Related Party Transactions

6 Months Ended

Jun. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions

Note 9 — Related Party Transactions

The Company is party to certain agreements and transactions with Mr. Osborne, or companies owned or controlled by Mr. Osborne.

Notes Payable

The Company had two notes payable to Mr. Osborne. The first note was payable on demand and bore interest at a rate equal to the prime rate as published by Key Bank. On December 1, 2010, the Company repaid the first note in full, including all interest accrued to date. The second note had a maturity date of January 3, 2014 and bore interest at 6.0% annually. On May 3, 2011, the Company repaid the second note in full, including all interest accrued to date, using the SunLife proceeds. As of June 30, 2011 and December 31, 2010, the second note had a balance of $0 and $52,578, which included $0 and $3,217 of accrued interest, respectively. Interest expense incurred related to both loans was $132 and $529, respectively, for the three and six months ended June 30, 2011. Interest expense incurred related to both loans was $30,104 and $77,653, respectively, for the three and six months ended June 30, 2010.

Note Receivable

The Company has a note receivable from John D. Oil and Gas Marketing, a company controlled by Mr. Osborne, with a maturity date of December 31, 2016 and an annual interest rate of 7.0% relating to funds loaned to John D. Oil and Gas Marketing to finance the acquisition of a gas pipeline. The balance due from John D. Oil and Gas Marketing was $50,531 and $55,230 (of which, $9,905 and $9,565 is due within one year) as of June 30, 2011 and December 31, 2010, respectively. The Company has a corresponding agreement to lease the pipeline from John D. Oil and Gas Marketing through December 31, 2016. Lease expense resulting from this agreement was $3,300 and $6,600 for the three and six months ended June 30, 2011, respectively, which is included in the Natural Gas Purchased column below. Lease expense resulting from this agreement was $3,300 and $7,827 for the three and six months ended June 30, 2010, respectively, which is included in the Natural Gas Purchased column below. The balance due at June 30, 2011 and December 31, 2010 was $2,200 and $0, respectively, to John D. Oil and Gas Marketing related to these lease payments.

Accounts Receivable and Accounts Payable

The table below details amounts due from and due to related parties, including companies owned or controlled by Mr. Osborne, at June 30, 2011 and December 30, 2010, respectively:

	Accounts Receivable				Accounts Payable
	June 30, 2011		December 31, 2010		June 30, 2011		December 31, 2010
John D. Oil and Gas Marketing	$	3,282	$	42,938	$	75,270	$	247,430
Cobra Pipeline		929		22,071		250		84,597
Orwell Trumbell Pipeline		126,540		120,975		—		77,325
Great Plains Exploration		125,080		148,252		—		—
Big Oats Pipeline Supply		1,543		863		99,467		4,723
Kykuit Resources		97,264		97,154		—		—
Sleepy Hollow		112,163		100,640		—		—
Other		18,331		26,491		13,000		3,468
Total	$	485,132	$	559,384	$	187,987	$	417,543

The table below details transactions with related parties, including companies owned or controlled by Mr. Osborne, for the three months ended June 30, 2011:

	Three Months Ended June 30, 2011
			Pipeline and		Rent, Supplies				Management
	Natural Gas		Construction		Consulting, and		Natural Gas		and Other
	Purchased		Purchases		and Other Purchases		Sold		Sales
John D. Oil and Gas Marketing	$	954,623	$	—	$	1,646	$	—	$	3,282
Cobra Pipeline		64,176		68,767		452		—		929
Orwell Trumbell Pipeline		55,656		—		638		386		850
Great Plains Exploration		554,728		111,750		—		1,242		3,854
Big Oats Pipeline Supply		—		89,886		270,140		539		1,000
Kykuit Resources		—		—		—		—		110
Sleepy Hollow		—		—		—		—		5,318
Other		—		—		42,257		9,073		1,308
TOTAL	$	1,629,183	$	270,403	$	315,133	$	11,240	$	16,651

The table below details transactions with related parties, including companies owned or controlled by Mr. Osborne, for the three months ended June 30, 2010:

	Three Months Ended June 30, 2010
			Pipeline and		Rent, Supplies				Management
	Natural Gas		Construction		Consulting, and		Natural Gas		and Other
	Purchased		Purchases		and Other Purchases		Sold		Sales
John D. Oil and Gas Marketing	$	1,033,792	$	—	$	—	$	—	$	—
Cobra Pipeline		82,601		—		50,863		—		7,819
Orwell Trumbell Pipeline		104,388		—		430		—		—
Great Plains Exploration		3,783		—		—		945,550		1,888
Big Oats Pipeline Supply		—		41,382		105,620		273		1,505
Kykuit Resources		—		—		—		—		4,813
Sleepy Hollow		—		—		—		—		17,937
Other		—		8,400		43,849		10,135		16,509
TOTAL	$	1,224,564	$	49,782	$	200,762	$	955,958	$	50,471

The table below details transactions with related parties, including companies owned or controlled by Mr. Osborne, for the six months ended June 30, 2011:

	Six Months Ended June 30, 2011
			Pipeline and		Rent, Supplies				Management
	Natural Gas		Construction		Consulting, and		Natural Gas		and Other
	Purchased		Purchases		and Other Purchases		Sold		Sales
John D. Oil and Gas Marketing	$	2,426,724	$	—	$	1,772	$	—	$	6,564
Cobra Pipeline		243,779		68,767		452		—		1,056
Orwell Trumbell Pipeline		276,174		—		49,718		1,757		5,565
Great Plains Exploration		573,871		197,430		150		2,484		12,836
Big Oats Pipeline Supply		—		256,668		409,012		2,712		1,000
Kykuit Resources		—		—		39,600		—		110
Sleepy Hollow		—		—		—		—		11,523
Other		—		—		97,873		50,313		3,057
TOTAL	$	3,520,548	$	522,865	$	598,577	$	57,266	$	41,711

The table below details transactions with related parties, including companies owned or controlled by Mr. Osborne, for the six months ended June 30, 2010:

	Six Months Ended June 30, 2010
			Pipeline and		Rent, Supplies				Management
	Natural Gas		Construction		Consulting, and		Natural Gas		and Other
	Purchased		Purchases		and Other Purchases		Sold		Sales
John D. Oil and Gas Marketing	$	2,404,756	$	—	$	127	$	49,824	$	—
Cobra Pipeline		237,451		83,010		107,447		—		21,044
Orwell Trumbell Pipeline		303,527		—		430		—		—
Great Plains Exploration		20,649				—		1,953,052		2,345
Big Oats Pipeline Supply		—		87,224		221,423		2,267		—
Kykuit Resources		—		—		—		—		10,559
Sleepy Hollow		—		—		—		—		54,506
Other		—		42,600		246,348		58,367		120,274
TOTAL	$	2,966,383	$	212,834	$	575,775	$	2,063,510	$	208,728

The Company also accrued a liability of $13,894 and $413,399, respectively, due to companies controlled by Mr. Osborne for natural gas used through June 30, 2011 and December 31, 2010 that is not yet invoiced. The related expense is included in the gas purchased line item in the accompanying statements of income. These amounts will be trued up to the actual invoices when received in future periods.