Industry Segment Information

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Industry Segment Information

INDUSTRY SEGMENT INFORMATION

We have three main business segments offering different products and services:

• Contract drilling,

• Oil and natural gas, and

• Mid-stream

The contract drilling segment is engaged in the land contract drilling of oil and natural gas wells. The oil and natural gas segment is engaged in the development, acquisition and production of oil and natural gas properties and the mid-stream segment is engaged in the buying, selling, gathering, processing, and treating of natural gas and NGLs.

We evaluate each segment’s performance based on its operating income, which is defined as operating revenues less operating expenses and depreciation, depletion, amortization, and impairment. Our production in Canada is not significant.

The following table provides certain information about the operations of each of our segments:

	Three Months Ended June 30,							Six Months Ended June 30,
	2012				2011			2012				2011
	(In thousands)
Revenues:
Contract drilling	$	160,925			$	129,281		$	313,384			$	241,789
Elimination of inter-segment revenue	(14,053		)		(14,098		)	(25,606		)		(28,618		)
Contract drilling net of inter-segment revenue	146,872				115,183			287,778				213,171
Oil and natural gas	132,553				131,662			266,325				241,496
Gas gathering and processing	65,901				63,894			140,156				120,902
Elimination of inter-segment revenue	(16,154		)		(19,526		)	(33,114		)		(36,770		)
Gas gathering and processing net of inter-segment revenue	49,747				44,368			107,042				84,132
Other	720				282			1,175				101
Total revenues	$	329,892			$	291,495		$	662,320			$	538,900
Operating income (loss):
Contract drilling	$	50,815			$	31,727		$	94,220			$	59,574
Oil and natural gas	(73,753		)	(2)	53,695			(27,787		)	(2)	92,480
Gas gathering and processing	2,072				3,742			6,620				10,678
Total operating income (loss) (1)	(20,866		)		89,164			73,053				162,732
General and administrative expense	(8,376		)		(7,496		)	(15,380		)		(14,388		)
Interest expense, net	(2,542		)		(673		)	(4,368		)		(727		)
Other	720				282			1,175				101
Income (loss) before income taxes	$	(31,064	)		$	81,277		$	54,480			$	147,718

(1) Total operating income (loss) is total operating revenues less operating expenses, depreciation, depletion, amortization and impairment and does not include non-operating revenues, general corporate expenses, interest expense or income taxes.

(2) In June 2012, we had a non-cash ceiling test write-down of $115.9 million pre-tax ($72.1 million, net of tax).