Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

(9)          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 condensed 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 June 30, 2013, 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. After this decision, the oil and gas operations of the newly formed HBI entity were absorbed by HKN personnel throughout 2013 and no additional resources were allocated to the management of those operations. Therefore, we did 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 June 30, 2013, that period has been restated to be included with the HKN parent company activity in order to be consistent with the three and six months ended June 30, 2014.

Our financial information, expressed in thousands, for each of our operating segments for the three and six months ended June 30, 2014 and 2013 is as follows:

	Three Months Ended June 30, 2014
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	317		$	—		$	—		$	317
Oil and gas expenses		(76	)		—			—			(76	)
Selling, general and administrative expenses		(623	)		(204	)		—			(827	)
Depreciation, depletion and amortization		(135	)		(59	)		—			(194	)
Interest and other expenses		—			(108	)		45			(63	)
Interest and other income - related parties		417			—			(45	)		372
Interest and other income		50			—			—			50
Segment loss from continuing operations	$	(50	)	$	(371	)	$	—		$	(421	)
Capital Expenditures	$	(42	)	$	2,851		$	—		$	2,809
Total Assets	$	47,036		$	22,903		$	(8,038	)	$	61,901

	Three Months Ended June 30, 2013
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	266		$	—		$	—		$	266
Oil and gas expenses		(36	)		—			—			(36	)
Selling, general and administrative expenses		(570	)		(185	)		—			(755	)
Depreciation, depletion and amortization		(78	)		(56	)		—			(134	)
Interest and other expenses		(2	)		(141	)		143			—
Interest and other income - related parties		729			—			(143	)		586
Interest and other income		4			—			—			4
Segment income (loss) from continuing operations	$	313		$	(382	)	$	—		$	(69	)
Capital Expenditures	$	105		$	837		$	—		$	942
Total Assets	$	56,773		$	12,613		$	(8,468	)	$	60,918

	Six Months Ended June 30, 2014
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	455		$	—		$	—		$	455
Oil and gas expenses		(112	)		—			—			(112	)
Selling, general and administrative expenses		(1,560	)		(429	)		—			(1,989	)
Depreciation, depletion and amortization		(212	)		(115	)		—			(327	)
Interest and other expenses		—			(176	)		113			(63	)
Interest and other income - related parties		909			—			(113	)		796
Interest and other income		92			—			—			92
Segment loss from continuing operations	$	(428	)	$	(720	)	$	—		$	(1,148	)
Capital Expenditures	$	3		$	5,099		$	—		$	5,102
Total Assets	$	47,036		$	22,903		$	(8,038	)	$	61,901

	Six Months Ended June 30, 2013
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	514		$	—		$	—		$	514
Oil and gas expenses		(66	)		—			—			(66	)
Selling, general and administrative expenses		(1,324	)		(324	)		—			(1,648	)
Depreciation, depletion and amortization		(234	)		(110	)		—			(344	)
Interest and other expenses		(2	)		(262	)		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	$	435		$	(697	)	$	—		$	(262	)
Capital Expenditures	$	326		$	1,650		$	—		$	1,976
Total Assets	$	56,773		$	12,613		$	(8,468	)	$	60,918