Leased Properties and Leases (Tables)
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12 Months Ended |
Dec. 31, 2019 |
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| Leases [Abstract] |
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| Summary of Significant Leased Properties, Major Tenants and Lease Terms |
The following table summarizes the significant leased properties, major tenants and lease terms:
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Summary of Leased Properties, Major Tenants and Lease Terms |
Property |
Grand Isle Gathering System |
Pinedale LGS |
Location |
Gulf of Mexico/Louisiana |
Pinedale, WY |
Tenant |
Energy XXI GIGS Services, LLC |
Ultra Wyoming LGS, LLC |
Asset Description |
Approximately 137 miles of offshore pipeline with total capacity of 120 thousand Bbls/d, including a 16-acre onshore terminal and saltwater disposal system. |
Approximately 150 miles of pipelines and four central storage facilities. |
Date Acquired |
June 2015 |
December 2012 |
Initial Lease Term |
11 years |
15 years |
Renewal Option |
Equal to the lesser of 9-years or 75 percent of the remaining useful life |
5-year terms |
Current Monthly Rent Payments |
7/1/18 - 6/30/19: $2,860,917
7/1/19 - 6/30/20: $3,223,917 |
$1,812,307(1)
|
Estimated Useful Life |
27 years |
26 years |
(1) Monthly rent payments increased to $1,844,748 beginning January 1, 2020. |
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| Schedule of Future Minimum Rental Receipts |
The future contracted minimum rental receipts for all leases as of December 31, 2019, are as follows:
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Future Minimum Lease Receipts |
Year Ending December 31, |
Amount |
2020 |
$ |
65,772,473 |
|
2021 |
71,734,473 |
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2022 |
70,711,973 |
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2023 |
67,663,973 |
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2024 |
65,874,973 |
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Thereafter |
129,321,920 |
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Total |
$ |
471,079,785 |
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| Schedule of Significant Leases |
The table below displays the Company's individually significant leases as a percentage of total leased properties and total lease revenues for the periods presented:
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As a Percentage of (1)
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Leased Properties |
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Lease Revenues |
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As of December 31, |
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For the Years Ended December 31, |
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2019 |
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2018 |
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2019 |
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2018 |
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2017 |
Pinedale LGS (2)
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44.4 |
% |
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44.5 |
% |
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39.2 |
% |
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35.2 |
% |
|
31.2 |
% |
Grand Isle Gathering System |
55.3 |
% |
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55.2 |
% |
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60.6 |
% |
|
55.9 |
% |
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59.1 |
% |
Portland Terminal Facility (3)
|
— |
% |
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— |
% |
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— |
% |
|
8.8 |
% |
|
9.6 |
% |
(1) Insignificant leases are not presented; thus percentages may not sum to 100%. |
(2) Pinedale LGS lease revenues include variable rent of $4.6 million, $4.3 million and $587 thousand for the years ended December 31, 2019, 2018 and 2017, respectively. |
(3) On December 21, 2018, the Portland Terminal Facility was sold to Zenith Terminals, terminating the Portland Lease Agreement. |
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| Schedule of Depreciation, Amortization and Accretion |
The following table reflects the depreciation and amortization included in the accompanying Consolidated Statements of Income associated with the Company's leases and leased properties:
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For the Years Ended December 31, |
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2019 |
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2018 |
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2017 |
Depreciation Expense |
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GIGS |
$ |
9,763,163 |
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$ |
10,836,590 |
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$ |
9,754,596 |
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Pinedale |
8,869,440 |
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|
8,869,440 |
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8,869,440 |
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Portland Terminal Facility (1)
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— |
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|
1,243,769 |
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|
1,275,660 |
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United Property Systems |
39,117 |
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|
36,662 |
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|
36,298 |
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Total Depreciation Expense |
$ |
18,671,720 |
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|
$ |
20,986,461 |
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$ |
19,935,994 |
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Amortization Expense - Deferred Lease Costs |
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GIGS |
$ |
30,564 |
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$ |
30,564 |
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$ |
30,564 |
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Pinedale |
61,368 |
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|
61,368 |
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|
61,368 |
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Total Amortization Expense - Deferred Lease Costs |
$ |
91,932 |
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$ |
91,932 |
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$ |
91,932 |
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ARO Accretion Expense |
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GIGS |
$ |
443,969 |
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$ |
499,562 |
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|
$ |
663,065 |
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Total ARO Accretion Expense |
$ |
443,969 |
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$ |
499,562 |
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$ |
663,065 |
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(1) On December 21, 2018, the Portland Terminal Facility was sold to Zenith Terminals, terminating the Portland Lease Agreement. |
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| Schedule of Deferred Lease Costs |
The following table reflects the deferred costs that are included in the accompanying Consolidated Balance Sheets associated with the Company's leased properties:
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December 31, 2019 |
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December 31, 2018 |
Net Deferred Lease Costs |
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GIGS |
$ |
198,755 |
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$ |
229,319 |
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Pinedale |
488,981 |
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|
550,349 |
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Total Deferred Lease Costs, net |
$ |
687,736 |
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$ |
779,668 |
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| Cumulative Effect of Changes for ASC 842 Adoption |
In accordance with ASC 842 transition disclosure requirements, the cumulative effect of changes made to the Consolidated Balance Sheets as of January 1, 2019 for the adoption of ASC 842 were as follows:
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Balance Sheet |
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Balance at December 31, 2018 |
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Adjustments Due to ASC 842 |
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Balance at
January 1, 2019 |
Assets |
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Prepaid expenses and other assets |
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$ |
668,584 |
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$ |
74,534 |
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$ |
743,118 |
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Liabilities |
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Accounts payable and other accrued liabilities |
|
3,493,490 |
|
|
74,534 |
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|
3,568,024 |
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Equity |
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Retained earnings |
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9,147,701 |
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— |
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9,147,701 |
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