,567 
1,260,681 
Water Services
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Segment assets
$ 133,984 
$ 138,536 
Financial Information by Business Segment (Schedule of Goodwill of Reportable Segments) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
Goodwill
$ 494,580 
$ 494,580 
Gathering and Compression
 
 
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
Goodwill
494,580 
494,580 
Water Services
 
 
Segment Reporting, Other Significant Reconciling Item [Line Items]
 
 
Goodwill
$ 0 
$ 0 
Related Party Transactions (Details)
0 Months Ended
Nov. 4, 2015
Subsidiary of Common Parent
Water Assets
Mar. 31, 2017
Gas Gathering and Compression Agreement, Gathering Fee
Gas Gathering and Compression Agreement
Affiliated Entity
Mar. 31, 2017
Gas Gathering and Compression Agreement, Compression Fee
Gas Gathering and Compression Agreement
Affiliated Entity
Related Party Transaction [Line Items]
 
 
 
Gathering fee (per Dth)
 
0.30 
0.07 
Margin percentage
2.00% 
 
 
Subsequent Events (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 0 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Apr. 20, 2017
Subsequent Event
May 18, 2017
Subsequent Event
Scenario, Forecast
Limited Partners
GP Holdings
Subsequent Event [Line Items]
 
 
 
 
Cash distributions declared per limited partner unit (in dollars per unit)
$ 0.2608 1
$ 0.21 1
$ 0.2608 
 
Amount of cash distribution related to incentive distribution rights
 
 
 
$ 1.2