Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

(14) SEGMENT INFORMATION

The Company’s reportable business segments have been identified based on the differences in products or services provided. Revenues for the E&P segment are derived from the production and sale of natural gas and crude oil. The Midstream Services segment generates revenue through the marketing of both Company and third-party produced natural gas volumes and through gathering fees associated with the transportation of natural gas to market.

Summarized financial information for the Company’s reportable segments is shown in the following table. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements included in Item 8 of the 2011 Annual Report on Form 10-K. Management evaluates the performance of its segments based on operating income, defined as operating revenues less operating costs and expenses. Income before income taxes, for the purpose of reconciling the operating income amount shown below to consolidated income before income taxes, is the sum of operating income, interest expense and interest and other income (loss). The “Other” column includes items not related to the Company’s reportable segments including real estate and corporate items.

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Three months ended June 30, 2012:
Revenues from external customers	$	430,687	$	169,004	$	37		$	599,728
Intersegment revenues		(1,448)		319,391		816			318,759
Operating income (loss)(1)		(859,872)		71,821		410			(787,641)
Other income (loss), net		(64)		(5)		2,646			2,577
Depreciation, depletion and amortization expense		196,201		11,309		320			207,830
Impairment of natural gas and oil properties		935,899		–		–			935,899
Interest expense(2)		4,430		3,578		353			8,361
Provision for income taxes(2)		(331,772)		25,414		1,033			(305,325)
Assets		5,985,450		1,114,364		404,149	(3)		7,503,963
Capital investments(4)		531,845		47,719		9,069			588,633
Three months ended June 30, 2011:
Revenues from external customers	$	526,969	$	238,197	$	–		$	765,166
Intersegment revenues		2,899		522,412		793			526,104
Operating income(1)		222,539		59,644		359			282,542
Other income, net		6		52		11			69
Depreciation, depletion and amortization expense		161,929		9,365		326			171,620
Interest expense(2)		799		5,371		–			6,170
Provision for income taxes(2)		87,492		21,349		146			108,987
Assets		5,366,199		1,095,685		280,217	(3)		6,742,101
Capital investments(4)		476,040		59,862		20,072			555,974

	Exploration
	and		Midstream
	Production		Services		Other			Total
	(in thousands)
Six months ended June 30, 2012:
Revenues from external customers	$	896,952	$	359,177	$	68		$	1,256,197
Intersegment revenues		(735)		675,672		1,635			676,572
Operating income (loss)(1)		(743,629)		141,110		838			(601,681)
Other income (loss), net		(247)		(23)		2,647			2,377
Depreciation, depletion and amortization expense		378,940		21,879		638			401,457
Impairment of natural gas and oil properties		935,899		–		–			935,899
Interest expense(2)		7,752		7,245		702			15,699
Provision for income taxes(2)		(286,934)		51,262		1,065			(234,607)
Assets		5,985,450		1,114,364		404,149	(3)		7,503,963
Capital investments(4)		1,064,984		73,883		22,878			1,161,745
Six months ended June 30, 2011:
Revenues from external customers	$	997,625	$	443,876	$	–		$	1,441,501
Intersegment revenues		8,413		996,001		1,569			1,005,983
Operating income(1)		400,822		113,561		810			515,193
Other income, net		349		81		13			443
Depreciation, depletion and amortization expense		316,739		17,756		572			335,067
Interest expense(2)		3,703		9,903		–			13,606
Provision for income taxes(2)		156,874		40,769		324			197,967
Assets		5,366,199		1,095,685		280,217	(3)		6,742,101
Capital investments(4)		944,252		105,840		36,411			1,086,503

(1)The operating loss for the E&P segment for the three and six- months ended June 30, 2012 includes a $935.9 million non-cash ceiling test impairment of our natural gas and oil properties.

(2)Interest income, interest expense and the provision for income taxes by segment are allocated as they are incurred at the corporate level.

(3)Other assets represent corporate assets not allocated to segments and assets, including restricted cash and investments in cash equivalents, for non-reportable segments.

(4)Capital investments include an increase of $0.2 million and a reduction of $56.4 million for the three-month periods ended June 30, 2012 and 2011, respectively, and increases of $15.5 million and $57.9 million for the six-month periods ended June 30, 2012 and 2011, respectively, relating to the change in accrued expenditures between periods.

Included in intersegment revenues of the Midstream Services segment are $245.5 million and $456.7 million for the three months ended June 30, 2012 and 2011, respectively, and $531.6 million and $867.9 million for the six months ended June 30, 2012 and 2011, respectively, for marketing of the Company’s E&P sales. Corporate assets include cash and cash equivalents, restricted cash, furniture and fixtures, prepaid debt and other costs. Corporate general and administrative costs, depreciation expense and taxes other than income are allocated to the segments. For the three months ended June 30, 2012 and 2011, capital investments within the E&P segment include $2.3 million and $5.4 million, respectively, related to the Company’s activities in Canada. For the six months ended June 30, 2012 and 2011, capital investments within the E&P segment include $4.7 million and $7.8 million, respectively, related to the Company’s activities in Canada. At June 30, 2012, assets include $33.2 million and at June 30, 2011, assets include $18.4 million related to the Company’s activities in Canada.