Note 2 - Revenue Recognition

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE

2

—Revenue Recognition

On

January 1, 2018,

we adopted ASU

2014

-

09,

Revenue from Contracts with Customers,

and the series of related ASU's that followed under ASC Topic

606

(collectively, “Topic

606”

).Under Topic

606,

revenue will generally be recognized upon delivery of our produced oil and natural gas volumes to our customers. Our customer sales contracts include oil and natural gas sales. Under Topic

606,

each unit (Mcf or barrel) of commodity product represents a separate performance obligation which is sold at variable prices, determinable on a monthly basis. The pricing provisions of our contracts are primarily tied to a market index with certain adjustments based on factors such as delivery, product quality and prevailing supply and demand conditions in the geographic areas in which we operate. We will allocate the transaction price to each performance obligation and recognize revenue upon delivery of the commodity product when the customer obtains control. Control of our produced natural gas volumes passes to our customers at specific metered points indicated in our natural gas contracts. Similarly, control of our produced oil volumes passes to our customers when the oil is measured either by a trucking oil ticket or by a meter when entering an oil pipeline. The Company has

no

control over the commodities after those points and the measurement at those points dictates the amount on which the customer's payment is based. Our oil and natural gas revenue streams include volumes burdened by royalty and other joint owner working interests. Our revenues are recorded and presented on our financial statements net of the royalty and other joint owner working interests.

Our revenue stream does

not

include any payments for services or ancillary items other than sale of oil and natural gas.

We record revenue in the month our production is delivered to the purchaser. However, settlement statements and payments for our oil and natural gas sales

may

not

be received for up to 

60

 days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record any differences, which historically have

not

been significant, between the actual amounts ultimately received and the original estimates in the period they become finalized. As of 

December 31, 2019

and

December 31, 2018

, receivables from contracts with customers were

$11.3

 million and

$14.5

million, respectively.

Topic

606

will

not

change our pattern of timing of revenue recognition. We utilized the full retrospective method for adoption of Topic

606,

and in accordance with this method our consolidated financial statements for periods prior to

January 1, 2018

were

not

materially affected or revised. We also do

not

anticipate a material impact on our financial statements on an ongoing basis.

The following tables present our oil and natural gas revenues disaggregated by revenue source and by operated and non-operated properties:

	Year Ended December 31, 2019
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	9,961	$	91,811	$	-	$	101,772
Non-operated		426		16,142		13		16,581
Total oil and natural gas revenues	$	10,387	$	107,953	$	13	$	118,353

	Year Ended December 31, 2018
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	14,189	$	58,911	$	-	$	73,100
Non-operated		556		14,236		51		14,843
Total oil and natural gas revenues	$	14,745	$	73,147	$	51	$	87,943