Note 4 - Segment Information

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

4. SEGMENT INFORMATION 

The Company’s operations are based in Gabon, Egypt, and Canada, and the Company has an undeveloped block in Equatorial Guinea. Each of the Company’s reportable operating segments is organized and managed based upon geographic location. The Company’s Chief Executive Officer, who is the chief operating decision maker, and management review and evaluate the operation of each geographic segment separately, primarily based on operating income (loss). The operations of all segments include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues are based on the location of hydrocarbon production. Corporate and other is primarily corporate and operations support costs that are not allocated to the reportable operating segments.

Segment activity of continuing operations for the three and nine months ended September 30, 2023 and 2022 as well as long-lived assets and segment assets at September 30, 2023 and December 31, 2022 are as follows:

	Three Months Ended September 30, 2023
(in thousands)	Gabon			Egypt			Canada		Equatorial Guinea			Corporate and Other			Total
Revenues:
Crude oil, natural gas and natural gas liquids sales	$	57,275		$	50,307		$	8,687	$	—		$	—		$	116,269
Operating costs and expenses:
Production expense		20,731			16,040			2,627		259			299			39,956
FPSO Demobilization		—			—			—		—			—			—
Exploration expense		—			1,194			—		—			—			1,194
Depreciation, depletion and amortization		14,583			12,967			4,948		—			40			32,538
General and administrative expense		348			54			—		94			5,720			6,216
Credit losses and other		684			—			—		138			—			822
Total operating costs and expenses		36,346			30,255			7,575		491			6,059			80,726
Other operating income (expense), net		5			—			—		—			—			5
Operating income		20,934			20,052			1,112		(491	)		(6,059	)		35,548
Other income (expense):
Derivative instruments loss, net		—			—			—		—			(2,320	)		(2,320	)
Interest (expense) income, net		(1,371	)		(270	)		—		—			215			(1,426	)
Other (expense) income, net		111			—			—		(3	)		75			183
Total other expense, net		(1,260	)		(270	)		—		(3	)		(2,030	)		(3,563	)
Income (loss) from continuing operations before income taxes		19,674			19,782			1,112		(494	)		(8,089	)		31,985
Income tax (benefit) expense		13,173			888			—		—			11,783			25,844
Income (loss) from continuing operations		6,501			18,894			1,112		(494	)		(19,872	)		6,141
Loss from discontinued operations, net of tax		—			—			—		—			—			—
Net income (loss)	$	6,501		$	18,894		$	1,112	$	(494	)	$	(19,872	)	$	6,141
Consolidated capital expenditures	$	10,109		$	11,987		$	3,870	$	—		$	—		$	25,966

	Nine Months Ended September 30, 2023
(in thousands)	Gabon			Egypt			Canada			Equatorial Guinea			Corporate and Other			Total
Revenues:
Crude oil, natural gas and natural gas liquids sales	$	171,936		$	106,399		$	27,577		$	—		$	—		$	305,912
Operating costs and expenses:
Production expense		59,077			38,239			8,136			1,007			301			106,760
FPSO Demobilization		5,647			—			—			—			—			5,647
Exploration expense		51			1,208			—			—			—			1,259
Depreciation, depletion and amortization		43,885			37,519			13,406			—			148			94,958
General and administrative expense		1,284			435			—			310			14,806			16,835
Credit losses and other		2,137			—			—			300			—			2,437
Total operating costs and expenses		112,081			77,401			21,542			1,617			15,255			227,896
Other operating income, net		(57	)		(241	)		—			—			—			(298	)
Operating income (loss)		59,798			28,757			6,035			(1,617	)		(15,255	)		77,718
Other income (expense):
Derivative instruments gain, net		—			—			—			—			(2,268	)		(2,268	)
Interest (expense) income, net		(4,254	)		(1,581	)		(4	)		—			464			(5,375	)
Other income (expense), net		9			—			1			(4	)		(1,500	)		(1,494	)
Total other expense, net		(4,245	)		(1,581	)		(3	)		(4	)		(3,304	)		(9,137	)
Income (loss) from continuing operations before income taxes		55,553			27,176			6,032			(1,621	)		(18,559	)		68,581
Income tax expense (benefit)		36,002			10,141			—			—			6,060			52,203
Income (loss) from continuing operations		19,551			17,035			6,032			(1,621	)		(24,619	)		16,378
Loss from discontinued operations, net of tax		—			—			—			—			(15	)		(15	)
Net income (loss)	$	19,551		$	17,035		$	6,032		$	(1,621	)	$	(24,634	)	$	16,363
Consolidated capital expenditures	$	15,173		$	32,084		$	16,008		$	—		$	36		$	63,301

