second step of the goodwill impairment test at these interim dates. The fair value amount of the assets and liabilities were calculated using a combination of a market and income approach as follows: equity, debt and certain oil and gas properties were valued using a market approach while the remaining balance sheet assets and liabilities were valued using an income approach. Furthermore, significant assumptions used in calculating the fair value of our oil and gas properties include: (i) observable forward prices for commodities at the respective measurement date and (ii) a 10% discount rate, which was comparable to discount rates on recent transactions. Based on the results of the the second step of the interim goodwill impairment test, we recorded a non-cash goodwill impairment loss of \$252.7 million during the quarter ended September 30, 2016 to write the goodwill down to its estimated fair value of \$253.4 million. Based on our estimates, the implied fair value of our reporting unit exceeded its carrying value at the measurement dates of March 31, 2016, June 30, 2016, and December 31, 2016, therefore no additional impairment loss was recorded for the year ended December 31, 2016. Based on evaluation of qualitative factors, we determined that the goodwill impairment was primarily a result of the decline in the prices of oil and natural gas as well as deteriorating market conditions and the decline in the market price of our common units. Any further significant decline in the prices of oil and natural gas as well as any continued declines in the quoted market price of the Company’s units could change our estimate of the fair value of the reporting unit and could result in an additional impairment charge.

Our nonfinancial assets and liabilities that are initially measured at fair value are comprised primarily of assets acquired in business combinations and asset retirement costs and obligations. These assets and liabilities are recorded at fair value when acquired/incurred but not re-measured at fair value in subsequent periods. We classify such initial measurements as Level 3 since certain significant unobservable inputs are utilized in their determination. A reconciliation of the beginning and ending balance of our asset retirement obligations is presented in Note 7, in accordance with ASC Topic 410-20 “Asset Retirement Obligations.” During the years ended December 31, 2016 and 2015, in connection with the oil and natural gas properties acquired in all of our acquisitions, the LRE and Eagle Rock Mergers, as well as new wells drilled during each year, we incurred and recorded asset retirement obligations totaling \$0.7 million and \$90.9 million, respectively, at fair value. We also recorded a \$1.3 million and a \$22.3 million change in estimate as a result of revisions to the timing or the amount of our original undiscounted estimated asset retirement costs during the years ended December 31, 2016 and 2015, respectively. The

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fair value of additions to the asset retirement obligation liability and certain changes in the estimated fair value of the liability are measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Inputs to the valuation include: (1) estimated plug and abandonment cost per well based on our experience; (2) estimated remaining life per well based on average reserve life per field; (3) our credit-adjusted risk-free interest rate ranging between 4.6% and 5.5%; and (4) the average inflation factor (2.0%). These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change.

# 7. Asset Retirement Obligations

The asset retirement obligations as of December 31, 2016 and 2015, reported on our Consolidated Balance Sheets and the changes in the asset retirement obligations for the year ended December 31, 2016 were as follows:

2016	2015