Note 10 - Segment Reporting

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 10 – Segment Reporting

Enservco’s reportable operating segments are Production Services and Completion and Other Services. These segments have been selected based on management’s resource allocation and performance assessment in making decisions regarding the Company. The following is a description of the segments.

Production Services

This segment utilizes a fleet of hot oiling trucks and acidizing units to provide maintenance services to the domestic oil and gas industry. These services include hot oiling services and acidizing services. Hot oiling is utilized by customers to remove paraffins from wellbores, pipes and vessels. Acidizing services are utilized by customers to clean reservoir surfaces and increase flow rates.

Completion and Other Services

This segment utilizes a fleet of frac water heating units to provide frac water heating services and related support services to the domestic oil and gas industry. These services also include other services for other industries, which consist primarily of hauling and transport of materials and heat treating for customers. Frac water heating is utilized by customers during the completion of oil and gas wells.

Unallocated

This segment includes general overhead expenses and assets associated with managing all reportable operating segments which have not been allocated to a specific segment.

The following tables set forth certain financial information with respect to Enservco’s reportable segments (in thousands):

	Production Services			Completion and Other Services			Unallocated		Total
For the Three Months Ended September 30, 2022:
Revenues	$	2,788		$	321		$	-	$	3,109
Cost of revenues		2,599			890			-		3,489
Segment profit (loss)	$	189		$	(569	)	$	-	$	(380	)
Depreciation and amortization	$	546		$	432		$	91	$	1,069
Capital expenditures	$	34		$	27		$	-	$	61
Identifiable assets(1)	$	9,017		$	7,131		$	206	$	16,354
For the Three Months Ended September 30, 2021:
Revenues	$	2,483		$	544		$	-	$	3,027
Cost of revenues		2,489			1,189			-		3,678
Segment loss	$	(6	)	$	(645	)	$	-	$	(651	)
Depreciation and amortization	$	639		$	562		$	101	$	1,302
Capital expenditures	$	77		$	68		$	8	$	153
Identifiable assets (1)	$	11,906		$	10,460		$	614	$	22,980

	Production Services			Completion and Other Services			Unallocated		Total
For the Nine Months Ended September 30, 2022:
Revenues	$	8,645		$	6,497		$	-	$	15,142
Cost of revenues		7,976			6,724			-		14,700
Segment profit (loss)	$	669		$	(227	)	$	-	$	442
Depreciation and amortization	$	1,593		$	1,440		$	284	$	3,317
Capital expenditures	$	116		$	104		$	-	$	220
Identifiable assets(1)	$	9,017		$	7,131		$	206	$	16,354
For the Nine Months Ended September 30, 2021:
Revenues	$	6,556		$	4,701		$	-	$	11,257
Cost of revenues		6,802			5,680			-		12,482
Segment loss	$	(246	)	$	(979	)	$	-	$	(1,225	)
Depreciation and amortization	$	1,739		$	1,935		$	301	$	3,975
Capital expenditures	$	166		$	174		$	8	$	348
Identifiable assets(1)	$	11,906		$	10,460		$	614	$	22,980

Note to tables:

(1) Identifiable assets is calculated by summing the balances of accounts receivable, net; inventories; property and equipment, net; net right-of-use lease assets; assets held for sale; and other assets.

The following table reconciles the segment losses reported above to the loss from operations reported in the condensed consolidated statements of operations (in thousands): 

	For the Three Months Ended
	September 30,
	2022			2021
Segment loss	$	(380	)	$	(651	)
Sales, general, and administrative expenses		(1,094	)		(907	)
Severance and transition costs		(2	)		-
Loss on disposal of equipment		(93	)		-
Depreciation and amortization		(1,069	)		(1,302	)
Loss from operations	$	(2,638	)	$	(2,860	)

	For the Nine Months Ended
	September 30,
	2022			2021
Segment profit (loss)	$	442		$	(1,225	)
Sales, general, and administrative expenses		(3,763	)		(2,897	)
Severance and transition costs		(301	)		(7	)
Loss on disposal of equipment		(258	)		(70	)
Depreciation and amortization		(3,317	)		(3,975	)
Loss from operations	$	(7,197	)	$	(8,174	)

Geographic Areas

The Company only conducts business in the USA, in what it believes are three geographically diverse regions. The following tables set forth revenues from operations for the Company’s three geographic regions (in thousands):

	For the Three Months Ended
	September 30,
	2022		2021
BY GEOGRAPHY
Production Services:
Rocky Mountain Region(1)	$	325	$	676
Central USA Region(2)		2,249		1,651
Eastern USA Region(3)		214		156
Total Production Services		2,788		2,483
Completion and Other Services:
Rocky Mountain Region (1)		52		435
Central USA Region(2)		233		38
Eastern USA Region(3)		36		71
Total Completion and Other Services		321		544
Total Revenues	$	3,109	$	3,027

	For the Nine Months Ended
	September 30,
	2022		2021
BY GEOGRAPHY
Production Services:
Rocky Mountain Region(1)	$	1,494	$	1,708
Central USA Region(2)		6,587		4,304
Eastern USA Region(3)		564		544
Total Production Services		8,645		6,556
Completion and Other Services:
Rocky Mountain Region(1)		4,932		3,142
Central USA Region(2)		481		38
Eastern USA Region(3)		1,084		1,521
Total Completion and Other Services		6,497		4,701
Total Revenues	$	15,142	$	11,257

Notes to tables:

(1) Includes the DJ Basin/Niobrara field (northeastern Colorado and southeastern Wyoming), the San Juan Basin (southeastern Colorado and northeastern New Mexico), the Powder River and Green River Basins (northeastern and southwestern Wyoming), the Bakken area (western North Dakota and eastern Montana).

(2) Includes the Eagle Ford Shale in Southern Texas and the East Texas Oil Field beginning during the second quarter of 2021.

(3) Consists of the southern region of the Marcellus Shale formation (southwestern Pennsylvania and northern West Virginia) and the Utica Shale formation (eastern Ohio).