Company Quick10K Filing
Brigham Minerals
Price20.29 EPS0
Shares22 P/E47
MCap445 P/FCF8
Net Debt19 EBIT11
TEV464 TEV/EBIT44
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-14
10-K 2019-12-31 Filed 2020-02-28
S-1 2019-12-09 Public Filing
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-20
S-1 2019-03-18 Public Filing
8-K 2020-06-09
8-K 2020-05-28
8-K 2020-05-13
8-K 2020-02-27
8-K 2019-12-11
8-K 2019-11-07
8-K 2019-08-08
8-K 2019-05-20
8-K 2019-04-23
8-K 2019-04-17

MNRL 10Q Quarterly Report

Part I - Financial Information
Item 1. - Financial Statements (Unaudited)
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. - Quantitative and Qualitative Disclosures About Market Risk
Item 4. - Controls and Procedures
Part II - Other Information
Item 1. - Legal Proceedings
Item 1A. - Risk Factors
Item 6. - Exhibits
EX-31.1 exhibit311-1q2020.htm
EX-31.2 exhibit312-1q2020.htm
EX-32.1 exhibit321-1q2020.htm
EX-32.2 exhibit322-1q2020.htm

Brigham Minerals Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
72057643228814402018201820192020
Assets, Equity
292316103-32018201820192020
Rev, G Profit, Net Income
1056321-21-63-1052018201820192020
Ops, Inv, Fin

mnrl-20200331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
____________________
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
or
o 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: 001-38870
Brigham Minerals, Inc.
(Exact name of registrant as specified in its charter)
Delaware
83-1106283
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
 Identification No.)
5914 W. Courtyard Drive, Suite 150
Austin, Texas
78730
(Address of principal executive offices)
(Zip code)
(512) 220-6350
(Registrant’s telephone number, including area code)
___________________
Securities registered pursuant to section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.01MNRLNew York Stock Exchange
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 x No o
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 x No o
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 filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
Emerging growth company x

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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The registrant had 34,173,819 shares of Class A common stock and 22,706,711 shares of Class B common stock outstanding as of May 10, 2020.



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BRIGHAM MINERALS, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2020
TABLE OF CONTENTS
Page

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GLOSSARY OF OIL AND NATURAL GAS TERMS
The following are abbreviations and definitions of certain terms used in this document, which are commonly used in the oil and natural gas industry:
TermDefinition
BasinA depression in the Earth's crust formed from plate tectonics providing accommodation space for the accumulation of sedimentary rocks and organic material. When subjected to the appropriate depth and duration of burial, hydrocarbon generation can occur creating oil and natural gas bearing strata.
BblOne stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGLs.
BoeOne barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil. This is an energy content correlation and does not reflect a value or price relationship between the commodities.
Boe/dOne Boe per day.
British thermal unit or BtuThe quantity of heat required to raise the temperature of a one-pound mass of water from 58.5 to 59.5 degrees Fahrenheit.
CompletionThe process of treating a drilled well followed by the installation of permanent equipment for the production of oil and natural gas, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.
Development wellA well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.
DifferentialAn adjustment to the price of oil or natural gas from an established spot market price to reflect differences in the quality and/or location of oil or natural gas.
Drilled but Uncompleted Well (DUC)A well that an operator has spud but has not yet begun hydraulic fracturing or completion operations.
Gross acres or gross wellsThe total acres or wells, as the case may be, in which a mineral or royalty interest is owned.
MBblOne thousand barrels of crude oil, condensate or NGLs.
MBoeOne thousand Boe.
McfOne thousand cubic feet of natural gas.
Mcf/dOne Mcf per day.
MMBtuOne million British thermal units.
MMcfOne million cubic feet of natural gas.
Net royalty acreMineral ownership standardized to a 12.5%, or 1/8th, royalty interest.
Net wellThe percentage of net revenue interest an owner has out of a gross well. For example, an owner who has an 25% royalty interest in a single well owns 0.25 net wells.
NGLsNatural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline.
NYMEXThe New York Mercantile Exchange.
OperatorThe individual or company responsible for the development and/or production of an oil or natural gas well or lease.
Possible ReservesReserves that are less certain to be recovered than probable reserves.
Probable reservesReserves that are less certain to be recovered than proved reserves but that, together with proved reserves, are as likely as not to be recovered.
ProspectA specific geographic area that, based on supporting geological, geophysical or other data and also preliminary economic analysis using reasonably anticipated prices and costs, is deemed to have potential for the discovery of commercial hydrocarbons.
Proved reservesThose quantities of oil, natural gas and NGLs that, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible-from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations-prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. For a complete definition of proved oil and natural gas reserves, refer to the SEC’s Regulation S-X, Rule 4-10(a)(22).


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TermDefinition
Realized priceThe cash market price less all applicable deductions such as quality, transportation and demand adjustments.
ReservesEstimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to market and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).
ReservoirA porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.
RoyaltyAn interest in an oil and natural gas lease that gives the owner the right to receive a portion of the production from the leased acreage (or of the proceeds from the sale thereof), but does not require the owner to pay any portion of the production or development costs on the leased acreage. Royalties may be either landowner’s royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.
Spot market priceThe cash market price without reduction for expected quality, transportation and demand adjustments.
SpudCommenced drilling operations on an identified location.
Undeveloped acreageLease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil, natural gas or NGLs regardless of whether such acreage contains proved reserves.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (this "Quarterly Report") includes “forward-looking statements.” All statements, other than statements of historical fact, included in this Quarterly Report regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In particular, our statements regarding the ongoing COVID-19 pandemic and its expected impact on our business, financial position, results of operations and cash flows are forward-looking statements. When used in this Quarterly Report, the words “may,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions and the negative of such words and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Such statements may be influenced by factors that could cause actual outcomes and results to differ materially from those projected. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” included in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "Annual Report"), as well as the risk factors and other cautionary statements contained in our other filings with the United States Securities and Exchange Commission (the "SEC").

