17. REPORTING SEGMENTS

“Midstream” and “Production” best describe the operating segments of the businesses that we separately report. The factors used to identify these reporting segments are based on the nature of the operations that are undertaken by each segment. The Midstream segment operates the gathering, processing and transportation of crude oil, natural gas and NGLs. The Production segment operates to produce crude oil and natural gas. 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 (“CODM”) 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 present financial information for each operating segment for the periods indicated based on our operating segments (in thousands):


	Three Months Ended March 31,
	2019				2018
	Production		Midstream		Production		Midstream
Segment revenues
Natural gas sales	$	110	$	—	$	473	$	—
Oil sales		(739)		—		3,462		—
Natural gas liquid sales		179		—		595		—
Gathering and transportation sales		—		1,683		—		1,688
Gathering and transportation lease revenues		—		16,257		—		12,318
Total segment revenues		(450)		17,940		4,530		14,006

Segment operating costs
Lease operating expenses		1,319		396		1,752		219
Transportation operating expenses		—		2,676		—		2,847
Production taxes		183		—		322		—
Depreciation, depletion and amortization		1,095		5,334		1,363		5,265
Accretion expense		54		79		54		72
Total segment operating costs		2,651		8,485		3,491		8,403

Segment other income
Earnings from equity investments		—		1,442		—		4,272
Total segment other income		—		1,442		—		4,272

Segment operating income (expense)	$	(3,101)	$	10,897	$	1,039	$	9,875


	Three Months Ended
	March 31,
	2019		2018
Reconciliation of segment operating income to net income (loss)
Total production operating income (loss)	$	(3,101)	$	1,039
Total midstream operating income		10,897		9,875
Total segment operating income		7,796		10,914

General and administrative expense		(4,749)		(5,165)
Unit-based compensation expense		(635)		(1,438)
Interest expense, net		(2,786)		(2,599)
Other income (expense)		46		(270)
Income tax expense		(46)		—
Net income (loss)	$	(374)	$	1,442

The following table summarizes the total assets by operating segment as of March 31, 2019 and December 31, 2018 and total capital expenditures for the three months ended March 31, 2019 and the year ended December 31, 2018 (in thousands):


	March 31, 2019
	Production		Midstream		Corporate (a)		Total
Other financial information
Total assets	$	47,745	$	421,122	$	8,684	$	477,551
Capital expenditures(b)	$	—	$	186	$	—	$	186


	December 31, 2018
	Production		Midstream		Corporate (a)		Total
Other financial information
Total assets	$	53,556	$	429,523	$	3,606	$	486,685
Capital expenditures(b)	$	11	$	4,856	$	—	$	4,867

(a)

Corporate assets not reviewed by the CODM on a segment basis consists of cash, certain prepaid expenses, office furniture, and other assets.

(b)

Inclusive of capital contributions made to equity method investments.