Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.10.0.1
Segment Information
6 Months Ended
Jun. 30, 2018
Segment Information  
Segment Information

(15)Segment Information

See Note 2(i) for a description of the Company’s determination of its reportable segments.  Revenues from gathering and processing and water handling and treatment operations are primarily derived from intersegment transactions for services provided to the Company’s exploration and production operations.  Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market excess firm transportation capacity to third parties.

Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income of each segment.  General and administrative expenses are allocated to the gathering and processing and water handling and treatment segments based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures, and labor costs, as applicable.  General and administrative expenses related to the marketing segment are not allocated because they are immaterial.  Other income, income taxes, and interest expense are primarily managed and evaluated on a consolidated basis.  Intersegment sales are transacted at prices which approximate market.  Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2 to the condensed consolidated financial statements.

The operating results and assets of the Company’s reportable segments were as follows for the three months ended June 30, 2017 and 2018 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Exploration
and
production

    

Gathering and
processing

    

Water handling and treatment

    

Marketing

    

Elimination of
intersegment
transactions

    

Consolidated
total

 

Three months ended June 30, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third-party

 

$

737,229

 

2,324

 

868

 

49,968

 

 —

 

790,389

 

Intersegment

 

 

3,911

 

96,438

 

94,137

 

 —

 

(194,486)

 

 —

 

Total

 

$

741,140

 

98,762

 

95,005

 

49,968

 

(194,486)

 

790,389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

$

17,189

 

 —

 

41,444

 

 —

 

(41,641)

 

16,992

 

Gathering, compression, processing, and transportation

 

 

353,216

 

9,910

 

 —

 

 —

 

(96,379)

 

266,747

 

Impairment of unproved properties

 

 

15,199

 

 —

 

 —

 

 —

 

 —

 

15,199

 

Depletion, depreciation, and amortization

 

 

170,446

 

22,494

 

8,242

 

 —

 

 —

 

201,182

 

General and administrative

 

 

49,531

 

10,705

 

4,084

 

 —

 

(221)

 

64,099

 

Other

 

 

24,052

 

12

 

4,532

 

77,421

 

(3,590)

 

102,427

 

Total

 

 

629,633

 

43,121

 

58,302

 

77,421

 

(141,831)

 

666,646

 

Operating income (loss)

 

$

111,507

 

55,641

 

36,703

 

(27,453)

 

(52,655)

 

123,743

 

Equity in earnings of unconsolidated affiliates

 

$

 —

 

3,623

 

 —

 

 —

 

 —

 

3,623

 

Segment assets

 

$

13,430,135

 

2,065,899

 

711,735

 

14,357

 

(779,905)

 

15,442,221

 

Capital expenditures for segment assets

 

$

583,687

 

88,806

 

58,497

 

 —

 

(51,342)

 

679,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Exploration
and
production

    

Gathering and
processing

    

Water handling and treatment

    

Marketing

    

Elimination of
intersegment
transactions

    

Consolidated
total

 

Three months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third-party

 

$

823,734

 

4,263

 

1,255

 

160,092

 

 —

 

989,344

 

Intersegment

 

 

5,179

 

114,456

 

131,001

 

 —

 

(250,636)

 

 —

 

Total

 

$

828,913

 

118,719

 

132,256

 

160,092

 

(250,636)

 

989,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

$

32,312

 

 —

 

62,218

 

 —

 

(64,366)

 

30,164

 

Gathering, compression, processing, and transportation

 

 

409,708

 

12,400

 

 —

 

 —

 

(114,322)

 

307,786

 

Impairment of unproved properties

 

 

134,437

 

 —

 

 —

 

 —

 

 —

 

134,437

 

Impairment of gathering systems and facilities

 

 

 —

 

8,501

 

 —

 

 —

 

 —

 

8,501

 

Depletion, depreciation, and amortization

 

 

201,393

 

24,482

 

12,175

 

 —

 

 —

 

238,050

 

General and administrative

 

 

46,662

 

11,995

 

3,499

 

 —

 

(469)

 

61,687

 

Other

 

 

27,023

 

 4

 

4,982

 

213,420

 

(3,947)

 

241,482

 

Total

 

 

851,535

 

57,382

 

82,874

 

213,420

 

(183,104)

 

1,022,107

 

Operating income (loss)

 

$

(22,622)

 

61,337

 

49,382

 

(53,328)

 

(67,532)

 

(32,763)

 

Equity in earnings of unconsolidated affiliates

 