The following important factors, in addition to those discussed elsewhere in this Quarterly Report, could affect the future results of the energy industry in general, and our company in particular, and could cause actual results to differ materially from those expressed in such forward-looking statements:

our ability to execute on our business objectives;
the effect of changes in commodity prices;
the level of production on our properties;
risks associated with the drilling and operation of oil and natural gas wells;
the availability or cost of rigs, equipment, raw materials, supplies, oilfield services or personnel;
legislative or regulatory actions pertaining to hydraulic fracturing, including restrictions on the use of water;
the availability of pipeline capacity and transportation facilities;
the effect of existing and future laws and regulatory actions;
the impact of derivative instruments;
conditions in the capital markets and our ability to obtain capital on favorable terms or at all;
the overall supply and demand for oil, natural gas and NGLs, and regional supply and demand factors, storage availability, delays, or interruptions of production, including voluntary shut-ins;
operator budget constraints;
the actions of the Organization of Petroleum Exporting Countries and other significant producers and governments and the ability of such producers to agree to and maintain oil price and production controls;
competition from others in the energy industry;
the impact of reduced drilling activity in our focus areas, particularly in the Anadarko Basin in Oklahoma, and uncertainty in whether development projects will be pursued;
global or national health events, including the ongoing outbreak and resulting economic effects of the COVID-19 pandemic;
uncertainty of estimates of oil and natural gas reserves and production;
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the cost of developing the oil and natural gas underlying our properties;
our ability to replace our oil, natural gas and NGL reserves;
our ability to identify, complete and integrate acquisitions;
title defects in the properties in which we invest;
the cost of inflation;
technological advances;
weather conditions, natural disasters and other matters beyond our control;
general economic, business, political or industry conditions; and
certain factors discussed elsewhere in this Quarterly Report.
Should one or more of the risks or uncertainties described in this Quarterly Report, our Annual Report or any of our other SEC filings occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this Quarterly Report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil, natural gas and NGLs that are ultimately recovered.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.




        
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PART I — FINANCIAL INFORMATION
Item 1. — Financial Statements (Unaudited)

BRIGHAM MINERALS, INC.
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS

March 31,December 31,
(In thousands, except share amounts)20202019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$30,979  $51,133  
Restricted cash127    
Accounts receivable24,748  30,291  
Prepaid expenses and other2,102  1,688  
Total current assets57,956  83,112  
Oil and gas properties, at cost, using the full cost method of accounting:
Unevaluated property305,642  291,664  
Evaluated property462,019  449,061  
Less accumulated depreciation, depletion, and amortization(74,915) (61,103) 
Total oil and gas properties, net692,746  679,622  
Other property and equipment5,282  5,095  
Less accumulated depreciation(4,281) (3,703) 
Other property and equipment, net1,001  1,392  
Deferred tax asset16,585  18,823  
Other assets, net1,294  1,213  
Total assets$769,582  $784,162  
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities$7,976  $11,533  
Total current liabilities7,976  11,533  
Long-term bank debt    
Other non-current liabilities1,154  803  
Temporary equity240,819  454,507  
Shareholders' equity:
Preferred stock, $0.01 par value; 50,000,000 authorized; no shares issued and outstanding at March 31, 2020 and December 31, 2019    
Class A common stock, $0.01 par value; 400,000,000 authorized, 34,173,819 shares issued and outstanding at March 31, 2020; 400,000,000 authorized, 34,040,934 issued and outstanding at December 31, 2019342  340  
Class B common stock, $0.01 par value; 150,000,000 authorized, 22,706,711 shares issued and outstanding at March 31, 2020; 150,000,000 authorized, 22,847,045 shares issued and outstanding at December 31, 2019    
Additional paid-in Capital534,725  323,578  
Accumulated deficit(15,434) (6,599) 
Total shareholders' equity attributable to Brigham Minerals Inc. 519,633  317,319  
Total liabilities and shareholders' equity$769,582  $784,162  





The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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BRIGHAM MINERALS, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
(In thousands, except per share data)20202019
REVENUES
Mineral and royalty revenues
$28,374  $17,590  
Lease bonus and other revenues
3,906  675  
Total revenues
32,280  18,265  
OPERATING EXPENSES
Gathering, transportation and marketing
1,779  1,114  
Severance and ad valorem taxes
1,752  1,379  
Depreciation, depletion and amortization
12,826  5,116  
General and administrative
5,510  1,949  
Total operating expenses
21,867  9,558  
NET INCOME FROM OPERATIONS10,413  8,707  
Loss on derivative instruments, net
  (685) 
Interest expense, net
(32) (3,825) 
Other income, net
2  29  
Income before income taxes
10,383  4,226  
Income tax expense
1,582  190  
NET INCOME
$8,801  $4,036  
Less: net income attributable to predecessor
  (3,502) 
Less: net income attributable to temporary equity
(4,095)   
Net income attributable to Brigham Minerals, Inc. shareholders
$4,706  $534  
NET INCOME PER COMMON SHARE
Basic
$0.14  $  
Diluted
$0.14  $  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic
33,979    
Diluted
33,979    


















