Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 10 – Related Party Transactions

Acquisition of John D. Oil and Gas Marketing

On June 1, 2013, the Company and its wholly-owned Ohio subsidiary, GNR, completed the acquisition of substantially all of the assets and certain liabilities of JDOG Marketing, an Ohio company engaged in the marketing of natural gas. The Osborne Trust, of which Mr. Osborne is the sole trustee, is the majority owner of JDOG Marketing and Mr. Osborne is also the Chairman of the Board and Chief Executive Officer of Gas Natural. The acquisition of JDOG Marketing was approved by the independent members of the Company’s board of directors. See Note 2 – Acquisitions for details regarding this transaction.

Acquisition of 8500 Station Street

On March 5, 2013, the Company purchased the Matchworks building in Mentor, Ohio from McKay Real Estate Corporation, Matchworks, LLC, and Nathan Properties, LLC (collectively, the “Sellers”) by and through Mark E. Dottore as Receiver in the United States District Court. The Sellers are entities owned or controlled by Richard M. Osborne, the Company’s chairman and chief executive officer. The acquisition of the Matchworks Building was approved by the independent members of the Company’s board of directors. See Note 2 - Acquisitions for details regarding this transaction.

Notes Receivable

The Company had a note receivable due from John D. Marketing, a company controlled by Mr. Osborne. In connection to the acquisition of JDOG Marketing, the Company assumed the corresponding liability of this note, effectively settling the note at the close of the acquisition. The note had a maturity date of December 31, 2016 and an annual interest rate of 7.0% relating to funds loaned to John D. Marketing to finance the acquisition of a gas pipeline. The balance due from John D. Marketing was $0 and $35,409 (of which, $0 and $10,998 was due within one year) as of June 30, 2013 and December 31, 2012, respectively. The Company had a corresponding agreement to lease the pipeline from John D. Marketing through December 31, 2016. This pipeline and corresponding lease were also acquired by the Company in the acquisition of JDOG Marketing. Lease expense resulting from this agreement was $2,200 and $5,500 for the three and six months ended June 30, 2013, respectively, and $3,300 and $6,600 for the three and six months ended June 30, 2012, respectively. These amounts are included in the Natural Gas Purchased column below. There was no balance due at June 30, 2013 or December 31, 2012 to John D. Marketing related to these lease payments. See Note 2 – Acquisitions for details regarding the JDOG Marketing acquisition.

The Company also has a note receivable from one of its employees with an annual interest rate of 4%. Monthly payments are based on a 30 year amortization schedule with a balloon payment no later than December 1, 2017. The principal balance due was $99,129 and $99,856 (of which $1,785 and $1,617 is due within one year) as of June 30, 2013 and December 31, 2012, respectively.

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, 2013 and December 31, 2012. These amounts are presented on the balance sheet as Related parties under Accounts receivable and Accounts payable.

	Accounts Receivable				Accounts Payable
	June 30, 2013		December 31, 2012		June 30, 2013		December 31, 2012
John D. Oil and Gas Marketing	$	—	$	3,282	$	81,542	$	40,518
Cobra Pipeline		48,324		21,698		21,788		—
Orwell Trumbell Pipeline		10,583		90,385		5,582		—
Great Plains Exploration		9,715		142,740		31,166		9
Big Oats Oil Field Supply		113		769		416,264		11,270
Kykuit Resources		—		98,037		—		—
John D. Oil and Gas Company		—		—		128,021
Sleepy Hollow Oil & Gas		15,128		143,697		—		—
Other		26,615		21,949		23,995		—
Total	$	110,478	$	522,557	$	708,358	$	51,797

The tables below detail transactions with related parties, including companies owned or controlled by Mr. Osborne, for the three months ended June 30, 2013 and 2012.

