Industry Segment Information

6 Months Ended

Jun. 30, 2019

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, 2019
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	77,815	$	—	$	—	$	—	$	—	$	77,815
Contract drilling	—		50,773		—		—		(7,736)		43,037
Gas gathering and processing	—		—		54,630		—		(10,336)		44,294
Total revenues	77,815		50,773		54,630		—		(18,072)		165,146
Expenses:
Operating costs:
Oil and natural gas	37,519		—		—		—		(1,277)		36,242
Contract drilling	—		36,390		—		—		(7,082)		29,308
Gas gathering and processing	—		—		41,550		—		(9,059)		32,491
Total operating costs	37,519		36,390		41,550		—		(17,418)		98,041
Depreciation, depletion, and amortization	38,751		13,504		12,102		1,935		—		66,292
Total expenses	76,270		49,894		53,652		1,935		(17,418)		164,333
General and administrative	—		—		—		10,064		—		10,064
Gain on disposition of assets	(60)		(296)		(66)		—		—		(422)
Income (loss) from operations	1,605		1,175		1,044		(11,999)		(654)		(8,829)
Gain on derivatives	—		—		—		7,927		—		7,927
Interest, net	—		—		(345)		(8,650)		—		(8,995)
Other	—		—		—		6		—		6
Income (loss) before income taxes	$	1,605	$	1,175	$	699	$	(12,716)	$	(654)	$	(9,891)

_______________________

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.


	Three Months Ended June 30, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and 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		—		(20,083)		39,703
Total operating costs	33,682		36,921		59,786		—		(26,374)		104,015
Depreciation, depletion, and amortization	31,554		13,726		11,175		1,918		—		58,373
Total expenses	65,236		50,647		70,961		1,918		(26,374)		162,388
General and administrative expense	—		—		—		8,712		—		8,712
Gain on disposition of assets	(59)		(57)		(45)		—		—		(161)
Income (loss) from operations	37,141		2,177		4,490		(10,630)		(814)		32,364
Loss on derivatives	—		—		—		(14,461)		—		(14,461)
Interest, net	—		—		(304)		(7,425)		—		(7,729)
Other	—		—		—		5		—		5
Income (loss) before income taxes	$	37,141	$	2,177	$	4,186	$	(32,511)	$	(814)	$	10,179

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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.


	Six Months Ended June 30, 2019
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	163,910	$	—	$	—	$	—	$	—	$	163,910
Contract drilling	—		108,972		—		—		(14,780)		94,192
Gas gathering and processing	—		—		125,139		—		(28,404)		96,735
Total revenues	163,910		108,972		125,139		—		(43,184)		354,837
Expenses:
Operating costs:
Oil and natural gas	71,527		—		—		—		(2,571)		68,956
Contract drilling	—		73,775		—		—		(13,066)		60,709
Gas gathering and processing	—		—		97,679		—		(25,833)		71,846
Total operating costs	71,527		73,775		97,679		—		(41,470)		201,511
Depreciation, depletion, and amortization	74,518		26,203		23,828		3,869		—		128,418
Total expenses	146,045		99,978		121,507		3,869		(41,470)		329,929
General and administrative expense	—		—		—		19,805		—		19,805
(Gain) loss on disposition of assets	(138)		1,449		(108)		(10)		—		1,193
Income (loss) from operations	18,003		7,545		3,740		(23,664)		(1,714)		3,910
Gain on derivatives	—		—		—		995		—		995
Interest, net	—		—		(681)		(16,852)		—		(17,533)
Other	—		—		—		11		—		11
Income (loss) before income taxes	$	18,003	$	7,545	$	3,059	$	(39,510)	$	(1,714)	$	(12,617)

_______________________ ____________________

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.


	Six Months Ended June 30, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and 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		—		(37,499)		81,307
Total operating costs	70,834		72,875		118,806		—		(49,267)		213,248
Depreciation, depletion, and amortization	62,337		27,038		22,228		3,836		—		115,439
Total expenses	133,171		99,913		141,034		3,836		(49,267)		328,687
General and administrative expense	—		—		—		19,474		—		19,474
Gain on disposition of assets	(129)		(84)		(79)		(30)		—		(322)
Income (loss) from operations	72,375		3,648		9,101		(23,280)		(1,248)		60,596
Loss on derivatives	—		—		—		(21,223)		—		(21,223)
Interest, net	—		—		(453)		(17,280)		—		(17,733)
Other	—		—		—		11		—		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.