Industry Segment Information

12 Months Ended

Dec. 31, 2019

INDUSTRY SEGMENT INFORMATION

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

•Oil and natural gas,

•Contract drilling, and

•Mid-stream

The oil and natural gas segment is engaged in the development, acquisition, 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. Our oil and natural gas production outside the United States is not significant.

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


	Year Ended December 31, 2019
	Oil and Natural Gas		Contract Drilling		Mid-stream		Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	325,797	$	—	$	—	$	—	$	—	$	325,797
Contract drilling	—		184,192		—		—		(15,809)		168,383
Gas gathering and processing	—		—		227,939		—		(47,485)		180,454
Total revenues	325,797		184,192		227,939		—		(63,294)		674,634
Expenses:
Operating costs:
Oil and natural gas	140,026		—		—		—		(4,902)		135,124
Contract drilling	—		130,188		—		—		(14,190)		115,998
Gas gathering and processing	—		—		176,189		—		(42,583)		133,606
Total operating costs	140,026		130,188		176,189		—		(61,675)		384,728
Depreciation, depletion, and amortization	168,651		51,552		47,663		7,707		—		275,573
Impairments ⁽²⁾	559,867		62,809		3,040		—		—		625,716
Total expenses	868,544		244,549		226,892		7,707		(61,675)		1,286,017
General and administrative	—		—		—		38,246		—		38,246
(Gain) loss on disposition of assets	(199)		3,872		(160)		(11)		—		3,502
Income (loss) from operations	(542,548)		(64,229)		1,207		(45,942)		(1,619)		(653,131)
Gain on derivatives	—		—		—		4,225		—		4,225
Interest expense, net	—		—		(1,546)		(35,466)		—		(37,012)
Other	(481)		(605)		827		23		—		(236)
Income (loss) before income taxes	$	(543,029)	$	(64,834)	$	488	$	(77,160)	$	(1,619)	$	(686,154)

Identifiable assets:
Oil and natural gas ⁽³⁾	$	851,662	$	—	$	—	$	—	$	(4,264)	$	847,398
Contract drilling	—		708,510		—		—		(42)		708,468
Gas gathering and processing	—		—		463,699		—		(4,255)		459,444
Total identifiable assets ⁽⁴⁾	851,662		708,510		463,699		—		(8,561)		2,015,310
Corporate land and building	—		—		—		54,155		—		54,155
Other corporate assets ⁽⁵⁾	—		—		—		23,092		(2,505)		20,587
Total assets	$	851,662	$	708,510	$	463,699	$	77,247	$	(11,066)	$	2,090,052

Capital expenditures:	$	268,622	$	40,636	$	64,438	$	673	$	—	$	374,369

_______________________

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.We incurred non-cash ceiling test write-down of our oil and natural gas properties of $559.4 million pre-tax ($422.4 million, net of tax). We also recognized goodwill impairment charges of $62.8 million pre-tax ($59.8 million, net of tax).

3.Oil and natural gas assets include oil and natural gas properties, saltwater disposal systems, and other non-full cost pool assets.

4.Identifiable assets are those used in Unit’s operations in each industry segment.

5.Other corporate assets are principally cash and cash equivalents, short-term investments, transportation equipment, furniture, and equipment.


	Year Ended December 31, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream		Other		Eliminations		Total Consolidated
	(In thousands)
Revenues:
Oil and natural gas	$	423,059	$	—	$	—	$	—	$	—	$	423,059
Contract drilling	—		218,982		—		—		(22,490)		196,492
Gas gathering and processing	—		—		312,417		—		(88,687)		223,730
Total revenues ⁽¹⁾	423,059		218,982		312,417		—		(111,177)		843,281
Expenses:
Operating costs:
Oil and natural gas	136,870		—		—		—		(5,195)		131,675
Contract drilling	—		150,834		—		—		(19,449)		131,385
Gas gathering and processing	—		—		251,328		—		(83,492)		167,836
Total operating costs	136,870		150,834		251,328		—		(108,136)		430,896
Depreciation, depletion and amortization	133,584		57,508		44,834		7,679		—		243,605
Impairments ⁽²⁾	—		147,884		—		—		—		147,884
Total expenses	270,454		356,226		296,162		7,679		(108,136)		822,385
General and administrative	—		—		—		38,707		—		38,707
Gain on disposition of assets	(139)		(425)		(110)		(30)		—		(704)
Income (loss) from operations	152,744		(136,819)		16,365		(46,356)		(3,041)		(17,107)
Loss on derivatives	—		—		—		(3,184)		—		(3,184)
Interest expense, net	—		—		(1,214)		(32,280)		—		(33,494)
Other	—		—		—		22		—		22
Income (loss) before income taxes	$	152,744	$	(136,819)	$	15,151	$	(81,798)	$	(3,041)	$	(53,763)