$

 —

 

9,264

 

 —

 

 —

 

 —

 

9,264

 

Segment assets

 

$

13,381,044

 

2,299,863

 

993,238

 

61,684

 

(1,045,222)

 

15,690,607

 

Capital expenditures for segment assets

 

$

506,055

 

113,083

 

17,842

 

 —

 

(73,919)

 

563,061

 

 

The operating results and assets of the Company’s reportable segments were as follows for the six months ended June 30, 2017 and 2018 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Exploration
and
production

    

Gathering and
processing

    

Water handling and treatment

    

Marketing

    

Elimination of
intersegment
transactions

    

Consolidated
total

 

Six months ended June 30, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third-party

 

$

1,864,280

 

4,863

 

933

 

115,892

 

 —

 

1,985,968

 

Intersegment

 

 

8,351

 

185,558

 

177,182

 

 —

 

(371,091)

 

 —

 

Total

 

$

1,872,631

 

190,421

 

178,115

 

115,892

 

(371,091)

 

1,985,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

$

32,931

 

 —

 

80,066

 

 —

 

(80,454)

 

32,543

 

Gathering, compression, processing, and transportation

 

 

700,984

 

18,024

 

 —

 

 —

 

(185,432)

 

533,576

 

Impairment of unproved properties

 

 

42,098

 

 —

 

 —

 

 —

 

 —

 

42,098

 

Depletion, depreciation, and amortization

 

 

345,415

 

42,418

 

16,078

 

 —

 

 —

 

403,911

 

General and administrative

 

 

100,587

 

20,843

 

8,403

 

 —

 

(1,036)

 

128,797

 

Other

 

 

50,771

 

12

 

8,876

 

167,414

 

(7,116)

 

219,957

 

Total

 

 

1,272,786

 

81,297

 

113,423

 

167,414

 

(274,038)

 

1,360,882

 

Operating income (loss)

 

$

599,845

 

109,124

 

64,692

 

(51,522)

 

(97,053)

 

625,086

 

Equity in earnings of unconsolidated affiliates

 

$

 —

 

5,854

 

 —

 

 —

 

 —

 

5,854

 

Segment assets

 

$

13,430,135

 

2,065,899

 

711,735

 

14,357

 

(779,905)

 

15,442,221

 

Capital expenditures for segment assets

 

$

1,041,426

 

155,365

 

95,451

 

 —

 

(96,360)

 

1,195,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Exploration
and
production

    

Gathering and
processing

    

Water handling and treatment

    

Marketing

    

Elimination of
intersegment
transactions

    

Consolidated
total

 

Six months ended June 30, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third-party

 

$

1,608,277

 

8,408

 

2,045

 

398,715

 

 —

 

2,017,445

 

Intersegment

 

 

11,054

 

218,488

 

251,625

 

 —

 

(481,167)

 

 —

 

Total

 

$

1,619,331

 

226,896

 

253,670

 

398,715

 

(481,167)

 

2,017,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

$

63,574

 

 —

 

117,090

 

 —

 

(123,778)

 

56,886

 

Gathering, compression, processing, and transportation

 

 

794,053

 

23,768

 

 —

 

 —

 

(218,097)

 

599,724

 

Impairment of unproved properties

 

 

184,973

 

 —

 

 —

 

 —

 

 —

 

184,973

 

Impairment of gathering systems and facilities

 

 

 —

 

8,501

 

 —

 

 —

 

 —

 

8,501

 

Depletion, depreciation, and amortization

 

 

396,981

 

48,120

 

21,193

 

 —

 

 —

 

466,294

 

General and administrative

 

 

93,082

 

22,357

 

7,592

 

 —

 

(1,314)

 

121,717

 

Other

 

 

54,371

 

18

 

9,892

 

409,159

 

(7,821)

 

465,619

 

Total

 

 

1,587,034

 

102,764

 

155,767

 

409,159

 

(351,010)

 

1,903,714

 

Operating income (loss)

 

$

32,297

 

124,132

 

97,903

 

(10,444)

 

(130,157)

 

113,731

 

Equity in earnings of unconsolidated affiliates

 

$

 —

 

17,126

 

 —

 

 —

 

 —

 

17,126

 

Segment assets

 

$

13,381,044

 

2,299,863

 

993,238

 

61,684

 

(1,045,222)

 

15,690,607

 

Capital expenditures for segment assets

 

$

978,822

 

206,753

 

58,127

 

 —

 

(134,678)

 

1,109,024