The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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BRIGHAM MINERALS, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF CHANGES IN SHAREHOLDERS' AND MEMBERS' EQUITY
(Unaudited)

Members' Contributed CapitalClass A
Common Stock
Class B
Common Stock
Additional Paid-In CapitalAccumulated DeficitTotal Shareholders' Equity
(In thousands)SharesAmountSharesAmount
Balance - December 31, 2019$  34,041  $340  22,847  $  $323,578  $(6,599) $317,319  
Shares surrendered for tax withholdings on vested equity awards —  (7) —  —  —  —  —  —  
Conversion of shares of Class B Common Stock to Class A Common Stock—  140  2  (140) —  1,524  —  1,526  
Deferred tax asset arising from Conversion of shares of Class B Common Stock to Class A Common Stock—  —  —  —  —  204  —  204  
Share-based compensation —  —  —  —  —  3,402  —  3,402  
Dividends declared—  —  —  —  —  —  (12,945) (12,945) 
Dividend equivalent rights declared—  —  —  —  —  —  (596) (596) 
Net income attributable to shareholders—  —  —  —  —  —  4,706  4,706  
Adjustment of temporary equity to carrying value—  —  —  —  —  206,017  —  206,017  
Balance - March 31, 2020$  34,174  $342  22,707  $  $534,725  $(15,434) $519,633  
Members' Contributed CapitalClass A
Common Stock
Class B
Common Stock
Additional Paid-In CapitalAccumulated DeficitTotal Shareholders' and Members' Equity
(In thousands)SharesAmountSharesAmount
Balance—December 31, 2018$208,728    $    $  $(3,057) $168,277  $373,948  
Net income attributable to shareholders  —  —  —  —  —  —  534  534  
Net income attributable to predecessor—  —  —  —  —  —  3,502  3,502  
Balance—March 31, 2019$208,728    $    $  $(3,057) $172,313  $377,984  












The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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BRIGHAM MINERALS, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
(In thousands)20202019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$8,801  $4,036  
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization 12,826  5,116  
Share-based compensation expense1,884    
Amortization of debt issuance costs98  190  
Deferred income taxes2,440  140  
Loss on derivative instruments, net  685  
Net cash received for derivative settlements  198  
Bad debt expense244    
Changes in operating assets and liabilities:
Decrease in accounts receivable 5,298  1,115  
(Increase) in other current assets(414) (1,555) 
Decrease in other deferred charges2    
(Decrease)/Increase in accounts payable and accrued liabilities(3,720) 114  
Decrease in other long-term liabilities(309)   
Net cash provided by operating activities$27,150  $10,039  
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to oil and gas properties(25,260) (42,686) 
Additions to other fixed assets(187) (48) 
Proceeds from sale of oil and gas properties, net1,565    
Net cash used in investing activities$(23,882) $(42,734) 
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing of long-term debt  10,000  
Dividends paid (12,969)   
Distribution to holders of temporary equity(10,145)   
Debt issuance costs(181)   
Net cash (used in) provided by financing activities$(23,295) $10,000  
Decrease in cash and cash equivalents and restricted cash(20,027) (22,695) 
Cash and cash equivalents and restricted cash, beginning of period51,133  32,458  
Cash and cash equivalents and restricted cash, end of period$31,106  $9,763  
Supplemental disclosure of noncash activity:
Accrued capital expenditures$220  $72  
Capitalized share-based compensation cost$1,518  $  
Temporary equity cumulative adjustment to carrying value$(206,017) $  
Supplemental cash flow information:
Cash payments for loan commitment fees and interest$252  $3,543  
Cash paid for taxes$  $  

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.
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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

1.Business and Basis of Presentation

Description of the Business

Brigham Minerals, Inc. (together with its wholly owned subsidiaries, “Brigham Minerals” or the “Company”) is a Delaware corporation formed in June 2018 to become a holding company. Brigham Minerals acquired an indirect interest in Brigham Resources, LLC (“Brigham Resources”), our predecessor, on July 16, 2018 in a series of restructuring transactions pursuant to which certain entities affiliated with Warburg Pincus LLC (“Warburg Pincus”) contributed all of their respective interests in the entities through which they held interests in Brigham Resources to Brigham Minerals in exchange for all of the outstanding shares of common stock of Brigham Minerals (the “July 2018 restructuring”). As a result of such restructuring transactions, Brigham Minerals became wholly owned by an entity affiliated with Warburg Pincus, and Brigham Minerals indirectly owned a 16.5% membership interest in Brigham Resources. The remaining outstanding membership interests of Brigham Resources remained with certain other entities affiliated with Warburg Pincus, Yorktown Partners LLC and Pine Brook Road Advisors, LP, Brigham Minerals’ management and its other investors (collectively, the “Original Owners”).

On November 20, 2018, Brigham Resources underwent a second series of restructuring transactions (the “November 2018 restructuring”). In the November 2018 restructuring, Brigham Resources became a wholly owned subsidiary of Brigham Minerals Holdings, LLC (“Brigham LLC”), which was a wholly owned subsidiary of Brigham Equity Holdings, LLC (“Brigham Equity Holdings”), and Brigham Equity Holdings became wholly owned by the owners of Brigham Resources immediately prior to such restructuring, directly or indirectly, through Brigham Minerals. As a result of the foregoing transactions, there was no change in the control or economic interests of the Original Owners and Brigham Minerals in Brigham Resources, although their ownership became indirect through Brigham Equity Holdings and its wholly owned subsidiary, Brigham LLC. The July 2018 restructuring and the November 2018 restructuring are collectively referred to herein as, the “2018 corporate reorganizations.”

