Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Segment Information

v3.23.3
Note 4 - Segment Information
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

4. SEGMENT INFORMATION 

 

The Company’s operations are based in Gabon, Egypt, and Canada, and the Company has an undeveloped block in Equatorial Guinea. Each of the Company’s 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, 2023 and 2022 as well as long-lived assets and segment assets at September 30, 2023 and December 31, 2022 are as follows:

 

   

Three Months Ended September 30, 2023

  

(in thousands)

  

Gabon

    

Egypt

    

Canada

    

Equatorial Guinea

    

Corporate and Other

    

Total

  

Revenues:

                                                

Crude oil, natural gas and natural gas liquids sales

   $ 57,275     $ 50,307     $ 8,687     $ —     $ —     $ 116,269  

Operating costs and expenses:

                                                

Production expense

     20,731       16,040       2,627       259       299       39,956  

FPSO Demobilization

     —       —       —       —       —       —  

Exploration expense

     —       1,194       —       —       —       1,194  

Depreciation, depletion and amortization

     14,583       12,967       4,948       —       40       32,538  

General and administrative expense

     348       54       —       94       5,720       6,216  

Credit losses and other

     684       —       —       138       —       822  

Total operating costs and expenses

     36,346       30,255       7,575       491       6,059       80,726  

Other operating income (expense), net

     5       —       —       —       —       5  

Operating income

     20,934       20,052       1,112       (491 )     (6,059 )     35,548  

Other income (expense):

                                                

Derivative instruments loss, net

     —       —       —       —       (2,320 )     (2,320 )

Interest (expense) income, net

     (1,371 )     (270 )     —       —       215       (1,426 )

Other (expense) income, net

     111       —       —       (3 )     75       183  

Total other expense, net

     (1,260 )     (270 )     —       (3 )     (2,030 )     (3,563 )

Income (loss) from continuing operations before income taxes

     19,674       19,782       1,112       (494 )     (8,089 )     31,985  

Income tax (benefit) expense

     13,173       888       —       —       11,783       25,844  

Income (loss) from continuing operations

     6,501       18,894       1,112       (494 )     (19,872 )     6,141  

Loss from discontinued operations, net of tax

     —       —       —       —       —       —  

Net income (loss)

   $ 6,501     $ 18,894     $ 1,112     $ (494 )   $ (19,872 )   $ 6,141  

Consolidated capital expenditures

   $ 10,109     $ 11,987     $ 3,870     $ —     $ —     $ 25,966  

 

 

   

Nine Months Ended September 30, 2023

  

(in thousands)

  

Gabon

    

Egypt

    

Canada

    

Equatorial Guinea

    

Corporate and Other

    

Total

  

Revenues:

                                                

Crude oil, natural gas and natural gas liquids sales

   $ 171,936     $ 106,399     $ 27,577     $ —     $ —     $ 305,912  

Operating costs and expenses:

                                                

Production expense

     59,077       38,239       8,136       1,007       301       106,760  

FPSO Demobilization

     5,647       —       —       —       —       5,647  

Exploration expense

     51       1,208       —       —       —       1,259  

Depreciation, depletion and amortization

     43,885       37,519       13,406       —       148       94,958  

General and administrative expense

     1,284       435       —       310       14,806       16,835  

Credit losses and other

     2,137       —       —       300       —       2,437  

Total operating costs and expenses

     112,081       77,401       21,542       1,617       15,255       227,896  

Other operating income, net

     (57 )     (241 )     —       —       —       (298 )

Operating income (loss)

     59,798       28,757       6,035       (1,617 )     (15,255 )     77,718  

Other income (expense):

                                                

Derivative instruments gain, net

     —       —       —       —       (2,268 )     (2,268 )

Interest (expense) income, net

     (4,254 )     (1,581 )     (4 )     —       464       (5,375 )

Other income (expense), net

     9       —       1       (4 )     (1,500 )     (1,494 )

Total other expense, net

     (4,245 )     (1,581 )     (3 )     (4 )     (3,304 )     (9,137 )

Income (loss) from continuing operations before income taxes

     55,553       27,176       6,032       (1,621 )     (18,559 )     68,581  

Income tax expense (benefit)

     36,002       10,141       —       —       6,060       52,203  

Income (loss) from continuing operations

     19,551       17,035       6,032       (1,621 )     (24,619 )     16,378  

Loss from discontinued operations, net of tax

     —       —       —       —       (15 )     (15 )

Net income (loss)

   $ 19,551     $ 17,035     $ 6,032     $ (1,621 )   $ (24,634 )   $ 16,363  

Consolidated capital expenditures

   $ 15,173     $ 32,084     $ 16,008     $ —     $ 36     $ 63,301  

 

 

   

Three Months Ended September 30, 2022

  

(in thousands)

  

Gabon

    

Equatorial Guinea

    

Corporate and Other

    

Total

  

Revenues:

                                

Crude oil and natural gas sales

   $ 78,097     $ —     $ —     $ 78,097  

Operating costs and expenses:

                                

