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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number: 001-38048
Altus Midstream Company
(Exact name of registrant as specified in its charter)
Delaware81-4675947
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Post Oak Central, 2000 Post Oak Boulevard, Suite 100, Houston, Texas 77056-4400
(Address of principal executive offices) (Zip Code)
(713296-6000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class  Trading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 par value  ALTMNasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer 
Non-accelerated filerSmaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Number of shares of registrant’s Class A common stock, par value $0.0001 per share issued and outstanding as of April 30, 20213,746,460 
Number of shares of registrant’s Class C common stock, par value $0.0001 per share issued and outstanding as of April 30, 202112,500,000 




TABLE OF CONTENTS
 
Item Page
PART I — FINANCIAL INFORMATION
1.
2.
3.
4.
PART II — OTHER INFORMATION
1.
1A.
6.
 

i


FORWARD-LOOKING STATEMENTS AND RISK
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected revenues, projected costs and plans, and objectives of management for future operations, are forward-looking statements. Such forward-looking statements are based on the Company’s examination of historical operating trends, production and growth forecasts of Apache Corporation’s Alpine High field development and other data in the Company’s possession or available from third parties. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “continue,” “seek,” “guidance,” “might,” “outlook,” “possibly,” “potential,” “prospect,” “should,” “would,” or similar terminology, but the absence of these words does not mean that a statement is not forward looking. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable under the circumstances, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, its assumptions about:
the scope, duration, and reoccurrence of any epidemics or pandemics (including, specifically the coronavirus disease 2019 (COVID-19) pandemic) and the actions taken by third parties, including, but not limited to, governmental authorities, customers, contractors, and suppliers, in response to such epidemics or pandemics;
the availability and effectiveness of any vaccine programs or other therapeutics related to the treatment of COVID-19;
the market prices of oil, natural gas, natural gas liquids (NGLs), and other products or services;
pipeline and gathering system capacity and availability;
production rates, throughput volumes, reserve levels, and development success of dedicated oil and gas fields;
economic and competitive conditions;
the availability of capital;
cash flow and the timing of expenditures;
capital expenditures and other contractual obligations;
weather conditions;
inflation rates;
the availability of goods and services;
legislative, regulatory, or policy changes;
terrorism or cyberattacks;
occurrence of property acquisitions or divestitures;
the integration of acquisitions;
a decline in oil, natural gas, and NGL production, and the impact of general economic conditions on the demand for oil, natural gas, and NGLs;
the impact of environmental, health and safety, and other governmental regulations and of current or pending legislation;
environmental risks;
the effects of competition;
the retention of key members of senior management and key technical personnel;
ii


increases in interest rates;
the effectiveness of the Company’s business strategy;
changes in technology;
market-related risks, such as general credit, liquidity, and interest-rate risks;
the timing, amount, and terms of the Company’s future issuances of equity and debt securities;
other factors disclosed under Item 1A—Risk Factors, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A—Quantitative and Qualitative Disclosures About Market Risk and elsewhere in the Company’s most recently filed Annual Report on Form 10-K;
other risks and uncertainties disclosed in the Company’s first-quarter 2021 earnings release;
other factors disclosed under Part II, Item 1A—Risk Factors of this Quarterly Report on Form 10-Q; and
any other factors disclosed in the other filings that the Company makes with the Securities and Exchange Commission (SEC).
Other factors or events that could cause the Company’s actual results to differ materially from the Company’s expectations may emerge from time to time, and it is not possible for the Company to predict all such factors or events. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements. All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, the Company disclaims any obligation to update or revise its forward-looking statements, whether based on changes in internal estimates or expectations, new information, future developments, or otherwise.


iii


GLOSSARY OF TERMS
The following are abbreviations and definitions of certain terms used in this Quarterly Report on Form 10-Q and certain terms which are commonly used in the exploration, production and midstream sectors of the oil and natural gas industry:
Bbl. One stock tank barrel of 42 United States (U.S.) gallons liquid volume used herein in reference to crude oil, condensate or NGLs.
Bbl/d. One Bbl per day.
Bcf. One billion cubic feet of natural gas.
Bcf/d. One Bcf per day.
Btu. One British thermal unit, which is the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.
Field. An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.
Formation. A layer of rock which has distinct characteristics that differs from nearby rock.
MBbl. One thousand barrels of crude oil, condensate or NGLs.
MBbl/d. One MBbl per day.
Mcf. One thousand cubic feet of natural gas.
Mcf/d. One Mcf per day.
MMBbl. One million barrels of crude oil, condensate or NGLs.
MMBtu. One million British thermal units.
MMcf. One million cubic feet of natural gas.
MMcf/d. One MMcf per day.
NGLs. Natural gas liquids. Hydrocarbons found in natural gas, which may be extracted as liquefied petroleum gas and natural gasoline.
References to “Altus,” “ALTM,” and the “Company” mean Altus Midstream Company and its consolidated subsidiaries, unless otherwise specifically stated. References to “Apache” mean Apache Corporation and its consolidated subsidiaries. All references to the Company’s Class A common stock, $0.0001 par value (Class A Common Stock), and Class C common stock, $0.0001 par value (Class C Common Stock), reflect such share amounts as retrospectively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020.
iv


PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALTUS MIDSTREAM COMPANY
STATEMENT OF CONSOLIDATED OPERATIONS
(Unaudited)
 Three Months Ended March 31,
 2021
2020(1)
(In thousands, except per share data)
REVENUES:
Midstream services revenue — affiliate (Note 2)$31,529 $40,767 
Product sales third parties
2,617 102 
Total revenues 34,146 40,869 
COSTS AND EXPENSES:
Costs of product sales1,993 91 
Operations and maintenance(2)
7,402 10,591 
General and administrative(3)
3,455 4,178 
Depreciation and accretion4,000 3,914 
Impairments441  
Taxes other than income3,808 3,443 
Total costs and expenses21,099 22,217 
OPERATING INCOME13,047 18,652 
Unrealized derivative instrument loss(16,529)(61,984)
Interest income 1 7 
Income from equity method interests, net21,688 15,842 
Warrants valuation adjustment (664)1,877 
Other 7,544 (188)
Total other income (loss)12,040 (44,446)
Financing costs, net of capitalized interest2,598 273 
NET INCOME (LOSS) BEFORE INCOME TAXES22,489 (26,067)
Current income tax benefit (696)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS22,489 (25,371)
Net income attributable to Preferred Unit limited partners19,492 18,262 
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS2,997 (43,633)
Net income (loss) attributable to Apache limited partner2,817 (35,552)
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS$180 $(8,081)
NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS, PER SHARE(4)
Basic$0.05 $(2.16)
Diluted$0.05 $(2.69)
WEIGHTED AVERAGE SHARES(4)
Basic3,7463,746
Diluted3,74616,246
(1)This period presented has been revised to reflect the Company’s fair value change of its underlying warrants. Refer to Note 1Summary of Significant Accounting Policies, see the section titled Revision of Previously Issued Consolidated Financial Statements for Immaterial Adjustment for further information.
(2)Includes amounts of $0.8 million and $1.4 million associated with related parties for the three months ended March 31, 2021 and 2020, respectively. Refer to Note 2—Transactions with Affiliates.
(3)Includes amounts of $2.2 million and $2.0 million associated with related parties for the three months ended March 31, 2021 and 2020, respectively. Refer to Note 2—Transactions with Affiliates.
(4)Share and per share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.




The accompanying notes to consolidated financial statements are an integral part of this statement.
1


ALTUS MIDSTREAM COMPANY
STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended March 31,
2021
2020(1)
(In thousands)
NET INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS$22,489 $(25,371)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Share of equity method interests other comprehensive income (loss)630 (1,184)
COMPREHENSIVE INCOME (LOSS) INCLUDING NONCONTROLLING INTERESTS23,119 (26,555)
Comprehensive income attributable to Preferred Unit limited partners19,492 18,262 
Comprehensive income (loss) attributable to Apache limited partner3,302 (36,463)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON SHAREHOLDERS$325 $(8,354)
(1)This period presented has been revised to reflect the Company’s fair value change of its underlying warrants. Refer to Note 1—Summary of Significant Accounting Policies, see the section titled Revision of Previously Issued Consolidated Financial Statements for Immaterial Adjustment for further information.













































The accompanying notes to consolidated financial statements are an integral part of this statement.
2


ALTUS MIDSTREAM COMPANY
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31,December 31,
 2021
2020(1)
(In thousands, except per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$51,306 $24,188 
Accounts receivable1,259 1,033 
Accounts receivable from Apache Corporation (Note 1)799 446 
Revenue receivables (Note 3)11,152 11,378 
Inventories3,891 3,597 
Prepaid assets and other7,787 2,127 
76,194 42,769 
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment209,323 208,870 
Less: Accumulated depreciation and accretion(15,907)(13,034)
193,416 195,836 
OTHER ASSETS:
Equity method interests1,566,672 1,555,182 
Deferred charges and other6,294 5,843 
1,572,966 1,561,025 
Total assets$1,842,576 $1,799,630 
LIABILITIES, NONCONTROLLING INTERESTS, AND EQUITY
CURRENT LIABILITIES:
Distributions payable to Preferred Unit limited partners$11,562 $ 
Dividends payable  5,620 
Distributions payable to Apache Corporation  18,750 
Other current liabilities (Note 6)10,322 5,613 
21,884 29,983 
LONG-TERM DEBT657,000 624,000 
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Asset retirement obligation65,100 64,062 
Embedded derivative 155,538 139,009 
Other noncurrent liabilities6,907 6,424 
227,545 209,495 
Total liabilities906,429 863,478 
COMMITMENTS AND CONTINGENCIES (Note 7)
Redeemable noncontrolling interest — Apache limited partner662,432 575,125 
Redeemable noncontrolling interest — Preferred Unit limited partners604,749 608,381 
EQUITY:
Class A Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 3,746,460 shares issued and outstanding at March 31, 2021 and December 31, 2020(2)
1 1 
Class C Common Stock: $0.0001 par, 1,500,000,000 shares authorized, 12,500,000 shares issued and outstanding at March 31, 2021 and December 31, 2020(2)
1 1 
Additional paid-in capital38,217 122,222 
Accumulated deficit(369,253)(369,433)
Accumulated other comprehensive loss (145)
(331,034)(247,354)
Total liabilities, noncontrolling interests, and equity$1,842,576 $1,799,630 
(1)The Consolidated Balance Sheet as of December 31, 2020 has been derived from the audited consolidated financial statements, revised to reflect the Company’s fair value change of its underlying warrants. Refer to Note 1—Summary of Significant Accounting Policies, see the section titled Revision of Previously Issued Consolidated Financial Statements for Immaterial Adjustment for further information.
(2)Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.