Brigham Resources wholly owns Brigham Minerals, LLC and Rearden Minerals, LLC (collectively, the “Minerals Subsidiaries”), which acquire and actively manage a portfolio of mineral and royalty interests. The Minerals Subsidiaries are Brigham Resources’ sole material assets.

Initial Public Offering

In April 2019, Brigham Minerals completed the initial public offering (the "IPO") of 16,675,000 shares of Class A common stock at a price to the public of $18.00 per share. This resulted in net proceeds of approximately $273.4 million, after deducting underwriting commissions and discounts and offering expenses, which proceeds were used to repay $200.0 million of existing indebtedness and to fund mineral and royalty acquisitions. As a result of the IPO and the corporate restructuring described in "Note 10—Temporary Equity", Brigham Minerals became a holding company whose sole material asset consisted of a 43.3% interest in Brigham LLC, which wholly owns Brigham Resources. Brigham Resources continues to wholly own the Minerals Subsidiaries, which own all of Brigham Resources’ operating assets. In connection with the IPO, Brigham Minerals became the sole managing member of Brigham LLC and is responsible for all operational, management and administrative decisions relating to Brigham LLC’s business and consolidates the financial results of Brigham LLC and its wholly owned subsidiary, Brigham Resources.

December 2019 Offering

On December 16, 2019, Brigham Minerals completed an offering of 12,650,000 shares of its Class A common stock (the "December 2019 Offering"), including 6,000,000 shares issued and sold by Brigham Minerals and an aggregate of 6,650,000 shares sold by certain shareholders of the Company (the "Selling Shareholders"), of which 5,496,813 represents shares issued upon redemption of an equivalent number of their common units in Brigham LLC (the "Brigham LLC Units") (together with a corresponding number of shares of Class B common stock in Brigham Minerals), at a price to the public of $18.10 per share ($17.376 per share net of underwriting discounts and commissions). After deducting underwriting discounts, commissions and offering expenses, Brigham Minerals received net proceeds of approximately $102.7 million which were used to repay $80.0 million of existing indebtedness and to fund future mineral and royalty acquisitions. Brigham Minerals did not receive any proceeds from the sale of shares of Class A common stock by the Selling Shareholders.

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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

Following the completion of the December 2019 Offering and certain redemptions of Brigham LLC Units for shares of Class A common stock (and the cancellation of the corresponding number of shares of Class B common stock), Brigham Minerals owned a 60.1% interest in Brigham LLC as of March 31, 2020. The Original Owners owned 39.9% of the outstanding voting stock of Brigham Minerals as of March 31, 2020. Certain other entities affiliated with Warburg Pincus, Yorktown Partners LLC and Pine Brook Road Advisors, LP (collectively, the "Sponsors"), which are a subset of the Company's Original Owners, collectively owned 39.1% of the outstanding voting stock of Brigham Minerals as of March 31, 2020.

Basis of Presentation

Subsequent to the July 2018 restructuring and prior to the IPO, Brigham Minerals used the equity method of accounting for its investment in Brigham Resources, its predecessor, because its 16.5% ownership in Brigham Resources provided Brigham Minerals with significant influence, but not with a controlling financial interest or the ability to direct the most significant activities of Brigham Resources. Upon the completion of the IPO, Brigham Minerals indirectly owned an approximate 43.3% interest of Brigham Resources and 100% of the voting rights and consolidates the results of operations of Brigham Resources. In order to furnish comparative financial information, the accompanying consolidated and combined financial statements and related notes of Brigham Minerals for periods prior to the IPO, including the 2019 amounts presented, have been retrospectively recast to include the combined historical financial information of both Brigham Resources (at historical carrying values) and Brigham Minerals, taking into account state and federal income taxes and liabilities associated with Brigham Minerals. All intercompany transactions between Brigham Minerals and Brigham Resources have been eliminated. Because Brigham Minerals acquired an interest in Brigham Resources as part of certain reorganization transactions in 2018, net income is attributable to stockholders of Brigham Minerals in addition to its predecessor beginning in 2018.

The accompanying unaudited condensed, consolidated and combined interim financial statements of Brigham Minerals have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), except that, in accordance with the instructions to Form 10-Q, they do not include all of the notes required for financial statements prepared in conformity with U.S. GAAP. Accordingly, the accompanying unaudited interim financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 28, 2020 (the "Annual Report"). The unaudited interim financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair representation. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2020. Brigham Minerals operates in one segment: oil and natural gas exploration and production.

2.Summary of Significant Accounting Policies 

Use of Estimates

These condensed, consolidated and combined financial statements and related notes are presented in accordance with GAAP. Preparation in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the condensed consolidated and combined financial statements and accompanying notes. Although management believes these estimates are reasonable, actual results could differ from these estimates. Changes in estimates are recorded prospectively.

The accompanying condensed, consolidated and combined financial statements are based on a number of significant estimates including quantities of oil, natural gas and NGL reserves that are the basis for the calculations of depreciation, depletion, amortization (“DD&A”) and impairment of oil and natural gas properties. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas and there are numerous uncertainties inherent in estimating quantities of proved oil and natural gas reserves. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, reserve estimates may differ from the quantities of oil and natural gas that are ultimately recovered. Brigham Minerals’ year-end reserve estimates are audited by Cawley, Gillespie & Associates, Inc. (“CG&A”), an independent petroleum engineering firm. Quarterly reserve estimates are internally generated by our in-house engineering staff. Other items subject to significant estimates and assumptions include the carrying amount of oil and natural gas properties, valuation of derivative instruments, share-based compensation costs, and revenue accruals.

