Industry Segment Information

9 Months Ended

Sep. 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

• Midstream

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 midstream 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 oil and natural gas production outside the United States is not significant.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
	(In thousands)
Revenues:
Contract drilling	$	140,193		$	96,705		$	381,982		$	246,252
Elimination of inter-segment revenue		(11,266	)		(11,701	)		(39,884	)		(28,333	)
Contract drilling net of inter-segment revenue		128,927			85,004			342,098			217,919
Oil and natural gas		134,897			96,562			376,393			286,751
Gas gathering and processing		79,919			47,864			200,821			148,606
Elimination of inter-segment revenue		(19,231	)		(10,435	)		(56,001	)		(33,698	)
Gas gathering and processing net of inter-segment revenue		60,688			37,429			144,820			114,908
Other, net		(667	)		(879	)		(566	)		9,691
Total revenues	$	323,845		$	218,116		$	862,745		$	629,269
Operating income:
Contract drilling	$	35,105		$	21,129		$	94,679		$	36,372
Oil and natural gas		58,104			39,379			150,584			129,062
Gas gathering and processing		3,372			2,863			14,050			10,755
Total operating income (1)		96,581			63,371			259,313			176,189
General and administrative expense		(7,800	)		(6,637	)		(22,188	)		(19,372	)
Interest expense, net		(1,351	)		0			(2,078	)		0
Other income (loss), net		(667	)		(879	)		(566	)		9,691
Income before income taxes	$	86,763		$	55,855		$	234,481		$	166,508

(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.