The accompanying notes to consolidated financial statements are an integral part of this statement.
3


ALTUS MIDSTREAM COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS
(Unaudited)
 Three Months Ended March 31,
 2021
2020(1)
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) including noncontrolling interests$22,489 $(25,371)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Unrealized derivative instrument loss16,529 61,984 
Depreciation and accretion4,000 3,914 
Income from equity method interests, net(21,688)(15,842)
Distributions from equity method interests23,810 20,985 
Impairments441  
Other income(7,205) 
Warrants valuation adjustment664 (1,877)
Other217 461 
Changes in operating assets and liabilities:
Increase in inventories(294)(182)
(Increase) decrease in prepaid assets and other544 (79)
Increase in accounts receivable(226)(101)
Decrease in revenue receivables (Note 2)226 3,752 
(Increase) decrease in account receivables from/payable to affiliate279 (948)
Increase in accrued expenses4,491 3,017 
Increase (decrease) in deferred charges, deferred credits, and other noncurrent liabilities(1,005)1,825 
NET CASH PROVIDED BY OPERATING ACTIVITIES43,272 51,538 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(1,330)(19,096)
Proceeds from sale of assets1,090 6,096 
Contributions to equity method interests(20,522)(82,827)
Distributions from equity method interests7,540 1,552 
Capitalized interest paid (3,340)
NET CASH USED IN INVESTING ACTIVITIES(13,222)(97,615)
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to Preferred Unit limited partners(11,562) 
Distributions paid to Apache limited partner(18,750) 
Dividends paid(5,620) 
Proceeds from revolving credit facility33,000 72,000 
Finance lease (11,789)
Deferred facility fees  (816)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES(2,932)59,395 
INCREASE IN CASH AND CASH EQUIVALENTS27,118 13,318 
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR24,188 5,983 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$51,306 $19,301 
SUPPLEMENTAL CASH FLOW DATA:
Accrued capital expenditures(2)
$305 $6,557 
Interest paid, net of capitalized interest2,328  
(1)This period presented has been revised to reflect the Company’s fair value change of its underlying warrants. Refer to Note 1—Summary of Significant Accounting Policies, see the section titled Revision of Previously Issued Consolidated Financial Statements for Immaterial Adjustment for further information.
(2)Includes $0.3 million due from Apache and $1.7 million due to Apache for the three months ended March 31, 2021 and 2020, respectively, pursuant to the terms of the COMA (as defined herein). Refer to Note 2—Transactions with Affiliates for more information.




The accompanying notes to consolidated financial statements are an integral part of this statement.
4


ALTUS MIDSTREAM COMPANY
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY AND NONCONTROLLING INTERESTS
(Unaudited)
Redeemable Noncontrolling Interest — Preferred Unit Limited Partners(2)
Redeemable Noncontrolling Interest — Apache Limited PartnerClass A Common StockClass C Common StockAdditional Paid-in CapitalRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)Total Equity
 
Shares(3)
Amount
Shares(3)
Amount
(In thousands)(In thousands)
For the Quarter Ended March 31, 2020(1)
Balance at December 31, 2019 (Revised)$555,599 $701,000 3,746 $1 12,500 $1 $17,327 $(372,224)$(266)$(355,161)
Net income (loss)18,262 (35,552)— — — — — (8,081)— (8,081)
Change in redemption value of noncontrolling interests— (433,710)— — — — 433,710 — — 433,710 
Accumulated other comprehensive loss— (911)— — — — — — (273)(273)
Balance at March 31, 2020 (Revised)$573,861 $230,827 3,746 $1 12,500 $1 $451,037 $(380,305)$(539)$70,195 
For the Quarter Ended March 31, 2021
Balance at December 31, 2020 (Revised)$608,381 $575,125 3,746 $1 12,500 $1 $122,222 $(369,433)$(145)$(247,354)
Distributions paid to Preferred Unit limited partners(11,562)— — — — — — — — — 
Distributions payable to Preferred Unit limited partners(11,562)— — — — — — — — — 
Net income19,492 2,817 — — — — — 180 — 180 
Change in redemption value of noncontrolling interests— 84,005 — — — — (84,005)— — (84,005)
Accumulated other comprehensive income— 485 — — — — — — 145 145 
Balance at March 31, 2021$604,749 $662,432 3,746 $1 12,500 $1 $38,217 $(369,253)$ $(331,034)
(1)This period presented has been revised to reflect the Company’s fair value change of its underlying warrants. Refer to Note 1—Summary of Significant Accounting Policies, see the section titled Revision of Previously Issued Consolidated Financial Statements for Immaterial Adjustment for further information.
(2)Certain redemption features embedded within the Preferred Units require bifurcation and measurement at fair value. For further detail, refer to Note 10—Series A Cumulative Redeemable Preferred Units.
(3)Share amounts have been retroactively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note 9—Equity for further information.









The accompanying notes to consolidated financial statements are an integral part of this statement.
5


ALTUS MIDSTREAM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
These consolidated financial statements have been prepared by Altus Midstream Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). They reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited financial statements, with the exception of recently adopted accounting pronouncements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10-Q should be read along with Altus Midstream Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (Form 10-K), which contains a summary of the Company’s significant accounting policies and other disclosures. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Form 10-K.
Unless the context otherwise requires, the “Company,” “ALTM” and “Altus” refers to Altus Midstream Company and its consolidated subsidiaries. “Altus Midstream” refers to Altus Midstream LP and its consolidated subsidiaries. “Apache” refers to Apache Corporation and its consolidated subsidiaries. All references to the Company’s Class A common stock, $0.0001 par value (Class A Common Stock), and Class C common stock, $0.0001 par value (Class C Common Stock), reflect such share amounts as retrospectively restated to reflect the Company’s reverse stock split, which was effected June 30, 2020. Refer to Note—9 Equity for further information.
Nature of Operations
    Through its consolidated subsidiaries, the Company owns gas gathering, processing, and transmission assets in the Permian Basin of West Texas. Construction on the assets began in the fourth quarter of 2016, and operations commenced in the second quarter of 2017. Additionally, the Company owns equity interests in four separate Permian Basin pipeline entities that have access to various points along the Texas Gulf Coast. The Company’s operations consist of one reportable segment.
Organization
The Company originally incorporated on December 12, 2016 in Delaware under the name Kayne Anderson Acquisition Corp. (KAAC) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. KAAC completed its initial public offering in the second quarter of 2017.
On August 3, 2018, Altus Midstream LP was formed in Delaware as a limited partnership and wholly-owned subsidiary of KAAC. On August 8, 2018, KAAC and Altus Midstream LP entered into a contribution agreement (the Contribution Agreement) with certain wholly-owned subsidiaries of Apache, including four Delaware limited partnerships (collectively, Altus Midstream Operating) and their general partner (Altus Midstream Subsidiary GP LLC, a Delaware limited liability company, and together with Altus Midstream Operating, the Altus Midstream Entities). The Altus Midstream Entities were formed by Apache between May 2016 and January 2017 for the purpose of acquiring, developing, and operating midstream oil and gas assets in the Alpine High resource play and surrounding areas (Alpine High).
On November 9, 2018 (the Closing Date) and pursuant to the terms of the Contribution Agreement, KAAC acquired from Apache the entire equity interests of the Altus Midstream Entities and options to acquire equity interests in five separate third-party pipeline projects (the Pipeline Options). The acquisition of the entities and the Pipeline Options is referred to herein as the Business Combination. In exchange, the consideration provided to Apache included economic voting and non-economic voting shares in KAAC and common partnership units representing limited partner interests in Altus Midstream LP (Common Units). Following the Closing Date and in connection with the completion of the Business Combination, KAAC changed its name to Altus Midstream Company.