Significant Accounting Policies

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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

Significant accounting policies are disclosed in Brigham Resources' audited consolidated financial statements and notes for the year ended December 31, 2019, presented in the Annual Report. There have been no changes in such policies or the application of such policies during the three months ended March 31, 2020.

Recently Adopted Accounting Standards

Restricted cash includes cash that is contractually restricted for its use through an agreement with a non-related party.
On December 31, 2019, the Company adopted ASU 2016-18, Statement of Cash Flows, which amends ASC 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The ASU requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows.

The adoption resulted in a decrease in reported investing cash flow of $0.7 million for the three months ended March 31, 2019 with a corresponding increase to the reported end of period cash balances. The March 31, 2019 accompanying statement of cash flow that was adjusted as a result of adoption of ASU 2016-18 is summarized below:

Three Months Ended March 31, 2019
(In thousands)As reportedAs adjusted
Changes in restricted cash held in escrow for acquisitions$(726) $  
                Net cash used in investing activities$(43,460) $(42,734) 
Decrease in cash, cash equivalents and restricted cash(23,421) (22,695) 
Cash, cash equivalents and restricted cash, beginning of period31,985  32,458  
Cash, cash equivalents and restricted cash end of period$8,564  $9,763  


Accounts Receivables

As of March 31, 2020 and December 31, 2019, accounts receivables was comprised of the following:

(In thousands)March 31, 2020December 31, 2019
Accounts receivables
              Oil and gas sales$22,675  $27,888  
              Reserve for bad debt(800) (556) 
              Other2,873  2,959  
Total accounts receivables$24,748  $30,291  

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject Brigham Minerals to concentrations of credit risk consist of cash, accounts receivable, commodity derivative financial instruments and its revolving credit facility. Cash and cash equivalents are held in a few financial institutions in amounts that may, at times, exceed federally insured limits. However, no losses have been incurred and management believes that counterparty risks are minimal based on the reputation and history of the institutions selected. Accounts receivable are concentrated among operators and purchasers engaged in the energy industry within the United States. Management periodically assesses the financial condition of these entities and institutions and considers any possible credit risk to be minimal. Concentrations of oil and gas sales to significant customers (operators) are presented in the table below.


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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

Three Months Ended March 31,
20202019
Royal Dutch Shell PLC16 % %
Occidental Petroleum Corp13 %20 %
Continental Resources, Inc.9 %10 %

Management does not believe that the loss of any customer would have a long-term material adverse effect on our financial position or the results of operations. For the three months ended March 31, 2020, we received revenues from over 150 operators with approximately 63% of revenues coming from the top ten operators on our properties.

Recently Issued Accounting Standards Not Yet Adopted
Brigham Minerals’ status as an emerging growth company under Section 107 of the Jumpstart Our Business Startups Act of 2012 permits it to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Brigham Minerals is choosing to take advantage of this extended transition period and, as a result, Brigham Minerals will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies.
In February 2016, Financial Accounting Standards Board (the "FASB") issued ASU 2016-02, Leases, which requires all leasing arrangements to be presented in the balance sheet as liabilities along with a corresponding asset. ASU 2016-02 does not apply to leases of mineral rights to explore for or use crude oil and natural gas. The ASU will replace most existing lease guidance in GAAP when it becomes effective. In January 2018, the FASB issued ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842, to provide an optional practical expedient to not evaluate existing or expired land easements that were not previously accounted for as leases under Topic 840. In July 2018, the FASB issued ASU 2018-11 Leases (Topic 842): Targeted Improvements, which provides for another transition method, in addition to the existing transition method, by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption (i.e. comparative periods presented in the financial statements will continue to be in accordance with current GAAP (Topic 840, Leases)). The new standard becomes effective for us during the fiscal year ending December 31, 2021 and interim periods within the fiscal year ending December 31, 2022 and early adoption is permitted. We are currently evaluating the impact that the adoption of this update will have on our condensed consolidated and combined financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses. In May 2019, ASU 2016-13 was subsequently amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses and ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. ASU 2016-13, as amended, affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. This ASU will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost and is effective for financial statements issued for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ASU 2016-13 will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We are currently evaluating the impact that the adoption of this update will have on our condensed consolidated and combined financial statements and related disclosures.

3.Oil and Gas Properties
Brigham Minerals uses the full cost method of accounting for its oil and natural gas properties. Under this method, all acquisition costs incurred for the purpose of acquiring mineral and royalty interests, including certain internal costs, are capitalized into a full cost pool. Costs associated with general corporate activities are expensed in the period incurred. Oil and gas properties as of the dates shown consisted of the following:
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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

(In thousands)March 31, 2020December 31, 2019
Oil and gas properties, at cost, using the full cost method of accounting:
Unevaluated property$305,642  $291,664  
Evaluated property462,019  449,061  
Total oil and gas properties, at cost767,661  740,725  
Less accumulated depreciation, depletion, and amortization(74,915) (61,103) 
Total oil and gas properties, net$692,746  $679,622  