	Three Months Ended June 30. 2013
	Natural Gas Purchases		Pipeline Construction Purchases		Rent, Supplies, Consulting and Other Purchases		Natural Gas Sales		Rental Income and Other Sales
John D. Oil and Gas Marketing	$	376,445	$	—	$	3,186	$	2,188	$	—
Cobra Pipeline		176,102		—		—		26,626		—
Orwell Trumbell Pipeline		105,505		—		—		221		—
Great Plains Exploration		187,289		854		—		2,133		25,587
Big Oats Oil Field Supply		—		1,140,133		138,459		806		125
John D. Oil and Gas Company		284,184		5,976		—		143		14,590
Sleepy Hollow Oil & Gas		—		—		—		—		438
Kykuit Resources		—		—		—		—		1,050
OsAir		72,691		—		62,223		623		31,468
Other		24,288		854		2,322		2,972		29,743
Total	$	1,226,504	$	1,147,817	$	206,190	$	35,712	$	103,001

	Three Months Ended June 30. 2012
	Natural Gas Purchases		Pipeline Construction Purchases		Rent, Supplies, Consulting and Other Purchases		Natural Gas Sales		Management and Other Sales
John D. Oil and Gas Marketing	$	402,461	$	—	$	2,132	$	—	$	3,282
Cobra Pipeline		81,159		—		491		—		19,454
Orwell Trumbell Pipeline		86,191		—		19,429		219		2,747
Great Plains Exploration		57,112		—		—		835		2,117
Big Oats Oil Field Supply		—		307,980		34,631		178		6,765
Sleepy Hollow Oil & Gas		—		—		—		—		1,326
Other		226,567		—		40,581		4,339		—
Total	$	853,490	$	307,980	$	97,264	$	5,571	$	35,691

The tables below detail transactions with related parties, including companies owned or controlled by Mr. Osborne, for the six months ended June 30, 2013 and 2012.

	Six Months Ended June 30. 2013
	Natural Gas Purchases		Pipeline Construction Purchases		Rent, Supplies, Consulting and Other Purchases		Natural Gas Sales		Rental Income and Other Sales
John D. Oil and Gas Marketing	$	952,899	$	—	$	7,271	$	5,470	$	—
Cobra Pipeline		509,871		—		—		44,481		25
Orwell Trumbell Pipeline		418,040		—		—		10,768		301
Great Plains Exploration		316,725		854		—		12,679		30,309
Big Oats Oil Field Supply		—		1,477,683		298,170		2,746		125
John D. Oil and Gas Company		367,545		5,976		—		143		14,590
Sleepy Hollow Oil & Gas		—		—		—		—		438
Kykuit Resources		—		—		—		—		1,050
OsAir		130,980		—		80,473		623		31,468
Other		34,399		854		30,011		18,423		44,527
Total	$	2,730,459	$	1,485,367	$	415,925	$	95,333	$	122,833

	Six Months Ended June 30. 2012
	Natural Gas Purchases		Pipeline Construction Purchases		Rent, Supplies, Consulting and Other Purchases		Natural Gas Sales		Management and Other Sales
John D. Oil and Gas Marketing	$	1,409,395	$	9,870	$	2,132	$	—	$	6,564
Cobra Pipeline		282,518		890		491		—		19,454
Orwell Trumbell Pipeline		297,656		—		19,429		934		2,898
Great Plains Exploration		254,036		—		—		4,886		7,370
Big Oats Oil Field Supply		—		471,463		125,031		1,425		6,765
Sleepy Hollow Oil & Gas		—		—		—		—		5,113
Other		600,569		—		81,352		22,454		671
Total	$	2,844,174	$	482,223	$	228,435	$	29,699	$	48,835

The Company also accrued a liability of $46,783 and $595,240 due to companies controlled by Mr. Osborne for natural gas used through June 30, 2013 and December 31, 2012, respectively, that were not yet invoiced. The related expense is included in the gas purchased line item in the accompanying statements of comprehensive income. These amounts will be trued up to the actual invoices when received in future periods.