6


Ownership of Altus Midstream LP
As of and following the Closing Date and in connection with the completion of the Business Combination, the Company’s wholly-owned subsidiary, Altus Midstream GP LLC, a Delaware limited liability company (Altus Midstream GP), is the sole general partner of Altus Midstream LP. The Company operates its business through Altus Midstream LP and its subsidiaries, which include Altus Midstream Operating. The Company holds approximately 23.1 percent of the outstanding Common Units, and a controlling interest, in Altus Midstream, while Apache holds the remaining 76.9 percent.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). Certain reclassifications of prior year balances have been made to conform such amounts to current year presentation. These reclassifications have no impact on net income.
Principles of Consolidation
The consolidated financial results of Altus Midstream are included in the Company’s consolidated financial statements due to the Company’s 100 percent ownership interest in Altus Midstream GP, and Altus Midstream GP’s control of Altus Midstream.
The Company has no independent operations or material assets other than its partnership interests in Altus Midstream, which constitutes all of its business. Additionally, the Company’s balance sheet reflects the presentation of noncontrolling interest ownership attributable to the limited partner interests in Altus Midstream held by Apache and the holders of Series A Cumulative Redeemable Preferred Units (the Preferred Units). Refer to Note 9—Equity and Note 10—Series A Cumulative Redeemable Preferred Units for further information.
Variable Interest Entity
Altus Midstream is a variable interest entity (VIE) because the partners in Altus Midstream with equity at risk lack the power, through voting or similar rights, to direct the activities that most significantly impact Altus Midstream’s economic performance.
A reporting entity that concludes it has a variable interest in a VIE must evaluate whether it has a controlling financial interest in the VIE, such that it is the VIE’s primary beneficiary and should consolidate. The Company is the primary beneficiary of Altus Midstream, and therefore should consolidate Altus Midstream because (i) the Company has the ability to direct the activities of Altus Midstream that most significantly affect its economic performance, and (ii) the Company has the right to receive benefits or the obligation to absorb losses that could be potentially significant to Altus Midstream.
Redeemable Noncontrolling Interest — Apache Limited Partner
The Company’s redeemable noncontrolling interest presented in the consolidated financial statements consists of Common Units representing limited partner interests in Altus Midstream held by Apache. Pursuant to certain provisions of the partnership agreement of Altus Midstream (as amended in connection with the Business Combination, and subsequent issuance of Preferred Units, the Amended LPA), the limited partner interests held by Apache are equal to the number of shares of the Company’s Class C Common Stock, held by Apache.
The Company initially recorded the redeemable noncontrolling interest upon the issuance of the Common Units to Apache as part of the Business Combination and based on the recapitalization value ascribed at the Closing Date to the limited partner interest. All or a portion of these Common Units may be redeemed at Apache’s option. The Company has the ability to settle the redemption option either (i) in shares of Class A Common Stock, on a one-for-one basis, or (ii) in cash (based on the fair market value of the Class A Common Stock as determined pursuant to the Contribution Agreement), subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. Upon the future redemption or exchange of Common Units held by Apache, a corresponding number of shares of Class C Common Stock will be cancelled.
The Company’s policy is to record the redeemable noncontrolling interest represented by the Common Units held by Apache at the higher of (i) its initial fair value plus accumulated earnings/losses associated with the noncontrolling interest or (ii) the redemption value as of the balance sheet date.
See discussion and additional detail further discussed in Note 9—Equity.
7


Redeemable Noncontrolling Interest — Preferred Unit Limited Partners
On June 12, 2019, Altus Midstream issued and sold the Preferred Units in a private offering, and the purchasers of the Preferred Units were admitted as limited partners of Altus Midstream. The Preferred Units will be exchangeable for shares of the Company’s Class A Common Stock at the option of the Preferred Unit holders after the seventh anniversary of the closing of the Preferred Unit offering or upon the occurrence of specified events, unless otherwise redeemed by Altus Midstream.
The Preferred Units are accounted for on the Company’s consolidated balance sheet as a redeemable noncontrolling interest classified as temporary equity based on the terms of the Preferred Units. Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value and are accounted for on the Company’s consolidated balance sheet as a long-term liability embedded derivative.
See discussion and additional detail further discussed in Note 10—Series A Cumulative Redeemable Preferred Units.
Equity Method Interests
The Company follows the equity method of accounting when it does not exercise control over its equity interests, but can exercise significant influence over the operating and financial policies of the entity. Under this method, the equity interests are carried originally at acquisition cost, increased by Altus’ proportionate share of the equity interest’s net income and contributions made by Altus, and decreased by Altus’ proportionate share of the equity interest’s net losses and distributions received by Altus. Please refer to Note 8—Equity Method Interests, for further details of the Company’s equity method interests.
Use of Estimates
Preparation of financial statements in conformity with GAAP and disclosure of contingent assets and liabilities requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on a regular basis. Actual results may differ from these estimates and assumptions used in preparation of its financial statements, and changes in these estimates are recorded when known.

