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Segment Information
9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
SEGMENT INFORMATION
The Company operates in two business segments: (i) exploration and production and (ii) midstream. The exploration and production segment is engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States 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. 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, oil, natural gas 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
 
 
Midstream
 
Corporate
 
 
Three Months Ended September 30, 2019
 
 
 
 
 
 
 
 
 
Oil and natural gas revenues
$
228,188

 
$
1,189

 
$

 
$

 
$
229,377

Midstream services revenues

 
35,533

 

 
(20,276
)
 
15,257

Sales of purchased natural gas
3,080

 
16,784

 

 

 
19,864

Lease bonus - mineral acreage
1,711

 

 

 

 
1,711

Realized gain on derivatives
3,346

 

 

 

 
3,346

Unrealized gain on derivatives
9,847

 

 

 

 
9,847

Expenses(1)
164,352

 
30,611

 
18,613

 
(20,276
)
 
193,300

Operating income (loss)(2)
$
81,820

 
$
22,895

 
$
(18,613
)
 
$

 
$
86,102

Total assets
$
3,332,910

 
$
566,551

 
$
37,178

 
$

 
$
3,936,639

Capital expenditures(3)
$
201,323

 
$
66,438

 
$
1,705

 
$

 
$
269,466

_____________________
(1)
Includes depletion, depreciation and amortization expenses of $87.7 million and $4.1 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.7 million.
(2)
Includes $9.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.
(3)
Includes $6.5 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $47.2 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
 
Exploration and Production
 
 
 
 
 
Consolidations and Eliminations
 
Consolidated Company
 
 
Midstream
 
Corporate
 
 
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Oil and natural gas revenues
$
215,248

 
$
1,034

 
$

 
$

 
$
216,282

Midstream services revenues

 
24,950

 

 
(18,141
)
 
6,809

Realized gain on derivatives
5,424

 

 

 

 
5,424

Unrealized loss on derivatives
(21,337
)
 

 

 

 
(21,337
)
Expenses(1)
128,263

 
10,162

 
19,041

 
(18,141
)
 
139,325

Operating income (loss)(2)
$
71,072

 
$
15,822

 
$
(19,041
)
 
$

 
$
67,853

Total assets
$
2,697,685

 
$
391,323

 
$
65,194

 
$

 
$
3,154,202

Capital expenditures(3)
$
716,751

 
$
47,153

 
$
312

 
$

 
$
764,216

_____________________
(1)
Includes depletion, depreciation and amortization expenses of $67.2 million and $2.6 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million.
(2)
Includes $7.3 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.
(3)
Includes $554.9 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $23.1 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
 
Exploration and Production
 
 
 
 
 
Consolidations and Eliminations
 
Consolidated Company
 
 
Midstream
 
Corporate
 
 
Nine Months Ended September 30, 2019
 
 
 
 
 
 
 
 
 
Oil and natural gas revenues
$
629,414

 
$
4,292

 
$

 
$

 
$
633,706

Midstream services revenues

 
97,953

 

 
(56,499
)
 
41,454

Sales of purchased natural gas
3,080

 
36,978

 

 

 
40,058

Lease bonus - mineral acreage
1,711

 

 

 

 
1,711

Realized gain on derivatives
7,781

 

 

 

 
7,781

Unrealized loss on derivatives
(29,715
)
 

 

 

 
(29,715
)
Expenses(1)
447,844

 
79,870

 
53,349

 
(56,499
)
 
524,564

Operating income (loss)(2)
$
164,427

 
$
59,353

 
$
(53,349
)
 
$

 
$
170,431

Total assets
$
3,332,910

 
$
566,551

 
$
37,178

 
$

 
$
3,936,639

Capital expenditures(3)
$
565,466

 
$
137,577

 
$
3,911

 
$

 
$
706,954

_____________________
(1)
Includes depletion, depreciation and amortization expenses of $236.0 million and $11.6 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.9 million.
(2)
Includes $25.6 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.
(3)
Includes $37.8 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $85.1 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.
 
Exploration and Production
 
 
 
 
 
Consolidations and Eliminations
 
Consolidated Company
 
 
Midstream
 
Corporate
 
 
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
Oil and natural gas revenues
$
602,737

 
$
4,518

 
$

 
$

 
$
607,255

Midstream services revenues

 
60,658

 

 
(47,374
)
 
13,284

Realized loss on derivatives
(1,322
)
 

 

 

 
(1,322
)
Unrealized loss on derivatives
(9,492
)
 

 

 

 
(9,492
)
Expenses(1)
359,830

 
26,723

 
55,338

 
(47,374
)
 
394,517

Operating income (loss)(2)
$
232,093

 
$
38,453

 
$
(55,338
)
 
$

 
$
215,208

Total assets
$
2,697,685

 
$
391,323

 
$
65,194

 
$

 
$
3,154,202

Capital expenditures(3)
$
1,105,541

 
$
125,770

 
$
1,570

 
$

 
$
1,232,881

_____________________
(1)
Includes depletion, depreciation and amortization expenses of $184.4 million and $6.5 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.8 million.
(2)
Includes $18.2 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.
(3)
Includes $613.8 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $61.6 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.