Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 07, 2014 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Gas Natural Inc. | ' |
Entity Central Index Key | '0000043350 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'EGAS | ' |
Entity Common Stock, Shares Outstanding | ' | 10,487,511 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $1,103,434 | $12,741,197 |
Marketable securities | 0 | 406,134 |
Accounts receivable | ' | ' |
Trade, less allowance for doubtful accounts of $223,293 and $1,978,358, respectively | 6,039,891 | 12,305,657 |
Related parties | 219,918 | 146,225 |
Unbilled gas | 2,160,367 | 7,172,062 |
Note receivable, current portion | 1,938 | 1,938 |
Inventory | ' | ' |
Natural gas | 7,892,795 | 4,996,065 |
Materials and supplies | 2,638,416 | 2,285,722 |
Prepaid income taxes | 707,191 | 727,427 |
Prepayments and other | 1,529,065 | 970,574 |
Recoverable cost of gas purchases | 1,927,177 | 1,209,982 |
Deferred tax asset | 750,471 | 1,225,032 |
Derivative instruments | 8,419 | 0 |
Assets held for sale | 35,115 | 0 |
Discontinued operations | 11,041,679 | 12,032,203 |
Total current assets | 36,055,876 | 56,220,218 |
PROPERTY, PLANT AND EQUIPMENT | ' | ' |
Property, plant and equipment | 181,878,664 | 164,886,688 |
Less accumulated depreciation, depletion and amortization | -44,752,830 | -40,299,043 |
PROPERTY, PLANT AND EQUIPMENT, NET | 137,125,834 | 124,587,645 |
OTHER ASSETS | ' | ' |
Note receivable, less current portion | 90,975 | 93,727 |
Regulatory assets | ' | ' |
Deferred costs | 2,327,501 | 0 |
Property taxes | 6,250 | 25,000 |
Income taxes | 296,819 | 296,819 |
Rate case costs | 97,734 | 130,228 |
Debt issuance costs, net of amortization | 1,093,245 | 1,388,124 |
Goodwill | 16,267,377 | 16,267,377 |
Customer relationships | 3,003,208 | 3,230,333 |
Investment in unconsolidated affiliate | 350,748 | 351,724 |
Restricted cash | 1,897,701 | 1,137,442 |
Other assets | 9,169 | 3,160 |
Total other assets | 25,440,727 | 22,923,934 |
TOTAL ASSETS | 198,622,437 | 203,731,797 |
CURRENT LIABILITIES | ' | ' |
Checks in excess of amounts on deposit | 1,523,212 | 842,443 |
Line of credit | 24,060,799 | 24,529,799 |
Accounts payable | ' | ' |
Trade | 7,814,606 | 12,355,605 |
Related parties | 9 | 559,933 |
Notes payable, current portion | 542,156 | 3,502,190 |
Contingent consideration, current portion | 671,638 | 671,638 |
Accrued liabilities | ' | ' |
Taxes other than income | 1,763,630 | 3,043,583 |
Vacation | 331,467 | 83,189 |
Employee benefit plans | 82,712 | 161,440 |
Interest | 359,156 | 169,581 |
Deferred payments received from levelized billing | 2,326,208 | 2,293,801 |
Customer deposits | 713,914 | 667,479 |
Related parties | 69,253 | 0 |
Capital lease obligation, current portion | 188,224 | 177,570 |
Over-recovered gas purchases | 885,500 | 793,184 |
Build-to-suit liability | 4,148,469 | 0 |
Other current liabilities | 1,308,544 | 1,464,646 |
Discontinued operations | 617,774 | 574,889 |
Total current liabilities | 47,407,271 | 51,890,970 |
LONG-TERM LIABILITIES | ' | ' |
Deferred investment tax credits | 118,458 | 134,255 |
Deferred tax liability | 9,761,396 | 9,055,166 |
Asset retirement obligation | 2,166,280 | 2,026,353 |
Customer advances for construction | 996,416 | 987,265 |
Regulatory liability for income taxes | 83,161 | 83,161 |
Customer deposits | 949,540 | 0 |
Capital lease obligation, less current portion | 1,674,714 | 1,862,938 |
Contingent consideration, less current portion | 10,362 | 13,362 |
Total long-term liabilities | 15,760,327 | 14,162,500 |
NOTES PAYABLE, less current portion | 39,856,427 | 40,198,552 |
COMMITMENTS AND CONTINGENCIES (see Note 15) | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock; $0.15 par value, 1,500,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock; $0.15 par value, Authorized: 15,000,000 shares: Issued: 10,487,511 and 10,451,678 shares, respectively; Outstanding: 10,487,511 and 10,451,678 shares, respectively | 1,573,127 | 1,567,752 |
Capital in excess of par value | 63,821,456 | 63,468,969 |
Accumulated other comprehensive income | 0 | 104,909 |
Retained earnings | 30,203,829 | 32,338,145 |
Total stockholders' equity | 95,598,412 | 97,479,775 |
TOTAL CAPITALIZATION | 135,454,839 | 137,678,327 |
TOTAL LIABILITIES AND CAPITALIZATION | $198,622,437 | $203,731,797 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Allowance for doubtful accounts | $223,293 | $1,978,358 |
Preferred stock, par value | $0.15 | $0.15 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.15 | $0.15 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 10,487,511 | 10,451,678 |
Common stock, shares outstanding | 10,487,511 | 10,451,678 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statement of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
REVENUES | ' | ' | ' | ' |
Natural gas operations | $12,542,698 | $11,500,163 | $88,327,066 | $64,779,596 |
Marketing and production | 1,072,273 | 2,117,165 | 7,284,543 | 8,334,626 |
Total revenues | 13,614,971 | 13,617,328 | 95,611,609 | 73,114,222 |
COST OF SALES | ' | ' | ' | ' |
Natural gas purchased | 5,739,430 | 4,681,265 | 56,257,668 | 36,426,083 |
Marketing and production | 860,900 | 1,701,554 | 6,538,023 | 6,794,511 |
Total cost of sales | 6,600,330 | 6,382,819 | 62,795,691 | 43,220,594 |
GROSS MARGIN | 7,014,641 | 7,234,509 | 32,815,918 | 29,893,628 |
OPERATING EXPENSES | ' | ' | ' | ' |
Distribution, general, and administrative | 6,321,270 | 5,595,965 | 19,018,069 | 15,638,813 |
Maintenance | 295,762 | 274,403 | 920,308 | 827,727 |
Depreciation and amortization | 1,794,019 | 1,402,867 | 5,074,876 | 3,959,418 |
Accretion | 45,523 | 44,411 | 139,927 | 130,530 |
Provision for doubtful accounts | 7,626 | 13,558 | 829,814 | 37,115 |
Taxes other than income | 901,329 | 944,411 | 2,861,724 | 2,606,160 |
Total operating expenses | 9,365,529 | 8,275,615 | 28,844,718 | 23,199,763 |
OPERATING INCOME (LOSS) | -2,350,888 | -1,041,106 | 3,971,200 | 6,693,865 |
Loss from unconsolidated affiliate | 0 | -980 | -977 | -5,007 |
Other income, net | 408,821 | 305,956 | 617,656 | 713,265 |
Gain on sale of marketable securities | 183,371 | 0 | 183,371 | 0 |
Acquisition expense | 0 | -87,575 | -7,197 | -244,109 |
Interest expense | -764,367 | -811,476 | -2,334,435 | -2,379,368 |
Income (loss) before income taxes | -2,523,063 | -1,635,181 | 2,429,618 | 4,778,646 |
Income tax benefit (expense) | 1,008,494 | 785,135 | -901,141 | -1,724,239 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | -1,514,569 | -850,046 | 1,528,477 | 3,054,407 |
Discontinued operations, net of tax | 34,825 | -154,292 | 581,652 | 402,062 |
NET INCOME (LOSS) | -1,479,744 | -1,004,338 | 2,110,129 | 3,456,469 |
Basic weighted shares outstanding (in shares) | 10,487,511 | 10,054,558 | 10,475,213 | 8,974,584 |
Dilutive effect of stock based compensation (in shares) | 0 | 0 | 0 | 903 |
Diluted weighted shares outstanding (in shares) | 10,487,511 | 10,054,558 | 10,475,213 | 8,975,487 |
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: | ' | ' | ' | ' |
Continuing operations (in dollars per share) | ($0.14) | ($0.08) | $0.15 | $0.34 |
Discontinued operations (in dollars per share) | $0 | ($0.02) | $0.05 | $0.05 |
Net income (loss) per share (in dollars per share) | ($0.14) | ($0.10) | $0.20 | $0.39 |
Weighted average dividends declared per common share (in dollars per share) | $0.14 | $0.14 | $0.41 | $0.34 |
COMPREHENSIVE INCOME: | ' | ' | ' | ' |
Net income (loss) | -1,479,744 | -1,004,338 | 2,110,129 | 3,456,469 |
OTHER COMPREHENSIVE INCOME, NET OF TAX | ' | ' | ' | ' |
Unrealized gain on available-for-sale securities, net of tax of $6,066, $11,467, $7,689 and $15,571, respectively | 10,584 | 18,908 | 14,811 | 25,114 |
Unrealized gain on available-for-sale securities transferred to earnings, net of tax of $63,651 | -119,720 | 0 | -119,720 | 0 |
Other comprehensive income, net of tax | -109,136 | 18,908 | -104,909 | 25,114 |
COMPREHENSIVE INCOME (LOSS) | ($1,588,880) | ($985,430) | $2,005,220 | $3,481,583 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Comprehensive Income [Parenthetical] (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Unrealized gain on available for sale securities, tax portion | $6,066 | $11,467 | $7,689 | $15,571 |
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | $63,651 | ' | $63,651 | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net income | $2,110,129 | $3,456,469 |
Loss from discontinued operations | -581,652 | -402,062 |
Income from continuing operations | 1,528,477 | 3,054,407 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 5,074,876 | 3,959,418 |
Accretion | 139,927 | 130,530 |
Amortization of debt issuance costs | 304,177 | 315,898 |
Provision for doubtful accounts | 829,814 | 37,115 |
Stock based compensation | 312,100 | 2,423 |
Gain on sale of marketable securities | -183,371 | 0 |
Loss (gain) on sale of assets | 10,635 | -154,657 |
Loss from unconsolidated affiliate | 977 | 5,007 |
Unrealized holding (gain) loss on contingent consideration | -3,000 | 215,000 |
Change in fair value of derivative financial instruments | -8,419 | 0 |
Investment tax credit | -15,797 | -15,797 |
Deferred income taxes | 1,243,512 | 2,467,689 |
Changes in assets and liabilities | ' | ' |
Accounts receivable, including related parties | 5,467,686 | 5,394,354 |
Unbilled gas | 5,011,695 | 2,501,719 |
Natural gas inventory | -3,048,511 | -1,173,128 |
Accounts payable, including related parties | -3,425,347 | -2,398,156 |
Recoverable/refundable cost of gas purchases | -624,880 | -778,963 |
Regulatory assets | -2,401,250 | 245,577 |
Prepayments and other | -560,351 | 839,282 |
Other assets | -141,418 | -834,170 |
Other liabilities | -912,571 | -191,348 |
Net cash provided by operating activities of continuing operations | 8,598,961 | 13,622,200 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -16,276,508 | -15,357,615 |
Proceeds from sale of fixed assets | 33,234 | 958,448 |
Proceeds from sale of marketable securities | 421,875 | 0 |
Proceeds from notes receivable | 2,752 | 5,657 |
Investment in unconsolidated affiliate | 0 | -35,000 |
Restricted cash - capital expenditures fund | 57,441 | 1,062,763 |
Customer advances for construction | 15,303 | 31,212 |
Contributions in aid of construction | 1,942,695 | 296,342 |
Net cash used in investing activities of continuing operations | -13,803,208 | -13,038,193 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from lines of credit | 16,450,000 | 14,400,000 |
Repayments of lines of credit | -16,919,000 | -20,048,956 |
Proceeds from notes payable | 102,000 | 0 |
Repayments of notes payable | -3,429,702 | -506,311 |
Payments of capital lease obligations | -177,570 | -167,518 |
Debt issuance costs | -9,298 | -7,492 |
Proceeds from issuance of common shares | 0 | 15,943,051 |
Exercise of stock options | 45,761 | 159,500 |
Restricted cash - debt service fund | 131,840 | 749,326 |
Dividends paid | -4,242,608 | -3,598,449 |
Net cash provided by (used in) financing activities of continuing operations | -8,048,577 | 6,923,151 |
DISCONTINUED OPERATIONS | ' | ' |
Operating cash flows | 1,907,389 | 1,028,772 |
Investing cash flows | -346,220 | -338,827 |
Financing cash flows | 53,892 | -134,552 |
Net cash provided by discontinued operations | 1,615,061 | 555,393 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -11,637,763 | 8,062,551 |
Cash and cash equivalents, beginning of period | 12,741,197 | 3,202,643 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,103,434 | 11,265,194 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ' | ' |
Cash paid for interest | 1,842,202 | 1,930,773 |
Cash refunded for income taxes, net | 6,025 | -14,688 |
NONCASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Assets acquired under build-to-suit agreement | 4,148,469 | 0 |
Restricted cash received from customer as security deposit | 949,540 | 0 |
Capital expenditures included in accounts payable | 848,371 | 768,079 |
Accrued dividends | 472,163 | 466,726 |
Assets acquired through trade-in | 85,068 | 23,500 |
Assets acquired through debt | 25,543 | 0 |
Capitalized interest | 16,742 | 6,003 |
Customer relationships acquired from JDOG Marketing purchase | 0 | 2,800,000 |
Shares issued to purchase JDOG Marketing | 0 | 2,641,199 |
Contingent consideration issued to purchase JDOG Marketing | 0 | 2,250,000 |
Goodwill acquired from JDOG Marketing purchase | 0 | 2,101,744 |
Capital assets exchanged to settle payables | 0 | 82,584 |
Note receivable effectively settled in JDOG Marketing acquisition | 0 | 32,145 |
Plant, property and equipment acquired from JDOG Marketing purchase | 0 | 21,600 |
Customer advances for construction moved to contribution in aid of construction | $6,152 | $16,364 |
Summary_of_Business_and_Basis_
Summary of Business and Basis of Presentation | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Accounting Policies [Abstract] | ' | |||
Summary of Business and Basis of Presentation | ' | |||
Note 1 – Summary of Business and Basis of Presentation | ||||
Nature of Business | ||||
Gas Natural Inc. (the “Company”) is a natural gas company with operations in six states. The Company’s primary operations are natural gas utility companies located throughout these states. The Company’s operations also include the marketing and production of natural gas. Along with its corporate level operations, these areas of operation represent the Company’s three main operating segments and are described below. | ||||
· | Natural Gas Operations | Annually distributes approximately 35 Bcf of natural gas to approximately 67,000 customers. The Company’s natural gas utility subsidiaries are Public Gas Company (Kentucky), Bangor Gas (Maine), Cut Bank Gas Company (Montana), Energy West Montana (Montana), Frontier Natural Gas (North Carolina), Brainard Gas Corp. (Ohio), Northeast Ohio Natural Gas Corporation (Ohio), and Orwell Natural Gas Company (Ohio and Pennsylvania). | ||