8


Revision of Previously Issued Consolidated Financial Statements for Immaterial Adjustment
Warrants
On April 12, 2021, the SEC Staff issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs) (the SEC Staff Statement). The SEC Staff Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to the Company’s public and private warrants outstanding at the time of the Business Combination. The SEC determined that certain features of warrants issued in SPAC transactions common across many entities, such as those outstanding for the Company, should be recorded as a derivative liability under ASC 815 “Derivatives and Hedges” with any changes in fair value being recorded as a gain or loss in the Company’s Statement of Consolidated Operations. The Company has historically accounted for its warrants as equity, with no change in fair value being recorded in the applicable period. The Company has concluded that the previous accounting policy to account for its warrants as equity rather than as a liability was an immaterial error. The Company has corrected this immaterial error by revising its consolidated financial statements as of and for the year ended December 31, 2020 and as of and for the three months ended March 31, 2020 and related notes included herein to include the effect of accounting for the warrants as a liability from the date of the Business Combination. Note 12—Net Income (Loss) Per Share and Note 13—Fair Value Measurements have also been updated to reflect this revision. In addition, management has also corrected previously identified immaterial errors related to income from its equity method interests unrelated to the SEC Staff Statement.
The impacts of this adjustment in fiscal year 2020, as presented in the accompanying financial statements, are as follows:
Statement of Consolidated Operations:
Three Months Ended March 31, 2020
As Reported
Change(1)
As Revised
(In thousands)
Income from equity method interests, net$16,298 $(456)$15,842 
Warrants valuation adjustment 1,877 1,877 
Total other income (loss)(45,867)1,421 (44,446)
Net income (loss) before income taxes(27,488)1,421 (26,067)
Net income (loss) including noncontrolling interests(26,792)1,421 (25,371)
Net income (loss) attributable to common shareholders(45,054)1,421 (43,633)
Net income (loss) attributable to Apache limited partner(35,201)(351)(35,552)
Net income (loss) attributable to Class A common shareholders(9,853)1,772 (8,081)
Net Income (Loss) Attributable To Class A Common Shareholders, Per Share
Basic$(2.63)$0.47 $(2.16)
Diluted$(2.77)$0.08 $(2.69)
(1)All changes related to Income from equity method interests, net above relate to an immaterial prior period adjustment unrelated to the SEC Staff Statement.
Statement of Consolidated Comprehensive Income (Loss):
Three Months Ended March 31, 2020
As Reported
Change(1)
As Revised
(In thousands)
Net income (loss) including noncontrolling interests$(26,792)$1,421 $(25,371)
Comprehensive income (loss) including noncontrolling interests(27,976)1,421 (26,555)
Comprehensive income (loss) attributable to Apache limited partner(36,112)(351)(36,463)
Comprehensive income (loss) attributable to Class A Common Shareholders(10,126)1,772 (8,354)
(1)All changes related to Income from equity method interests, net relate to an immaterial prior period adjustment unrelated to the SEC Staff Statement.
9


Consolidated Balance Sheet:
December 31, 2020
As ReportedChangeAs Revised
(In thousands)
Other non-current liabilities$5,539 $885 $6,424 
Total liabilities862,593 885 863,478 
Additional paid-in-capital144,716 (22,494)122,222 
Accumulated equity (deficit)(391,042)21,609 (369,433)
Statement of Consolidated Cash Flows:
Three Months Ended March 31, 2020
As Reported
Change(1)
As Revised
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITY:
Net income (loss) including noncontrolling interests$(26,792)$1,421 $(25,371)
Income from equity method interests, net(16,298)456 (15,842)
Warrants valuation adjustment  (1,877)(1,877)
Net Cash Provided by Operating Activities51,538  51,538 
(1)All changes related to Income from equity method interests, net above relate to an immaterial prior period adjustment unrelated to the SEC Staff Statement.
Fair Value Measurements
Accounting Standards Codification (ASC) 820-10-35, “Fair Value Measurement” (ASC 820), provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value. The fair value hierarchy gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.
The valuation techniques that may be used to measure fair value include a market approach, an income approach and a cost approach. A market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. An income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectations, including present value techniques, option-pricing models, and the excess earnings method. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).
Embedded features identified within the Company’s agreements are bifurcated and measured at fair value at the end of each period on the Company’s consolidated balance sheet. Such recurring fair value measurements are presented in further detail in Note 13—Fair Value Measurements. When required the Company also uses fair value measurements on a nonrecurring basis when certain qualitative assessments of its assets indicate a potential impairment.
Accounts Receivable From/Payable To Apache
The accounts receivable from or payable to Apache represent the net result of Altus Midstream’s monthly revenue, capital and operating expenditures, and other miscellaneous transactions to be settled with Apache as provided under the Construction, Operations and Maintenance Agreement (COMA) between the two entities. Generally, cash in this amount will be transferred to Apache in the month after the Company’s transactions are processed and the net results of operations are determined. However, from time to time, the Company may estimate and transfer the cash settlement amount in the month the transactions are processed, in order to minimize related-party working capital balances. See discussion and additional detail in Note 2—Transactions with Affiliates.
10


