Operating Segments

12 Months Ended

Dec. 31, 2022

12. Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as executive management. Segment performance is evaluated based on operating profit or loss as shown in the table below. Interest expense, interest income and income taxes are managed separately on a group basis.

The Company’s reportable segments are as follows:

The Upstream segment activities include acquisition, development and production of primarily natural gas reserves on properties within the United States;

The Gas Gathering segment partners with two other companies to operate a natural gas gathering system; and

The Corporate segment activities include corporate listing and governance functions of the Company.

Segment activity as of, and for the years ended December 31, 2022 and 2021 is as follows:


	Upstream		Gas Gathering		Corporate		Elimination		Consolidated
As of and for the year ended December 31, 2022
Operating revenue
Natural gas	$	56,948,734	$	—	$	—	$	—	$	56,948,734
Natural gas liquids		1,733,130		—		—		—		1,733,130
Oil and condensate		3,195,333		—		—		—		3,195,333
Gathering and compression fees		—		9,609,172		—		(1,523,660)		8,085,512
Total operating revenue ⁽¹⁾		61,877,197		9,609,172		—		(1,523,660)		69,962,709

Operating costs
Operating costs		15,079,783		2,287,763		706,849		(1,523,660)		16,550,735
Depletion, depreciation, amortization and accretion		5,375,225		1,063,286		—		—		6,438,511
Operating income		41,422,189		6,258,123		(706,849)		—		46,973,463

Other income (expense)
Interest income		447,128		—		5,749		—		452,877
Interest expense		(50,782)		—		—		—		(50,782)
Gain (loss) on derivative contracts		236,077		—		—		—		236,077
Other (expense) income		(100,315)		—		846		—		(99,469)
Other income (expense), net		532,108		—		6,595		—		538,703
Net income before income tax expense	$	41,954,297		6,258,123		(700,254)		—		47,512,166

Segment assets	$	112,450,893		10,603,000		808,350		—		123,862,243
Capital expenditures ⁽²⁾		6,785,930		163,914		—		—		6,949,844
Proved properties		40,596,972		—		—		—		40,596,972
Unproved properties		18,169,157		—		—		—		18,169,157
Gathering system		—		8,138,261		—		—		8,138,261
Operating lease right-of-use asset		31,383		—		—		—		31,383
Other property and equipment		923,799		—		—		—		923,799

As of and for the year ended December 31, 2021
Operating revenue
Natural gas	$	31,708,185		—		—		—		31,708,185
Natural gas liquids		1,053,486		—		—		—		1,053,486
Oil and condensate		1,776,496		—		—		—		1,776,496
Gathering and compression fees		—		9,460,508		—		(1,594,683)		7,865,825
Total operating revenue ⁽¹⁾		34,538,167		9,460,508		—		(1,594,683)		42,403,992

Operating costs
Operating costs		13,867,817		2,321,329		570,192		(1,594,683)		15,164,655
Depletion, depreciation, amortization and accretion		5,278,617		1,348,399		—		—		6,627,016
Operating income		15,391,733		5,790,780		(570,192)		—		20,612,321

Other income (expense)
Interest income		38,865		—		—		—		38,865
Interest expense		(101,382)		—		—		—		(101,382)
Gain (loss) on derivative contracts		(4,482,909)		—		—		—		(4,482,909)
Other (expense) income		2,585		—		(1,455)		—		1,130
Other income (expense), net		(4,542,841)		—		(1,455)		—		(4,544,296)
Net income before income tax expense	$	10,848,892		5,790,780		(571,647)		—		16,068,025

Segment assets	$	85,828,508		13,506,775		127,311		—		99,462,594
Capital expenditures ⁽²⁾		4,638,448		272,442		—		—		4,910,890
Proved properties		35,551,441		—		—		—		35,551,441
Unproved properties		21,700,926		—		—		—		21,700,926
Gathering system		—		9,031,137		—		—		9,031,137
Other property and equipment		946,866		—		—		—		946,866

(1)

Segment operating revenue represents revenues generated from the operations of the segment. Inter-segment sales during the years ended December 31, 2022 and 2021 have been eliminated upon consolidation. For the year ended December 31, 2022, we sold natural gas to 26 unique customers. Direct Energy Business Marketing, LLC and EQT Energy, LLC each accounted for 10% or more of our total revenue. For the year

ended December 31, 2021, we sold natural gas to 30 unique customers. Direct Energy Business Marketing, LLC and SWN Energy Services Company, LLC each accounted for 10% or more of our total revenue.

(2)

Capital expenditures for Upstream consist primarily of the drilling and completing of wells while Gas Gathering consists of expenditures relating to the installation of additional gathering facilities.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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