c. The Original Omnibus Agreement
On July 31, 2013, the Debtors entered into an omnibus agreement with NuDevco (the Original Omnibus Agreement). Under the Original Omnibus Agreement, the Debtors received a right of first offer to purchase certain of NuDevcos midstream energy assets during the five-year period following the closing of the IPO. The Original Omnibus Agreement also provided that NuDevco would provide management and administrative services to the Debtors and that the Debtors would reimburse NuDevco for any corresponding fees and expenses in connection therewith.
d. The AES Services Agreement
On July 31, 2013, Marlin Midstream entered into a series of three-year agreements with AES pursuant to which Marlin Midstream would provide gas gathering, processing, and crude oil logistics and transloading services to AES (the AES Services Agreements). The AES Service Agreements provided for a minimum volume commitment of 18,980 Bbls/d in connection with gas gathering and processing services and 577,309 Bbls/month in connection with transloading services. AES obligations under the AES Service Agreements were supported by a $15 million letter of credit (the AES LC). When the AES Service Agreements were executed in 2013 they generated approximately $16.2 million in total annual revenue for the Partnership. By the end of 2015, they generated approximately $29 million in total annual revenue.
e. The IPO
On July 31, 2013, Azure completed an initial public offering, placing 6,875,000 Common Units comprising 38.6% of the limited partner interests in the Partnership (the IPO). Azures Common Units initially traded on NASDAQ under the symbol FISH. From May 29, 2015 through June 3, 2016, the Common Units traded on the NYSE under the symbol AZUR, when they were delisted for failure to comply with the NYSEs continued listing standards. Thereafter, the Common Units continued to trade over the counter.
3. Acquisition of the Legacy Assets
On January 14, 2015, the Partnership entered into an agreement (the Transaction Agreement) with AME, NuDevco Midstream, and IDRH, whereby the Partnership acquired the Legacy System. Specifically, under the terms of the Transaction Agreement, the Partnership acquired Debtors Talco Midstream Assets, Ltd. and Azure TGG, LLC, which own and operate the assets that constitute the Legacy System, from AME. In return, AME received (i) $99.5 million in cash, (ii) 90% of all IDR Units, and (iii) all of the General Partner Units in Azure General Partner. To effectuate the transfer of the IDR Units from IDRH to AME, the Partnership redeemed 90% of the IDR Units from IDRH for $63 million in cash. Following consummation of the Transaction Agreement, IDRH owned 10% of all IDR Units. The Debtors financed the acquisition of the Legacy System by drawing on their Prepetition Credit Facility. As part of the transaction, the AES Services Agreements were extended for five years from the closing of the Transaction Agreement.
4. The Omnibus Agreement
On February 27, 2015, the Partnership and AME entered into a new omnibus services agreement (the Omnibus Agreement) that superseded the Original Omnibus Agreement. Under the Omnibus Agreement, AME (a) procures insurance coverage on behalf of the Partnership and pays all costs related to such coverage (the Insurance Coverage), (b) pays certain costs related to the Debtors