Other Income
In 2020, the Company entered into a contract with a provider to supply the Company with electrical power. If the Company does not utilize all of its fixed purchase volumes under this contract, then it will receive a credit based on a market rate for the related underutilization. In February 2021, in conjunction with increased power pricing due to the Texas freeze event and under usage of contractual electricity volumes, the Company earned an estimated credit of approximately $7.2 million. This amount is recorded on the statement of consolidation operations in Other income and is recorded in Prepaid assets and other on the consolidated balance sheet. No credits were recorded for the three month period ending March 31, 2020. The Company has no remaining performance obligations related to these credits as of March 31, 2021.
2.    TRANSACTIONS WITH AFFILIATES
Revenues
The Company has contracted to provide services including gas gathering, compression, processing, transmission, and NGL transmission, pursuant to acreage dedications provided by Apache, comprising the entire Alpine High acreage. In accordance with the terms of these agreements, the Company receives prescribed fees based on the type and volume of product for which the services are provided. Additionally, beginning in 2020, Altus Midstream entered into three agreements to provide operating and maintenance services for Apache’s compressors in exchange for a fixed monthly fee per compressor serviced.
Revenues generated under these agreements are presented on the Company’s statement of consolidated operations as “Midstream services revenue — affiliate.” Revenues earned that have not yet been invoiced to Apache are presented on the Company’s consolidated balance sheet as “Revenue receivables.” Refer to Note 3—Revenue Recognition for further discussion.
Cost and Expenses
The Company has no employees and receives certain operational, maintenance, and management services from Apache under the COMA. Under the COMA, the Company incurred operations and maintenance expenses of $0.8 million and $1.4 million for the three months ended March 31, 2021 and 2020, respectively. The Company incurred general and administrative expenses of $2.2 million and $2.0 million for the three months ended March 31, 2021 and 2020, respectively, including expenses related to the COMA. Further information on this related-party agreement in place during the period is provided below.
Construction, Operations and Maintenance Agreement
At the closing of the Business Combination, the Company entered into the COMA with Apache. Under the terms of the COMA, Apache provides certain services related to the design, development, construction, operation, management, and maintenance of certain gathering, processing and other midstream assets, on behalf of the Company. In return, the Company paid or will pay fees to Apache of (i) $5.0 million for the period of January 1, 2020 through December 31, 2020, (ii) $7.0 million for the period of January 1, 2021 through December 31, 2021 and (iii) $9.0 million annually thereafter, adjusted based on actual internal overhead and general and administrative costs incurred, until terminated. The annual fee was negotiated as part of the Business Combination to reimburse Apache for indirect costs of performing administrative corporate functions for the Company, including services for information technology, risk management, corporate planning, accounting, cash management, and others.
In addition, Apache may be reimbursed for certain internal costs and third-party costs incurred in connection with its role as service provider under the COMA. Costs incurred by Apache directly associated with midstream activity, where substantially all the services are rendered for Altus Midstream, are charged to Altus Midstream on a monthly basis.
The COMA stipulates that the Company shall provide reimbursement of amounts owing to Apache attributable to a particular month by no later than the last day of the immediately following month. Unpaid amounts accrue interest until settled.
The COMA will continue to be effective until terminated (i) upon the mutual consent of Altus and Apache, (ii) by either of Altus and Apache, at its option, upon 30 days’ prior written notice in the event Apache or an affiliate no longer owns a direct or indirect interest in at least 50 percent of the voting or other equity securities of Altus, or (iii) by Altus if Apache fails to perform any of its covenants or obligations due to willful misconduct of certain key personnel and such failure has a material adverse financial impact on Altus.
11


Distributions to Apache
In December 2020, the Company’s Board of Directors declared a cash dividend of $1.50 per share on the Company’s Class A Common Stock, totaling $5.6 million, which was paid to stockholders in the first quarter of 2021. This payment included a payment of approximately $0.5 million to Apache due to its 9.8 percent ownership of the Company’s Class A Common Stock. The Class A Common Stock dividend was funded by a distribution from Altus Midstream to its common unitholders of $1.50 per Common Unit, totaling $24.4 million, of which $5.6 million, as noted above, was paid to the Company to fund the cash dividend payment, and the balance of $18.8 million was paid to Apache due to its 76.9 percent ownership of outstanding Common Units. Please refer to Note 9—Equity for further information.
3.    REVENUE RECOGNITION
The following table presents a disaggregation of the Company’s revenue.
Three Months Ended March 31,
20212020
Gas gathering and compression$4,335 $5,720 
Gas processing 23,195 29,896 
Transmission3,157 4,175 
NGL transmission528 826 
Other314 150 
Midstream services revenue — affiliate31,529 40,767 
Product sales third parties
2,617 102 
Total revenues$34,146 $40,869 
There have been no significant changes to the Company’s contracts with customers during the three months ended March 31, 2021 and 2020.
Payments with all contracts with customers are typically due one month after physical delivery of the product or service has been rendered. Revenue receivables from the Company’s contracts with Apache totaled $11.2 million and $11.4 million as of March 31, 2021 and December 31, 2020, respectively, as presented on the Company’s consolidated balance sheet. Sales revenue receivables from the Company’s contracts with third parties totaled $1.3 million and $1.0 million as of March 31, 2021 and December 31, 2020, respectively, as presented on the Company’s consolidated balance sheet.
In accordance with the provisions of ASC Topic 606, “Revenue from Contracts with Customers,” variable market prices for each short-term sale are allocated entirely to each performance obligation as the terms of payment relate specifically to the Company’s efforts to satisfy its obligations. As such, the Company has elected the practical expedients available under the standard to not disclose the aggregate transaction price allocated to unsatisfied, or partially unsatisfied, performance obligations as of the end of the reporting period.