Identifiable assets:
Oil and natural gas ⁽³⁾	$	1,357,779	$	—	$	—	$	—	$	(6,949)	$	1,350,830
Contract drilling	—		806,696		—		—		(85)		806,611
Gas gathering and processing	—		—		466,851		—		(5,023)		461,828
Total identifiable assets ⁽⁴⁾	1,357,779		806,696		466,851		—		(12,057)		2,619,269
Corporate land and building	—		—		—		55,505		—		55,505
Other corporate assets ⁽⁵⁾	—		—		—		25,566		(2,287)		23,279
Total assets	$	1,357,779	$	806,696	$	466,851	$	81,071	$	(14,344)	$	2,698,053

Capital expenditures:	$	367,335	$	75,510	$	44,810	$	1,125	$	—	$	488,780

_______________________

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.Impairment for contract drilling equipment includes a $147.9 million pre-tax write-down for 41 drilling rigs and other drilling equipment.

3.Oil and natural gas assets include oil and natural gas properties, saltwater disposal systems, and other non-full cost pool assets.

4.Identifiable assets are those used in Unit’s operations in each industry segment.

5.Other corporate assets are principally cash and cash equivalents, short-term investments, transportation equipment, furniture, and equipment.


	Year Ended December 31, 2017
	Oil and Natural Gas		Contract Drilling		Mid-stream		Other		Eliminations		Total Consolidated
	(In thousands)
Revenues:
Oil and natural gas	$	357,744	$	—	$	—	$	—	$	—	$	357,744
Contract drilling	—		188,172		—		—		(13,452)		174,720
Gas gathering and processing	—		—		277,049		—		(69,873)		207,176
Total revenues	357,744		188,172		277,049		—		(83,325)		739,640
Expenses:
Operating costs:
Oil and natural gas	135,532		—		—		—		(4,743)		130,789
Contract drilling	—		134,432		—		—		(11,832)		122,600
Gas gathering and processing	—		—		220,613		—		(65,130)		155,483
Total operating costs	135,532		134,432		220,613		—		(81,705)		408,872
Depreciation, depletion and amortization	101,911		56,370		43,499		7,477		—		209,257

Total expenses	237,443		190,802		264,112		7,477		(81,705)		618,129
General and administrative	—		—		—		38,087		—		38,087
(Gain) loss on disposition of assets	(228)		776		(25)		(850)		—		(327)
Income (loss) from operations	120,529		(3,406)		12,962		(44,714)		(1,620)		83,751
Gain on derivatives	—		—		—		14,732		—		14,732
Interest expense, net	—		—		—		(38,334)		—		(38,334)
Other	—		—		—		21		—		21
Income (loss) before income taxes	$	120,529	$	(3,406)	$	12,962	$	(68,295)	$	(1,620)	$	60,170

Identifiable assets:
Oil and natural gas ⁽¹⁾	$	1,134,080	$	—	$	—	$	—	$	(6,180)	$	1,127,900
Contract drilling	—		933,063		—		—		—		933,063
Gas gathering and processing	—		—		439,369		—		(798)		438,571
Total identifiable assets ⁽²⁾	1,134,080		933,063		439,369		—		(6,978)		2,499,534
Corporate land and building	—		—		—		56,854		—		56,854
Other corporate assets ⁽³⁾	—		—		—		25,064		—		25,064
Total assets	$	1,134,080	$	933,063	$	439,369	$	81,918	$	(6,978)	$	2,581,452

Capital expenditures:	$	270,443	$	36,148	$	22,168	$	3,521	$	—	$	332,280

_______________________

1.Oil and natural gas assets include oil and natural gas properties, saltwater disposal systems, and other non-full cost pool assets.

2.Identifiable assets are those used in Unit’s operations in each industry segment.

3.Corporate assets are principally cash and cash equivalents, short-term investments, transportation equipment, furniture, and equipment.