Production expense

     22,828       484       —       23,312  

FPSO demobilization

     8,867       —       —       8,867  

Exploration expense

     56       —       —       56  

Depreciation, depletion and amortization

     8,940       —       23       8,963  

General and administrative expense

     915       120       944       1,979  

Bad debt expense and other

     681       339       —       1,020  

Total operating costs and expenses

     42,287       943       967       44,197  

Other operating income (expense), net

     —       —       —       —  

Operating income

     35,810       (943 )     (967 )     33,900  

Other income (expense):

                                

Derivative instruments loss, net

     —       —       3,778       3,778  

Interest (expense) income, net

     (351 )     —       117       (234 )

Other (expense) income, net

     (1,305 )     1       (6,403 )     (7,707 )

Total other expense, net

     (1,656 )     1       (2,508 )     (4,163 )

Income from continuing operations before income taxes

     34,154       (942 )     (3,475 )     29,737  

Income tax (benefit) expense

     25,415       —       (2,572 )     22,843  

Income from continuing operations

     8,739       (942 )     (903 )     6,894  

Loss from discontinued operations, net of tax

     —       —       (26 )     (26 )

Net income

   $ 8,739     $ (942 )   $ (929 )   $ 6,868  

Consolidated capital expenditures

   $ 51,610     $ —     $ 53     $ 51,663  

 

   

Nine Months Ended September 30, 2022

  

(in thousands)

  

Gabon

    

Equatorial Guinea

    

Corporate and Other

    

Total

  

Revenues:

                                

Crude oil and natural gas sales

   $ 257,738     $ —     $ —     $ 257,738  

Operating costs and expenses:

                                

Production expense

     66,269       878       —       67,147  

FPSO demobilization

     8,867       —       —       8,867  

Exploration expense

     250       —       —       250  

Depreciation, depletion and amortization

     21,766       —       61       21,827  

General and administrative expense

     2,073       329       8,105       10,507  

Credit losses and other

     1,744       339       —       2,083  

Total operating costs and expenses

     100,969       1,546       8,166       110,681  

Other operating income (expense), net

     (5 )     —       —       (5 )

Operating income

     156,764       (1,546 )     (8,166 )     147,052  

Other income (expense):

                                

Derivative instruments loss, net

     —       —       (37,522 )     (37,522 )

Interest (expense) income, net

     (515 )     —       160       (355 )

Other (expense) income, net

     (2,799 )     (1 )     (7,714 )     (10,514 )

Total other expense, net

     (3,314 )     (1 )     (45,076 )     (48,391 )

Income from continuing operations before income taxes

     153,450       (1,547 )     (53,242 )     98,661  

Income tax (benefit) expense

     74,671       1       (10,205 )     64,467  

Income from continuing operations

     78,779       (1,548 )     (43,037 )     34,194  

Loss from discontinued operations, net of tax

     —       —       (58 )     (58 )

Net income

   $ 78,779     $ (1,548 )   $ (43,095 )   $ 34,136  

Consolidated capital expenditures

   $ 121,492     $ —     $ 120     $ 121,612  

 

(in thousands)

  

Gabon

    

Egypt

    

Canada

    

Equatorial Guinea

    

Corporate and Other

    

Total

  

Long-lived assets from continuing operations:

                                                

As of September 30, 2023

   $ 186,966     $ 163,639     $ 106,561     $ 10,000     $ 711     $ 467,877  

As of December 31, 2022

   $ 213,204     $ 168,012     $ 103,263     $ 10,000     $ 793     $ 495,272  

 

(in thousands)

  

Gabon

    

Egypt

    

Canada

    

Equatorial Guinea

    

Corporate and Other

    

Total

  

Total assets from continuing operations:

                                                

As of September 30, 2023

   $ 353,896     $ 254,673     $ 112,289     $ 11,335     $ 95,635     $ 827,828  

As of December 31, 2022

   $ 395,393     $ 293,640     $ 110,071     $ 10,861     $ 45,676     $ 855,641  

 

Information about the Company’s most significant customers

 

For the three and nine months ended September 30, 2023 sales of crude oil to Glencore made up 100% of Etame revenues. For the three and nine months ended September 30, 2022, sales of crude oil to ExxonMobil Sales and Supply LLC made up 100% of Etame revenues through July 2022. For August and September 2022, sales to Glencore made up 100% of Etame revenues. For the three months ended September 30, 2023, the EGPC and Mercuria split the Company's crude oil sales in Egypt. For the nine months ended  September 30, 2023, Mercuria covered 100% of the Company’s crude oil sales in Egypt in the first quarter; the EGPC covered 100% of sales in the second quarter; and, sales were split between Mercuria and the EGPC in the third quarter. For the three and nine months ended September 30, 2023, revenues in Canada were concentrated in three separate customers. For the nine months ended September 30, 2023, these customers were Plains Midstream (41.9%), AltaGas (18.4%), and PetroGas Energy (28.4%). For the three months ended September 30, 2023, these customers were PetroGas Energy (51.0%), Plains Midstream (19.8%) and AltaGas (17.5%). Concentrations of accounts receivable are similar to the revenue percentages.