	Three Months Ended September 30, 2022
(in thousands)	Gabon			Equatorial Guinea			Corporate and Other			Total
Revenues:
Crude oil and natural gas sales	$	78,097		$	—		$	—		$	78,097
Operating costs and expenses:
Production expense		22,828			484			—			23,312
FPSO demobilization		8,867			—			—			8,867
Exploration expense		56			—			—			56
Depreciation, depletion and amortization		8,940			—			23			8,963
General and administrative expense		915			120			944			1,979
Bad debt expense and other		681			339			—			1,020
Total operating costs and expenses		42,287			943			967			44,197
Other operating income (expense), net		—			—			—			—
Operating income		35,810			(943	)		(967	)		33,900
Other income (expense):
Derivative instruments loss, net		—			—			3,778			3,778
Interest (expense) income, net		(351	)		—			117			(234	)
Other (expense) income, net		(1,305	)		1			(6,403	)		(7,707	)
Total other expense, net		(1,656	)		1			(2,508	)		(4,163	)
Income from continuing operations before income taxes		34,154			(942	)		(3,475	)		29,737
Income tax (benefit) expense		25,415			—			(2,572	)		22,843
Income from continuing operations		8,739			(942	)		(903	)		6,894
Loss from discontinued operations, net of tax		—			—			(26	)		(26	)
Net income	$	8,739		$	(942	)	$	(929	)	$	6,868
Consolidated capital expenditures	$	51,610		$	—		$	53		$	51,663

	Nine Months Ended September 30, 2022
(in thousands)	Gabon			Equatorial Guinea			Corporate and Other			Total
Revenues:
Crude oil and natural gas sales	$	257,738		$	—		$	—		$	257,738
Operating costs and expenses:
Production expense		66,269			878			—			67,147
FPSO demobilization		8,867			—			—			8,867
Exploration expense		250			—			—			250
Depreciation, depletion and amortization		21,766			—			61			21,827
General and administrative expense		2,073			329			8,105			10,507
Credit losses and other		1,744			339			—			2,083
Total operating costs and expenses		100,969			1,546			8,166			110,681
Other operating income (expense), net		(5	)		—			—			(5	)
Operating income		156,764			(1,546	)		(8,166	)		147,052
Other income (expense):
Derivative instruments loss, net		—			—			(37,522	)		(37,522	)
Interest (expense) income, net		(515	)		—			160			(355	)
Other (expense) income, net		(2,799	)		(1	)		(7,714	)		(10,514	)
Total other expense, net		(3,314	)		(1	)		(45,076	)		(48,391	)
Income from continuing operations before income taxes		153,450			(1,547	)		(53,242	)		98,661
Income tax (benefit) expense		74,671			1			(10,205	)		64,467
Income from continuing operations		78,779			(1,548	)		(43,037	)		34,194
Loss from discontinued operations, net of tax		—			—			(58	)		(58	)
Net income	$	78,779		$	(1,548	)	$	(43,095	)	$	34,136
Consolidated capital expenditures	$	121,492		$	—		$	120		$	121,612

(in thousands)	Gabon		Egypt		Canada		Equatorial Guinea		Corporate and Other		Total
Long-lived assets from continuing operations:
As of September 30, 2023	$	186,966	$	163,639	$	106,561	$	10,000	$	711	$	467,877
As of December 31, 2022	$	213,204	$	168,012	$	103,263	$	10,000	$	793	$	495,272

(in thousands)	Gabon		Egypt		Canada		Equatorial Guinea		Corporate and Other		Total
Total assets from continuing operations:
As of September 30, 2023	$	353,896	$	254,673	$	112,289	$	11,335	$	95,635	$	827,828
As of December 31, 2022	$	395,393	$	293,640	$	110,071	$	10,861	$	45,676	$	855,641

Information about the Company’s most significant customers

For the three and nine months ended September 30, 2023 sales of crude oil to Glencore made up 100% of Etame revenues. For the three and nine months ended September 30, 2022, sales of crude oil to ExxonMobil Sales and Supply LLC made up 100% of Etame revenues through July 2022. For August and September 2022, sales to Glencore made up 100% of Etame revenues. For the three months ended September 30, 2023, the EGPC and Mercuria split the Company's crude oil sales in Egypt. For the nine months ended  September 30, 2023, Mercuria covered 100% of the Company’s crude oil sales in Egypt in the first quarter; the EGPC covered 100% of sales in the second quarter; and, sales were split between Mercuria and the EGPC in the third quarter. For the three and nine months ended September 30, 2023, revenues in Canada were concentrated in three separate customers. For the nine months ended September 30, 2023, these customers were Plains Midstream (41.9%), AltaGas (18.4%), and PetroGas Energy (28.4%). For the three months ended September 30, 2023, these customers were PetroGas Energy (51.0%), Plains Midstream (19.8%) and AltaGas (17.5%). Concentrations of accounts receivable are similar to the revenue percentages.