The Company operates in two business segments: (i) exploration and production and (ii) midstream. The exploration and production segment is engaged in the acquisition, exploration and development of oil and natural gas properties and is currently focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The Company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. The midstream segment conducts midstream operations in support of the Company’s exploration, development and production operations and provides natural gas processing, oil transportation services, natural gas, oil and salt water gathering services and salt water disposal services to third parties. Substantially all of the Company’s midstream operations in the Rustler Breaks and Wolf asset areas in the Delaware Basin are conducted through San Mateo.

The following tables present selected financial information for the periods presented regarding the Company’s business segments on a stand-alone basis, corporate expenses that are not allocated to a segment and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a consolidated basis (in thousands). On a consolidated basis, midstream services revenues consist primarily of those revenues from midstream operations related to third parties, including working interest owners in the Company’s operated wells. All midstream services revenues associated with Company-owned production are eliminated in consolidation. In evaluating the operating results of the exploration and production and midstream segments, the Company does not allocate certain expenses to the individual segments, including general and administrative expenses. Such expenses are reflected in the column labeled “Corporate.”



	Exploration and Production								Consolidations and Eliminations			Consolidated Company
	Exploration and Production			Midstream		Corporate			Consolidations and Eliminations			Consolidated Company
Three Months Ended March 31, 2018
Oil and natural gas revenues	$	180,260		$	1,694	$	—		$	—		$	181,954
Midstream services revenues	—			15,812		—			(12,744		)	3,068
Realized loss on derivatives	(4,258		)	—		—			—			(4,258		)
Unrealized gain on derivatives	10,416			—		—			—			10,416
Expenses⁽¹⁾	106,155			7,198		17,209			(12,744		)	117,818
Operating income (loss)⁽²⁾	$	80,263		$	10,308	$	(17,209	)	$	—		$	73,362
Total assets	$	1,902,151		$	323,536	$	50,018		$	—		$	2,275,705
Capital expenditures⁽³⁾	$	189,445		$	45,717	$	526		$	—		$	235,688

_____________________


(1)	Includes depletion, depreciation and amortization expenses of $53.2 million and $1.5 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million.


(2)	Includes $5.0 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.


(3)	Includes $22.4 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.



	Exploration and Production								Consolidations and Eliminations			Consolidated Company
	Exploration and Production			Midstream		Corporate			Consolidations and Eliminations			Consolidated Company
Three Months Ended March 31, 2017
Oil and natural gas revenues	$	114,165		$	682	$	—		$	—		$	114,847
Midstream services revenues	—			9,616		—			(8,061		)	1,555
Realized loss on derivatives	(2,219		)	—		—			—			(2,219		)
Unrealized gain on derivatives	20,631			—		—			—			20,631
Expenses⁽¹⁾	68,339			4,503		15,755			(8,061		)	80,536
Operating income (loss)⁽²⁾	$	64,238		$	5,795	$	(15,755	)	$	—		$	54,278
Total assets	$	1,296,823		$	166,148	$	223,422		$	—		$	1,686,393
Capital expenditures⁽³⁾	$	208,373		$	12,880	$	1,464		$	—		$	222,717

_____________________


(1)	Includes depletion, depreciation and amortization expenses of $32.5 million and $1.2 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.3 million.


(2)	Includes $1.9 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.


(3)	Includes $4.7 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.