NOTE 3. REVENUE

Revenue from contracts with customers includes the sale of oil, natural gas and natural gas liquids production (recorded in “Oil, natural gas and natural gas liquids revenues” in the unaudited condensed consolidated statements of operations) and gathering and transportation revenues (recorded in “Transportation and marketing-related revenues” in the unaudited condensed consolidated statements of operations).

The following table disaggregates revenue by significant product and service type:


	Successor				Predecessor
	Three Months		One Month		Two Months
	Ended		Ended		Ended
	June 30, 2019		June 30, 2018		May 31, 2018
Oil	$	8,076	$	7,161	$	17,555
Natural gas (1)		16,541		8,664		14,562
Natural gas liquids (1)		5,512		5,710		10,632
Oil, natural gas and natural gas liquids revenues		30,129		21,535		42,749
Transportation and marketing–related revenues		458		185		340
Total revenues	$	30,587	$	21,720	$	43,089


	Successor				Predecessor
	Six Months		One Month		Five Months
	Ended		Ended		Ended
	June 30, 2019		June 30, 2018		May 31, 2018
Oil	$	17,509	$	7,161	$	42,460
Natural gas (1)		40,342		8,664		40,951
Natural gas liquids (1)		15,564		5,710		26,896
Oil, natural gas and natural gas liquids revenues		73,415		21,535		110,307
Transportation and marketing–related revenues		1,018		185		724
Total revenues	$	74,433	$	21,720	$	111,031

⁽¹⁾

The Company recognizes wet gas revenues, which are recorded net of transportation, gathering and processing expenses, partially as natural gas revenues and partially as natural gas liquids revenues based on the end products after processing occurs. For the Successor period of the three months ended June 30, 2019, wet gas revenues were $0.5 million which were recognized as natural gas liquids revenues. For the Successor period of the six months ended June 30, 2019, wet gas revenues were $3.8 million which were recognized as $1.5 million of natural gas revenues and $2.3 million of natural gas liquids revenues. For the Successor period of the one month ended June 30, 2018, wet gas revenues were $1.5 million which were recognized as $0.5 million of natural gas revenues and $1.0 million of natural gas liquids revenues. For the Predecessor period of the two months ended May 31, 2018, wet gas revenues were $3.3 million which were recognized as $1.4 million of natural gas revenues and $1.9 million of natural gas liquids revenues. For the Predecessor period of the five months ended May 31, 2018, wet gas revenues were $8.4 million which were recognized as $3.2 million of natural gas revenues and $5.2 million of natural gas liquids revenues.

Contract Balances

Customers are invoiced once the Company’s performance obligations have been satisfied. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. There are no significant judgments that significantly affect the amount or timing of revenue from contracts with customers. Accordingly, the Company’s product sales contracts do not give rise to material contract assets or contract liabilities.

Accounts receivable are primarily from purchasers of oil, natural gas and natural gas liquids and from exploration and production companies that own interests in properties Harvest operates. As of June 30, 2019 and December 31, 2018, the Company had receivables of $26.7 million and $38.3 million, respectively. This industry concentration could affect overall exposure to credit risk, either positively or negatively, because the Company’s purchasers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. The Company routinely assesses the financial strength of its customers and bad debts are recorded based on an account-by-account review specifically identifying receivables that the Company believes may be uncollectible after all means of collection have been exhausted, and the potential recovery is considered remote. As of June 30, 2019 and December 31, 2018, the Company did not have any reserves for doubtful accounts.

Performance Obligations

The Company applies the optional exemptions in Topic 606 and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied performance obligations.