Business Segment Information

9 Months Ended

Sep. 30, 2019

The Company’s exploration and production segment is engaged in the acquisition and development of oil and natural gas properties. Revenues for the exploration and production segment are derived from the sale of crude oil and natural gas production. The Company’s midstream services business segment performs produced and flowback water gathering and disposal services, fresh water services, natural gas gathering and processing and crude oil gathering and transportation and other midstream services for crude oil and natural gas wells operated by the Company as well as third-party operated wells. Revenues for the midstream segment are primarily derived from produced and flowback water pipeline transport, produced and flowback water disposal, fresh water sales, natural gas gathering and processing and crude oil gathering, blending, stabilization and transportation. The Company’s well services business segment performs completion services for the Company’s crude oil and natural gas wells. Revenues for the well services segment are derived from providing well services, product sales and equipment rentals. The revenues and expenses related to work performed by OMP, OMS and OWS for the Company’s ownership interests are eliminated in consolidation, and only the revenues and expenses related to non-affiliated working interest owners are included in the Company’s Condensed Consolidated Statements of Operations. These segments represent the Company’s three operating units, each offering different products and services. The Company’s corporate activities have been allocated to the supported business segments accordingly.

Management evaluates the performance of the Company’s business segments based on operating income, which is defined as segment operating revenues less operating expenses, including depreciation, depletion and amortization (“DD&A”).

For the three and nine months ended September 30, 2018, the Company has revised the condensed consolidated financial statements and business segment financial information to reflect the correction of errors related to the manner in which it accounted for certain crude oil purchase and sale arrangements, which are included in the Company’s exploration and production segment and had no effect on operating income. Please see Note 2 — Summary of Significant Accounting Policies for more information related to the revision.

The following table summarizes financial information for the Company’s three business segments for the periods presented:


	Exploration and Production		Midstream Services		Well Services		Eliminations		Consolidated

	(In thousands)
Three months ended September 30, 2019:
Revenues from non-affiliates	$	423,822	$	50,023	$	8,898	$	—	$	482,743
Inter-segment revenues	—		73,388		21,511		(94,899)		—
Total revenues	423,822		123,411		30,409		(94,899)		482,743
Operating income (loss)	(51,476)		64,299		236		(4,618)		8,441
Other income (expense), net	8,871		(4,512)		139		—		4,498
Income (loss) before income taxes including non-controlling interests	$	(42,605)	$	59,787	$	375	$	(4,618)	$	12,939
General and administrative	$	46,377	$	7,842	$	6,489	$	(7,848)	$	52,860
Equity-based compensation	8,246		383		42		(225)		8,446

Three months ended September 30, 2018:
Revenues from non-affiliates	$	625,342	$	33,025	$	16,262	$	—	$	674,629
Inter-segment revenues	—		42,745		40,177		(82,922)		—
Total revenues	625,342		75,770		56,439		(82,922)		674,629
Operating income	146,969		31,326		9,237		(8,487)		179,045
Other expense, net	(87,594)		(367)		(79)		—		(88,040)
Income before income taxes including non-controlling interests	$	59,375	$	30,959	$	9,158	$	(8,487)	$	91,005
General and administrative	$	30,454	$	5,614	$	5,437	$	(6,646)	$	34,859
Equity-based compensation	7,102		442		354		(442)		7,456



Nine months ended September 30, 2019:
Revenues from non-affiliates	$	1,407,440	$	149,645	$	30,795	$	—	$	1,587,880
Inter-segment revenues	—		199,793		71,526		(271,319)		—
Total revenues	1,407,440		349,438		102,321		(271,319)		1,587,880
Operating income (loss)	(30,657)		169,321		2,538		(10,745)		130,457
Other income (expense), net	(153,481)		(12,460)		156		—		(165,785)
Income (loss) before income taxes including non-controlling interests	$	(184,138)	$	156,861	$	2,694	$	(10,745)	$	(35,328)
General and administrative	$	99,665	$	24,683	$	20,038	$	(26,141)	$	118,245
Equity-based compensation	25,348		1,363		1,130		(1,471)		26,370

Nine months ended September 30, 2018:
Revenues from non-affiliates	$	1,585,204	$	90,644	$	46,344	$	—	$	1,722,192
Inter-segment revenues	—		119,095		114,898		(233,993)		—
Total revenues	1,585,204		209,739		161,242		(233,993)		1,722,192
Operating income (loss)	(53,159)		101,457		25,415		(24,357)		49,356
Other expense, net	(370,311)		(703)		(99)		—		(371,113)
Income (loss) before income taxes including non-controlling interests	$	(423,470)	$	100,754	$	25,316	$	(24,357)	$	(321,757)
General and administrative	$	77,425	$	18,107	$	17,084	$	(21,587)	$	91,029
Equity-based compensation	20,565		1,222		1,149		(1,350)		21,586

At September 30, 2019:
Property, plant and equipment, net	$	6,236,331	$	1,052,558	$	27,712	$	(226,991)	$	7,089,610
Total assets⁽¹⁾	6,736,948		1,088,728		33,292		(191,991)		7,666,977
At December 31, 2018:
Property, plant and equipment, net	$	6,311,566	$	893,285	$	38,871	$	(216,613)	$	7,027,109
Total assets⁽¹⁾	6,838,987		920,619		48,150		(181,614)		7,626,142

___________________

(1)Intercompany receivables (payables) for all segments were reclassified to capital contributions from (distributions to) parent and not included in total assets.