INDUSTRY SEGMENT INFORMATION

We have three main business segments offering different products and services within the energy industry:


•	Oil and natural gas,


•	Contract drilling, and


•	Mid-stream

Our oil and natural gas segment is engaged in the acquisition, development, and production of oil, NGLs, and natural gas properties. The contract drilling segment is engaged in the land contract drilling of oil and natural gas wells 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. We have no oil and natural gas production outside the United States.

The following tables provide certain information about the operations of each of our segments:



	Three Months Ended June 30, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream			Other			Eliminations			Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	102,318	$	—	$	—		$	—		$	—		$	102,318
Contract drilling	—		52,767		—			—			(5,841		)	46,926
Gas gathering and processing	—		—		75,406			—			(21,347		)	54,059
Total revenues	102,318		52,767		75,406			—			(27,188		)	203,303
Expenses:
Operating costs:
Oil and natural gas	33,682		—		—			—			(1,264		)	32,418
Contract drilling	—		36,921		—			—			(5,027		)	31,894
Gas gathering and processing	—		—		59,786			3,576			(23,659		)	39,703
Total operating costs	33,682		36,921		59,786			3,576			(29,950		)	104,015
Depreciation, depletion, and amortization	31,554		13,726		11,175			1,918			—			58,373
Total expenses	65,236		50,647		70,961			5,494			(29,950		)	162,388
Total operating income (loss) ⁽²⁾	37,082		2,120		4,445			(5,494		)	2,762
General and administrative expense	—		—		—			(8,712		)	—			(8,712		)
Gain on disposition of assets	59		57		45			—			—			161
Loss on derivatives	—		—		—			(14,461		)	—			(14,461		)
Interest, net	—		—		(304		)	(7,425		)	—			(7,729		)
Other	—		—		—			3,581			(3,576		)	5
Income (loss) before income taxes	$	37,141	$	2,177	$	4,186		$	(32,511	)	$	(814	)	$	10,179

_______________________


(1)	The revenues for oil and natural gas occur at a point in time. The revenues for contract drilling and gas gathering and processing occur over time.


(2)	Operating income (loss) is total operating revenues less operating expenses, depreciation, depletion, and amortization and does not include general corporate expenses, gain on disposition of assets, loss on derivatives, interest, net, other income, or income taxes.



	Three Months Ended June 30, 2017
	Oil and Natural Gas		Contract Drilling			Mid-stream		Other			Eliminations			Total Consolidated
	(In thousands)
Revenues:
Oil and natural gas	$	83,173	$	—		$	—	$	—		$	—		$	83,173
Contract drilling	—		44,844			—		—			(5,589		)	39,255
Gas gathering and processing	—		—			63,111		—			(14,958		)	48,153
Total revenues	83,173		44,844			63,111		—			(20,547		)	170,581
Expenses:
Operating costs:
Oil and natural gas	33,941		—			—		—			(1,183		)	32,758
Contract drilling	—		32,452			—		—			(5,213		)	27,239
Gas gathering and processing	—		—			49,817		—			(13,775		)	36,042
Total operating costs	33,941		32,452			49,817		—			(20,171		)	96,039
Depreciation, depletion, and amortization	23,558		13,769			10,849		1,904			—			50,080
Total expenses	57,499		46,221			60,666		1,904			(20,171		)	146,119
Total operating income (loss)⁽¹⁾	25,674		(1,377		)	2,445		(1,904		)	(376		)
General and administrative expense	—		—			—		(8,713		)	—			(8,713		)
Gain on disposition of assets	168		31			44		5			—			248
Gain on derivatives	—		—			—		8,902			—			8,902
Interest, net	—		—			—		(9,467		)	—			(9,467		)
Other	—		—			—		6			—			6
Income (loss) before income taxes	$	25,842	$	(1,346	)	$	2,489	$	(11,171	)	$	(376	)	$	15,438

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(1)	Operating income (loss) is total operating revenues less operating expenses, depreciation, depletion, and amortization and does not include general corporate expenses, gain on disposition of assets, gain on derivatives, interest, net, other income, or income taxes.



	Six Months Ended June 30, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream			Other			Eliminations			Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	205,417	$	—	$	—		$	—		$	—		$	205,417
Contract drilling	—		103,477		—			—			(10,562		)	92,915
Gas gathering and processing	—		—		150,056			—			(39,953		)	110,103
Total revenues	205,417		103,477		150,056			—			(50,515		)	408,435
Expenses:
Operating costs:
Oil and natural gas	70,834		—		—			—			(2,454		)	68,380
Contract drilling	—		72,875		—			—			(9,314		)	63,561
Gas gathering and processing	—		—		118,806			3,576			(41,075		)	81,307
Total operating costs	70,834		72,875		118,806			3,576			(52,843		)	213,248
Depreciation, depletion, and amortization	62,337		27,038		22,228			3,836			—			115,439
Total expenses	133,171		99,913		141,034			7,412			(52,843		)	328,687
Total operating income (loss) ⁽²⁾	72,246		3,564		9,022			(7,412		)	2,328
General and administrative expense	—		—		—			(19,474		)	—			(19,474		)
Gain on disposition of assets	129		84		79			30			—			322
Loss on derivatives	—		—		—			(21,223		)	—			(21,223		)
Interest, net	—		—		(453		)	(17,280		)	—			(17,733		)
Other	—		—		—			3,587			(3,576		)	11
Income (loss) before income taxes	$	72,375	$	3,648	$	8,648		$	(61,772	)	$	(1,248	)	$	21,651

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(1)	The revenues for oil and natural gas occur at a point in time. The revenues for contract drilling and gas gathering and processing occur over time.


(2)	Operating income (loss) is total operating revenues less operating expenses, depreciation, depletion, and amortization and does not include general corporate expenses, gain on disposition of assets, loss on derivatives, interest, net, other income, or income taxes.



	Six Months Ended June 30, 2017
	Oil and Natural Gas		Contract Drilling			Mid-stream		Other			Eliminations			Total Consolidated
	(In thousands)
Revenues:
Oil and natural gas	$	170,771	$	—		$	—	$	—		$	—		$	170,771
Contract drilling	—		82,029			—		—			(5,589		)	76,440
Gas gathering and processing	—		—			129,575		—			(30,481		)	99,094
Total revenues	170,771		82,029			129,575		—			(36,070		)	346,305
Expenses:
Operating costs:
Oil and natural gas	64,267		—			—		—			(2,305		)	61,962
Contract drilling	—		61,679			—		—			(5,213		)	56,466
Gas gathering and processing	—		—			101,922		—			(28,176		)	73,746
Total operating costs	64,267		61,679			101,922		—			(35,694		)	192,174
Depreciation, depletion, and amortization	45,084		26,616			21,667		3,645			—			97,012
Total expenses	109,351		88,295			123,589		3,645			(35,694		)	289,186
Total operating income (loss)⁽¹⁾	61,420		(6,266		)	5,986		(3,645		)	(376		)
General and administrative expense	—		—			—		(17,667		)	—			(17,667		)
Gain on disposition of assets	177		38			44		813			—			1,072
Gain on derivatives	—		—			—		23,633			—			23,633
Interest, net	—		—			—		(18,863		)	—			(18,863		)
Other	—		—			—		9			—			9
Income (loss) before income taxes	$	61,597	$	(6,228	)	$	6,030	$	(15,720	)	$	(376	)	$	45,303

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(1)	Operating income (loss) is total operating revenues less operating expenses, depreciation, depletion, and amortization and does not include general corporate expenses, gain on disposition of assets, gain on derivatives, interest, net, other income, or income taxes.