· | Marketing & Production | Annually markets approximately 1.5 Bcf of natural gas to commercial and industrial customers in Montana, Wyoming, Ohio, and Pennsylvania through the Company’s EWR and GNR subsidiaries. The EWR subsidiary also manages midstream supply and production assets for transportation customers and utilities. EWR owns an average 51% gross working interest (average 43% net revenue interest) in 160 natural gas producing wells and gas gathering assets located in Glacier and Toole Counties in Montana. | ||
· | Corporate & Other | Encompasses costs associated with business development and acquisitions, dispositions of subsidiary entities, results of discontinued operations, dividend income, recognized gains or losses from the sale of marketable securities, and activity from Lone Wolfe which serves as an insurance agent for the Company and other businesses in the energy industry. | ||
Energy West was originally incorporated in Montana in 1909 and was reorganized as a holding company in 2009 to facilitate future acquisitions and corporate-level financing to support the Company’s growth strategy. On July 9, 2010, the Company changed its name to Gas Natural Inc. and reincorporated from Montana to Ohio. Moving the incorporation to Ohio enhanced the Company’s flexibility and provided a more efficient platform from which to operate and grow. | ||||
Basis of Presentation | ||||
The accompanying Condensed Consolidated Balance Sheet as of December 31, 2013, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements of Gas Natural Inc. have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not contain all disclosures required by generally accepted accounting principles. In the opinion of the Company, all normal recurring adjustments have been made, that are necessary to fairly present the results of operations for the interim periods. Certain reclassifications have been made to prior period amounts to conform to current period presentation. Such reclassifications have no effect on net income as previously reported. | ||||
Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. A majority of the Company’s revenues are derived from its natural gas utility operations, making its revenue seasonal in nature. Therefore, the largest portion of the Company’s operating revenue is generated during the colder months when its sales volume increases considerably. Reference should be made to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
The effect of restricted stock awards equivalent to 322 and 14 shares for the three and nine months ended September 30, 2014 would have been anti-dilutive and therefore, were excluded from the computation of diluted earnings per share. The effect of stock options equivalent to 1,012 shares for the three months ended September 30, 2013 would have been anti-dilutive and therefore, were excluded from the computation of diluted earnings per share. There were no stock options that would have been anti-dilutive for the nine months ended September 30, 2013. | ||||
Change in Accounting Principle | ||||
In the second quarter of 2014, the Company changed the timing of its annual goodwill impairment testing. This change in accounting principle is viewed as preferable due to the Company’s accelerated filing status for it 2014 Annual Report on Form 10-K. Historically, the Company has used December 31st as its annual testing date. This has directly resulted in the Company filing its Annual Report on the 90th day of its fiscal year, the deadline for non-accelerated filers. Starting in 2014, the Company will use a testing date of October 1st. The Company believes that this change should provide the Company sufficient time to meet its new 75 day filing deadline for its 2014 Annual Report. The Company believes that retrospective application of this change in accounting policy would be impracticable because it requires: (1) assumptions about management's intentions over the last several years related to the business units being tested which cannot be independently substantiated and (2) significant estimates which cannot be distinguished objectively from those estimates that would have existed on the prior test dates and would have been available to the Company’s management at that time. Due to these factors, the Company will recognize this change in accounting principle on a prospective basis. | ||||
There have been no other material changes in the Company’s significant accounting policies during the nine months ended September 30, 2014 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
Recent Accounting Pronouncements | ||||
In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016 and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on the consolidated financial statements. | ||||
Recently Adopted Accounting Pronouncements | ||||
In April 2014, the FASB issued ASU 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the prior guidance of the reclassification of components of an entity to discontinued operations under U.S. GAAP. Under the amended guidance, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The amendment also removes requirements relating to the cessation of operations, cash flows and significant continuing involvement with the discontinued component. This pronouncement is effective for annual and interim periods beginning after December 15, 2014 with early adoption permitted. This update it to be applied prospectively on components classified as held for after the adoption date. The Company has chosen to early adopt ASU 2014-08 effective September 30, 2014. | ||||
Discontinued_Operations
Discontinued Operations | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||||||||
Discontinued Operations | ' | |||||||||||||
Note 2 – Discontinued Operations | ||||||||||||||
On September 30, 2014, the Company’s Energy West Inc. subsidiary was in the final stages of negotiating a stock purchase agreement for the sale of all of the stock of its wholly-owned subsidiary Energy West Wyoming, Inc. (“EWW”) to Cheyenne Light, Fuel and Power Company (“Cheyenne”). EWW has historically been included in the Company’s Natural Gas Operations segment. In conjunction, the Company’s subsidiary, Energy West Development, Inc., was also in the final stages of negotiating an asset purchase agreement for the sale of the transmission pipeline system known as the Shoshone Pipeline and the gathering pipeline system known as the Glacier Pipeline and certain other assets directly used in the operation of the pipelines (together the “Pipeline Assets”) to Black Hills Exploration and Production, Inc. (“Black Hills”), an affiliate of Cheyenne. The Pipeline Assets have historically been included in the Company’s Pipeline Operations segment. The Company expects to close the transactions in approximately six to twelve months. The agreements for the sale of EWW and the Pipeline Assets were executed on October 10, 2014. See Note 17 – Subsequent Events for more information regarding these transactions. | ||||||||||||||
Upon completion of the transactions, the Company’s marketing and production subsidiary, EWR, will continue to conduct some business with both EWW and Black Hills relating to the Pipeline Assets. EWW will continue to purchase natural gas from EWR under an established gas purchase agreement through the first quarter of 2017. Concurrently, EWR will continue to use EWW’s transmission system under a standing transportation agreement through the first quarter of 2017. Finally, EWR will continue to use the Pipeline Assets’ transmission systems under a standing transportation agreement through October 2017.These transactions are a continuation of transactions that were conducted prior to the sales EWW and the Pipeline Assets and had been eliminated through the consolidation process. | ||||||||||||||
The following table shows revenue and income from discontinued operations associated with EWW and the Pipeline Assets for the three and nine month periods ended September 30, 2014 and 2013. | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Energy West Wyoming revenues | $ | 1,644,296 | $ | 1,457,619 | $ | 6,891,206 | $ | 5,869,145 | ||||||
Shoshone & Glacier Pipeline revenues | 97,195 | 99,290 | 294,071 | 302,609 | ||||||||||
Pretax income (loss) from discontinued operations | ||||||||||||||
Energy West Wyoming | $ | 5,763 | $ | -18,991 | $ | 775,630 | $ | 776,091 | ||||||
Shoshone & Glacier Pipeline | 66,209 | 63,909 | 191,745 | 186,801 | ||||||||||
Other discontinued operations | -4,437 | -194,468 | -42,205 | -364,739 | ||||||||||
Total pre-tax income | $ | 67,535 | $ | -149,550 | $ | 925,170 | $ | 598,153 | ||||||
Income tax expense (benefit) | -32,710 | -4,742 | -343,518 | -196,091 | ||||||||||
Income (loss) from discontiuned operations, net of tax | $ | 34,825 | $ | -154,292 | $ | 581,652 | $ | 402,062 | ||||||
Basic and diluted income (loss) from discontiuned operations per share | ||||||||||||||
Energy West Wyoming | $ | 0 | $ | -0.01 | $ | 0.05 | $ | 0.06 | ||||||
Shoshone & Glacier Pipeline | 0.01 | 0.01 | 0.01 | 0.01 | ||||||||||
Other discontinued operations | 0 | -0.02 | -0.01 | -0.02 | ||||||||||
Total | $ | 0.01 | $ | -0.02 | $ | 0.05 | $ | 0.05 | ||||||
The following table shows the major classes of assets and liabilities included in the sale of EWW and the Pipeline Assets. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 35,113 | $ | 406,184 | ||||||||||
Accounts receivable, net | 543,162 | 971,308 | ||||||||||||
Unbilled gas | 164,608 | 557,498 | ||||||||||||
Inventory | 372,408 | 748,482 | ||||||||||||
Prepayments and other | 91,784 | 94,271 | ||||||||||||
Recoverable cost of gas | 852,988 | 88,318 | ||||||||||||
Total current assets | 2,060,063 | 2,866,061 | ||||||||||||
Non-Current Assets: | ||||||||||||||
Property, plant & equipment, net | 8,787,287 | 8,932,641 | ||||||||||||
Regulatory asset - income taxes | 155,826 | 155,826 | ||||||||||||
Other assets | 33,318 | 43,524 | ||||||||||||
Total non-current assets | 8,976,431 | 9,131,991 | ||||||||||||
Total assets | $ | 11,036,494 | $ | 11,998,052 | ||||||||||
Current Liabilities: | ||||||||||||||
Checks in excess of amounts on deposit | $ | - | $ | 1,192 | ||||||||||
Accounts payable | 114,973 | 51,278 | ||||||||||||
Accrued liabilities | 406,926 | 429,430 | ||||||||||||
Other current assets | 63,010 | 17,729 | ||||||||||||
Total current liabilities | 584,909 | 499,629 | ||||||||||||
Non-Current Liabilities: | ||||||||||||||
Customer advances for construction | 31,815 | 29,405 | ||||||||||||
Total liabilities | $ | 616,724 | $ | 529,034 | ||||||||||
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2014 | |
Business Combinations [Abstract] | ' |
Acquisitions | ' |
Note 3 – Acquisitions | |
On June 1, 2013, the Company and its wholly-owned Ohio subsidiary, GNR, completed the acquisition of substantially all of the assets and certain liabilities of JDOG Marketing, an Ohio company engaged in the marketing of natural gas. The Osborne Trust is the majority owner of JDOG Marketing. Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, is the sole trustee of the Osborne Trust. The Company believes the natural gas marketing business complements its existing natural gas distribution business in Ohio. In addition, it currently conducts natural gas marketing in Montana and Wyoming, which the Company believes allowed it to integrate the Ohio marketing operations into Gas Natural with minimal increases in staff or overhead. Costs related to this acquisition totaled $0.6 million and were expensed as incurred. | |
Pursuant to the terms of the purchase agreement, the consummation of the transaction depended upon the satisfaction or waiver of a number of certain customary closing conditions, the receipt of regulatory approvals and the consent of certain of Gas Natural’s lenders. In addition, the transaction was subject to the approval of Gas Natural’s shareholders, and the receipt of a fairness opinion by an independent investment banking firm. All of these conditions were satisfied and the acquisition was completed on June 1, 2013. In accordance with U.S. GAAP, the consideration given, assets received, and liabilities assumed by the Company were recorded at their fair market value as of this date. | |
Under the purchase agreement, Gas Natural issued to JDOG Marketing 256,926 shares of the Company’s common stock. These shares had an acquisition date fair value of $2,641,199. There were no underwriting discounts or commissions in connection with the issuance, as no underwriters were used to facilitate the acquisition. The shares were not registered under the Securities Act of 1933, as amended (the “Act”), in reliance on the exemption from registration provided by Section 4(2) of the Act. | |
In addition, the purchase agreement provides for contingent “earn-out” payments for a period of five years after the closing of the transaction if GNR achieves an annual EBITDA target in the amount of $810,432, which was JDOG Marketing’s EBITDA for the year ended December 31, 2011. If GNR’s actual EBITDA for a given year is less than the target EBITDA, then no earn-out payment will be due and payable for that particular period. If GNR’s actual EBITDA for a given year meets or exceeds the target EBITDA, then an earn-out payment in an amount equal to actual EBITDA divided by target EBITDA times $575,000 will have been earned for that year. Due to the earn-out structure, the maximum amount that could be earned over the five year period is unlimited. | |
Earn-out payments are to be settled annually in validly issued, fully paid and non-assessable shares of the Company’s common stock. The share price to be used to determine the number of shares to be issued for each earn-out payment will be the average closing price of Gas Natural’s common stock for the 20 trading days preceding issuance of Gas Natural’s common stock for such earn-out payment. The Company estimated the acquisition date fair value of this liability to be $2,250,000, of which $669,396 was classified as current. The fair value of this liability is remeasured on a recurring basis. The Company’s current estimate of the total liability was $ 682,000 at September 30, 2014. See Note 4– Fair Value Measurements for details regarding this valuation. The Company calculated a first year earn-out payment of $671,638 as its best estimate for financial reporting purposes and this amount is included in the Contingent consideration, current portion line of the Company’s Condensed Consolidated Balance Sheet. The Company does not believe an earn-out payment is due to JDOG Marketing as a result of payments made by the Ohio utilities to JDOG Marketing during 2013 that were disallowed by the PUCO. Mr. Osborne believes that JDOG Marketing is entitled to the earn-out. Mr. Osborne and JDOG Marketing have filed a suit against the Company for the earn-out payment. See Note 15 – Commitments and Contingencies for more information. | |
