Note 6 - Segment Information

9 Months Ended

Sep. 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 30 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 September 30, 2016, our fleet of production servicing rigs totaled 33 rigs, which we operate through 5 locations in Texas and New Mexico.

(in thousands)	Oil and Gas Exploration & Production			Production Services			Eliminations			Total
Three Months Ended September 30, 2016:
Sales revenues
United States	$	3,382		$	3,229		$	-		$	6,611
Israel		7,506			-			-			7,506
Office services and other		335			-			(30	)		305
Total revenues and other		11,223			3,229			(30	)		14,422
Operating costs and expenses		4,277			4,274			(30	)		8,521
Interest expenses, net		421			814			-			1,235
Gain on derivative contracts		(181	)		-			-			(181	)
Capital loss		2			36			-			38
Total expenses and other		4,519			5,124			(30	)		9,613
Income (loss) before income taxes	$	6,704		$	(1,895	)	$	-		$	4,809
Net Income (loss)		4,358			(1,364	)		-			2,994
Net loss attributable to noncontrolling interests		-			(379	)		-			(379	)
Net income (loss) attributable to Isramco		4,358			(985	)		-			3,373
Total Assets	$	106,823		$	37,490		$	-		$	144,313
Expenditures for Long-lived Assets	$	84		$	-		$	-		$	84

(in thousands)	Oil and Gas Exploration & Production			Production Services			Eliminations			Total
Three Months Ended September 30, 2015:
Sales revenues
United States	$	3,617		$	5,615		$	-		$	9,232
Israel		7,613			-			-			7,613
Office services and other		7,013			-			(30	)		6,983
Total revenues and other		18,243			5,615			(30	)		23,828
Operating costs and expenses		29,621			7,117			(30	)		36,708
Interest expenses, net		373			787			-			1,160
Loss from derivative contracts, net		1,734			-			-			1,734
Capital loss		44			9			-			53
Total expenses and other		31,772			7,913			(30	)		39,655
Loss before income taxes	$	(13,529	)	$	(2,298	)	$	-		$	(15,827	)
Net Loss		(8,794	)		(1,654	)		-			(10,448	)
Net loss attributable to noncontrolling interests		-			(459	)		-			(459	)
Net loss attributable to Isramco		(8,794	)		(1,195	)		-			(9,989	)
Total Assets	$	107,990		$	55,969		$	-		$	163,959
Expenditures for Long-lived Assets	$	648		$	62		$	-		$	710

(in thousands)	Oil and Gas Exploration & Production		Production Services			Eliminations			Total
Nine months Ended September 30, 2016:
Sales revenues
United States	$	9,309	$	9,528		$	-		$	18,837
Israel		20,614		-			-			20,614
Office services and other		1,624		-			(90	)		1,534
Total revenues and other		31,547		9,528			(90	)		40,985
Impairment expense		583		-			-			583
Operating costs and expenses		12,681		13,558			(90	)		26,149
Interest expenses, net		1,150		2,465			-			3,615
Loss from derivative contracts, net		2,170		-			-			2,170
Capital loss		19		36			-			55
Total expenses and other		16,603		16,059			(90	)		32,572
Income (loss) before income taxes	$	14,944	$	(6,531	)	$	-		$	8,413
Net Income (Loss)		9,712		(4,702	)		-			5,010
Net loss attributable to noncontrolling interests		-		(1,306	)		-			(1,306	)
Net income (loss) attributable to Isramco		9,712		(3,396	)		-			6,316
Total Assets	$	106,823	$	37,490		$	-		$	144,313
Expenditures for Long-lived Assets	$	283	$	308		$	-		$	591

(in thousands)	Oil and Gas Exploration & Production			Production Services			Eliminations			Total
Nine months Ended September 30, 2015:
Sales revenues
United States	$	13,697		$	17,415		$	-		$	31,112
Israel		19,057			-			-			19,057
Office services and other		9,598			-			(90	)		9,508
Total revenues and other		42,352			17,415			(90	)		59,677
Operating costs and expenses		44,746			19,986			(90	)		64,642
Interest expenses, net		1,757			2,369			-			4,126
Loss from derivative contracts, net		2,406			-			-			2,406
Capital loss		54			26			-			80
Total expenses and other		48,963			22,381			(90	)		71,254
Loss before income taxes	$	(6,611	)	$	(4,966	)	$	-		$	(11,577	)
Net Loss		(4,297	)		(3,575	)		-			(7,872	)
Net loss attributable to noncontrolling interests		-			(993	)		-			(993	)
Net loss attributable to Isramco		(4, 297	)		(2,582	)		-			(6,879	)
Total Assets	$	107,990		$	55,969		$	-		$	163,959
Expenditures for Long-lived Assets	$	2,684		$	2,388		$	-		$	5,072