Note 6 - Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 6 - Segment Information

Isramco's primary business segments are vertically integrated within the oil and gas industry. These segments are separately managed due to distinct operational differences, unique technology, distribution and marketing requirements. The Company's two reporting segments are oil and gas exploration and production and production services. The oil and gas exploration and production segment explores for and produces natural gas, crude oil, condensate, and natural gas liquids ("NGLs"). The production services segment is engaged in rig-based and workover services, well completion and recompletion services, plugging and abandonment of wells and other ancillary oilfield services.

Oil and Gas Exploration and Production Segment

Our Oil and Gas segment is engaged in the exploration, development and production of oil and natural gas properties located onshore in the United States and ownership of various royalty interests in oil and gas concessions located offshore Israel. We own varying working interests in oil and gas wells in Louisiana, Texas, New Mexico, Oklahoma, Wyoming, Utah and Colorado and currently serve as operator of approximately 515 producing wells located mainly in Texas in New Mexico.

Production Services Segment

The Company began production services operations in October 2011. Our production servicing rig and truck fleet provides a range of production services, including the completion of newly-drilled wells, maintenance and workover of existing wells, fluid transportation, related oilfield services and plugging and abandonment of wells at the end of their useful lives to a diverse group of oil and gas exploration and production companies.

●   Completion Service. Newly drilled wells require completion services to prepare the well for production. Production servicing rigs are frequently used to complete newly drilled wells to minimize the use of higher cost drilling rigs in the completion process. The completion process may involve selectively perforating the well casing in the productive zones to allow oil or gas to flow into the well bore, stimulating and testing these zones, and installing the production string and other downhole equipment. The completion process typically ranges from a few days to several weeks, depending on the nature and type of the completion, and generally requires additional auxiliary equipment in addition to a production services rigs. The demand for completion services is directly related to drilling activity levels, which are sensitive to fluctuations in oil and gas prices.

●   Well-servicing/Maintenance Services. We provide maintenance services on the mechanical apparatus used to pump or lift oil from producing wells. These services include, among other activities, repairing and replacing pumps, sucker rods and tubing. We provide the rigs, equipment and crews for these tasks, which are performed on both oil and natural gas wells, but which are more commonly required on oil wells. Maintenance services typically take less than 48 hours to complete. Rigs generally are provided to customers on a call-out basis.

●   Workover Services. Producing oil and natural gas wells occasionally require major repairs or modifications, called "workovers." Workovers may be required to remedy failures, modify well depth and formation penetration to capture hydrocarbons from alternative formations, clean out and recomplete a well when production has declined, repair leaks or convert a depleted well to an injection well for secondary or enhanced recovery projects. Workovers normally are carried out with pumps and tanks for drilling fluids, blowout preventers, and other specialized equipment for servicing rigs. A workover may last anywhere from a few days to several weeks.

●   Fluid Services.  We own and operate 12 fluid service trucks equipped with an average fluid hauling capacity of up to 130 barrels a piece. Each fluid service truck is equipped to pump fluids from or into wells, pits, tanks and other storage facilities. The majority of our fluid service trucks are also used to transport water to fill frac tanks on well locations, to transport produced salt water to disposal wells, and to transport drilling and completion fluids to and from well locations.

●   Plugging Services. Production servicing rigs are also used in the process of permanently closing oil and gas wells no longer capable of producing in economic quantities. Many well operators bid for this work on a "turnkey" basis, requiring the service company to perform the entire job, including the sale or disposal of equipment salvaged from the well as part of the compensation received, and complying with state regulatory requirements. Plugging and abandonment work can provide favorable operating margins and is less sensitive to oil and gas pricing than drilling and workover activity since well operators must plug a well in accordance with state regulations when it is no longer productive. We perform plugging and abandonment work throughout our core areas of operation in conjunction with equipment provided by us or by other service companies.