The Company applied the acquisition method to the business combination and valued each of the assets acquired (property, plant and equipment and customer relationships) and liabilities assumed (earn-out liability) at fair value as of the acquisition date. The Company used the net book value of property, plant, and equipment received as this closely approximated the fair value. The Company used the present value of expected net cash flows associated with the acquired customer contracts to approximate the assets’ fair values. These customer contracts represent established and ongoing contracts to provide natural gas to the former customers of JDOG Marketing acquired by the Company as part of the acquisition. These customer contracts will be fully amortized over their 10 year estimated useful lives. The Company recorded the fair value of the earn-out liability as the present value of estimated future earn-out payments as of the acquisition date. In addition to the assets acquired and liabilities assumed in the transaction, the Company also effectively settled a note due from JDOG Marketing. As a result of the purchase, $2,101,744 was allocated to goodwill. The Company expects none of the goodwill to be deductible for tax purposes. | |
The results of GNR are included in the Company’s Marketing and Production Operations reporting segment. For the three and nine months ended September 30, 2014, GNR contributed $0.6 million and $3.1 million to the Company’s revenues, respectively, and income of $8,900 and loss of $23,179 to the Company’s net income, respectively. For the three and nine months ended September 30, 2013, GNR contributed $0.5 million and $0.8 million to the Company’s revenues and losses of $47,399 and $16,632 to the Company’s net income. | |
Historically, the Company has been a party to transactions with JDOG Marketing primarily for the purchase of natural gas. In addition to these purchases, the Company also had a note receivable outstanding from JDOG Marketing and an operating lease agreement. Both of these relationships were effectively settled with the completion of the transaction. See Note 14 – Related Party Transactions for more information regarding the Company’s transactions with JDOG Marketing prior to the acquisition. | |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
Note 4 – Fair Value Measurements | ||||||||||||||
The Company follows a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to measurements involving unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows: | ||||||||||||||
Level 1 inputs - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||||||||
Level 2 inputs - other inputs that are directly or indirectly observable in the marketplace. | ||||||||||||||
Level 3 inputs - unobservable inputs which are supported by little or no market activity. | ||||||||||||||
The level in the fair value hierarchy within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. | ||||||||||||||
The following table presents the placement in the fair value hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis: | ||||||||||||||
September 30, 2014 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
ASSETS: | ||||||||||||||
Commodity swap contracts | $ | - | $ | 8,419 | $ | - | $ | 8,419 | ||||||
LIABILITIES: | ||||||||||||||
Contingent consideration | $ | - | $ | - | $ | 682,000 | $ | 682,000 | ||||||
December 31, 2013 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
ASSETS: | ||||||||||||||
Common stock | $ | 406,134 | $ | - | $ | - | $ | 406,134 | ||||||
LIABILITIES: | ||||||||||||||
Contingent consideration | $ | - | $ | - | $ | 685,000 | $ | 685,000 | ||||||
The fair value of financial instruments including cash and cash equivalents, notes and accounts receivable and notes and accounts payable are not materially different from their carrying amounts. The fair values of marketable securities are estimated based on closing share price on the quoted market price for those investments. Cost basis is determined by specific identification of securities sold. Under the fair value hierarchy, the fair value of cash and cash equivalents is classified as a Level 1 measurement and the fair value of notes payable are classified as Level 2 measurements. | ||||||||||||||
The contingent consideration liability categorized in level 3 of the fair value hierarchy arose as a result of the JDOG Marketing acquisition in June 2013. See Note 3 – Acquisitions for more information regarding this liability. | ||||||||||||||
Valuation of the contingent consideration liability categorized under level 3 of the fair value hierarchy was conducted by an independent third-party valuation firm. Inputs and assumptions used in the valuation were reviewed for reasonableness by the Company in the course of the valuation process and have been updated to reflect changes in the Company’s business environment. | ||||||||||||||
The following table reconciles the beginning and ending balances of the contingent consideration liability categorized under level 3 of the fair value hierarchy. | ||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||
Contingent | ||||||||||||||
Consideration | ||||||||||||||
Opening balance December 31, 2013 | $ | 685,000 | ||||||||||||
Transfers into level 3 | - | |||||||||||||
Transfers out of level 3 | - | |||||||||||||
Total (gains) losses for period: | ||||||||||||||
Included in net income | -3,000 | |||||||||||||
Included in other comprehensive income | - | |||||||||||||
Purchases | - | |||||||||||||
Sales | - | |||||||||||||
Settlements | - | |||||||||||||
Issuances | - | |||||||||||||
Closing balance September 30, 2014 | $ | 682,000 | ||||||||||||
The following table summarizes quantitative information used in determining the fair value of the Company’s liabilities categorized in level 3 of the fair value hierarchy. | ||||||||||||||
Quantitative Information about Level 3 Fair Value Measures | ||||||||||||||
Fair Value at | Valuation | |||||||||||||
September 30, 2014 | Techniques | Unobservable Input | Range | |||||||||||
Contingent Consideration | $ | 682,000 | Monte Carlo analysis | Forecasted annual EBITDA | 0.4 to 0.6 million | |||||||||
Weighted avg cost of capital | 14.5% to 14.5% | |||||||||||||
U.S. Treasury yields | 0.2% to 1.2% | |||||||||||||
Discounted cash flow | U.S. Treasury yields | 0.2% to 1.2% | ||||||||||||
Credit spread | 2.0% to 2.5% | |||||||||||||
The significant unobservable inputs used in the fair value measure of the Company’s contingent consideration liability are its weighted average cost of capital, various U.S. Treasury yields, and the Company’s credit spread above the risk free rate. Significant increases (decreases) in any of these inputs in isolation would result in a significantly lower (higher) fair value measure. An additional significant unobservable input for this fair value measure is the Company’s forecasted annual EBITDA related to its GNR subsidiary. A significant increase (decrease) in this input would result in a significant increase (decrease) in the fair value measure. | ||||||||||||||
Marketable_Securities
Marketable Securities | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||
Marketable Securities | ' | |||||||||||||
Note 5 – Marketable Securities | ||||||||||||||
The Company’s marketable securities consisted only of common stock classified as available-for-sale securities. During the three months ended September 30, 2014, the Company sold all of its available-for-sale securities. The Company received $0.5 million in proceeds which resulted in a gain on sale of approximately $0.2 million. All unrealized gains and losses on these securities have been included in Other comprehensive income on the Company’s Condensed Consolidated Statement of Comprehensive Income net of tax. An unrealized gain of approximately $0.1 million, net of tax, was reclassified from Other comprehensive income to a component of Net income during the period as a result of the sale. This amount represented the complete cumulative net unrealized gain on these securities. | ||||||||||||||
The following is a summary of available-for-sale securities owned by the Company at December 31, 2013: | ||||||||||||||
December 31, 2013 | ||||||||||||||
Investment | Unrealized | Unrealized | Estimated | |||||||||||
at cost | gains | losses | fair value | |||||||||||
Common stock | $ | 238,504 | $ | 167,630 | $ | - | $ | 406,134 | ||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | ' | |||||||||||||||
Note 6 – Derivative Financial Instruments | ||||||||||||||||
The Company has entered into commodity swap contracts in order to reduce the commodity price risk related to natural gas prices during the winter months. These commodity swap contracts set a fixed price that the Company will ultimately pay for quantities of natural gas specified in the contracts. FASB ASC 815-10 requires that an entity recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. These commodity swaps contracts are not designated as hedging instruments under this authoritative guidance. | ||||||||||||||||
The following table summarizes the commodity swap contracts entered into by the Company as of September 30, 2014. The Company will pay the price for the volumes denoted in the table below and will receive from a counterparty the CIG – Rockies IFERC market price for these volumes, settled monthly. | ||||||||||||||||
Product | Type | Contract Period | Volume | Price per MMBtu | ||||||||||||
CIG - Rockies - IFERC Natural Gas | Swap | 11/01/14 - 3/31/15 | 500 MMBtu/Day | $ | 3.98 | |||||||||||
CIG - Rockies - IFERC Natural Gas | Swap | 11/01/14 - 3/31/15 | 500 MMBtu/Day | $ | 4.075 | |||||||||||
The table below summarizes the amount of gain recognized as a component of Net income from the contracts. | ||||||||||||||||
Unrealized gain (loss) on derivative | Location of Gain recognized in Net | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
instruments not designated as hedging | Income on Derivatives | |||||||||||||||
instruments | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Commodity swap contracts | Other income, net | $ | 8,419 | $ | - | $ | 8,419 | $ | - | |||||||
The table below shows the line item in the Company’s Condensed Consolidated Balance Sheets where the fair value of the commodity swap contracts is included. | ||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||
Asset Derivatives | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
Balance Sheet Location | 2014 | 2013 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Commodity swap contracts | Derivative instruments | $ | 8,419 | $ | - | |||||||||||
Regulatory_Assets
Regulatory Assets | 9 Months Ended |
Sep. 30, 2014 | |
Regulated Operations [Abstract] | ' |
Regulatory Assets | ' |
Note 7 – Regulatory Assets | |
On June 27, 2014, the Company’s Frontier Natural Gas subsidiary entered into a stipulation with the Public Staff of the North Carolina Utilities Commission (Docket No G-40, Sub 124), in which the subsidiary agreed, among other items, to reclassify $2.5 million from its deferred gas cost account to a regulatory asset account. This amount represents a portion of deferred expenses related to the subsidiary’s January and February 2014 gas purchases. The stipulation calls for amortization of this amount as operating expense over a five year period beginning July 1, 2014. Under the stipulation, the Public Staff agreed to not request a change in Frontier Natural Gas’s base margin rates, exclusive of cost of gas, for the same five-year period. The unamortized balance of this regulatory asset was $2.3 million and is reflected in the balance of the Company’s Deferred costs regulatory asset line item on its Condensed Consolidated Balance Sheet dated September 30, 2014. | |
Build_to_Suit_Lease
Build to Suit Lease | 9 Months Ended |
Sep. 30, 2014 | |
Leases [Abstract] | ' |
Build to Suit Lease | ' |
Note 8 – Build to Suit Lease | |
In April 2014, with the approval of its creditors, the Company entered into a build-to-suit lease agreement for its new enterprise resource planning (“ERP”) system. The Company has determined that during the application development stage it possesses substantially all of the project’s risk and as such should be considered the owner of the asset during this period. The Company has recorded a $4.6 million asset included in Property, plant and equipment and a $4.1 million liability included in the Build-to-suit liability line items on its Condensed Consolidated Balance Sheet dated September 30, 2014 related to this project. Upon completion of the ERP project, the Company will assess whether the lease qualifies for sales recognition under sale-leaseback accounting guidance. | |
Restricted_Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2014 | |
Text Block [Abstract] | ' |
Restricted Cash | ' |
Note 9 – Restricted Cash | |
At September 30, 2014 and December 31, 2013, the Company maintained a restricted cash balance of $1.9 million and $1.1 million, respectively. Of these amounts, $0.9 million and $1.1 million at September 30, 2014 and December 31, 2013, respectively, are related to the Company’s Sun Life debt covenants. See the Sun Life Debt Covenant section of Note 10 – Credit Facilities and Long-Term Debt for more information regarding these restricted funds. The remaining $0.9 million at September 30, 2014 is related to a deposit paid in the first quarter of 2014 to Bangor Gas, a subsidiary of the Company, by Verso Bucksport Power LLC (“Verso”) as a required condition connected to H.Q. Energy Services (U.S.) Inc. transferring to Verso its rights under a gas transportation service agreement with Bangor Gas. Bangor Gas is restricted from using these funds unless and until a default under this agreement has occurred. This deposit will be refunded to Verso at the termination of the gas transportation service agreement. | |
