Segments (Tables)

6 Months Ended

Jun. 30, 2015

Schedule of Segment Reporting Information, by Segment

The following tables present selected financial information regarding the Company's operating segments for the periods presented:



(in thousands)	Exploration and production			Midstream and marketing			Intercompany eliminations			Consolidated company
Three months ended June 30, 2015:
Oil, NGL and natural gas sales	$	125,679		$	221		$	(346	)	$	125,554
Midstream service revenues	—			4,362			(2,636		)	1,726
Sales of purchased oil	—			55,051			—			55,051
Total revenues	125,679			59,634			(2,982		)	182,331
Lease operating expenses, including production tax	41,423			—			(2,717		)	38,706
Midstream service expenses, including minimum volume commitments	4,399			998			(221		)	5,176
Costs of purchased oil	—			54,417			—			54,417
General and administrative⁽¹⁾	21,347			1,861			—			23,208
Depletion, depreciation and amortization⁽²⁾	69,987			2,125			—			72,112
Other operating costs and expenses⁽³⁾	490,147			45			—			490,192
Operating income (loss)	$	(501,624	)	$	188		$	(44	)	$	(501,480	)
Other financial information:
Income from equity method investee	$	—		$	2,914		$	—		$	2,914
Interest expense⁽⁴⁾	$	(22,845	)	$	(1,125	)	$	—		$	(23,970	)
Loss on early redemption of debt⁽⁴⁾	$	(30,056	)	$	(1,481	)	$	—		$	(31,537	)
Capital expenditures⁽⁵⁾	$	(133,259	)	$	(13,841	)	$	—		$	(147,100	)
Gross property and equipment⁽⁶⁾	$	5,170,912		$	257,073		$	(365	)	$	5,427,620
Three months ended June 30, 2014:
Oil, NGL and natural gas sales	$	182,872		$	—		$	—		$	182,872
Midstream service revenues	—			1,542			(1,370		)	172
Total revenues	182,872			1,542			(1,370		)	183,044
Lease operating expenses, including production tax	34,709			—			(1,370		)	33,339
Midstream service expenses, including minimum volume commitments	—			2,114			—			2,114
General and administrative⁽¹⁾	27,742			1,810			—			29,552
Depletion, depreciation and amortization⁽²⁾	52,261			795			—			53,056
Other operating costs and expenses⁽³⁾	422			—			—			422
Operating income (loss)	$	67,738		$	(3,177	)	$	—		$	64,561
Other financial information:
Loss from equity method investee	$	—		$	(41	)	$	—		$	(41	)
Interest expense⁽⁴⁾	$	(29,729	)	$	(928	)	$	—		$	(30,657	)
Capital expenditures⁽⁵⁾	$	(229,922	)	$	(15,705	)	$	—		$	(245,627	)
Gross property and equipment⁽⁶⁾	$	3,962,611		$	123,648		$	—		$	4,086,259

_______________________________________________________________________________


(1)	General and administrative costs were allocated based on the number of employees in the respective segment as of June 30, 2015 and 2014. However, payroll, deferred compensation, vehicle costs and the capitalization of payroll and deferred compensation associated with land and geology are based on actual costs for each segment for the three months ended June 30, 2015 and 2014.


(2)	Depletion, depreciation and amortization is based on actual costs for each segment with the exception of the allocation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2015 and 2014.


(3)	Includes accretion of asset retirement obligations and impairments for the three months ended June 30, 2015 and 2014. These expenses are based on actual costs and are not allocated. See Notes 2.g and 2.n for discussion of the Company's impairments.


(4)	Interest expense and loss on early redemption of debt are allocated based on gross property and equipment and total contributions to the Company's equity method investee as of June 30, 2015 and 2014.


(5)	Capital expenditures excludes acquisition of oil and natural gas properties for the three months ended June 30, 2014.


(6)	Gross property and equipment includes investment in equity method investee totaling $103.2 million and $40.9 million as of June 30, 2015 and 2014, respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2015 and 2014.



