Segment Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

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, Wolf and Stateline asset areas and the Greater Stebbins Area 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 June 30, 2020
Oil and natural gas revenues	$	118,258	$	509	$	—	$	—	$	118,767
Midstream services revenues	—		36,234		—		(21,566)		14,668
Sales of purchased natural gas	8,327		5,654		—		—		13,981
Lease bonus - mineral acreage	4,062		—		—		—		4,062
Realized gain on derivatives	44,110		—		—		—		44,110
Unrealized loss on derivatives	(132,668)		—		—		—		(132,668)
Expenses(1)	483,812		23,575		12,409		(21,566)		498,230
Operating (loss) income(2)	$	(441,723)	$	18,822	$	(12,409)	$	—	$	(435,310)
Total assets	$	3,159,528	$	765,034	$	76,571	$	—	$	4,001,133
Capital expenditures(3)	$	130,709	$	64,656	$	594	$	—	$	195,959

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(1)  Includes depletion, depreciation and amortization expenses of $87.8 million and $5.0 million for the exploration and production and midstream segments, respectively. Includes full-cost ceiling impairment of $324.0 million for the exploration and production segment. Also includes corporate depletion, depreciation and amortization expenses of $0.7 million.

(2)  Includes $7.5 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)  Includes $9.6 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $31.9 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 June 30, 2019
Oil and natural gas revenues	$	209,563	$	1,497	$	—	$	—	$	211,060
Midstream services revenues	—		32,166		—		(17,807)		14,359
Sales of purchased natural gas	—		8,963		—		—		8,963
Realized gain on derivatives	1,165		—		—		—		1,165
Unrealized gain on derivatives	6,157		—		—		—		6,157
Expenses(1)	141,514		23,425		17,783		(17,807)		164,915
Operating income (loss)(2)	$	75,371	$	19,201	$	(17,783)	$	—	$	76,789
Total assets	$	3,155,577	$	508,074	$	87,800	$	—	$	3,751,451
Capital expenditures(3)	$	166,532	$	41,707	$	1,400	$	—	$	209,639

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(1)  Includes depletion, depreciation and amortization expenses of $75.7 million and $3.8 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $0.6 million.

(2)  Includes $8.3 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)  Includes $8.2 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $24.2 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
Six Months Ended June 30, 2020
Oil and natural gas revenues	$	315,053	$	1,628	$	—	$	—	$	316,681
Midstream services revenues	—		73,983		—		(43,485)		30,498
Sales of purchased natural gas	11,922		12,603		—		—		24,525
Lease bonus - mineral acreage	4,062		—		—		—		4,062
Realized gain on derivatives	54,977		—		—		—		54,977
Unrealized gain on derivatives	3,762		—		—		—		3,762
Expenses(1)	645,137		47,905		26,726		(43,485)		676,283
Operating income (loss)(2)	$	(255,361)	$	40,309	$	(26,726)	$	—	$	(241,778)
Total assets	$	3,159,528	$	765,034	$	76,571	$	—	$	4,001,133
Capital expenditures(3)	$	340,444	$	132,729	$	1,381	$	—	$	474,554

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(1)  Includes depletion, depreciation and amortization expenses of $172.9 million and $9.8 million for the exploration and production and midstream segments, respectively. Includes full-cost ceiling impairment of $324.0 million for the exploration and production segment. Also includes corporate depletion, depreciation and amortization expenses of $1.4 million.

(2)  Includes $16.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)  Includes $49.3 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $79.4 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.

	Exploration and Production						Consolidations and Eliminations		Consolidated Company
			Midstream		Corporate
Six Months Ended June 30, 2019
Oil and natural gas revenues	$	401,226	$	3,103	$	—	$	—	$	404,329
Midstream services revenues	—		62,420		—		(36,223)		26,197
Sales of purchased natural gas	—		20,194		—		—		20,194
Realized gain on derivatives	4,435		—		—		—		4,435
Unrealized loss on derivatives	(39,562)		—		—		—		(39,562)
Expenses(1)	283,493		49,260		34,734		(36,223)		331,264
Operating income (loss)(2)	$	82,606	$	36,457	$	(34,734)	$	—	$	84,329
Total assets	$	3,155,577	$	508,074	$	87,800	$	—	$	3,751,451
Capital expenditures(3)	$	364,143	$	71,139	$	2,206	$	—	$	437,488

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(1)  Includes depletion, depreciation and amortization expenses of $148.3 million and $7.5 million for the exploration and production and midstream segments, respectively. Also includes corporate depletion, depreciation and amortization expenses of $1.2 million.

(2)  Includes $15.8 million in net income attributable to non-controlling interest in subsidiaries related to the midstream segment.

(3)  Includes $31.3 million attributable to land and seismic acquisition expenditures related to the exploration and production segment and $37.9 million in capital expenditures attributable to non-controlling interest in subsidiaries related to the midstream segment.