Credit_Facilities_and_LongTerm
Credit Facilities and Long-Term Debt | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Credit Facilities and Long-Term Debt | ' | |||||||
Note 10 – Credit Facilities and Long-Term Debt | ||||||||
Line of Credit | ||||||||
The Company has a revolving credit facility with the Bank of America with a maximum borrowing capacity of $30.0 million due April 1, 2017. This revolving credit facility includes an annual commitment fee ranging from 25 to 45 basis points of the unused portion of the facility and interest on the amounts outstanding at LIBOR plus 175 to 225 basis points. The Company had outstanding borrowings under this facility of $24.1 million and $24.5 million at September 30, 2014 and December 31, 2013, respectively. For the three months ended September 30, 2014 and 2013, interest expense related to the line of credit was $0.1 million and $0.1 million, respectively. For the nine months ended September 30, 2014 and 2013, interest expense related to the line of credit was $0.4 million and $0.4 million, respectively. The weighted average interest rate for the revolving credit facility was 2.5% and 3.3%, for the three months ended September 30, 2014 and 2013, respectively. The weighted average interest rate for the revolving credit facility was 2.4% and 3.3%, for the nine months ended September 30, 2014 and 2013, respectively. | ||||||||
Notes Payable | ||||||||
The following table details the Company’s outstanding long-term debt balances at September 30, 2014 and December 31, 2013. | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
LIBOR plus 1.75 to 2.25%, Bank of America amortizing term loan, due April 1, 2017 | $ | 9,000,000 | $ | 9,375,000 | ||||
6.16%, Allstate/CUNA Senior unsecured notes, due June 29, 2017 | 13,000,000 | 13,000,000 | ||||||
5.38%, Sun Life fixed rate note, due June 1, 2017 | 15,334,000 | 15,334,000 | ||||||
LIBOR plus 3.85%, Sun Life floating rate note, due May 3, 2014 | - | 3,000,000 | ||||||
4.15% Sun Life senior secured guaranteed note, due June 1, 2017 | 2,989,552 | 2,989,552 | ||||||
Vehicle & equipment financing loans | 75,031 | 2,190 | ||||||
Total notes payable | 40,398,583 | 43,700,742 | ||||||
Less: current portion | 542,156 | 3,502,190 | ||||||
Notes payable, long-term portion | $ | 39,856,427 | $ | 40,198,552 | ||||
Debt Covenants | ||||||||
Bank of America | ||||||||
The Bank of America revolving credit agreement and term loan contain various covenants, which require that Energy West and its subsidiaries maintain compliance with a number of financial covenants, including a limitation on investments in another entity by acquisition of any debt or equity securities or assets or by making loans or advances to such entity. In addition, Energy West must maintain a total debt to total capital ratio of not more than .55-to-1.00 and an interest coverage ratio of no less than 2.0-to-1.0. The credit facility restricts Energy West’s ability to create, incur or assume indebtedness except (i) indebtedness under the credit facility (ii) indebtedness incurred under certain capitalized leases including the capital lease related to the Loring pipeline, and purchase money obligations not to exceed $500,000, (iii) certain indebtedness of Energy West’s subsidiaries, (iv) certain subordinated indebtedness, (v) certain hedging obligations and (vi) other indebtedness not to exceed $1.0 million. | ||||||||
In addition, the Bank of America revolving credit agreement and term loan also restricts Energy West’s ability to pay dividends and make distributions, redemptions and repurchases of stock during any 60-month period to 80% of its net income over that period. In addition, no event of default may exist at the time such dividend, distribution, redemption or repurchase is made. Energy West is also prohibited from consummating a merger or consolidation or selling all or substantially all of its assets or stock except for (i) any merger consolidation or sale by or with certain of its subsidiaries, (ii) any such purchase or other acquisition by Energy West or certain of its subsidiaries and (iii) sales and dispositions of assets for at least fair market value so long as the net book value of all assets sold or otherwise disposed of in any fiscal year does not exceed 5% of the net book value of Energy West’s assets as of the last day of the preceding fiscal year. | ||||||||
Allstate/CUNA | ||||||||
The Allstate/CUNA senior unsecured notes contain various covenants, including a limitation on Energy West’s total dividends and distributions made in the immediately preceding 60-month period to 100% of aggregate consolidated net income for such period. The notes restrict Energy West from incurring additional senior indebtedness in excess of 65% of capitalization at any time and require Energy West to maintain an interest coverage ratio of more than 150% of the pro forma annual interest charges on a consolidated basis in two of the three preceding fiscal years. | ||||||||
Sun Life | ||||||||
The Sun Life covenants restrict certain cash balances and require two main types of debt service reserve accounts to be maintained to cover approximately one year of interest payments. The total balance in the debt service reserve accounts was $0.9 million and $1.1 million at September 30, 2014 and December 31, 2013, respectively, and is included in restricted cash on the Company’s Consolidated Balance Sheets. The debt service reserve accounts cannot be used for operating cash needs. | ||||||||
The covenants also provide that any cash dividends, distributions, redemptions or repurchases of common stock may be made by the obligors (NEO, Orwell, Brainard, and the Company’s unregulated Ohio subsidiaries) to the holding company only if (i) the aggregate amount of all such dividends, distributions, redemptions and repurchases for the fiscal year do not exceed 70% of net income of the obligors for the four fiscal quarters then ending determined as of the end of each fiscal quarter, and (ii) there exists no other event of default at the time the dividend, distribution, redemption or repurchase is made. The inability of the obligors to pay a dividend to the holding company may impact the Company’s ability to pay a dividend to shareholders. | ||||||||
The obligors are also prohibited from creating, assuming or incurring additional indebtedness except for (i) obligations under certain financing agreements, (ii) indebtedness incurred under certain capitalized leases and purchase money obligations not to exceed $500,000 at any one time outstanding, (iii) indebtedness outstanding as of March 31, 2011, (iv) certain unsecured intercompany indebtedness and (v) certain other indebtedness permitted under the notes. | ||||||||
The covenants require, on a consolidated basis, an interest coverage ratio of at least 2.0 to 1.0, measured quarterly on a trailing four quarter basis. The notes generally define the interest coverage ratio as the ratio of EBITDA to gross interest expense. The note defines EBITDA as net income plus the sum of interest expense, any provision for federal, state, and local taxes, depreciation, and amortization determined on a consolidated basis in accordance with GAAP, but excluding any extraordinary non-operating income or loss and any gain or loss from non-operating transactions. The interest coverage ratio is measured with respect to the obligors on a consolidated basis and also with respect to the Company and all of its subsidiaries on a consolidated basis. The notes also require that the Company does not permit indebtedness to exceed 60% of capitalization at any time. Like the interest coverage ratio, the ratio of debt to capitalization is measured on a consolidated basis for the Obligors and again on a consolidated basis with respect to the Company and all of its subsidiaries. | ||||||||
The notes prohibit the Company from selling or otherwise transferring assets except in the ordinary course of business and to the extent such sales or transfers, in the aggregate, over each rolling twelve month period, do not exceed 1% of total assets. Generally, the Company may consummate a merger or consolidation if there is no event of default and the provisions of the notes are assumed by the surviving or continuing corporation. The Company is also generally limited in making acquisitions in excess of 10% of total assets. | ||||||||
An event of default, if not cured or waived, would require the Company to immediately pay the outstanding principal balance of the notes as well as any and all interest and other payments due. An event of default would also entitle Sun Life to exercise certain rights with respect to any collateral that secures the indebtedness incurred under the notes. | ||||||||
The Company believes it is in compliance with the financial covenants under its debt agreements. | ||||||||
Stock_Compensation
Stock Compensation | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||
Stock Compensation | ' | ||||||||||
Note 11 – Stock Compensation | |||||||||||
2012 Incentive and Equity Award Plan | |||||||||||
The 2012 Incentive and Equity Award Plan provides for the grant of options, restricted stock, performance awards, other stock-based awards and cash awards to certain eligible employees and directors. The number of shares authorized for issuance under the plan is 500,000. | |||||||||||
On March 26, 2014, in order to further align the directors’ interests with those of the Company’s shareholders, the board granted an award of the Company’s common stock to each current director of Gas Natural. The total number of shares awarded was 30,833 with a grant date fair value of $0.3 million. The award was not conditional on any future performance or event and as such, the award was fully expensed on the grant date. These shares were issued on April 3, 2014. | |||||||||||
On July 21, 2014, in conjunction with his employment agreement, the Company granted 5,000 shares of restricted stock to Gregory J. Osborne, the Company’s chief executive officer. These shares had a grant date fair value of $58,000 and will vest ratably through July 21, 2017. During the vesting period, each restricted share has the same rights to dividend distributions and voting as any other common share of the Company. | |||||||||||
2012 Non-Employee Director Stock Award Plan | |||||||||||
The 2012 Non-Employee Director Stock Award Plan allows each non-employee director to receive his or her fees in shares of the Company’s common stock by providing written notice to the Company. The number of shares authorized for issuance under the plan is 250,000. As of September 30, 2014, no shares had been issued under the plan. | |||||||||||
2002 Stock Option Plan | |||||||||||
The Energy West Incorporated 2002 Stock Option Plan (the "Option Plan") expired on October 4, 2012 and provided for the issuance of up to 300,000 options to purchase the Company’s common stock to be issued to certain key employees. Pursuant to the Option Plan, the options vest over four to five years and are exercisable over a five to ten-year period from date of issuance. The fair value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. | |||||||||||
A summary of the status of outstanding stock options under the plan is as follows: | |||||||||||
Weighted | |||||||||||
Number of | Average | Aggregate | |||||||||
Shares | Exercise Price | Intrinsic Value | |||||||||
Outstanding December 31, 2013 | 5,000 | $ | 8.44 | $ | - | ||||||
Granted | - | ||||||||||
Exercised | -5,000 | $ | 8.44 | ||||||||
Expired | - | ||||||||||
Outstanding September 30, 2014 | - | $ | - | $ | - | ||||||
Exercisable September 30, 2014 | - | $ | - | $ | - | ||||||
Employee_Benefit_Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
Employee Benefit Plans | ' |
Note 12 – Employee Benefit Plans | |
The Company has a defined contribution plan (the "401k Plan") which covers substantially all of its employees. The plan provides for an annual contribution of 3% of salaries, with a discretionary contribution of up to an additional 3%. The expense related to the 401k Plan for the three months ended September 30, 2014 and 2013 was $115,297 and $108,950, respectively. The expense related to the 401k Plan for the nine months ended September 30, 2014 and 2013 was $376,123 and $306,467, respectively. | |
The Company makes matching contributions in the form of Company common stock equal to 10% of each participant’s elective deferrals in the 401k Plan. For the three months ended September 30, 2014 and 2013, the Company contributed shares of common stock valued at $15,954 and $14,475, respectively. For the nine months ended September 30, 2014 and 2013, the Company contributed shares of common stock valued at $41,104 and $41,912, respectively. In addition, a portion of the 401k Plan consists of an Employee Stock Ownership Plan ("ESOP") that covers most employees. The ESOP receives contributions of common stock from the Company each year as determined by the Board of Directors. For the nine months ended September 31, 2014 and 2013, the Company made no contributions. | |
