Segment Information

9 Months Ended

Sep. 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 material 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 disposal costs of these 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 nine months ended September 30, 2013 and 2012 is as follows:

	For the Three Months Ended September 30, 2013
	HKN			BWI			HBI			Eliminations			Consolidated
Oil and gas revenues	$	—		$	—		$	309		$	—		$	309
Oil and gas expenses		—			—			(60	)		—			(60	)
Selling, general and administrative expenses		(576	)		(166	)		(85	)		—			(827	)
Depreciation, depletion and amortization		(11	)		(54	)		(146	)		—			(211	)
Interest and other expenses		(27	)		(174	)		(6	)		172			(35	)
Interest and other income - related parties		700			—			—			(172	)		528
Interest and other income		3			1			—			—			4
Segment income (loss) from continuing operations	$	89		$	(393	)	$	12		$	—		$	(292	)
Capital Expenditures	$	30		$	1,527		$	197		$	—		$	1,754
Total Assets	$	58,186		$	16,273		$	4,642		$	(10,787	)	$	68,314

	For the Three Months Ended September 30, 2012
	HKN			BWI			HBI			Eliminations			Consolidated
Oil and gas revenues	$	—		$	—		$	185		$	—		$	185
Oil and gas expenses		—			—			(21	)		—			(21	)
Selling, general and administrative expenses		(550	)		(266	)		(41	)		—			(857	)
Depreciation, depletion and amortization		(10	)		(54	)		(53	)		—			(117	)
Interest and other expenses		—			(83	)		—			83			—
Interest and other income - related parties		579			—			—			(83	)		496
Interest and other income		12			—			—			—			12
Income tax benefit		2			—			—			—			2
Segment income (loss) from continuing operations	$	33		$	(403	)	$	70		$	—		$	(300	)
Capital Expenditures	$	10		$	263		$	331		$	—		$	604
Total Assets	$	66,215		$	9,689		$	4,115		$	(14,327	)	$	65,692

	For the Nine Months Ended September 30, 2013
	HKN			BWI			HBI			Eliminations			Consolidated
Oil and gas revenues	$	—		$	—		$	823		$	—		$	823
Oil and gas expenses		—			—			(126	)		—			(126	)
Selling, general and administrative expenses		(1,804	)		(490	)		(181	)		—			(2,475	)
Depreciation, depletion and amortization		(33	)		(164	)		(358	)		—			(555	)
Interest and other expenses		(27	)		(436	)		(8	)		436			(35	)
Interest and other income - related parties		2,209			—			—			(436	)		1,773
Interest and other income		41			—			—			—			41
Segment income (loss) from continuing operations	$	386		$	(1,090	)	$	150		$	—		$	(554	)
Capital Expenditures	$	82		$	3,177		$	471		$	—		$	3,730
Total Assets	$	58,186		$	16,273		$	4,642		$	(10,787	)	$	68,314

	For the Nine Months Ended September 30, 2012
	HKN			BWI			HBI			Eliminations			Consolidated
Oil and gas revenues	$	—		$	—		$	185		$	—		$	185
Oil and gas expenses		—			—			(21	)		—			(21	)
Selling, general and administrative expenses		(2,099	)		(1,017	)		(41	)		—			(3,157	)
Depreciation, depletion and amortization		(29	)		(162	)		(53	)		—			(244	)
Interest and other expenses		—			(204	)		—			204			—
Interest and other income - related parties		1,540			—			—			(204	)		1,336
Interest and other income		33			—			—			—			33
Income tax benefit		80			—			—			—			80
Segment income (loss) from continuing operations	$	(475	)	$	(1,383	)	$	70		$	—		$	(1,788	)
Capital Expenditures	$	16		$	762		$	331		$	—		$	1,109
Total Assets	$	66,215		$	9,689		$	4,115		$	(14,327	)	$	65,692