Capitalized costs are depleted on a unit of production basis based on proved oil and natural gas reserves. Depletion expense was $12.2 million and $5.0 million for the three months ended March 31, 2020 and March 31, 2019, respectively. Average depletion of proved properties was $12.94 per BOE and $10.26 per BOE for the three months ended March 31, 2020 and March 31, 2019, respectively.
The costs associated with unevaluated properties primarily consist of acquisition costs and capitalized general and administrative costs. Brigham Minerals capitalizes certain overhead expenses and other internal costs attributable to the acquisition of mineral and royalty interests as part of its investment in oil and gas properties over the periods benefitted by these activities. Capitalized costs do not include any costs related to general corporate overhead or similar activities. Capitalized costs were $2.4 million and $1.2 million for the three months ended March 31, 2020 and March 31, 2019.
Under the full cost method of accounting, total capitalized costs of oil and natural gas properties, net of accumulated depletion, may not exceed an amount equal to the present value of future net revenues from proved reserves, discounted at 10% per annum, plus the cost of unevaluated properties (the ceiling limitation). A write-down of the carrying value of the full cost pool is a noncash charge that reduces earnings and impacts equity in the period of occurrence and typically results in lower depletion expense in future periods. A ceiling limitation is calculated at each reporting period. The ceiling limitation calculation is prepared using the trailing 12-month first day of the month oil and natural gas average prices, as adjusted for basis or location differentials, held constant over the life of the reserves (net wellhead prices). As of March 31, 2020, the prices used in the calculation of the ceiling test were $55.71 per barrel of oil and $2.32 per MMbtu of natural gas. Using these prices, the ceiling limitation exceeded the net book value of oil and natural gas properties by approximately $100.0 million and no write off was necessary. Using the trailing 12-month first day of the month oil and natural gas average prices for the period from June 1, 2019 to May 1, 2020, of $48.61 per barrel of oil and $2.15 per MMbtu of natural gas, the ceiling limitation as of March 31, 2020, exceeds the net book value of oil and natural gas properties by approximately $40.0 million. This ceiling limitation does not consider drilling and completion activity, development timing, acquisitions or divestitures of oil and gas properties, changes in proved undeveloped locations and production occurring subsequent to March 31, 2020 that may require revisions to estimates of proved reserves.

During the three months ended March 31, 2020, Brigham Minerals reduced its proved undeveloped reserves by 3,284 Mboe as a result of a decrease in rig activity, primarily in the Anadarko basin. The reduction in rig activity led to changes in the development timing and a reduction of the number of proved undeveloped locations that Brigham Minerals expects will be developed within five years after the date of booking.


4. Acquisitions and Divestitures
During the three months ended March 31, 2020 and 2019, Brigham Minerals entered into a number of acquisitions of mineral and royalty interests from various sellers in Texas, Oklahoma, Colorado, New Mexico, and North Dakota, as reflected in the tables below. The change in the oil and natural gas property balance is comprised of payments for acquisitions of minerals, land brokerage costs and capitalized general and administrative expenses that were funded with proceeds from the December 2019 Offering.
Oil and Gas Properties AcquiredCash Consideration Paid
(In thousands)EvaluatedUnevaluated
Quarter Ended March 31, 2020$9,471  $15,947  $25,418  

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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

Oil and Gas Properties AcquiredCash Consideration Paid
(In thousands)EvaluatedUnevaluated
Quarter Ended March 31, 2019$27,929  $13,403  $41,332  

5. Revenue from contracts with customers

Contract Balances
Oil, natural gas and NGLs sales revenues are recognized when control of the product is transferred to the
customer, the performance obligations under the terms of the contracts with customers are satisfied and collectability is reasonably assured. Lease bonus revenues are recognized when the lease agreement has been executed, payment has been received, and the Company has no further obligation to refund the payment. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. As of March 31, 2020, accounts receivable from oil and gas sales of $22.7 million represent rights to payment for which Brigham Minerals has satisfied its obligations under contracts with customers.

Prior-period performance obligations
As a non-operator, Brigham Minerals has limited visibility into the timing of when new wells start producing and is required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. The amount of production delivered to the purchaser is estimated on the basis of state-reported production data or production statements from operators. The difference between the Company’s estimates and the actual amounts received for oil and natural gas sales is recorded in the month that payment is received from the third party. For the three months ended March 31, 2020 and 2019, revenue recognized in the reporting periods related to performance obligations satisfied in prior reporting periods was immaterial.

Allocation of transaction price to remaining performance obligations
Brigham Minerals’ right to royalty income does not originate until production occurs and, therefore, is not considered to exist beyond each day’s production. Brigham Minerals does not recognize lease bonus or other income until a lease agreement has been executed, at which point its performance obligation has been satisfied, and payment is received. Accordingly, there are no remaining performance obligations under any of our royalty income or lease bonus contracts.

