Industry Segment Information

9 Months Ended

Sep. 30, 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 September 30, 2019
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	78,045	$	—	$	—	$	—	$	—	$	78,045
Contract drilling	—		38,626		—		—		(1,030)		37,596
Gas gathering and processing	—		—		48,585		—		(8,787)		39,798
Total revenues	78,045		38,626		48,585		—		(9,817)		155,439
Expenses:
Operating costs:
Oil and natural gas	36,621		—		—		—		(1,257)		35,364
Contract drilling	—		29,913		—		—		(1,117)		28,796
Gas gathering and processing	—		—		36,023		—		(7,530)		28,493
Total operating costs	36,621		29,913		36,023		—		(9,904)		92,653
Depreciation, depletion, and amortization	43,587		12,845		11,847		1,935		—		70,214
Impairments	169,806		62,809		2,265		—		—		234,880
Total expenses	250,014		105,567		50,135		1,935		(9,904)		397,747
General and administrative	—		—		—		10,094		—		10,094
(Gain) loss on disposition of assets	(28)		288		(28)		(1)		—		231
Income (loss) from operations	(171,941)		(67,229)		(1,522)		(12,028)		87		(252,633)
Gain on derivatives	—		—		—		4,237		—		4,237
Interest, net	—		—		(448)		(9,086)		—		(9,534)
Other	—		(627)		—		5		—		(622)
Income (loss) before income taxes	$	(171,941)	$	(67,856)	$	(1,970)	$	(16,872)	$	87	$	(258,552)

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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 September 30, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	111,623	$	—	$	—	$	—	$	—	$	111,623
Contract drilling	—		58,012		—		—		(7,400)		50,612
Gas gathering and processing	—		—		82,882		—		(25,059)		57,823
Total revenues	111,623		58,012		82,882		—		(32,459)		220,058
Expenses:
Operating costs:
Oil and natural gas	33,400		—		—		—		(1,261)		32,139
Contract drilling	—		38,246		—		—		(6,214)		32,032
Gas gathering and processing	—		—		66,932		—		(23,798)		43,134
Total operating costs	33,400		38,246		66,932		—		(31,273)		107,305
Depreciation, depletion, and amortization	35,460		14,889		11,265		1,923		—		63,537
Total expenses	68,860		53,135		78,197		1,923		(31,273)		170,842
General and administrative	—		—		—		9,278		—		9,278
Gain on disposition of assets	(7)		(230)		(16)		—		—		(253)
Income (loss) from operations	42,770		5,107		4,701		(11,201)		(1,186)		40,191
Loss on derivatives	—		—		—		(4,385)		—		(4,385)
Interest, net	—		—		(381)		(7,564)		—		(7,945)
Other	—		—		—		6		—		6
Income (loss) before income taxes	$	42,770	$	5,107	$	4,320	$	(23,144)	(1,186)		$	27,867

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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.


	Nine Months Ended September 30, 2019
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	241,955	$	—	$	—	$	—	$	—	$	241,955
Contract drilling	—		147,598		—		—		(15,810)		131,788
Gas gathering and processing	—		—		173,724		—		(37,191)		136,533
Total revenues	241,955		147,598		173,724		—		(53,001)		510,276
Expenses:
Operating costs:
Oil and natural gas	108,148		—		—		—		(3,828)		104,320
Contract drilling	—		103,688		—		—		(14,183)		89,505
Gas gathering and processing	—		—		133,702		—		(33,363)		100,339
Total operating costs	108,148		103,688		133,702		—		(51,374)		294,164
Depreciation, depletion, and amortization	118,105		39,048		35,675		5,804		—		198,632
Impairments	169,806		62,809		2,265		—		—		234,880
Total expenses	396,059		205,545		171,642		5,804		(51,374)		727,676
General and administrative	—		—		—		29,899		—		29,899
(Gain) loss on disposition of assets	(166)		1,737		(136)		(11)		—		1,424
Income (loss) from operations	(153,938)		(59,684)		2,218		(35,692)		(1,627)		(248,723)
Gain on derivatives	—		—		—		5,232		—		5,232
Interest, net	—		—		(1,129)		(25,938)		—		(27,067)
Other	—		(627)		—		16		—		(611)
Income (loss) before income taxes	$	(153,938)	$	(60,311)	$	1,089	$	(56,382)	$	(1,627)	$	(271,169)

_______________________ ____________________

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.


	Nine Months Ended September 30, 2018
	Oil and Natural Gas		Contract Drilling		Mid-stream		Corporate and Other		Eliminations		Total Consolidated
	(In thousands)
Revenues: ⁽¹⁾
Oil and natural gas	$	317,040	$	—	$	—	$	—	$	—	$	317,040
Contract drilling	—		161,489		—		—		(17,962)		143,527
Gas gathering and processing	—		—		232,938		—		(65,012)		167,926
Total revenues	317,040		161,489		232,938		—		(82,974)		628,493
Expenses:
Operating costs:
Oil and natural gas	104,234		—		—		—		(3,715)		100,519
Contract drilling	—		111,121		—		—		(15,528)		95,593
Gas gathering and processing	—		—		185,738		—		(61,297)		124,441
Total operating costs	104,234		111,121		185,738		—		(80,540)		320,553
Depreciation, depletion, and amortization	97,797		41,927		33,493		5,759		—		178,976
Total expenses	202,031		153,048		219,231		5,759		(80,540)		499,529
General and administrative	—		—		—		28,752		—		28,752
Gain on disposition of assets	(136)		(314)		(95)		(30)		—		(575)
Income (loss) from operations	115,145		8,755		13,802		(34,481)		(2,434)		100,787
Loss on derivatives	—		—		—		(25,608)		—		(25,608)
Interest, net	—		—		(834)		(24,844)		—		(25,678)
Other	—		—		—		17		—		17
Income (loss) before income taxes	$	115,145	$	8,755	$	12,968	(84,916)		$	(2,434)	$	49,518

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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.