The Company has sponsored a defined postretirement health plan (the "Retiree Health Plan") providing health and life insurance benefits to eligible retirees. The Retiree Health Plan pays eligible retirees (post-65 years of age) up to $125 per month in lieu of contracting for health and life insurance benefits. The amount of this payment is fixed and will not increase with medical trends or inflation. In addition, the Retiree Health Plan allows retirees between the ages of 60 and 65 and their spouses to remain on the same medical plan as active employees by contributing 125% of the current COBRA rate to retain this coverage. The amounts paid in excess of the current COBRA rate is held in a VEBA trust account, and benefits for this plan are paid from assets held in the VEBA Trust account. The Company discontinued contributions in 2006 and is no longer required to fund the Retiree Health Plan. As of September 30, 2014 and December 31, 2013, the value of plan assets was $137,318 and $155,750, respectively. The assets remaining in the trust will be used to fund the plan until the assets are exhausted. | |
Income_Taxes
Income Taxes | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||||
Income Taxes | ' | |||||||||||||
Note 13 – Income Taxes | ||||||||||||||
Income tax position differs from the amount computed by applying the federal statutory rate to pre-tax income or loss as demonstrated in the table below: | ||||||||||||||
Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Tax expense at statutory rate of 34% | $ | -834,880 | $ | -671,409 | $ | 1,140,627 | $ | 1,763,512 | ||||||
State income tax, net of Federal tax expense | -82,641 | -80,135 | 112,905 | 210,480 | ||||||||||
Amortization of deferred investment tax credits | -5,265 | -5,265 | -15,794 | -15,794 | ||||||||||
Adjustment to tax return filed | -70,734 | -110,150 | -29,820 | -110,150 | ||||||||||
Other | 17,183 | 14,284 | 36,187 | - | ||||||||||
Total income tax expense (benefit) | -976,337 | -852,675 | 1,244,105 | 1,848,048 | ||||||||||
Less: Income tax benefit from discontinued operations | 32,157 | -67,540 | 342,964 | 123,809 | ||||||||||
Income tax expense (benefit) from continuing operations | $ | -1,008,494 | $ | -785,135 | $ | 901,141 | $ | 1,724,239 | ||||||
The “Adjustment to tax return filed” line above for the nine months ended September 30, 2014 includes an income tax adjustment of $40,941 related to the correction of income tax items related to 2012 recorded during the nine months ended September 30, 2014 and an income tax benefit of $70,734 related to the correction of income tax items related to 2013 recorded during the three months ended September 30, 2014. | ||||||||||||||
The Company files its income tax returns on a consolidated basis. Rate-regulated operations record cumulative increases in deferred taxes as income taxes recoverable from customers. The Company uses the deferral method to account for investment tax credits as required by regulatory commissions. Deferred income taxes are determined using the asset and liability method, under which deferred tax assets and liabilities are measured based upon the temporary differences between the financial statement and income tax basis of assets and liabilities, using current tax rates. | ||||||||||||||
Tax positions must meet a more-likely-than-not recognition threshold to be recognized. The Company has no unrecognized tax benefits that would have a material impact to the Company’s financial statements for any open tax years. No adjustments were recognized for uncertain tax positions for the three and nine months ended September 30, 2014 and 2013. | ||||||||||||||
The Company recognizes interest and penalties related to unrecognized tax benefits in operating expense. As of September 30, 2014 and December 31, 2013, there were no unrecognized tax benefits nor interest or penalties accrued related to unrecognized tax benefits. For the three and nine months ended September 30, 2014 and 2013, the Company did not recognize any interest or penalties related to unrecognized tax benefits. | ||||||||||||||
The Company, or one or more of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The tax years after 2010 for federal and state returns remain open to examination by the major taxing jurisdictions in which the Company operates. | ||||||||||||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Related Party Transactions | ' | ||||||||||||||||
Note 14 – Related Party Transactions | |||||||||||||||||
Purchase of 8500 Station Street | |||||||||||||||||
On March 5, 2013, the Company purchased the Matchworks Building in Mentor, Ohio for $1.9 million from McKay Real Estate Corporation, Matchworks, LLC, and Nathan Properties, LLC (collectively, the “Sellers”) by and through Mark E. Dottore as Receiver in the United States District Court. The Sellers are entities owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer. The acquisition of the Matchworks Building was approved by the independent members of the Company’s board of directors. A subsidiary of Gas Natural, 8500 Station Street, was formed to operate the property. The Company accounted for the transaction as an asset purchase and as such recorded the land and building purchased as Property, plant and equipment on its Condensed Consolidated Balance Sheets in the amounts of $244,859 and $1,607,915, respectively. These amounts were allocated based on the assets’ relative fair values. | |||||||||||||||||
Acquisition of John D. Oil and Gas Marketing | |||||||||||||||||
On June 1, 2013, the Company and its wholly-owned Ohio subsidiary, GNR, completed the acquisition of substantially all of the assets and certain liabilities of JDOG Marketing, an Ohio company engaged in the marketing of natural gas. The Osborne Trust is the majority owner of JDOG Marketing. Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, is the sole trustee of the Osborne Trust. The acquisition of JDOG Marketing was approved by the independent members of the Company’s board of directors and the Company’s shareholders. See Note 3 – Acquisitions for details regarding this transaction. | |||||||||||||||||
Accounts Receivable and Accounts Payable | |||||||||||||||||
The table below details amounts due from and due to related parties, including companies owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, at September 30, 2014 and December 31, 2013. These amounts are presented on the Condensed Consolidated Balance Sheet as Related parties under Accounts receivable and Accounts payable. | |||||||||||||||||
Accounts Receivable | Accounts Payable | ||||||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cobra Pipeline | $ | 178,596 | $ | 131,208 | $ | - | $ | 76,909 | |||||||||
Orwell Trumbell Pipeline | - | - | - | 122,693 | |||||||||||||
Great Plains Exploration | 7,670 | 7,033 | 9 | 73,983 | |||||||||||||
Big Oats Oil Field Supply | 5,190 | 4,945 | - | 179,447 | |||||||||||||
John D. Oil and Gas Company | 96 | 91 | - | 82,188 | |||||||||||||
OsAir | 17,152 | - | - | 12,979 | |||||||||||||
Other | 11,214 | 2,948 | - | 11,734 | |||||||||||||
Total related party balances | 219,918 | 146,225 | 9 | 559,933 | |||||||||||||
Less amounts included in discontinued operations | - | - | - | - | |||||||||||||
Total related party balances included in continuing operations | $ | 219,918 | $ | 146,225 | $ | 9 | $ | 559,933 | |||||||||
The tables below detail transactions with related parties, including companies owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, for the three months ended September 30, 2014 and 2013. | |||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Rental Income | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | and Other Sales | |||||||||||||
Cobra Pipeline | $ | 154,871 | $ | - | $ | 6,000 | $ | - | $ | - | |||||||
Orwell Trumbell Pipeline | 46,125 | - | - | 140 | 35,549 | ||||||||||||
Great Plains Exploration | 120,707 | - | - | 599 | 1,700 | ||||||||||||
Big Oats Oil Field Supply | - | - | - | 29 | - | ||||||||||||
John D. Oil and Gas Company | 135,237 | - | - | 144 | 6,323 | ||||||||||||
OsAir | 32,984 | - | - | 44 | 17,079 | ||||||||||||
Lake Shore Gas | - | - | - | - | - | ||||||||||||
Other | 13,839 | - | - | 2,839 | 100 | ||||||||||||
Total | $ | 503,763 | $ | - | $ | 6,000 | $ | 3,795 | $ | 60,751 | |||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Management and | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | Other Sales | |||||||||||||
Cobra Pipeline | $ | 227,381 | $ | - | $ | - | $ | 70,635 | $ | 218 | |||||||
Orwell Trumbell Pipeline | 51,621 | - | - | 115 | 31,582 | ||||||||||||
Great Plains Exploration | 189,991 | - | 1,341 | 669 | 1,500 | ||||||||||||
Big Oats Oil Field Supply | - | 603,360 | 161,597 | 78 | 800 | ||||||||||||
John D. Oil and Gas Company | 186,921 | - | - | 143 | 6,333 | ||||||||||||
OsAir | 51,891 | - | 7,198 | 139 | 22,910 | ||||||||||||
Other | 21,053 | - | 15,285 | 1,131 | 396 | ||||||||||||
Total | $ | 728,858 | $ | 603,360 | $ | 185,421 | $ | 72,910 | $ | 63,739 | |||||||
The tables below detail transactions with related parties, including companies owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, for the nine months ended September 30, 2014 and 2013. | |||||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Rental Income | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | and Other Sales | |||||||||||||
Cobra Pipeline | $ | 864,118 | $ | - | $ | 14,000 | $ | 104,623 | $ | 13,400 | |||||||
Orwell Trumbell Pipeline | 562,728 | - | - | 1,595 | 37,124 | ||||||||||||
Great Plains Exploration | 611,187 | - | - | 12,735 | 4,700 | ||||||||||||
Big Oats Oil Field Supply | - | 254,752 | 93,741 | 4,482 | 850 | ||||||||||||
John D. Oil and Gas Company | 737,522 | - | - | 431 | 35,473 | ||||||||||||
OsAir | 176,116 | - | 6,001 | 2,889 | 39,945 | ||||||||||||
Lake Shore Gas | 162,360 | - | - | - | - | ||||||||||||
Other | 76,281 | - | 22,808 | 21,065 | 1,676 | ||||||||||||
Total | $ | 3,190,312 | $ | 254,752 | $ | 136,550 | $ | 147,820 | $ | 133,168 | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Management and | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | Other Sales | |||||||||||||
John D. Oil and Gas Marketing | $ | 952,899 | $ | - | $ | 7,271 | $ | 5,470 | $ | - | |||||||
Cobra Pipeline | 737,252 | - | - | 115,116 | 243 | ||||||||||||
Orwell Trumbell Pipeline | 469,661 | - | - | 10,883 | 31,883 | ||||||||||||
Great Plains Exploration | 506,716 | 854 | 1,341 | 13,348 | 31,809 | ||||||||||||
Big Oats Oil Field Supply | - | 2,081,043 | 465,269 | 2,824 | 925 | ||||||||||||
John D. Oil and Gas Company | 554,466 | 5,976 | - | 286 | 20,923 | ||||||||||||
OsAir | 182,871 | - | 87,671 | 762 | 54,378 | ||||||||||||
Other | 55,452 | 854 | 45,296 | 19,554 | 46,411 | ||||||||||||
Total | $ | 3,459,317 | $ | 2,088,727 | $ | 606,848 | $ | 168,243 | $ | 186,572 | |||||||
At September 30, 2014, the Company accrued a liability of $69,253 due to companies controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, for natural gas used through that date not yet invoiced. The related expense is included in the gas purchased line item in the accompanying Statements of Comprehensive Income. | |||||||||||||||||
In addition, the Company had related party natural gas imbalances of $383,648 and $151,780 at September 30, 2014 and December 31, 2013, respectively, which were included in the Company’s Natural gas inventory balance. These amounts represent quantities of natural gas due to the Company from natural gas transportation companies controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 15 – Commitments and Contingencies | |
Legal Proceedings | |
From time to time, the Company is involved in lawsuits that have arisen in the ordinary course of business. The Company is contesting each of these lawsuits vigorously and believes it has defenses to the allegations that have been made. | |
Richard M. Osborne Suits | |
On June 13, 2014, Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, filed a lawsuit against the Company and the Company’s corporate secretary captioned, “Richard M. Osborne and Richard M. Osborne Trust, Under Restated and Amended Trust Agreement of February 24, 2012 v. Gas Natural, Inc. et al.,” Case No. 14CV001210 which was filed in the Court of Common Pleas in Lake County, Ohio. In this lawsuit, Mr. Osborne seeks an order requiring the Company to provide him with “the minutes and any corporate resolutions for the past five years.” The Company has provided Mr. Osborne with all the board minutes he requested that have been approved by the board. On October 29, 2014, Mr. Osborne filed an amended complaint in this matter demanding minutes of the committees of the board of directors and additional board minutes which he claims he is entitled to receive. Mr. Osborne has also filed requests for discovery in this lawsuit. | |
On June 26, 2014, Mr. Osborne filed a lawsuit against Gas Natural and the Company’s board of directors captioned “Richard M. Osborne, Richard M. Osborne Trust, Under Restated and Amended Trust Agreement of February 24, 2012 and John D. Oil and Gas Marketing Company, LLC v. Gas Natural, Inc. et al.,” Case No. 14CV001290, filed in the Court of Common Pleas in Lake County, Ohio. In this lawsuit, among other things, Mr. Osborne (1) demanded payment of an earnout associated with Gas Natural’s purchase of assets from John D. Marketing, (2) alleged that the board of directors breached its fiduciary duties, primarily by removing Mr. Osborne as chairman of the board and chief executive officer, (3) sought injunctive relief to restrain the Company’s board members from “taking any actions on behalf of Gas Natural until they are in compliance with the law and the documents governing corporate governance” and (4) asked the Court to enjoin the 2014 annual meeting that was scheduled to take place on July 30, 2014 and to delay it until such time that the board of directors would be “in compliance with the law and corporate governance.” | |
