11.Redeemable Preferred Units

On June 11, 2020, we issued 7,500 redeemable preferred units (the “Preferred Units”) to ConocoPhillips as part of the consideration in the Lea County Acquisition. The Preferred Units, which had a face value of $75.0 million, were initially recorded at $72.0 million, their issuance-date fair value.

On November 9, 2020, we issued a capital call to ConocoPhillips for $1.9 million. ConocoPhillips elected to redeem 193 Preferred Units in exchange for 192,981 Solaris LLC Class A units to satisfy this call.

Because the Preferred Units would have become redeemable by ConocoPhillips following the fifth anniversary of the issuance and were redeemable by us at any time, we elected to accrete changes in the redemption value over the period from the date of issuance to the date that the instrument would have been redeemable, using the effective interest method.

Concurrent with the closing of the Notes discussed in Note 9. Long-Term Debt, we repaid and redeemed all outstanding Preferred Units on April 1, 2021 for cash of $74.4 million.