6. Derivative Instruments
Brigham Minerals periodically uses commodity derivative instruments to reduce its exposure to commodity price volatility for a portion of its forecasted crude oil and natural gas sales and thereby achieve a more predictable level of cash flows. None of the derivative instruments are designated as hedges. Brigham Minerals does not enter into derivative instruments for speculative or trading purposes.
Because the counterparties to Brigham Minerals derivative instruments have investment grade credit ratings, Brigham Minerals believes it does not have significant credit risk and does not anticipate nonperformance from its counterparties. Brigham Minerals continually monitors the credit ratings of its counterparties.
Concurrent with the termination of its prior revolving credit facility in July 2018, Brigham Resources posted cash collateral of $1.4 million for its existing WTI fixed price swap contracts. The cash collateral was $1.6 million in May 2019 prior to the termination of the Owl Rock credit facility and was returned to Brigham Resources upon entering into the revolving credit facility. See "Note 8—Long-Term Debt."
Brigham Minerals had no derivative contracts in place as of March 31, 2020 and December 31, 2019. Prior to December 31, 2019, we had certain oil swap contracts based on the NYMEX futures index.
The following table summarizes Brigham Minerals' gain (loss) on derivative instruments, net on its condensed consolidated and combined statement of operations for the three months ended March 31, 2020 and 2019:
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BRIGHAM MINERALS, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Unaudited)

Three Months Ended March 31,
(In thousands) 20202019
Realized gain $  $198  
Unrealized loss  (883) 
Combined - realized/unrealized loss$  $(685) 
7. Fair Value Measurements
We classify financial assets and liabilities that are measured and reported at fair value on a recurring basis using a hierarchy based on the inputs used in measuring fair value. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We classify the inputs used to measure fair value into the following hierarchy:
• Level 1: Inputs based on quoted market prices in active markets for identical assets or liabilities at the measurement date.
• Level 2: Inputs based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active or other inputs that are observable and can be corroborated by observable market data.
• Level 3: Inputs that reflect management’s best estimates and assumptions of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.
Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer would be reported at the beginning of the period in which the change occurs.
Assets and Liabilities Measured at Fair Value on a Recurring Basis

We had no financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2020 and December 31, 2019.
Brigham Minerals had no derivative contracts in place as of March 31, 2020 and December 31, 2019 as disclosed in "Note 6—Derivative Instruments." Commodity derivative instruments are valued using a third-party industry-standard pricing model using contract terms and prices and assumptions and inputs that are substantially observable in active markets throughout the full term of the instruments, including forward oil and gas price curves, discount rates and volatility factors. The fair values are also compared to the values provided by the counterparties for reasonableness and are adjusted for the counterparties’ credit quality for derivative assets and our credit quality for derivative liabilities. As such, these derivative contracts are classified within Level 2.
Brigham Minerals had no transfers into or out of Level 1 and no transfers into or out of Level 2 for the three months ended March 31, 2020 and March 31, 2019.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Certain non-financial assets and liabilities, such as assets and liabilities acquired in a business combination, are measured at fair value on a nonrecurring basis on the acquisition date and are subject to fair value adjustments under certain circumstances. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and include factors such as estimates of economic reserves, future commodity prices and a risk-adjusted discount rates, and are classified within Level 3.
Fair Value of Other Financial Instruments
The carrying value of cash, trade and other receivables and trade payables are considered to be representative of their respective fair values due to the short-term nature of these instruments. The carrying amount of debt outstanding pursuant to our revolving credit facility approximates fair value as interest rates on the revolving credit facility approximate current market rates. We categorized our long-term debt within Level 2 of the fair value hierarchy.
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(Unaudited)


8. Long-Term Debt
Owl Rock Credit Facility
On July 27, 2018, Brigham Resources entered into a credit facility (the “Owl Rock credit facility”) with Owl Rock Capital Corporation as administrative agent and collateral agent. Brigham Resources used the proceeds from the Owl Rock credit facility to repay the outstanding $70 million of principal under its prior revolving credit facility and to fund mineral and royalty acquisitions. The Owl Rock credit facility was subject to customary fees, guarantees of subsidiaries, restrictions and covenants, including certain restricted payments, and was collateralized by certain oil and natural gas properties of Brigham Resources. The Owl Rock credit facility provided for a $125 million initial term loan, a $75 million delayed draw term loan and a $10 million revolving credit facility, bore interest at a rate per annum equal to, at Brigham Resources’ option, (a) the base rate plus 4.50%, or (b) the adjusted LIBOR rate for such interest period (subject to a 1.00% floor) plus 5.50%, matured on July 27, 2024 and required Brigham Resources to maintain compliance with certain financial and collateral coverage ratios.
On May 7, 2019, the Owl Rock credit facility was terminated and the outstanding balance of $200.0 million was fully repaid using the proceeds generated from the IPO. As a result of the debt repayment, Brigham Minerals recognized a loss on extinguishment of debt of $6.9 million, which consisted of a $4.0 million write-off of capitalized debt issuance costs, a $2.1 million prepayment fee and legal fees of $0.8 million.
Revolving Credit Facility

On May 16, 2019 Brigham Resources entered into a credit agreement with Wells Fargo Bank, N.A., as administrative agent for the various lenders from time to time party thereto, providing for a revolving credit facility (our “revolving credit facility”). Our revolving credit facility is guaranteed by Brigham Resources’ domestic subsidiaries and is collateralized by a lien on substantially all of Brigham Resources and its domestic subsidiaries’ assets, including substantially all of their respective royalty and mineral properties.
Availability under our revolving credit facility is governed by a borrowing base, which is subject to redetermination semi-annually in May and November of each year. In addition, lenders holding two-thirds of the aggregate commitments may request one additional redetermination each year. Brigham Resources can also request one additional redetermination each year, and such other redeterminations as appropriate when significant acquisition opportunities arise. The borrowing base is subject to further adjustments for asset dispositions, material title deficiencies, certain terminations of hedge agreements and issuances of permitted additional indebtedness. Increases to the borrowing base require unanimous approval of the lenders, while decreases only require approval of lenders holding two-thirds of the aggregate commitments at such time. We fully repaid the $80.0 million of outstanding borrowings under our revolving credit facility in December 2019 using a portion of the net proceeds from the December 2019 Offering. As of March 31, 2020, the borrowing base on our revolving credit facility was $180.0 million and there was no outstanding balance. Associated with the Company's late-May 2020 redetermination of the borrowing base under its revolving credit facility, the administrative agent has indicated a preliminary recommended decrease in the Company's borrowing base. See "Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Requirements and Sources of Liquidity—Revolving Credit Facility” for further discussion.