12


4.    PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, at carrying value, is as follows:
March 31,December 31,
20212020
(In thousands)
Gathering, processing and transmission systems and facilities(1)
$206,044 $204,643 
Construction in progress40 904 
Other property and equipment3,239 3,323 
Total property, plant and equipment209,323 208,870 
Less: accumulated depreciation and amortization(15,907)(13,034)
Total property, plant and equipment, net$193,416 $195,836 
(1)Included in gathering, processing, and transmissions systems and facilities are compressors under lease to Apache totaling $10.2 million and $6.2 million, net as of March 31, 2021 and December 31, 2020, respectively.
The cost of property classified as “Construction in progress” is excluded from capitalized costs being depreciated. These amounts represent property that is not yet available to be placed into productive service as of the respective balance sheet date.
5.    DEBT AND FINANCING COSTS
In November 2018, Altus Midstream entered into a revolving credit facility for general corporate purposes that matures in November 2023 (subject to Altus Midstream’s two, one year extension options). The agreement for this revolving credit facility, as amended (the Amended Credit Agreement), provides aggregate commitments from a syndicate of banks of $800.0 million. The aggregate commitments include a letter of credit subfacility of up to $100.0 million and a swingline loan subfacility of up to $100.0 million. Altus Midstream may increase commitments up to an aggregate $1.5 billion by adding new lenders or obtaining the consent of any increasing existing lenders. As of March 31, 2021, there were $657.0 million of borrowings and a $2.0 million of letter of credit outstanding under this facility. As of December 31, 2020, there were $624.0 million of borrowings and no letters of credit were outstanding under this facility.
Altus Midstream’s revolving credit facility is unsecured and is not guaranteed by the Company, Apache, APA Corporation or any of their respective subsidiaries.
At Altus Midstream’s option, the interest rate per annum for borrowings under this facility is either a base rate, as defined, plus a margin, or the London Interbank Offered Rate (LIBOR), plus a margin. Altus Midstream also pays quarterly a facility fee at a rate per annum on total commitments. The margins and the facility fee vary based upon (i) the Leverage Ratio (as defined below) until Altus Midstream has a senior long-term debt rating and (ii) such senior long-term debt rating once it exists. The Leverage Ratio is the ratio of (1) the consolidated indebtedness of Altus Midstream and its restricted subsidiaries to (2) EBITDA (as defined in the Amended Credit Agreement) of Altus Midstream and its restricted subsidiaries for the 12-month period ending immediately before the determination date. At March 31, 2021, the base rate margin was 0.05 percent, the LIBOR margin was 1.05 percent, and the facility fee was 0.20 percent. In addition, a commission is payable quarterly to the lenders on the face amount of each outstanding letter of credit at a per annum rate equal to the LIBOR margin then in effect. Customary letter of credit fronting fees and other charges are payable to issuing banks.
The Amended Credit Agreement contains restrictive covenants that may limit the ability of Altus Midstream and its restricted subsidiaries to, among other things, incur additional indebtedness or guaranty indebtedness, sell assets, make investments in unrestricted subsidiaries, enter into mergers, make certain payments and distributions, incur liens on certain property securing indebtedness, and engage in certain other transactions without the prior consent of the lenders.
Altus Midstream also is subject to a financial covenant under the Amended Credit Agreement, which requires it to maintain a Leverage Ratio not exceeding 5.00:1.00 at the end of any fiscal quarter, starting with the quarter ended December 31, 2019, except that during the period of up to one year following a qualified acquisition, the Leverage Ratio cannot exceed 5.50:1.00 at the end of any fiscal quarter. Unless the Leverage Ratio is less than or equal to 4.00:1.00, the Amended Credit Agreement limits distributions in respect of Altus Midstream LP’s capital to $30 million per calendar year until either (i) the consolidated net income of Altus Midstream LP and its restricted subsidiaries, as adjusted pursuant to the Amended Credit Agreement, for three consecutive calendar months equals or exceeds $350.0 million on an annualized basis or (ii) Altus Midstream LP has a specified senior long-term debt rating; in addition, before the occurrence of one of those events, the Leverage Ratio must be less than or equal to 5.00:1.00. In no event can any distribution be made that would, after giving effect
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to it on a pro forma basis, result in a Leverage Ratio greater than (i) 5.00:1.00 or (ii) for a specified period after a qualifying acquisition, 5.50:1.00. The Leverage Ratio as of March 31, 2021 was less than 4.00:1.00.
The terms of Altus Midstream’s Preferred Units also contain certain restrictions on distributions on Altus Midstream LP’s Common Units, including the Common Units held by the Company, and any other units that rank junior to the Preferred Units with respect to distributions or distributions upon liquidation. Refer to Note 10—Series A Cumulative Redeemable Preferred Units for further information. In addition, the amount of any cash distributions to Altus Midstream LP by any entity in which it has an interest accounted for by the equity method is subject to such entity’s compliance with the terms of any debt or other agreements by which it may be bound, which in turn may impact the amount of funds available for distribution by Altus Midstream LP to its partners.
There are no clauses in the Amended Credit Agreement that permit the lenders to accelerate payments or refuse to lend based on unspecified material adverse changes. The Amended Credit Agreement has no drawdown restrictions or prepayment obligations in the event of a decline in credit ratings. However, the agreement allows the lenders to accelerate payment maturity and terminate lending and issuance commitments for nonpayment and other breaches, and if Altus Midstream or any of its restricted subsidiaries defaults on other indebtedness in excess of the stated threshold, is insolvent, or has any unpaid, non-appealable judgment against it for payment of money in excess of the stated threshold. Lenders may also accelerate payment maturity and terminate lending and issuance commitments if Altus Midstream undergoes a specified change in control or has specified pension plan liabilities in excess of the stated threshold. Altus Midstream was in compliance with the terms of the Amended Credit Agreement as of March 31, 2021.
Financing Costs, Net of Capitalized Interest
The following table presents the components of Altus Midstream’s financing costs, net of capitalized interest:
Three Months Ended March 31,
20212020
(In thousands)
Interest expense$2,306 $3,358 
Amortization of deferred facility fees292 273 
Capitalized interest (3,358)
Financing costs, net of capitalized interest$2,598 $273 
6.    OTHER CURRENT LIABILITIES
The following table provides detail of the Company’s other current liabilities at March 31, 2021 and December 31, 2020:
March 31,December 31,
 20212020
(In thousands)
Accrued taxes other than income$3,865 $165 
Accrued operations and maintenance expense1,775 926 
Accrued capital costs576 360 
Accrued incentive compensation365 1,466 
Accrued professional and consulting fees360 421 
Other 3,381 2,275 
Total other current liabilities$10,322 $5,613 

