Industry Segment Information

6 Months Ended

Jun. 30, 2020

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, 2020
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	26,957	$	—	$	—	$	—	$	(1)	$	26,956
Contract drilling	—		29,202		—		—		—		29,202
Gas gathering and processing	—		—		37,719		—		(4,870)		32,849
Total revenues	26,957		29,202		37,719		—		(4,871)		89,007
Expenses:
Operating costs:
Oil and natural gas	72,354		—		—		—		(814)		71,540
Contract drilling	—		20,951		—		—		—		20,951
Gas gathering and processing	—		—		26,669		—		(4,057)		22,612
Total operating costs	72,354		20,951		26,669		—		(4,871)		115,103
Depreciation, depletion, and amortization	22,059		2,946		10,348		607				35,960
Impairments	109,318		—		—		—		—		109,318
Total expenses	203,731		23,897		37,017		607		(4,871)		260,381

General and administrative	—		—		—		25,814		—		25,814
(Gain) loss on disposition of assets	(45)		(548)		(9)		1,479		—		877
Income (loss) from operations	(176,729)		5,853		711		(27,900)		—		(198,065)
Loss on derivatives	—		—		—		(6,937)		—		(6,937)
Write-off of debt issuance costs	—		—		—		(2,426)		—		(2,426)
Reorganization items	—		—		—		(7,027)		—		(7,027)
Interest, net	—		—		(542)		(7,066)		—		(7,608)
Other	9		6		22		6		—		43
Income (loss) before income taxes	$	(176,720)	$	5,859	$	191	$	(51,350)	$	—	$	(222,020)

_______________________

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, 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.


	Six Months Ended June 30, 2020
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	75,481	$	—	$	—	$	—	$	(3)	$	75,478
Contract drilling	—		65,834		—		—		—		65,834
Gas gathering and processing	—		—		80,399		—		(10,328)		70,071
Total revenues	75,481		65,834		80,399		—		(10,331)		211,383
Expenses:
Operating costs:
Oil and natural gas	103,769		—		—		—		(1,566)		102,203
Contract drilling	—		46,400		—		—		—		46,400
Gas gathering and processing	—		—		58,988		—		(8,765)		50,223
Total operating costs	103,769		46,400		58,988		—		(10,331)		198,826
Depreciation, depletion, and amortization	58,787		14,691		22,621		1,478		—		97,577
Impairments	377,154		410,126		63,962		—		—		851,242
Total expenses	539,710		471,217		145,571		1,478		(10,331)		1,147,645
Loss on abandonment of assets	17,554		—		—		—		—		17,554
General and administrative	—		—		—		37,367		—		37,367
(Gain) loss on disposition of assets	(58)		(139)		(15)		1,479		—		1,267
Loss from operations	(481,725)		(405,244)		(65,157)		(40,324)		—		(992,450)
Loss on derivatives	—		—		—		(6,454)		—		(6,454)
Write-off of debt issuance costs	—		—		—		(2,426)		—		(2,426)
Reorganization items	—		—		—		(7,027)		—		(7,027)
Interest, net	—		—		(1,060)		(19,805)		—		(20,865)
Other	30		23		39		11		—		103
Loss before income taxes	$	(481,695)	$	(405,221)	$	(66,178)	$	(76,025)	$	—	$	(1,029,119)

_______________________ ____________________

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	—			—		—		19,805		—		19,805
(Gain) loss on disposition of assets	(138)		-84	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)

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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.