Our revolving credit facility bears interest at a rate per annum equal to, at our option, the adjusted base rate or the adjusted LIBOR rate plus an applicable margin. The applicable margin is based on utilization of our revolving credit facility and ranges from (a) in the case of adjusted base rate loans, 0.750% to 1.750% and (b) in the case of adjusted LIBOR rate loans, 1.750% to 2.750%. Brigham Resources may elect an interest period of one, two, three, six, or if available to all lenders, twelve months. Interest is payable in arrears at the end of each interest period, but no less frequently than quarterly. A commitment fee is payable quarterly in arrears on the daily undrawn available commitments under our revolving credit facility in an amount ranging from 0.375% to 0.500% based on utilization of our revolving credit facility. Our revolving credit facility is subject to other customary fee, interest and expense reimbursement provisions.
Our revolving credit facility matures on May 16, 2024. Loans drawn under our revolving credit facility may be prepaid at any time without premium or penalty (other than customary LIBOR breakage) and must be prepaid in the event that exposure exceeds the lesser of the borrowing base and the elected availability at such time. The principal amount of loans that are prepaid are required to be accompanied by accrued and unpaid interest and fees on such amounts. Loans that are prepaid may be reborrowed. In addition, Brigham Resources may permanently reduce or terminate in full the commitments under our revolving credit facility
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NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
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prior to maturity. Any excess exposure resulting from such permanent reduction or termination must be prepaid. Upon the occurrence of an event of default under our revolving credit facility, the administrative agent acting at the direction of the lenders holding a majority of the aggregate commitments at such time may accelerate outstanding loans and terminate all commitments under our revolving credit facility, provided that such acceleration and termination occurs automatically upon the occurrence of a bankruptcy or insolvency event of default.
Our revolving credit facility contains customary affirmative and negative covenants, including, without limitation, reporting obligations, restrictions on asset sales, restrictions on additional debt and lien incurrence and restrictions on making distributions (subject only to no default or borrowing base deficiency) and investments. In addition, our revolving credit facility requires us to maintain (a) a current ratio of not less than 1.00 to 1.00 and (b) a ratio of total net funded debt to consolidated EBITDA of not more than 4.00 to 1.00. As of March 31, 2020, we were in compliance with all covenants in accordance with our revolving credit facility.

9. Shareholders' Equity

Class A Common Stock

Brigham Minerals had approximately 34.2 million shares of its Class A common stock outstanding as of March 31, 2020. Holders of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders and are entitled to ratably receive dividends when and if declared by the Company’s board of directors. Upon liquidation, dissolution, distribution of assets or other winding up, the holders of Class A common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities.

Class B Common Stock

Brigham Minerals had approximately 22.7 million shares of its Class B common stock outstanding as of March 31, 2020. Holders of the Class B common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to Brigham Minerals’ stockholders for their vote or approval. Holders of Class B common stock generally do not have any right to receive dividends or distributions upon a liquidation or winding up of Brigham Minerals.

Earnings per Share

Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted earnings per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. Brigham Minerals uses the “if-converted” method to determine the potential dilutive effect of exchanges of outstanding shares of Class B common stock (and corresponding Brigham LLC Units), and the treasury stock method to determine the potential dilutive effect of vesting of its outstanding RSAs, RSUs, PSUs and unvested Incentive Units. Brigham Minerals does not use the two-class method because the Class B common stock and the unvested share-based awards are nonparticipating securities. For the three months ended March 31, 2020, the RSAs, RSUs, Incentive Units (each as defined in "Note 11—Share-Based Compensation"), and shares of Class B common stock were not recognized in dilutive EPS calculations as the effect would have been antidilutive. As of March 31, 2020, there were 1,187,811 shares related to PSUs (based on target), that could vest in the future dependent on predetermined performance goals. These units were not included in the computation of EPS for the three months ended March 31, 2020, because the performance goals had not been met, assuming the end of the reporting period was the end of the contingency period. There were no shares of Class A or Class B common stock outstanding for the three months ended March 31, 2019, and therefore, no earnings per share information has been presented for those periods.

The following table reflects the allocation of net income to common stockholders and EPS computations for the period indicated based on a weighted average number of common stock outstanding for the period:

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(Unaudited)

Three Months Ended March 31,
(In thousands, except per share data)20202019
Basic EPS
Numerator:
Basic net income attributable to Brigham Minerals, Inc. shareholders$4,706  $  
Denominator:
Basic weighted average shares outstanding
33,979    
Basic EPS attributable to Brigham Minerals, Inc. shareholders$0.14  $  
Diluted EPS
Numerator:
Basic net income attributable to Brigham Minerals, Inc. shareholders $4,706  $  
Diluted net income attributable to Brigham Minerals, Inc. shareholders4,706    
Denominator:
Basic weighted average shares outstanding33,979    
        Effect of dilutive securities:
RSAs, RSUs, Incentive Units, and shares of Class B common stock
    
Diluted weighted average shares outstanding
33,979    
Diluted EPS attributable to Brigham Minerals, Inc. shareholders$0.14  $  

10. Temporary Equity

Temporary equity represents the Original Owners' 39.9