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SIGNIFICANT CONCENTRATIONS
 12 Months Ended
Dec. 31, 2016
Risks and Uncertainties [Abstract]  
SIGNIFICANT CONCENTRATIONS
  14. SIGNIFICANT CONCENTRATIONS

 

The Company has exposure to credit risk in the event of nonpayment by the joint interest operators of the Company’s oil and gas properties. During the years ended December 31, 2016, 2015 and 2014, three joint interest operators accounted for the following percentages of the Company’s oil and gas sales:

 

Operator   2016     2015     2014  
                   
A     16 %     20 %     38 %
B     32 %     35 %     28 %
C     29 %     25 %     20 %

 

Approximately 22% of the Company’s proved developed oil and gas reserve quantities are associated with wells that are operated by operator B (the “Major Operator”) as shown in the table above. As of December 31, 2016, the Company had a liability to the Major Operator of $2,710 for accrued operating expenses and overpayments of net revenues when the Major Operator failed to recognize that the Company’s ownership interest reverted after payout was achieved for certain wells during 2014 and 2015. Beginning in the second quarter of 2015, the Major Operator began withholding the Company’s net revenues from all wells that it operates for the Company and management expects the Major Operator will continue to withhold the Company’s net revenues until this liability is paid in full. Based on the oil and gas prices and costs used in the Company’s reserve report as of December 31, 2016, this liability is expected to be settled in full by the first quarter of 2017, but under higher pricing scenarios it is possible that the entire liability could be repaid earlier. Accordingly, the aggregate balance of $2,710 is presented as a current liability in the accompanying consolidated balance sheet as of December 31, 2016.

 

Substantially all of the Company’s cash and equivalents are in accounts with a single financial institution and the balances typically exceed federally insured limits. The Company has not experienced any losses in such accounts.

 

During the years ended December 31, 2015 and 2014 the Company operated in two business segments, the oil and gas industry and the mining industry. As discussed in Note 6, in February 2016 the Company disposed of its mining operations and, accordingly, the mining operations and assets are presented under discontinued operations in the accompanying financial statements.