Reportable Segments

6 Months Ended

Jun. 30, 2016

Reportable Segments [Abstract]

Reportable Segments

15. REPORTABLE SEGMENTS

The operating segments, reported separately herein, are best defined as: (1) Exploration and Production and (2) Midstream. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment. The Exploration and Production segment operates to explore for and produce crude oil and natural gas. The Midstream segment operates the gathering, processing and transportation of crude oil, natural gas liquids (“NGLs”) and natural gas.  We completed the Western Catarina Midstream Acquisitions during the fourth quarter of 2015. As such, there were no midstream results for the three and six monthes ended June 30, 2015. These segments are broadly understood across the petroleum and petrochemical industries.

These functions have been defined as the operating segments of the Partnership because they are the segments (1) that engage in business activities from which revenues are earned and expenses are incurred; (2) whose operating results are regularly reviewed by the Partnership’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance; and (3) for which discrete financial information is available.  Operating segments are evaluated for their contribution to the Partnership’s consolidated results based on operating income, which is defined as segment operating revenues less expenses.

The following tables set forth our segment information for the periods indicated (in thousands):

	Three Months Ended June 30, 2016
	Exploration & Production		Midstream		Total
Operating revenues
Natural gas sales	$	600	$	—	$	600
Oil sales		(2,756)		—		(2,756)
Natural gas liquids sales		244		—		244
Gathering and transportation sales		—		14,258		14,258
Total operating revenues		(1,912)		14,258		12,346
Operating expenses:
Lease operating expenses		3,904		274		4,178
Transportation operating expenses		—		3,014		3,014
Cost of sales		63		—		63
Production taxes		326		—		326
General and administrative		3,550		1,428		4,978
Unit compensation expense		1,091		—		1,091
Depreciation, depletion and amortization		1,036		5,093		6,129
Asset impairments		—		—		—
Accretion expense		253		62		315
Total operating expenses		10,223		9,871		20,094
Operating income (loss)	$	(12,135)	$	4,387	$	(7,748)

	Three Months Ended June 30, 2015
	Exploration & Production		Midstream		Total
Operating revenues
Natural gas sales	$	3,642	$	—	$	3,642
Oil sales		639		—		639
Natural gas liquids sales		500		—		500
Gathering and transportation sales		—		—		—
Total operating revenues		4,781		—		4,781
Operating expenses:
Lease operating expenses		5,358		—		5,358
Cost of sales		125		—		125
Production taxes		583		—		583
General and administrative		3,351		—		3,351
Unit compensation expense		395		—		395
Gain on sale of assets		(54)		—		(54)
Depreciation, depletion and amortization		3,079		—		3,079
Asset impairments		862		—		862
Accretion expense		264		—		264
Total operating expenses		13,963		—		13,963
Operating loss	$	(9,182)	$	—	$	(9,182)

	Six Months Ended June 30, 2016
	Exploration & Production		Midstream		Total
Operating revenues
Natural gas sales	$	4,275	$	—	$	4,275
Oil sales		2,587		—		2,587
Natural gas liquids sales		520		—		520
Gathering and transportation sales		—		28,133		28,133
Total operating revenues		7,382		28,133		35,515
Operating expenses:
Lease operating expenses		8,780		371		9,151
Transportation operating expenses		—		6,068		6,068
Cost of sales		193		—		193
Production taxes		547		—		547
General and administrative		7,984		2,713		10,697
Unit compensation expense		1,529		—		1,529
Depreciation, depletion and amortization		3,149		10,168		13,317
Asset impairments		1,309		—		1,309
Accretion expense		507		123		630
Total operating expenses		23,998		19,443		43,441
Operating income (loss)	$	(16,616)	$	8,690	$	(7,926)

	Six Months Ended June 30, 2015
	Exploration & Production		Midstream		Total
Operating revenues
Natural gas sales	$	10,216	$	—	$	10,216
Oil sales		5,603		—		5,603
Natural gas liquids sales		886		—		886
Gathering and transportation sales		—		—		—
Total operating revenues		16,705		—		16,705
Operating expenses:
Lease operating expenses		10,258		—		10,258
Cost of sales		330		—		330
Production taxes		953		—		953
General and administrative		10,906		—		10,906
Unit compensation expense		2,387		—		2,387
Gain on sale of assets		(113)		—		(113)
Depreciation, depletion and amortization		6,199		—		6,199
Asset impairments		83,727		—		83,727
Accretion expense		517		—		517
Total operating expenses		115,164		—		115,164
Operating loss	$	(98,459)	$	—	$	(98,459)

The following table summarizes the total assets by operating segment as of June 30, 2016 and December 31, 2015 (in thousands):

		June 30,		December 31,
Segment Assets		2016		2015
Exploration & Production	$	59,920	$	118,083
Midstream		380,137		353,217
Total assets	$	440,057	$	471,300