Mr. Osborne dismissed the lawsuit above on July 15, 2014 without prejudice, as the parties started to engage in settlement negotiations in an attempt to resolve the dispute. After settlement negotiations broke down, Mr. Osborne refiled the lawsuit on July 28, 2014 against Gas Natural and the Company’s board members. In the re-filed lawsuit, among other things, Mr. Osborne (1) demands payment of an earnout amount associated with Gas Natural’s purchase of assets from John D. Marketing, (2) alleges that the board of directors has breached its fiduciary duties by removing Mr. Osborne as chairman and chief executive officer, (3) seeks to enforce a July 15, 2014 term sheet, where the parties memorialized certain discussions they had in connection with their efforts to resolve the dispute arising out of the lawsuit, which included a severance payment of $1.0 million, and (4) seeks to invalidate the results of the July 30, 2014 shareholder meeting and asks the court to order Gas Natural to hold a new meeting at a later date. Mr. Osborne is also seeking compensatory and punitive damages. The parties are currently conducting discovery in this lawsuit. Gas Natural believes that Mr. Osborne’s claims in this lawsuit are wholly without merit and will vigorously defend this case on all grounds. | |
As disclosed above, on June 26, 2014, Mr. Osborne filed a lawsuit against the Company in the Court of Common Pleas in Lake County, Ohio. In the lawsuit, Mr. Osborne sought injunctive relief delaying the 2014 annual meeting scheduled to take place on July 30, 2014. While that suit was pending, on July 9, 2014, Mr. Osborne mailed the first of several letters to the Company’s shareholders, criticizing the Company’s board and seeking shareholder’s support in replacing them. On July 15, 2014, Mr. Osborne dismissed without prejudice his Lake County lawsuit, but he refiled it on July 28, 2014. He did not again seek to enjoin the annual shareholder meeting, which occurred as scheduled two days later. Instead, he requests in his complaint that the Lake County court void the election of directors at the July 30 meeting and order the Company to conduct another shareholder meeting for the purpose of electing directors no later than February 2015. Mr. Osborne’s refiled lawsuit remains pending. Mr. Osborne wrote two additional letters, dated August 12, 2014 and September 9, 2014, which he mailed to the Company’s shareholders in mid-September. In the letters Mr. Osborne continued to criticize the Company’s board and management. | |
Mr. Osborne did not file his letters with the Securities and Exchange Commission and the Company believes that his letters violated Section 14(a) of the Securities Exchange Act and related regulations that require shareholder solicitations to be filed with the SEC. On October 2, 2014, Gas Natural filed a suit against Mr. Osborne captioned “Gas Natural Inc. v. Richard M. Osborne” in the United States District Court Northern District of Ohio (Case No. 1:14-cv-2181). In this case the Company sought to enjoin Mr. Osborne from sending additional letters to the Company’s shareholders without complying with applicable Federal securities laws. The court held a hearing on October 8, 2014 and the judge granted the injunction, requiring Mr. Osborne to file with the SEC any letters he writes to shareholders so long as his action in Lake County seeking to invalidate the July 30 meeting is pending. Mr. Osborne has appealed the ruling. The Company believes his appeal is wholly without merit and will vigorously contest it. | |
Shareholders Suit | |
Beginning on December 10, 2013, five putative shareholder derivative lawsuits were filed by five different individuals, in their capacity as shareholders of Gas Natural, in the United States District Court for the Northern District of Ohio, purportedly on behalf of Gas Natural and naming certain of the Company’s current and former executive officers and directors as individual defendants. These five shareholder lawsuits are captioned as follows: (1) Richard J. Wickham v. Richard M. Osborne, et al., (Case No. 1:13-cv-02718-LW); (2) John Durgerian v. Richard M. Osborne, et al., (Case No. 1:13-cv-02805-LW); (3) Joseph Ferrigno v. Richard M. Osborne, et al., (Case No. 1:13-cv-02822-LW); (4) Kyle Warner v. Richard M. Osborne, et al., (Case No. 1:14-cv-00007-LW) and (5) Gary F. Peters v. Richard M. Osborne, (Case No. 1:14-cv-0026-CAB). On February 6, 2014, the five lawsuits were consolidated solely for purposes of conducting limited pretrial discovery, and on February 21, 2014, the Court appointed lead counsel for all five lawsuits. No formal discovery has been conducted to date. | |
The consolidated action contains claims against various current or former directors or officers of Gas Natural alleging, among other things, violations of federal securities laws, breaches of fiduciary duty, waste of corporate assets and unjust enrichment arising primarily out of the Company’s acquisition of the Ohio utilities, services provided by JDOG Marketing and the acquisition of JDOG Marketing, and the sale of the Company’s common stock by Richard M. Osborne, the Company’s former chairman and chief executive officer, and Thomas J. Smith, a director of the Company and its former chief financial officer. The suit seeks the recovery of unspecified damages allegedly sustained by Gas Natural, which is named as a nominal defendant, corporate reforms, disgorgement, restitution, the recovery of plaintiffs’ attorney’s fees and other relief. | |
Gas Natural and the other defendants filed a motion to dismiss the consolidated action in its entirety on May 8, 2014. The motion to dismiss was based on, among other things, the failure of the plaintiffs to make demand on Gas Natural’s board of directors to address the alleged wrongdoing prior to filing their lawsuits and the failure to state viable claims against various individual defendants. Richard Osborne, individually, is now represented by counsel independent of all other defendants in the case and submitted a filing in support of the motion to dismiss on his own behalf. | |
On September 24, 2014, the magistrate judge assigned to the case issued a report and recommendation in response to the motion to dismiss. The magistrate judge recommended that the plaintiffs’ claims against the individual defendants with respect to the “unjust enrichment” allegation in the complaint be dismissed. The magistrate judge recommended that all other portions of the motion to dismiss be denied. The report and recommendation, the objections filed by the defendants, and the responses from the plaintiffs will all be reviewed by the trial judge assigned to the case who will then either adopt the report and recommendation in full, reject it in full, or adopt in part and modify in part. | |
At this time the Company is unable to provide an estimate of any possible future losses that it may incur in connection to this suit. The Company carries insurance that it believes will cover any negative outcome associated with this action. This insurance carries a $250,000 deductible, which the Company has reached. Although the Company believes these insurance proceeds are available, the Company may incur costs and expenses related to the lawsuits that are not covered by insurance which may be substantial. Any unfavorable outcome of the pending lawsuits could adversely impact the Company’s business and results of operations. | |
Harrington Employment Suit | |
On February 25, 2013, one of the Company’s former officers, Jonathan Harrington, filed a lawsuit captioned “Jonathan Harrington v. Energy West, Inc. and Does 1-4,” Case No. DDV-13-159 in the Montana Eighth Judicial District Court, Cascade County. Mr. Harrington claims he was terminated in violation of Montana statute requiring just cause for termination. In addition, he alleges claims for negligent infliction of emotional distress and negligent slander. Mr. Harrington is seeking relief for economic loss, including lost wages and fringe benefits for a period of at least four years from the date of discharge, together with interest. Mr. Harrington is an Ohio resident and was employed in Gas Natural’s Ohio corporate offices. On March 20, 2013, the Company filed a motion to dismiss the lawsuit on the basis that Mr. Harrington was an Ohio employee, not a Montana employee, and therefore the statute does not apply. The court had asked the parties to file comprehensive statements of fact and scheduled a hearing on the motion to dismiss on July 1, 2014. On July 1, 2014, the court conducted a hearing, made extensive findings on the record, and issued an Order finding in favor of the Company and dismissing all of Mr. Harrington’s claims. On July 21, 2014, Mr. Harrington appealed the dismissal to the Montana Supreme Court where the matter is presently pending awaiting full briefing by the parties. The Company continues to believe Mr. Harrington’s claims under Montana law are without merit, and will continue to vigorously defend this case on all grounds. | |
Special Committee of the Board Investigation | |
On March 26, 2014, the board of directors formed a special committee comprised of three independent directors to investigate the allegations contained in a letter received from one of our shareholders. The letter demands that the board take legal action to remedy alleged breaches of fiduciary duties by the board and certain of our executive officers in connection with the Order and Opinion issued by the PUCO on November 13, 2013. The special committee has the power to retain any advisors, including legal counsel and accounting, financial and regulatory advisors, that the committee determines to be appropriate to carry out its responsibilities in connection with its investigation. The special committee has retained legal counsel and financial and regulatory advisors and is in the process of investigating and evaluating the allegations in order to determine the position Gas Natural will take with respect to the letter. Although the Company believes that insurance proceeds are available for a portion of the cost of the investigation, the Company will incur costs and expenses related to the investigation that are not covered by insurance which may be substantial. | |
PUCO Audits | |
The Company accounts for purchased gas costs in accordance with procedures authorized by the utility commissions in the states in which it operates. Purchased gas costs that are different from those provided for in present rates, and approved by the respective commission, are accumulated and recovered or credited through future rate changes. The GCRs are monitored closely by the regulatory commissions in all of the states in which the Company operates and are subject to periodic audits or other review processes. The PUCO retrospectively audits the Ohio utility companies’ purchases of natural gas on an annual basis. The purpose of this GCR audit is to reconcile the differences, if any, between the amount the companies paid for natural gas and the amount the companies’ customers paid for natural gas. | |
2010 NEO Audit | |
During the year ended December 31, 2010, the PUCO conducted an audit of NEO’s GCR as filed from September 2007 through August 2009. In connection with the audits, the PUCO found that NEO had under-recovered gas costs of approximately $1.1 million. The collection of the under-recovery for NEO began in February of 2012. This adjustment appeared on the accompanying Condensed Consolidated Balance Sheets as part of “recoverable cost of gas purchases”. The remaining balance in NEO’s recoverable cost of gas purchases was $84,463 and $234,253 at June 30, 2014 and December 31, 2013, respectively. The recovery period for these under collected amounts has concluded. The remaining balance will be included as an adjustment in NEO’s future GCR audits until fully recovered. | |
2012 NEO & Orwell Audits | |
On January 23, 2012, the PUCO directed its staff to examine the compliance of NEO and Orwell under the GCR mechanism. In a non-binding report to the PUCO in February 2013, its staff asserted that NEO could have purchased natural gas from local producers for less and recommended an adjustment to the GCR calculations that would result in a liability for NEO and Orwell to its customers. | |
In July 2013, after a hearing with the PUCO and its staff, the Company determined it was probable that the GCR adjustments recommended by the staff would be adopted by the PUCO and as a result the Company recorded these liabilities in its financial statements for the period ended June 30, 2013. Based on the PUCO staff’s calculations and management’s assessment, a $943,550 liability to its customers was recorded as the Company’s best estimate of the required adjustment to NEO’s GCR and a liability for Orwell to its customers of $251,081. | |
On November 13, 2013, the PUCO issued an Opinion and Order in the NEO and Orwell GCR cases; case numbers 12-209-GA-GCR and 12-212-GA-GCR. The Order concluded that adjustments to NEO and Orwell’s GCRs were appropriate in the amounts of $0.8 million and $0.2 million, respectively. These adjustments represent disallowed agent fees paid by NEO and Orwell to JDOG Marketing for natural gas procurement, disallowed processing and treatment fees paid by NEO to Cobra for NEO’s natural gas supply being delivered through Cobra’s pipeline, and certain excess costs associated with local production gas purchased by NEO and Orwell from JDOG Marketing. Both JDOG Marketing and Cobra were companies controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, during the periods covered by these audits. These adjustments will be paid back to NEO and Orwell’s customers through July of 2015. The balance of these adjustments for NEO and Orwell at September 30, 2014 was $0.7 million and $0.2 million, respectively. The balance of these adjustments for NEO and Orwell at December 31, 2013 was $0.8 million and $0.2 million respectively. | |
In addition to the GCR adjustments, the PUCO ordered an investigative audit to be conducted of NEO, Orwell and all affiliated and related companies. These audits will examine the companies’ corporate separation and management structures, internal regulatory and financial controls, compensation systems, gas purchasing transactions and practices related to GCR calculations, and financial and accounting statements filed with regulatory agencies. The final results of these audits are to be reported to the PUCO by January 5, 2015. The PUCO capped the cost for the audit at $200,000 and provided for an additional $50,000 in fees for the preparation and presentation of expert testimony. These costs associated with the audit will be the responsibility of the Company. | |
