Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Information

(9) SEGMENT INFORMATION

Our reportable segments, which consist of BWI and HBI, are aligned around our energy assets which are managed separately. We have included activity of our parent company, HKN, in our disclosure to reconcile to our consolidated operating loss and total assets. HKN, which includes our investment in Global, performs general corporate activities such as corporate reporting and governance, financing, management and growth of current operations and the evaluation of new investment opportunities. Our accounting policies for each of our operating segments are the same as those for our consolidated condensed financial statements. Intersegment interest income and intersegment expenses between our parent company and BWI or HBI have been eliminated in consolidation. There were no intersegment sales or transfers for the periods presented.

Our BWI segment owns a patented oilfield emulsion breaking technology. This is a continuous process technology that can purify oilfield emulsions by breaking and separating the emulsions into oil, water and solids, thereby reducing the environmental impact and operating costs of the disposition of residual fuels and waste materials while recovering valuable oil. See Note 2 – “BriteWater International, Inc.” for further discussion.

Our HBI segment holds non-operated working interests in properties strategically located in the Bakken and Niobrara shale oil plays. See Note 3 – “HKN Bakken, Inc.” for further discussion.

Our financial information, expressed in thousands, for each of our operating segments for the three and six months ended June 30, 2013 and 2012 is as follows:

	For the Three Months Ended June 30, 2013
	HKN			BWI			HBI			Eliminations			Consolidated
Oil and gas revenues	$	—		$	—		$	266		$	—		$	266
Oil and gas expenses		—			—			(36	)		—			(36	)
Selling, general and administrative expenses		(566	)		(185	)		(4	)		—			(755	)
Depreciation, depletion and amortization		(9	)		(56	)		(69	)		—			(134	)
Interest and other expenses		—			(141	)		(2	)		143			—
Interest and other income - related parties		729			—			—			(143	)		586
Interest and other income		4			—			—			—			4
Segment income (loss) from continuing operations	$	158		$	(382	)	$	155		$	—		$	(69	)
Capital Expenditures	$	1		$	837		$	104		$	—		$	942
Total Assets	$	52,326		$	12,613		$	4,447		$	(8,468	)	$	60,918

	For the Three Months Ended June 30, 2012
	HKN			BWI			HBI		Eliminations			Consolidated
Revenues	$	—		$	—		$	—	$	—		$	—
Selling, general and administrative expenses		(731	)		(379	)		—		—			(1,110	)
Depreciation, depletion and amortization		(13	)		(54	)		—		—			(67	)
Interest and other expenses		—			(72	)		—		72			—
Interest and other income - related parties		550			—			—		(72	)		478
Interest and other income		9			—			—		—			9
Income tax benefit		73			—			—		—			73
Segment loss from continuing operations	$	(112	)	$	(505	)	$	—	$	—		$	(617	)
Capital Expenditures	$	2		$	305		$	—	$	—		$	307
Total Assets	$	67,805		$	9,457		$	—	$	(9,669	)	$	67,593

	For the Six Months Ended June 30, 2013
	HKN			BWI			HBI			Eliminations			Consolidated
Oil and gas revenues	$	—		$	—		$	514		$	—		$	514
Oil and gas expenses		—			—			(66	)		—			(66	)
Selling, general and administrative expenses		(1,228	)		(324	)		(96	)		—			(1,648	)
Depreciation, depletion and amortization		(22	)		(110	)		(212	)		—			(344	)
Interest and other expenses		—			(262	)		(2	)		264			—
Interest and other income - related parties		1,509			—			—			(264	)		1,245
Interest and other income		38			(1	)		—			—			37
Segment income (loss) from continuing operations	$	297		$	(697	)	$	138		$	—		$	(262	)
Capital Expenditures	$	52		$	1,650		$	274		$	—		$	1,976
Total Assets	$	52,326		$	12,613		$	4,447		$	(8,468	)	$	60,918

	For the Six Months Ended June 30, 2012
	HKN			BWI			HBI		Eliminations			Consolidated
Revenues	$	—		$	—		$	—	$	—		$	—
Selling, general and administrative expenses		(1,549	)		(751	)		—		—			(2,300	)
Depreciation, depletion and amortization		(19	)		(108	)		—		—			(127	)
Interest and other expenses		—			(121	)		—		121			—
Interest and other income - related parties		961			—			—		(121	)		840
Interest and other income		21			—			—		—			21
Income tax benefit		78			—			—		—			78
Segment loss from continuing operations	$	(508	)	$	(980	)	$	—	$	—		$	(1,488	)
Capital Expenditures	$	5		$	500		$	—	$	—		$	505
Total Assets	$	67,805		$	9,457		$	—	$	(9,669	)	$	67,593