| Segment Information |
4. SEGMENT INFORMATION The Company’s operations are based in Gabon and the Company has an undeveloped block in Equatorial Guinea. Each of the Company’s two 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, 2019 and 2018 as well as long-lived assets and segment assets at September 30, 2019 and December 31, 2018 are as follows:
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Three Months Ended September 30, 2019 |
(in thousands) |
|
Gabon |
|
Equatorial Guinea |
|
Corporate and Other |
|
Total |
Revenues-oil and natural gas sales |
|
$ |
17,603 |
|
$ |
— |
|
$ |
— |
|
$ |
17,603 |
Depreciation, depletion and amortization |
|
|
1,437 |
|
|
— |
|
|
72 |
|
|
1,509 |
Operating income (loss) |
|
|
6,048 |
|
|
(54) |
|
|
(4,493) |
|
|
1,501 |
Derivatives instruments loss, net |
|
|
— |
|
|
— |
|
|
2,267 |
|
|
2,267 |
Income tax expense |
|
|
4,774 |
|
|
— |
|
|
2,907 |
|
|
7,681 |
Additions to oil and natural gas properties and equipment – accrual |
|
|
6,112 |
|
|
— |
|
|
— |
|
|
6,112 |
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|
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Nine Months Ended September 30, 2019 |
(in thousands) |
|
Gabon |
|
Equatorial Guinea |
|
Corporate and Other |
|
Total |
Revenues-oil and natural gas sales |
|
$ |
62,598 |
|
$ |
— |
|
$ |
— |
|
$ |
62,598 |
Depreciation, depletion and amortization |
|
|
4,751 |
|
|
— |
|
|
220 |
|
|
4,971 |
Other operating income (expense), net |
|
|
(4,436) |
|
|
— |
|
|
35 |
|
|
(4,401) |
Operating income (loss) |
|
|
24,541 |
|
|
(370) |
|
|
(10,754) |
|
|
13,417 |
Derivatives instruments loss, net |
|
|
— |
|
|
— |
|
|
2,266 |
|
|
2,266 |
Other, net |
|
|
(333) |
|
|
(4) |
|
|
(184) |
|
|
(521) |
Interest income |
|
|
4 |
|
|
— |
|
|
577 |
|
|
581 |
Income tax expense |
|
|
15,134 |
|
|
12 |
|
|
4,496 |
|
|
19,642 |
Additions to oil and natural gas properties and equipment – accrual |
|
|
8,386 |
|
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(187) |
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|
220 |
|
|
8,419 |
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|
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|
|
|
|
Three Months Ended September 30, 2018 |
(in thousands) |
|
Gabon |
|
Equatorial Guinea |
|
Corporate and Other |
|
Total |
Revenues-oil and natural gas sales |
|
$ |
25,265 |
|
$ |
— |
|
$ |
1 |
|
$ |
25,266 |
Depreciation, depletion and amortization |
|
|
1,065 |
|
|
— |
|
|
65 |
|
|
1,130 |
Gain on revision of asset retirement obligations |
|
|
(3,325) |
|
|
— |
|
|
— |
|
|
(3,325) |
Operating income (loss) |
|
|
19,826 |
|
|
(159) |
|
|
(2,347) |
|
|
17,320 |
Derivatives instruments loss, net |
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|
— |
|
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— |
|
|
(1,026) |
|
|
(1,026) |
Income tax benefit |
|
|
(42,141) |
|
|
— |
|
|
(20,083) |
|
|
(62,224) |
Additions to oil and natural gas properties and equipment – accrual |
|
|
36,595 |
|
|
— |
|
|
3 |
|
|
36,598 |
|
|
|
|
|
|
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|
|
|
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|
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|
|
Nine Months Ended September 30, 2018 |
(in thousands) |
|
Gabon |
|
Equatorial Guinea |
|
Corporate and Other |
|
Total |
Revenues-oil and natural gas sales |
|
$ |
77,333 |
|
$ |
— |
|
$ |
4 |
|
$ |
77,337 |
Depreciation, depletion and amortization |
|
|
3,095 |
|
|
— |
|
|
194 |
|
|
3,289 |
Gain on revision of asset retirement obligations |
|
|
(3,325) |
|
|
— |
|
|
— |
|
|
(3,325) |
Other operating income (expense), net |
|
|
332 |
|
|
— |
|
|
- |
|
|
332 |
Operating income (loss) |
|
|
45,670 |
|
|
(274) |
|
|
(9,315) |
|
|
36,081 |
Derivatives instruments loss, net |
|
|
- |
|
|
— |
|
|
(2,036) |
|
|
(2,036) |
Other, net |
|
|
(127) |
|
|
(3) |
|
|
(18) |
|
|
(148) |
Interest expense, net |
|
|
(397) |
|
|
— |
|
|
124 |
|
|
(273) |
Income tax benefit |
|
|
(34,517) |
|
|
— |
|
|
(20,083) |
|
|
(54,600) |
Additions to oil and natural gas properties and equipment – accrual |
|
|
37,550 |
|
|
— |
|
|
17 |
|
|
37,567 |
|
|
|
|
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|
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|
(in thousands) |
|
Gabon |
|
Equatorial Guinea |
|
Corporate and Other |
|
Total |
Long-lived assets from continuing operations: |
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|
|
|
|
|
|
|
|
|
|
As of September 30, 2019 |
|
$ |
46,276 |
|
$ |
10,000 |
|
$ |
341 |
|
$ |
56,617 |
As of December 31, 2018 |
|
$ |
42,195 |
|
$ |
10,187 |
|
$ |
342 |
|
|
52,724 |
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|
(in thousands) |
|
Gabon |
|
Equatorial Guinea |
|
Corporate and Other |
|
Total |
Total assets from continuing operations: |
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As of September 30, 2019 |
|
$ |
148,221 |
|
$ |
10,085 |
|
$ |
50,680 |
|
$ |
208,986 |
As of December 31, 2018 |
|
$ |
103,401 |
|
$ |
10,320 |
|
$ |
49,301 |
|
|
163,022 |
Information about the Company’s most significant customers
The Company sells crude oil production from Gabon under term contracts with pricing based upon an average of Dated Brent in the month of lifting, adjusted for location and market factors. From August 2015 through January 2019, the Company sold its crude oil to Glencore Energy UK Ltd. (“Glencore”). The Company signed a new contract with Mercuria Energy Trading SA (“Mercuria”) that covers sales from February 2019 through January 2020 with pricing based upon an average of Dated Brent in the month of lifting, adjusted for location and market factors. Sales of oil to Glencore and Mercuria were approximately 100% of total revenues for the period during the terms of their contracts.
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