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7.    COMMITMENTS AND CONTINGENCIES
Accruals for loss contingencies arising from claims, assessments, litigation, environmental, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. As of March 31, 2021 and December 31, 2020, there were no accruals for loss contingencies.
Litigation
The Company is subject to governmental and regulatory controls arising in the ordinary course of business. The Company is not aware of any pending or threatened legal proceedings against it at the time of the filing of this Quarterly Report on Form 10-Q that would have a material impact on its financial position, results of operations, or liquidity.
Environmental Matters
As an owner of infrastructure assets and with rights to surface lands, the Company is subject to various local and federal laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages. In some instances, Altus Midstream may be directed to suspend or cease operations. The Company maintains insurance coverage, which management believes is customary in the industry, although insurance does not fully cover against all environmental risks. Additionally, there can be no assurance that current regulatory requirements will not change or past non-compliance with environmental laws will not be discovered. The Company is not aware of any environmental claims existing as of March 31, 2021, that have not been provided for or would otherwise have a material impact on its financial position, results of operations, or liquidity.
Contractual Obligations
Altus Midstream’s existing fee-based midstream services agreements, which have no minimum volume commitments or firm transportation commitments, are underpinned by acreage dedications covering Alpine High. Pursuant to these agreements, Altus Midstream is obligated to perform low and high pressure gathering, processing, dehydration, compression, treating, conditioning, and transportation on all volumes produced from the dedicated acreage, so long as Apache has the right to market such gas.
At the closing of the Business Combination, the Company entered into the COMA with Apache, which includes contractual obligations for the Company to pay certain management fees to Apache over the term of the agreement. Refer to Note 2—Transactions with Affiliates for further discussion of the COMA.
In the second quarter of 2019, Altus Midstream issued and sold the Preferred Units. Under the terms of the Amended LPA, the Preferred Unit holders are entitled to receive quarterly distributions until such time as the Preferred Units are redeemed or exchanged. Refer to Note 10—Series A Cumulative Redeemable Preferred Units for further discussion regarding the terms of the Preferred Units and the rights of the holders thereof.
Additionally, the Company is required to fund its pro-rata portion of any future capital expenditures for the development of the pipeline projects as referenced in Note 8—Equity Method Interests.
At March 31, 2021 and December 31, 2020, there were no other material contractual obligations related to the entities included in the consolidated financial statements other than the performance of asset retirement obligations and required credit facility fees discussed in Note 5—Debt and Financing Costs.
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8.    EQUITY METHOD INTERESTS
As of March 31, 2021, the Company owned the following equity method interests in Permian Basin long-haul pipeline entities. For each of the equity method interests, the Company has the ability to exercise significant influence based on certain governance provisions and its participation in the significant activities and decisions that impact the management and economic performance of the equity method interests. The table below presents the ownership percentage held by the Company for each entity:
March 31, 2021December 31, 2020
OwnershipAmountAmount
(In thousands)
Gulf Coast Express Pipeline LLC16.0%$280,787 $283,530 
EPIC Crude Holdings, LP15.0%172,592 176,640 
Permian Highway Pipeline LLC26.7%638,723 615,186 
Breviloba, LLC33.0%474,570 479,826 
$1,566,672 $1,555,182 
As of March 31, 2021 and December 31, 2020, unamortized basis differences included in the equity method interest balances were $37.4 million and $37.7 million, respectively. These amounts represent differences in the Company’s contributions to date and the Company’s underlying equity in the separate net assets within the financial statements of the respective entities. Unamortized basis differences will be amortized into net income over the useful lives of the underlying pipeline assets.
The following table presents the activity in the Company’s equity method interests for the three months ended March 31, 2021:
Gulf Coast Express Pipeline LLCEPIC Crude Holdings, LPPermian Highway Pipeline LLCBreviloba, LLC
Total
(In thousands)
Balance at December 31, 2020$283,530 $176,640 $615,186 $479,826 $1,555,182 
Contributions  20,522  20,522 
Distributions(12,257) (8,203)(10,890)(31,350)
Equity income (loss), net(1)
9,514 (4,678)11,218 5,634 21,688 
Accumulated other comprehensive income 630   630 
Balance at March 31, 2021$280,787 $172,592 $638,723 $474,570 $1,566,672 
(1)As of March 31, 2021, the amount of consolidated earnings, net of amortization basis differences, which represents undistributed earnings, was $3.2 million from Permian Highway Pipeline LLC.
Summarized Financial Information
The following table represents aggregated selected income statement data for the Company’s equity method interests (on a 100 percent basis):
Three Months Ended March 31,
20212020
Gulf Coast Express Pipeline LLCEPIC Crude Holdings, LPPermian Highway Pipeline LLCBreviloba, LLCGulf Coast Express Pipeline LLCEPIC Crude Holdings, LPPermian Highway Pipeline LLCBreviloba, LLC
(In thousands)
Revenues$88,369 $33,206 $97,848 $34,529 $92,205 $40,759 $ $42,818 
Operating income (loss)60,108 (8,384)42,580 17,300 65,706 (5,671)(23)25,589 
Net income (loss)59,768 (31,039)42,580 17,359 65,658 (13,984)