(in thousands)	Exploration and production				Midstream and marketing				Intercompany eliminations			Consolidated company
Six months ended June 30, 2015:
Oil, NGL and natural gas sales	$	243,890		—	$	333		—	$	(551	)	$	243,672
Midstream service revenues	—			—	8,045			—	(5,010		)	3,035
Sales of purchased oil	—			—	86,318			—	—			86,318
Total revenues	243,890				94,696				(5,561		)	333,025
Lease operating expenses, including production tax	85,268			—	—			—	(5,096		)	80,172
Midstream service expenses, including minimum volume commitments	4,399			—	4,340			—	(333		)	8,406
Costs of purchased oil	—			—	85,617			—	—			85,617
General and administrative⁽¹⁾	41,125			—	3,938			—	—			45,063
Depletion, depreciation and amortization⁽²⁾	140,244			—	3,810			—	—			144,054
Other operating costs and expenses⁽³⁾	497,338			—	353			—	—			497,691
Operating loss	$	(524,484	)		$	(3,362	)		$	(132	)	$	(527,978	)
Other financial information:
Income from equity method investee	$	—		—	$	2,481		—	$	—		$	2,481
Interest expense⁽⁴⁾	$	(53,932	)	—	$	(2,452	)	—	$	—		$	(56,384	)
Loss on early redemption of debt⁽⁴⁾	$	(30,056	)		$	(1,481	)		$	—		$	(31,537	)
Capital expenditures⁽⁵⁾	$	(380,872	)	—	$	(34,314	)	—	$	—		$	(415,186	)
Gross property and equipment⁽⁶⁾	$	5,170,912			$	257,073			$	(365	)	$	5,427,620
Six months ended June 30, 2014:
Oil, NGL and natural gas sales	$	356,086			$	—			$	—		$	356,086
Midstream service revenues	—				2,572				(2,304		)	268
Sales of purchased oil	—				—				—			—
Total revenues	356,086				2,572				(2,304		)	356,354
Lease operating expenses, including production tax	69,878				—				(2,304		)	67,574
Midstream service expenses, including minimum volume commitments	—				3,475				—			3,475
General and administrative⁽¹⁾	54,058				3,148				—			57,206
Depletion, depreciation and amortization⁽²⁾	101,229				1,434				—			102,663
Other operating costs and expenses⁽³⁾	837				—				—			837
Operating income (loss)	$	130,084			$	(5,485	)		$	—		$	124,599
Other financial information:
Loss from equity method investee	$	—			$	(25	)		$	—		$	(25	)
Interest expense⁽⁴⁾	$	(58,103	)		$	(1,540	)		$	—		$	(59,643	)
Capital expenditures⁽⁵⁾	$	(420,331	)		$	(26,225	)		$	—		$	(446,556	)
Gross property and equipment⁽⁶⁾	$	3,962,611			$	123,648			$	—		$	4,086,259

_______________________________________________________________________________


(1)	General and administrative costs were allocated based on the number of employees in the respective segment as of June 30, 2015 and 2014. However, payroll, deferred compensation, vehicle costs and the capitalization of payroll and deferred compensation associated with land and geology are based on actual costs for each segment for the six months ended June 30, 2015 and 2014.


(2)	Depletion, depreciation and amortization is based on actual costs for each segment with the exception of the allocation of other fixed assets, which is based on the number of employees in the respective segment as of June 30, 2015 and 2014.


(3)	Includes the following expenses: restructuring expense, accretion of asset retirement obligations and impairments for the six months ended June 30, 2015 and 2014. These expenses are based on actual costs and are not allocated. See Notes 2.g and 2.n for discussion of the Company's impairments.


(4)	Interest expense and loss on early redemption of debt are allocated based on gross property and equipment and total contributions to the Company's equity method investee as of June 30, 2015 and 2014.


(5)	Capital expenditures excludes acquisition of mineral interests and acquisition of oil and natural gas properties for the six months ended June 30, 2014.


(6)	Gross property and equipment includes investment in equity method investee totaling $103.2 million and $40.9 million as of June 30, 2015 and 2014, respectively. Other fixed assets were allocated based on the number of employees in the respective segment as of June 30, 2015 and 2014