Business Combination
 12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Business Combination
Note 2—Business Combination
On October 11, 2016 (the “Closing Date”), the Company consummated the acquisition of approximately 89% of the outstanding membership interests in CRP, pursuant to (i) that certain Contribution Agreement, dated as of July 6, 2016 (as amended by Amendment No. 1 thereto, dated as of July 29, 2016, the “Contribution Agreement”), among Centennial Resource Development, LLC, a Delaware limited liability company (“CRD”), NGP Centennial Follow-On LLC, a Delaware limited liability company (“NGP Follow-On”), Celero Energy Company, LP, a Delaware limited partnership (together with CRD and NGP Follow-On, the “Centennial Contributors”), CRP and New Centennial, LLC, a Delaware limited liability company (“NewCo”), (ii) that certain Assignment Agreement, dated as of October 7, 2016, between NewCo and the Company and (iii) that certain Joinder Agreement, dated as of October 7, 2016, by the Company (such acquisition, together with the other transactions contemplated by the Contribution Agreement, the “Business Combination”).
At the closing of the Business Combination (the “Closing”), Silver Run contributed approximately $1.49 billion in cash to CRP of which approximately $1.19 billion was then distributed to the Centennial Contributors for partial redemption of their membership interests in CRP. At the Closing, Silver Run and the Centennial Contributors effected a recapitalization of CRP pursuant to which (i) all of the remaining outstanding membership interests in CRP of the Centennial Contributors were converted into 20,000,000 units representing common membership interests in CRP (the “CRP Common Units”) and (ii) the Company was admitted as a member of CRP and issued 163,505,000 CRP Common Units, representing an approximate 89% interest in CRP. 
The Business Combination was recorded using the acquisition method of accounting for business combinations. The allocation of the purchase price has been finalized and was based upon management’s estimates and assumptions related to the fair value of assets acquired and liabilities assumed on the Closing Date using currently available information.
The purchase price consideration for the Business Combination was as follows:
(in thousands)
October 11, 2016
Purchase price consideration:
 
Cash
$
1,186,744

Repayment of CRP long-term debt(1)
189,000

Total purchase price consideration
1,375,744

Fair value of non-controlling interest(2)
184,779

Total purchase price consideration and fair value of non-controlling interest
$
1,560,523

 
(1) 
Represents the additional contribution made by Silver Run to CRP in exchange for CRP Common Units to repay CRP’s outstanding indebtedness at the Closing Date.
(2) 
Represents the fair value of the non-controlling interest (“NCI”) attributable to the Centennial Contributors. NCI is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to Silver Run. In a business combination the NCI is recognized at its acquisition date fair value. The fair value of the NCI at the Closing represented an 11% membership interest in CRP.
The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed:
(in thousands)
October 11, 2016
Fair value of assets acquired:
 
Unproved properties
1,138,423

Proved properties
444,551

Other current assets
$
13,341

Other property and equipment
1,764

Derivative instruments
1,052

Goodwill
—

Total amount attributable to assets acquired
1,599,131

Fair value of liabilities assumed:
 
Accounts payable and accrued expenses
(30,156
)
Other current liabilities
(63
)
Derivative instruments
(3,400
)
Asset retirement obligation
(4,989
)
Total fair value of net assets acquired
$
1,560,523


Unaudited Pro Forma Operating Results
The following unaudited pro forma combined financial information has been prepared as if the Business Combination and other related transactions had taken place on January 1, 2016. The unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting for business combinations.
The information reflects pro forma adjustments based on available information and certain assumptions that the Company believes are reasonable, including depletion of CRP’s fair-valued proved oil and gas properties, and the estimated tax impacts of the pro forma adjustments. Additionally, pro forma earnings for the year ended December 31, 2016, were adjusted to exclude $18.7 million of transaction-related costs and $165.4 million of incentive unit compensation incurred by CRP.
The pro forma condensed combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Business Combination taken place on January 1, 2016; furthermore, the financial information is not intended to be a projection of future results.
 
(Unaudited Pro Forma)
(in thousands)
Year Ended December 31, 2016
Oil and gas sales
$
98,833

Total operating expenses
86,490

Net income (loss) attributable to common shareholders
1,666

Basic and diluted net income (loss) per share
0.01