Industry Segment Information

6 Months Ended

Jun. 30, 2011

Industry Segment Information

Industry Segment Information

NOTE 12 – INDUSTRY SEGMENT INFORMATION

We have three main business segments offering different products and services:

• Contract drilling,

• Oil and natural gas and

• Mid-stream

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

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. Our natural gas production in Canada is not significant.

The following table provides certain information about the operations of each of our segments:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(In thousands)
Revenues:
Contract drilling	$	129,281		$	82,046		$	241,789		$	149,547
Elimination of inter-segment revenue		(14,098	)		(9,985	)		(28,618	)		(16,632	)
Contract drilling net of inter-segment revenue		115,183			72,061			213,171			132,915
Oil and natural gas		131,662			91,136			241,496			190,189
Gas gathering and processing		63,894			47,008			120,902			100,742
Elimination of inter-segment revenue		(19,526	)		(10,664	)		(36,770	)		(23,263	)
Gas gathering and processing net of inter-segment revenue		44,368			36,344			84,132			77,479
Other		282			5,062			101			10,570
Total revenues	$	291,495		$	204,603		$	538,900		$	411,153
Operating income:
Contract drilling	$	31,727		$	9,075		$	59,574		$	15,243
Oil and natural gas		53,695			41,000			92,480			89,683
Gas gathering and processing		3,742			3,424			10,678			7,892
Total operating income (1)		89,164			53,499			162,732			112,818
General and administrative expense		(7,496	)		(6,456	)		(14,388	)		(12,735	)
Interest expense, net		(673	)		0			(727	)		0
Other income, net		282			5,062			101			10,570
Income before income taxes	$	81,277		$	52,105		$	147,718		$	110,653

(1) Operating income is total operating revenues less operating expenses, depreciation, depletion and amortization and does not include non-operating revenues, general corporate expenses, interest expense or income taxes.