Concentration of Credit Risk

12 Months Ended

Dec. 31, 2016

Concentration of Credit Risk [Abstract]

Concentration of Credit Risk

(3)  Concentration of Credit Risk

Credit risk encompasses the amount of loss absorbed should the Company’s customers fail to perform pursuant to contractual terms.  Managing credit risk involves a number of considerations, such as the financial profile of the customer, the value of collateral held, if any, specific terms and duration of the contractual agreement, and the customer’s sensitivity to economic developments.  The Company has established various procedures to manage credit exposure, including initial credit approval, credit limits, and rights of offset.  Letters of credit and guarantees are also utilized to limit exposure. Accounts receivable associated with crude oil marketing activities comprise approximately 90 percent of the Company’s total receivables and industry practice requires payment for such sales to occur within 20 days of the end of the month following a transaction.  The Company’s customer makeup, credit policies and the relatively short duration of receivables mitigate the uncertainty typically associated with receivables management.  An allowance for doubtful accounts is provided where appropriate.  An analysis of the changes in the allowance for doubtful accounts is presented as follows (in thousands):

	2016			2015			2014
Balance, beginning of year	$	206		$	179		$	252
Provisions for bad debts		100			116			50
Less:  Write-offs and recoveries		(81	)		(89	)		(123	)
Balance, end of year	$	225		$	206		$	179

The Company’s largest customers consist of large multinational integrated oil companies and independent domestic refiners of crude oil.  In addition, the Company transacts business with independent oil producers, major chemical concerns, crude oil trading companies and a variety of commercial energy users.  Within this group of customers, the Company generally derives approximately 50 percent of its revenues from three to five large crude oil refining concerns.  While the Company has ongoing established relationships with certain domestic refiners of crude oil, alternative markets are readily available since the Company supplies less than one percent of U.S. domestic refiner demand.  As a fungible commodity delivered to major Gulf Coast supply points, the Company’s crude oil sales can be readily delivered to alternative end markets.  Management believes that a loss of any of those customers where the Company currently derives more than 10 percent of its revenues would not have a material adverse effect on the Company’s operations as shown below:

Individual customer sales			Individual customer receivables in excess
in excess of 10% of revenues			of 10% of total receivables as of December 31,
2016	2015	2014	2016	2015	2014
18.2%	24.4%	20.3%	20.9%	20.3%	16.6%
16.5%	13.8%	14.0%	14.0%	16.5%	16.6%
15.9%	-	-	10.1%	12.7%	10.4%
10.6%	-	-	-	-	-