Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Information

(13)         SEGMENT INFORMATION

We currently have one reportable segment consisting of our investment in BWI which is managed separately. Our BWI operating 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.

We have included activity of our parent company, HKN, in our disclosure to reconcile to our consolidated operating loss and total assets. HKN includes our investment in Global, our non-operated working interests in properties held by HBI, performance of 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 financial statements. Intersegment interest income and intersegment expenses between our parent company and BWI have been eliminated in consolidation. There were no material intersegment sales or transfers for the periods presented.

At December 31, 2012 we reported our investment in Gerrity Oil as a reportable segment. In January 2013, we made the decision to dissolve the joint venture and obtain a direct ownership interest in our 50% portion of the Gerrity Oil assets and properties under a newly formed corporation, HBI. The oil and gas operations of the newly formed HBI entity were absorbed by HKN personnel and no additional resources were allocated to the management of those operations. Therefore, we do not consider our investment in HBI to be a separate operating segment as of December 31, 2013. Since Gerrity Oil was previously reported as a separate reportable segment at December 31, 2012, that period has been restated to be included with the HKN parent company activity consistent with the year ended December 31, 2013.

Our financial information, expressed in thousands, for each of our operating segments for the years ended December 31, 2013 and 2012 is as follows:

	For the Year Ended December 31, 2013
		HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	1,093		$	—		$	—		$	1,093
Oil and gas expenses		(209	)		—			—			(209	)
Selling, general and administrative expenses		(2,767	)		(753	)		—			(3,520	)
Depreciation, depletion and amortization		(523	)		(220	)		—			(743	)
Interest and other expenses		(36	)		(651	)		651			(36	)
Interest and other income - related parties		2,901			—			(651	)		2,250
Interest and other income		163			—			—			163
Segment income (loss) from continuing operations	$	622		$	(1,624	)	$	—		$	(1,002	)
Capital Expenditures	$	694		$	5,924		$	—		$	6,618
Total Assets	$	62,149		$	17,014		$	(12,203	)	$	66,960

	For the Year Ended December 31, 2012
		HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	394		$	—		$	—		$	394
Oil and gas expenses		(49	)		—			—			(49	)
Selling, general and administrative expenses		(3,081	)		(1,372	)		—			(4,453	)
Depreciation, depletion and amortization		(254	)		(215	)		—			(469	)
Interest and other expenses		—			(305	)		303			(2	)
Interest and other income - related parties		2,220			—			(303	)		1,917
Interest and other income		39			—			—			39
Income tax benefit		80			—			—			80
Segment income (loss) from continuing operations	$	(651	)	$	(1,892	)	$	—		$	(2,543	)
Capital Expenditures	$	1,949		$	1,098		$	—		$	3,047
Total Assets	$	78,911		$	4,670		$	(9,604	)	$	73,977