Related Party Transactions

9 Months Ended

Sep. 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 September 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 $0 and $529, respectively, for the three and nine months ended September 30, 2011. Interest expense incurred related to both loans was $25,782 and $91,527, respectively, for the three and nine months ended September 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 $48,119 and $55,230 (of which, $10,079 and $9,565 is due within one year) as of September 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 $9,900 for the three and nine months ended September 30, 2011, respectively, which is included in the Natural Gas Purchased column below. Lease expense resulting from this agreement was $3,300 and $11,127 for the three and nine months ended September 30, 2010, respectively, which is included in the Natural Gas Purchased column below. There was no balance due at September 30, 2011 or December 31, 2010 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 September 30, 2011 and December 31, 2010, respectively:

	Accounts Receivable				Accounts Payable
	September 30, 2011		December 31, 2010		September 30, 2011			December 31, 2010
John D. Oil and Gas Marketing	$	2,188	$	42,938	$	38,623		$	247,430
Cobra Pipeline		5,254		22,071		—			84,597
Orwell Trumbell Pipeline		127,597		120,975		—			77,325
Great Plains Exploration		131,688		148,252		(10	)		—
Big Oats Pipeline Supply		23		863		28,297			4,723
Kykuit Resources		97,264		97,154		—			—
Sleepy Hollow		123,237		100,640		—			—
Other		14,501		26,491		—			3,468
Total	$	501,752	$	559,384	$	66,910		$	417,543

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

	Three Months Ended September 30, 2011
	Natural Gas Purchases		Pipeline and Construction Purchases		Rent, Supplies, Consulting,  and Other Purchases		Natural Gas Sales		Management and Other Sales
John D. Oil and Gas Marketing	$	763,371	$	45,450	$	5,340	$	—	$	3,282
Cobra Pipeline		17,873		1,282		319		—		6,090
Orwell Trumbell Pipeline		26,270		10,677		49,019		148		1,914
Great Plains Exploration		380,260		229,916		455		96		7,678
Big Oats Pipeline Supply		—		249,663		70,217		29		—
Kykuit Resources		—		—		—		—		—
Sleepy Hollow		—		—		—		—		11,074
Other		—		—		48,170		2,066		384
Total	$	1,187,774	$	536,988	$	173,520	$	2,339	$	30,422

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

	Three Months Ended September 30, 2010
	Natural Gas Purchases		Pipeline and Construction Purchases		Rent, Supplies, Consulting, and Other Purchases		Natural Gas Sales		Management and Other Sales
John D. Oil and Gas Marketing	$	692,198	$	—	$	—	$	—	$	—
Cobra Pipeline		4,147		—		—		—		—
Orwell Trumbell Pipeline		23,653		—		—		167		—
Great Plains Exploration		1,726		—		—		—		2,058
Big Oats Pipeline Supply		—		417,613		42,337		28		1,183
Kykuit Resources		—		—		—		—		—
Sleepy Hollow		—		—		—		—		15,128
Other		—		—		48,678		3,404		11,826
Total	$	721,724	$	417,613	$	91,015	$	3,599	$	30,195

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

	Nine Months Ended September 30, 2011
	Natural Gas Purchases		Pipeline and Construction Purchases		Rent, Supplies, Consulting,  and Other Purchases		Natural Gas Sales		Management and Other Sales
John D. Oil and Gas Marketing	$	3,190,095	$	45,450	$	7,112	$	—	$	9,846
Cobra Pipeline		261,652		70,048		771		—		7,146
Orwell Trumbell Pipeline		302,443		10,677		98,737		1,905		7,479
Great Plains Exploration		954,131		427,346		605		2,580		20,514
Big Oats Pipeline Supply		—		506,330		479,229		2,740		1,000
Kykuit Resources		—		—		39,600		—		110
Sleepy Hollow		—		—		—		—		22,597
Other		—		—		146,043		52,379		3,441
Total	$	4,708,321	$	1,059,851	$	772,097	$	59,604	$	72,133

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

	Nine Months Ended September 30, 2010
	Natural Gas Purchases		Pipeline and Construction Purchases		Rent, Supplies, Consulting,  and Other Purchases		Natural Gas Sales		Management and Other Sales
John D. Oil and Gas Marketing	$	3,096,955	$	—	$	127	$	49,824	$	—
Cobra Pipeline		241,598		83,010		107,447		—		21,044
Orwell Trumbell Pipeline		327,180		—		430		1,816		171
Great Plains Exploration		22,375		—		—		1,953,052		4,403
Big Oats Pipeline Supply		—		504,837		263,759		2,295		4,010
Kykuit Resources		—		—		—		—		10,559
Sleepy Hollow		—		—		—		—		69,633
Other		—		42,600		295,027		60,122		126,876
Total	$	3,688,108	$	630,447	$	666,790	$	2,067,109	$	236,696

The Company also accrued a liability of $23,091 and $413,399, respectively, due to companies controlled by Mr. Osborne for natural gas used through September 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.