Industry Segment Information

3 Months Ended

Mar. 31, 2019

INDUSTRY SEGMENT INFORMATION

We have three main business segments offering different products and services within the energy industry:

•Oil and natural gas,

•Contract drilling, and

•Mid-stream

Our oil and natural gas segment is engaged in the acquisition, development, and production of oil, NGLs, and natural gas properties. The contract drilling segment is engaged in the land contract drilling of oil and natural gas wells and the mid-stream segment is engaged in the buying, selling, gathering, processing, and treating of natural gas and NGLs.

We evaluate each segment’s performance based on its operating income, which is defined as operating revenues less operating expenses and depreciation, depletion, amortization, and impairment. We have no oil and natural gas production outside the United States.

The following tables provide certain information about the operations of each of our segments:


	Three Months Ended March 31, 2019
	Oil and Natural Gas		Contract Drilling		Mid-stream		Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	86,095	$	—	$	—	$	—	$	—	$	86,095
Contract drilling	—		58,199		—		—		(7,044)		51,155
Gas gathering and processing	—		—		70,509		—		(18,068)		52,441
Total revenues	86,095		58,199		70,509		—		(25,112)		189,691
Expenses:
Operating costs:
Oil and natural gas	34,008		—		—		—		(1,294)		32,714
Contract drilling	—		37,385		—		—		(5,984)		31,401
Gas gathering and processing	—		—		56,129		—		(16,774)		39,355
Total operating costs	34,008		37,385		56,129		—		(24,052)		103,470
Depreciation, depletion, and amortization	35,767		12,699		11,726		1,934		—		62,126
Total expenses	69,775		50,084		67,855		1,934		(24,052)		165,596
General and administrative	—		—		—		9,741		—		9,741
(Gain) loss on disposition of assets	(79)		1,746		(42)		(10)		—		1,615
Income (loss) from operations	16,399		6,369		2,696		(11,665)		(1,060)		12,739
Loss on derivatives	—		—		—		(6,932)		—		(6,932)
Interest, net	—		—		(336)		(8,202)		—		(8,538)
Other	—		—		—		5		—		5
Income (loss) before income taxes	$	16,399	$	6,369	$	2,360	$	(26,794)	$	(1,060)	$	(2,726)

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1.The revenues for oil and natural gas occur at a point in time. The revenues for contract drilling and gas gathering and processing occur over time.


	Three Months Ended March 31, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream		Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	103,099	$	—	$	—	$	—	$	—	$	103,099
Contract drilling	—		50,710		—		—		(4,721)		45,989
Gas gathering and processing	—		—		74,650		—		(18,606)		56,044
Total revenues	103,099		50,710		74,650		—		(23,327)		205,132
Expenses:
Operating costs:
Oil and natural gas	37,152		—		—		—		(1,190)		35,962
Contract drilling	—		35,954		—		—		(4,287)		31,667
Gas gathering and processing	—		—		59,020		—		(17,416)		41,604
Total operating costs	37,152		35,954		59,020		—		(22,893)		109,233
Depreciation, depletion, and amortization	30,783		13,312		11,053		1,918		—		57,066
Total expenses	67,935		49,266		70,073		1,918		(22,893)		166,299
General and administrative expense	—		—		—		10,762		—		10,762
Gain on disposition of assets	(71)		(26)		(34)		(30)		—		(161)
Income (loss) from operations	35,235		1,470		4,611		(12,650)		(434)		28,232
Loss on derivatives	—		—		—		(6,762)		—		(6,762)
Interest, net	—		—		(149)		(9,855)		—		(10,004)
Other	—		—		—		6		—		6
Income (loss) before income taxes	$	35,235	$	1,470	$	4,462	$	(29,261)	$	(434)	$	11,472

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1.The revenues for oil and natural gas occur at a point in time. The revenues for contract drilling and gas gathering and processing occur over time.