Note 13 - Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting Disclosure [Text Block]

(13)           SEGMENT INFORMATION

Our reportable segments, including BWI and Gerrity Oil, are aligned around our separate energy related assets and our need to manage those businesses 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 financial statements. Intersegment interest income and intersegment expenses between our parent company and BWI or Gerrity Oil 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 Gerrity Oil segment is our 50% joint venture which holds non-operated working interests in properties strategically located in the Bakken and Niobrara shale oil plays.  We have accounted for Gerrity Oil under proportionate consolidation rules pursuant to which our portion of the assets, liabilities and results of operations of Gerrity Oil are included in our consolidated financial statements (see Note 3 – “Gerrity Oil Joint Venture”).

Our financial information, expressed in thousands, for each of our operating segments for the years ended December 31, 2012 and 2011 is as follows:

	For the Year Ended December 31, 2012
	HKN			BWI			Gerrity Oil			Eliminations			Consolidated
Oil and gas revenues	$	-		$	-		$	394		$	-		$	394
Oil and gas expenses		-			-			(49	)		-			(49	)
Selling, general and administrative expenses		(2,989	)		(1,372	)		(92	)		-			(4,453	)
Depreciation, depletion and amortization		(41	)		(216	)		(212	)		-			(469	)
Interest and other expenses		-			(303	)		-			303			-
Interest and other income - related party		2,220			-			-			(303	)		1,917
Interest and other income		39			(2	)		-			-			37
Income tax benefit		80			-			-			-			80
Segment income (loss) from continuing operations	$	(691	)	$	(1,893	)	$	41		$	-		$	(2,543	)
Capital Expenditures	$	70		$	1,098		$	1,879		$	-		$	3,047
Total Assets	$	65,183		$	4,670		$	4,124		$	-		$	73,977

	For the Year Ended December 31, 2011
	HKN			BWI			Gerrity Oil		Eliminations			Consolidated
Revenues	$	-		$	-		$	-	$	-		$	-
Selling, general and administrative expenses		(3,372	)		(959	)		-		-			(4,331	)
Depreciation, depletion and amortization		(58	)		(228	)		-		-			(286	)
Interest and other expenses		-			(157	)		-		157			-
Interest and other income - related party		685			-			-		(157	)		528
Interest and other income		50			-			-		-			50
Income tax benefit		573			-			-		-			573
Segment loss from continuing operations	$	(2,122	)	$	(1,344	)	$	-	$	-		$	(3,466	)
Capital Expenditures	$	20		$	576		$	-	$	-		$	596
Total Assets	$	69,382		$	8,816		$	-	$	-		$	78,198