Note 8 - SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2011

Segment Reporting Disclosure [Text Block]

(8)           SEGMENT INFORMATION

We engage in oil and gas development and production activities in the onshore and offshore Gulf Coast regions of Louisiana. We operate primarily through traditional ownership of mineral interests in the states in which we operate.

We have a separate operating segment for our investment in BWI. BWI holds patents for OHSOL technology and related equipment which can be used to purify oilfield emulsions by breaking and separating the emulsions into oil, water and solids and to reduce the environmental impact for disposition of residual fuels and waste materials. BWI is also currently planning the design and construction of a processing plant on the Alaskan North Slope. Please see Note 2 –“Investment in BriteWater International, LLC” for further discussion.

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 us and BWI have been eliminated in consolidation. There were no intersegment sales or transfers for the periods presented.

Our financial information, expressed in thousands, for each of our operating segments for the three and nine months ended September 30, 2011 and 2010 is as follows:

	For the Three Months Ended September 30, 2011
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	3,239		$	-		$	-		$	3,239
Oil and gas processing and handling income		405			-			-			405
Oil and gas operating expenses		(1,860	)		-			-			(1,860	)
General and administrative expenses		(710	)		(152	)		-			(862	)
Depreciation, depletion, amortization and accretion		(900	)		(52	)		-			(952	)
Interest and other expenses		-			(38	)		38			-
Interest and other income		213			-			(38	)		175
Segment income (loss) from operations	$	387		$	(242	)	$	-		$	145
Capital Expenditures	$	196		$	241		$	-		$	437
Total Assets	$	86,666		$	8,595		$	(7,429	)	$	87,832

	For the Three Months Ended September 30, 2010
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	2,861		$	-		$	-		$	2,861
Oil and gas processing and handling income		316			-			-			316
Oil and gas operating expenses		(2,029	)		-			-			(2,029	)
General and administrative expenses		(610	)		(289	)		-			(899	)
Depreciation, depletion, amortization and accretion		(806	)		-			-			(806	)
Interest and other expenses		(22	)		(32	)		32			(22	)
Interest and other income		161			-			(32	)		129
Segment loss from operations	$	(129	)	$	(321	)	$	-		$	(450	)
Capital Expenditures	$	651		$	21		$	-		$	672
Total Assets	$	64,280		$	8,945		$	(4,429	)	$	68,796

	For the Nine Months Ended September 30, 2011
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	8,256		$	-		$	-		$	8,256
Oil and gas processing and handling income		1,097			-			-			1,097
Oil and gas operating expenses		(5,739	)		-			-			(5,739	)
General and administrative expenses		(2,179	)		(747	)		-			(2,926	)
Depreciation, depletion, amortization and accretion		(2,022	)		(169	)		-			(2,191	)
Interest and other expenses		(24	)		(114	)		114			(24	)
Interest and other income		597			-			(114	)		483
Segment loss from operations	$	(14	)	$	(1,030	)	$	-		$	(1,044	)
Capital Expenditures	$	819		$	241		$	-		$	1,060
Total Assets	$	86,666		$	8,595		$	(7,429	)	$	87,832

	For the Nine Months Ended September 30, 2010
	HKN			BWI			Eliminations			Consolidated
Oil and gas revenues	$	8,414		$	-		$	-		$	8,414
Oil and gas processing and handling income		923			-			-			923
Oil and gas operating expenses		(5,313	)		-			-			(5,313	)
General and administrative expenses		(1,764	)		(607	)		-			(2,371	)
Depreciation, depletion, amortization and accretion		(2,300	)		-			-			(2,300	)
Interest and other expenses		(64	)		(78	)		78			(64	)
Interest and other income		368			-			(78	)		290
Equity in losses of Spitfire		(20	)		-			-			(20	)
Gain on sale of investment		1,887			-			-			1,887
Segment income (loss) from operations	$	2,131		$	(685	)	$	-		$	1,446
Capital Expenditures	$	1,967		$	101		$	-		$	2,068
Total Assets	$	64,280		$	8,945		$	(4,429	)	$	68,796