We typically bill clients for our production servicing on an hourly basis for the period that the rig is actively working. As of June 30, 2016, our fleet of production servicing rigs totaled 33 rigs, which we operate through 5 locations in Texas and New Mexico.

thousands	Oil and Gas Exploration & Production		Production Services			Eliminations			Total
Three Months Ended June 30, 2016:
Sales revenues
United States	$	3,283	$	3,001		$	-		$	6,284
Israel		6,662		-			-			6,662
Office services and other		954		-			(30	)		924
Total revenues and other		10,899		3,001			(30	)		13,870
Impairment expense		-		-			-			-
Operating costs and expenses		4,154		4,607			(30	)		8,731
Interest expenses, net		381		819			-			1,200
Loss on derivative contracts		680		-			-			680
Total expenses and other		5,215		5,426			(30	)		10,611
Income (loss) before income taxes	$	5,684	$	(2,425	)	$	-		$	3,259
Net Income (loss)		3,693		(1,746	)		-			1,947
Net loss attributable to noncontrolling interests		-		(485	)		-			(485	)
Net income (loss) attributable to Isramco		3,693		(1,261	)		-			2,432
Total Assets	$	105,440	$	39,655		$	-		$	145,095
Expenditures for Long-lived Assets	$	86	$	152		$	-		$	238

thousands	Oil and Gas Exploration & Production		Production Services			Eliminations			Total
Three Months Ended June 30, 2015:
Sales revenues
United States	$	5,683	$	5,985		$	-		$	11,668
Israel		5,316		-			-			5,316
Office services and other		2,257		-			(30	)		2,227
Total revenues and other		13,256		5,985			(30	)		19,211
Operating costs and expenses		8,463		6,960			(30	)		15,393
Interest expenses, net		690		788			-			1,478
Loss from derivative contracts, net		672		-			-			672
Capital loss		17		-			-			17
Total expenses and other		9,842		7,748			(30	)		17,560
Income before income taxes	$	3,414	$	(1,763	)	$	-		$	1,651
Net Income (loss)		2,220		(1,269	)		-			951
Net loss attributable to noncontrolling interests		-		(353	)		-			(353	)
Net income (loss) attributable to Isramco		2,220		(916	)		-			1,304
Total Assets	$	116,667	$	55,579		$	-		$	172,246
Expenditures for Long-lived Assets	$	426	$	1,366		$	-		$	1,792

thousands	Oil and Gas Exploration & Production		Well Service			Eliminations			Total
Six Months Ended June 30, 2016:
Sales revenues
United States	$	5,927	$	6,299		$	-		$	12,226
Non-U.S.		13,108		-			-			13,108
Office services and other		1,289		-			(60	)		1,229
Total revenues and other		20,324		6,299			(60	)		26,563
Impairment expense		583		-			-			583
Operating costs and expenses		8,404		9,284			(60	)		17,628
Interest expenses, net		729		1,651			-			2,380
Loss from derivative contracts, net		2,351		-			-			2,351
Capital loss		17		-			-			17
Total expenses and other		12,084		10,935			(60	)		22,959
Income (loss) before income taxes	$	8,240	$	(4,636	)	$	-		$	3,604
Net Income (Loss)		5,354		(3,338	)		-			2,016
Net loss attributable to noncontrolling interests		-		(927	)		-			(927	)
Net income (loss) attributable to Isramco		5,354		(2,411	)		-			2,943
Total Assets	$	105,440	$	39,655		$	-		$	145,095
Expenditures for Long-lived Assets	$	199	$	322		$	-		$	521

thousands	Oil and Gas Exploration & Production		Well Service			Eliminations			Total
Six Months Ended June 30, 2015:
Sales revenues
United States	$	10,080	$	11,800		$	-		$	21,880
Non-U.S.		11,444		-			-			11,444
Office services and other		2,585		-			(60	)		2,525
Total revenues and other		24,109		11,800			(60	)		35,849
Operating costs and expenses		15,125		12,869			(60	)		27,934
Interest expenses, net		1,384		1,582			-			2,966
Loss from derivative contracts, net		672		-			-			672
Capital loss		10		17			-			27
Total expenses and other		17,191		14,468			(60	)		31,599
Income (loss) before income taxes	$	6,918	$	(2,668	)	$	-		$	4,250
Net Income (Loss)		4,497		(1,921	)		-			2,576
Net loss attributable to noncontrolling interests		-		(534	)		-			(534	)
Net income (loss) attributable to Isramco		4,497		(1,387	)		-			3,110
Total Assets	$	116,667	$	55,579		$	-		$	172,246
Expenditures for Long-lived Assets	$	2,036	$	2,326		$	-		$	4,362