After the November 13, 2013 PUCO Opinion and Order, the Company examined NEO and Orwell’s GCRs for the periods immediately following the companies’ audit periods. The Company calculated that a total liability, including the adjustments from the Opinion and Order, to its NEO and Orwell customers to be in the range of $1.5 million to $1.9 million. As a result, the Company accrued an additional $0.3 million in the fourth quarter of 2013 to increase its initial estimated liability to $1.5 million. The Company believes that this amount continues to be the best estimate to resolve this matter. New information may cause the Company to materially change this estimate in future periods. This amount is included as a reduction of the Recoverable cost of gas purchases line item on the accompanying Condensed Consolidated Balance Sheets. | |
Trade Receivables | |
At December 31, 2013, included in the accounts receivable, trade line item on the accompanying Condensed Consolidated Balance Sheet was $1,059,224, net of allowance for doubtful accounts of $1,421,000, due from a large industrial customer in bankruptcy proceedings. At the time, the Company believed that it had an administrative claim for the unreserved portion and that it was likely to collect the amount. In June 2014, the bankruptcy court denied the Company’s administrative claim on the customer. The Company’s claim is now considered that of an unsecured creditor and as such the Company believes that it is unlikely that it will collect any of the previously unreserved amounts. As a result, the Company has written-off the remaining balance of the receivable. This receivable was related to the Company’s Marketing & Production operating segment. The impact of the amount written-off is reflected in the Provision for doubtful accounts line of the Company’s Condensed Consolidated Statement of Comprehensive Income. | |
Operating_Segments
Operating Segments | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Operating Segments | ' | |||||||||||||
Note 16 – Operating Segments | ||||||||||||||
The Company classifies its operating segments to provide investors with a view of the business through management’s eyes. Historically, the Company has primarily separated its state regulated utility businesses from its non-regulated marketing and production business, and pipeline business. As of September 30, 2014, the Company has classified the operations of its Energy West Wyoming subsidiary and its Shoshone & Glacier pipeline assets as discontinued operations. As such, these components have been eliminated from the results of operation and financial position of the Natural Gas Operations and Pipeline Operations segments and presented as discontinued operations under Corporate & Other. This has effectively eliminated the Company’s Pipeline Operations segment. See Note 2- Discontinued Operations for more information regarding this treatment. Transactions between reportable segments are accounted for on the accrual basis, and eliminated prior to external financial reporting. Inter-company eliminations between segments consist primarily of gas sales from the marketing and production operations to the natural gas operations, inter-company accounts receivable and payable, equity, and subsidiary investments. | ||||||||||||||
The following tables set forth summarized financial information for the Company’s natural gas, marketing and production, and corporate & other operations. | ||||||||||||||
Three Months Ended September 30, 2014 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 12,544,151 | $ | 2,134,914 | $ | - | $ | 14,679,065 | ||||||
Intersegment elimination | -1,453 | -1,062,641 | - | -1,064,094 | ||||||||||
Total operating revenue | 12,542,698 | 1,072,273 | - | 13,614,971 | ||||||||||
COST OF SALES | 5,740,883 | 1,923,541 | - | 7,664,424 | ||||||||||
Intersegment elimination | -1,453 | -1,062,641 | - | -1,064,094 | ||||||||||
Total cost of sales | 5,739,430 | 860,900 | - | 6,600,330 | ||||||||||
GROSS MARGIN | $ | 6,803,268 | $ | 211,373 | $ | - | $ | 7,014,641 | ||||||
OPERATING EXPENSES | 8,146,216 | 372,682 | 873,202 | 9,392,100 | ||||||||||
Intersegment elimination | -26,571 | - | - | -26,571 | ||||||||||
Total operating expenses | 8,119,645 | 372,682 | 873,202 | 9,365,529 | ||||||||||
OPERATING INCOME (LOSS) | $ | -1,316,377 | $ | -161,309 | $ | -873,202 | $ | -2,350,888 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | 34,825 | $ | 34,825 | ||||||
NET INCOME (LOSS) | $ | -879,952 | $ | -108,248 | $ | -491,544 | $ | -1,479,744 | ||||||
Three Months Ended September 30, 2013 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 11,502,306 | $ | 4,036,248 | $ | - | $ | 15,538,554 | ||||||
Intersegment elimination | -2,143 | -1,919,083 | - | -1,921,226 | ||||||||||
Total operating revenue | 11,500,163 | 2,117,165 | - | 13,617,328 | ||||||||||
COST OF SALES | 4,683,408 | 3,620,637 | - | 8,304,045 | ||||||||||
Intersegment elimination | -2,143 | -1,919,083 | - | -1,921,226 | ||||||||||
Total cost of sales | 4,681,265 | 1,701,554 | - | 6,382,819 | ||||||||||
GROSS MARGIN | $ | 6,818,898 | $ | 415,611 | $ | - | $ | 7,234,509 | ||||||
OPERATING EXPENSES | 7,304,083 | 604,673 | 392,044 | 8,300,800 | ||||||||||
Intersegment elimination | -25,185 | - | - | -25,185 | ||||||||||
Total operating expenses | 7,278,898 | 604,673 | 392,044 | 8,275,615 | ||||||||||
OPERATING INCOME (LOSS) | $ | -460,000 | $ | -189,062 | $ | -392,044 | $ | -1,041,106 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | -154,292 | $ | -154,292 | ||||||
NET INCOME (LOSS) | $ | -440,255 | $ | -129,525 | $ | -434,558 | $ | -1,004,338 | ||||||
Nine Months Ended September 30, 2014 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 88,343,864 | $ | 13,136,479 | $ | - | $ | 101,480,343 | ||||||
Intersegment elimination | -16,798 | -5,851,936 | - | -5,868,734 | ||||||||||
Total operating revenue | 88,327,066 | 7,284,543 | - | 95,611,609 | ||||||||||
COST OF SALES | 56,274,466 | 12,389,959 | - | 68,664,425 | ||||||||||
Intersegment elimination | -16,798 | -5,851,936 | - | -5,868,734 | ||||||||||
Total cost of sales | 56,257,668 | 6,538,023 | - | 62,795,691 | ||||||||||
GROSS MARGIN | $ | 32,069,398 | $ | 746,520 | $ | - | $ | 32,815,918 | ||||||
OPERATING EXPENSES | 24,301,048 | 2,156,684 | 2,464,547 | 28,922,279 | ||||||||||
Intersegment elimination | -77,561 | - | - | -77,561 | ||||||||||
Total operating expenses | 24,223,487 | 2,156,684 | 2,464,547 | 28,844,718 | ||||||||||
OPERATING INCOME (LOSS) | $ | 7,845,911 | $ | -1,410,164 | $ | -2,464,547 | $ | 3,971,200 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | 581,652 | $ | 581,652 | ||||||
NET INCOME (LOSS) | $ | 4,189,646 | $ | -936,885 | $ | -1,142,632 | $ | 2,110,129 | ||||||
Nine Months Ended September 30, 2013 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 64,797,098 | $ | 13,852,389 | $ | - | $ | 78,649,487 | ||||||
Intersegment elimination | -17,502 | -5,517,763 | - | -5,535,265 | ||||||||||
Total operating revenue | 64,779,596 | 8,334,626 | - | 73,114,222 | ||||||||||
COST OF SALES | 36,443,585 | 12,312,274 | - | 48,755,859 | ||||||||||
Intersegment elimination | -17,502 | -5,517,763 | - | -5,535,265 | ||||||||||
Total cost of sales | 36,426,083 | 6,794,511 | - | 43,220,594 | ||||||||||
GROSS MARGIN | $ | 28,353,513 | $ | 1,540,115 | $ | - | $ | 29,893,628 | ||||||
OPERATING EXPENSES | 21,114,497 | 1,109,762 | 1,046,918 | 23,271,177 | ||||||||||
Intersegment elimination | -71,414 | - | - | -71,414 | ||||||||||
Total operating expenses | 21,043,083 | 1,109,762 | 1,046,918 | 23,199,763 | ||||||||||
OPERATING INCOME (LOSS) | $ | 7,310,430 | $ | 430,353 | $ | -1,046,918 | $ | 6,693,865 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | 402,062 | $ | 402,062 | ||||||
NET INCOME (LOSS) | $ | 3,787,103 | $ | 297,808 | $ | -628,442 | $ | 3,456,469 | ||||||
The following table shows the Company’s assets by operating segment. | ||||||||||||||
September 30, 2014 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
Investment in unconsolidated affiliate | $ | - | $ | 350,748 | $ | - | $ | 350,748 | ||||||
Goodwill | 14,891,377 | 1,376,000 | - | 16,267,377 | ||||||||||
Total assets | $ | 193,413,912 | $ | 7,963,197 | $ | 94,147,121 | $ | 295,524,230 | ||||||
Intersegment eliminations | -65,360,265 | -2,903,865 | -28,637,733 | -96,901,863 | ||||||||||
Total assets | $ | 128,053,647 | $ | 5,059,332 | $ | 65,509,388 | $ | 198,622,367 | ||||||
December 31, 2013 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
Investment in unconsolidated affiliate | $ | - | $ | 351,724 | $ | - | $ | 351,724 | ||||||
Goodwill | 14,891,377 | 1,376,000 | - | 16,267,377 | ||||||||||
Total assets | $ | 184,097,483 | $ | 11,633,544 | $ | 94,981,858 | $ | 290,712,885 | ||||||
Intersegment eliminations | -53,772,095 | -3,678,311 | -29,518,864 | -86,969,270 | ||||||||||
Total assets | $ | 130,325,388 | $ | 7,955,233 | $ | 65,462,994 | $ | 203,743,615 | ||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 17 – Subsequent Events | |
Dividends | |
On October 1, 2014, the Company declared a dividend of $0.045 per share that is payable to shareholders of record on October 15, 2014. There were a total of 10,492,511 shares outstanding and participating securities on October 15, 2014 resulting in a total dividend of $472,163 which was paid to shareholders on November 1, 2014. | |
Sale of Energy West Wyoming and Shoshone & Glacier Pipelines | |
On October 10, 2014, the Company executed a stock purchase agreement for the sale of all of the stock of EWW to Cheyenne and an asset purchase agreement for the sale of the Pipeline Assets to Black Hills. The Company will receive approximately $15.8 million for the sale of EWW and approximately $1.2 million for the sale of the Pipeline Assets. These amounts are subject to adjustments based upon the working capital on the closing of the transaction and any amendments to the disclosure schedules to the agreement that result in losses to EWW or the Pipeline Assets. | |
The agreements contain customary representations, warranties, covenants and indemnification provisions. The consummation of the transactions depends upon the satisfaction or waiver of a number of customary closing conditions, the receipt of regulatory approvals and the consent of certain of the Company’s lenders. In addition, Cheyenne and Black Hills have the right to terminate the agreements in the event that the amendments to the disclosure schedules to the purchase agreements are reasonably likely to result in losses to EWW and the Pipeline Assets, collectively, in excess of $750,000. | |
The Company expects to close the transactions in approximately six to twelve months but there can be no assurances that the transactions will be completed on the proposed terms or at all. See Note 2 – Discontinued Operations for more information regarding these transactions. | |
Summary_of_Business_and_Basis_1
Summary of Business and Basis of Presentation (Policies) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Accounting Policies [Abstract] | ' | |||
Nature of Business | ' | |||
Nature of Business | ||||
Gas Natural Inc. (the “Company”) is a natural gas company with operations in six states. The Company’s primary operations are natural gas utility companies located throughout these states. The Company’s operations also include the marketing and production of natural gas. Along with its corporate level operations, these areas of operation represent the Company’s three main operating segments and are described below. | ||||
⋅ | Natural Gas Operations | Annually distributes approximately 35 Bcf of natural gas to approximately 67,000 customers. The Company’s natural gas utility subsidiaries are Public Gas Company (Kentucky), Bangor Gas (Maine), Cut Bank Gas Company (Montana), Energy West Montana (Montana), Frontier Natural Gas (North Carolina), Brainard Gas Corp. (Ohio), Northeast Ohio Natural Gas Corporation (Ohio), and Orwell Natural Gas Company (Ohio and Pennsylvania). | ||
⋅ | Marketing & Production | Annually markets approximately 1.5 Bcf of natural gas to commercial and industrial customers in Montana, Wyoming, Ohio, and Pennsylvania through the Company’s EWR and GNR subsidiaries. The EWR subsidiary also manages midstream supply and production assets for transportation customers and utilities. EWR owns an average 51% gross working interest (average 43% net revenue interest) in 160 natural gas producing wells and gas gathering assets located in Glacier and Toole Counties in Montana. | ||
⋅ | Corporate & Other | Encompasses costs associated with business development and acquisitions, dispositions of subsidiary entities, results of discontinued operations, dividend income, recognized gains or losses from the sale of marketable securities, and activity from Lone Wolfe which serves as an insurance agent for the Company and other businesses in the energy industry. | ||
Energy West was originally incorporated in Montana in 1909 and was reorganized as a holding company in 2009 to facilitate future acquisitions and corporate-level financing to support the Company’s growth strategy. On July 9, 2010, the Company changed its name to Gas Natural Inc. and reincorporated from Montana to Ohio. Moving the incorporation to Ohio enhanced the Company’s flexibility and provided a more efficient platform from which to operate and grow. | ||||
Basis of Presentation | ' | |||
Basis of Presentation | ||||
The accompanying Condensed Consolidated Balance Sheet as of December 31, 2013, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements of Gas Natural Inc. have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not contain all disclosures required by generally accepted accounting principles. In the opinion of the Company, all normal recurring adjustments have been made, that are necessary to fairly present the results of operations for the interim periods. Certain reclassifications have been made to prior period amounts to conform to current period presentation. Such reclassifications have no effect on net income as previously reported. | ||||
Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. A majority of the Company’s revenues are derived from its natural gas utility operations, making its revenue seasonal in nature. Therefore, the largest portion of the Company’s operating revenue is generated during the colder months when its sales volume increases considerably. Reference should be made to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
The effect of restricted stock awards equivalent to 322 and 14 shares for the three and nine months ended September 30, 2014 would have been anti-dilutive and therefore, were excluded from the computation of diluted earnings per share. The effect of stock options equivalent to 1,012 shares for the three months ended September 30, 2013 would have been anti-dilutive and therefore, were excluded from the computation of diluted earnings per share. There were no stock options that would have been anti-dilutive for the nine months ended September 30, 2013. | ||||
Change in Accounting Principle | ' | |||
Change in Accounting Principle | ||||
In the second quarter of 2014, the Company changed the timing of its annual goodwill impairment testing. This change in accounting principle is viewed as preferable due to the Company’s accelerated filing status for it 2014 Annual Report on Form 10-K. Historically, the Company has used December 31st as its annual testing date. This has directly resulted in the Company filing its Annual Report on the 90th day of its fiscal year, the deadline for non-accelerated filers. Starting in 2014, the Company will use a testing date of October 1st. The Company believes that this change should provide the Company sufficient time to meet its new 75 day filing deadline for its 2014 Annual Report. The Company believes that retrospective application of this change in accounting policy would be impracticable because it requires: (1) assumptions about management's intentions over the last several years related to the business units being tested which cannot be independently substantiated and (2) significant estimates which cannot be distinguished objectively from those estimates that would have existed on the prior test dates and would have been available to the Company’s management at that time. Due to these factors, the Company will recognize this change in accounting principle on a prospective basis. | ||||
There have been no other material changes in the Company’s significant accounting policies during the nine months ended September 30, 2014 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||
Recent Accounting Pronouncements | ' | |||
Recent Accounting Pronouncements | ||||
In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016 and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on the consolidated financial statements. | ||||
Recently Adopted Accounting Pronouncements | ' | |||
Recently Adopted Accounting Pronouncements | ||||
In April 2014, the FASB issued ASU 2014-08 Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which amends the prior guidance of the reclassification of components of an entity to discontinued operations under U.S. GAAP. Under the amended guidance, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The amendment also removes requirements relating to the cessation of operations, cash flows and significant continuing involvement with the discontinued component. This pronouncement is effective for annual and interim periods beginning after December 15, 2014 with early adoption permitted. This update it to be applied prospectively on components classified as held for after the adoption date. The Company has chosen to early adopt ASU 2014-08 effective September 30, 2014. | ||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||||||||
Schedule of Revenue and Income from Discontinued Operations Associated with Independence | ' | |||||||||||||
The following table shows revenue and income from discontinued operations associated with EWW and the Pipeline Assets for the three and nine month periods ended September 30, 2014 and 2013. | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Energy West Wyoming revenues | $ | 1,644,296 | $ | 1,457,619 | $ | 6,891,206 | $ | 5,869,145 | ||||||
Shoshone & Glacier Pipeline revenues | 97,195 | 99,290 | 294,071 | 302,609 | ||||||||||
Pretax income (loss) from discontinued operations | ||||||||||||||
Energy West Wyoming | $ | 5,763 | $ | -18,991 | $ | 775,630 | $ | 776,091 | ||||||
Shoshone & Glacier Pipeline | 66,209 | 63,909 | 191,745 | 186,801 | ||||||||||
Other discontinued operations | -4,437 | -194,468 | -42,205 | -364,739 | ||||||||||
Total pre-tax income | $ | 67,535 | $ | -149,550 | $ | 925,170 | $ | 598,153 | ||||||
Income tax expense (benefit) | -32,710 | -4,742 | -343,518 | -196,091 | ||||||||||
Income (loss) from discontiuned operations, net of tax | $ | 34,825 | $ | -154,292 | $ | 581,652 | $ | 402,062 | ||||||
Basic and diluted income (loss) from discontiuned operations per share | ||||||||||||||
Energy West Wyoming | $ | 0 | $ | -0.01 | $ | 0.05 | $ | 0.06 | ||||||
Shoshone & Glacier Pipeline | 0.01 | 0.01 | 0.01 | 0.01 | ||||||||||
Other discontinued operations | 0 | -0.02 | -0.01 | -0.02 | ||||||||||
Total | $ | 0.01 | $ | -0.02 | $ | 0.05 | $ | 0.05 | ||||||
The following table shows the major classes of assets and liabilities included in the sale of EWW and the Pipeline Assets. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 35,113 | $ | 406,184 | ||||||||||
Accounts receivable, net | 543,162 | 971,308 | ||||||||||||
Unbilled gas | 164,608 | 557,498 | ||||||||||||
Inventory | 372,408 | 748,482 | ||||||||||||
Prepayments and other | 91,784 | 94,271 | ||||||||||||
Recoverable cost of gas | 852,988 | 88,318 | ||||||||||||
Total current assets | 2,060,063 | 2,866,061 | ||||||||||||
Non-Current Assets: | ||||||||||||||
Property, plant & equipment, net | 8,787,287 | 8,932,641 | ||||||||||||
Regulatory asset - income taxes | 155,826 | 155,826 | ||||||||||||
Other assets | 33,318 | 43,524 | ||||||||||||
Total non-current assets | 8,976,431 | 9,131,991 | ||||||||||||
Total assets | $ | 11,036,494 | $ | 11,998,052 | ||||||||||
Current Liabilities: | ||||||||||||||
Checks in excess of amounts on deposit | $ | - | $ | 1,192 | ||||||||||
Accounts payable | 114,973 | 51,278 | ||||||||||||
Accrued liabilities | 406,926 | 429,430 | ||||||||||||
Other current assets | 63,010 | 17,729 | ||||||||||||
Total current liabilities | 584,909 | 499,629 | ||||||||||||
Non-Current Liabilities: | ||||||||||||||
Customer advances for construction | 31,815 | 29,405 | ||||||||||||
Total liabilities | $ | 616,724 | $ | 529,034 | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | |||||||||||||
The following table presents the placement in the fair value hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis: | ||||||||||||||
September 30, 2014 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
ASSETS: | ||||||||||||||
Commodity swap contracts | $ | - | $ | 8,419 | $ | - | $ | 8,419 | ||||||
LIABILITIES: | ||||||||||||||
Contingent consideration | $ | - | $ | - | $ | 682,000 | $ | 682,000 | ||||||
December 31, 2013 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
ASSETS: | ||||||||||||||
Common stock | $ | 406,134 | $ | - | $ | - | $ | 406,134 | ||||||
LIABILITIES: | ||||||||||||||
Contingent consideration | $ | - | $ | - | $ | 685,000 | $ | 685,000 | ||||||
Reconciliation of Beginning and Ending Balances of Contingent Consideration Liability Categorized Under Level 3 of Fair Value | ' | |||||||||||||
The following table reconciles the beginning and ending balances of the contingent consideration liability categorized under level 3 of the fair value hierarchy. | ||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||
Contingent | ||||||||||||||
Consideration | ||||||||||||||
Opening balance December 31, 2013 | $ | 685,000 | ||||||||||||
Transfers into level 3 | - | |||||||||||||
Transfers out of level 3 | - | |||||||||||||
Total (gains) losses for period: | ||||||||||||||
Included in net income | -3,000 | |||||||||||||
Included in other comprehensive income | - | |||||||||||||
Purchases | - | |||||||||||||
Sales | - | |||||||||||||
Settlements | - | |||||||||||||
Issuances | - | |||||||||||||
Closing balance September 30, 2014 | $ | 682,000 | ||||||||||||
Quantitative Information about Level 3 Fair Value Measures | ' | |||||||||||||
The following table summarizes quantitative information used in determining the fair value of the Company’s liabilities categorized in level 3 of the fair value hierarchy. | ||||||||||||||
Quantitative Information about Level 3 Fair Value Measures | ||||||||||||||
Fair Value at | Valuation | |||||||||||||
September 30, 2014 | Techniques | Unobservable Input | Range | |||||||||||
Contingent Consideration | $ | 682,000 | Monte Carlo analysis | Forecasted annual EBITDA | 0.4 to 0.6 million | |||||||||
Weighted avg cost of capital | 14.5% to 14.5% | |||||||||||||
U.S. Treasury yields | 0.2% to 1.2% | |||||||||||||
Discounted cash flow | U.S. Treasury yields | 0.2% to 1.2% | ||||||||||||
Credit spread | 2.0% to 2.5% | |||||||||||||
Marketable_Securities_Tables
Marketable Securities (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||
Summary of Available-For-Sale Securities Owned by Company | ' | |||||||||||||
The following is a summary of available-for-sale securities owned by the Company at December 31, 2013: | ||||||||||||||
December 31, 2013 | ||||||||||||||
Investment | Unrealized | Unrealized | Estimated | |||||||||||
at cost | gains | losses | fair value | |||||||||||
Common stock | $ | 238,504 | $ | 167,630 | $ | - | $ | 406,134 | ||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Derivative Instruments [Table Text Block] | ' | |||||||||||||||
The following table summarizes the commodity swap contracts entered into by the Company as of September 30, 2014. The Company will pay the price for the volumes denoted in the table below and will receive from a counterparty the CIG – Rockies IFERC market price for these volumes, settled monthly. | ||||||||||||||||
Product | Type | Contract Period | Volume | Price per MMBtu | ||||||||||||
CIG - Rockies - IFERC Natural Gas | Swap | 11/01/14 - 3/31/15 | 500 MMBtu/Day | $ | 3.98 | |||||||||||
CIG - Rockies - IFERC Natural Gas | Swap | 11/01/14 - 3/31/15 | 500 MMBtu/Day | $ | 4.075 | |||||||||||
Derivative Instruments, Gain (Loss) [Table Text Block] | ' | |||||||||||||||
The table below summarizes the amount of gain recognized as a component of Net income from the contracts. | ||||||||||||||||
Unrealized gain (loss) on derivative | Location of Gain recognized in Net | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
instruments not designated as hedging | Income on Derivatives | |||||||||||||||
instruments | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Commodity swap contracts | Other income, net | $ | 8,419 | $ | - | $ | 8,419 | $ | - | |||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | ' | |||||||||||||||
The table below shows the line item in the Company’s Condensed Consolidated Balance Sheets where the fair value of the commodity swap contracts is included. | ||||||||||||||||
Fair Value of Derivative Instruments | ||||||||||||||||
Asset Derivatives | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
Balance Sheet Location | 2014 | 2013 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Commodity swap contracts | Derivative instruments | $ | 8,419 | $ | - | |||||||||||
Credit_Facilities_and_LongTerm1
Credit Facilities and Long-Term Debt (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Summary of Outstanding Long-Term Debt Balances | ' | |||||||
The following table details the Company’s outstanding long-term debt balances at September 30, 2014 and December 31, 2013. | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
LIBOR plus 1.75 to 2.25%, Bank of America amortizing term loan, due April 1, 2017 | $ | 9,000,000 | $ | 9,375,000 | ||||
6.16%, Allstate/CUNA Senior unsecured notes, due June 29, 2017 | 13,000,000 | 13,000,000 | ||||||
5.38%, Sun Life fixed rate note, due June 1, 2017 | 15,334,000 | 15,334,000 | ||||||
LIBOR plus 3.85%, Sun Life floating rate note, due May 3, 2014 | - | 3,000,000 | ||||||
4.15% Sun Life senior secured guaranteed note, due June 1, 2017 | 2,989,552 | 2,989,552 | ||||||
Vehicle & equipment financing loans | 75,031 | 2,190 | ||||||
Total notes payable | 40,398,583 | 43,700,742 | ||||||
Less: current portion | 542,156 | 3,502,190 | ||||||
Notes payable, long-term portion | $ | 39,856,427 | $ | 40,198,552 | ||||
Stock_Compensation_Tables
Stock Compensation (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||
Summary of Status of Outstanding Stock Options | ' | ||||||||||
A summary of the status of outstanding stock options under the plan is as follows: | |||||||||||
Weighted | |||||||||||
Number of | Average | Aggregate | |||||||||
Shares | Exercise Price | Intrinsic Value | |||||||||
Outstanding December 31, 2013 | 5,000 | $ | 8.44 | $ | - | ||||||
Granted | - | ||||||||||
Exercised | -5,000 | $ | 8.44 | ||||||||
Expired | - | ||||||||||
Outstanding September 30, 2014 | - | $ | - | $ | - | ||||||
Exercisable September 30, 2014 | - | $ | - | $ | - | ||||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||||
Federal Statutory Rate to Pre-Tax Income from Continuing Operations | ' | |||||||||||||
Income tax position differs from the amount computed by applying the federal statutory rate to pre-tax income or loss as demonstrated in the table below: | ||||||||||||||
Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Tax expense at statutory rate of 34% | $ | -834,880 | $ | -671,409 | $ | 1,140,627 | $ | 1,763,512 | ||||||
State income tax, net of Federal tax expense | -82,641 | -80,135 | 112,905 | 210,480 | ||||||||||
Amortization of deferred investment tax credits | -5,265 | -5,265 | -15,794 | -15,794 | ||||||||||
Adjustment to tax return filed | -70,734 | -110,150 | -29,820 | -110,150 | ||||||||||
Other | 17,183 | 14,284 | 36,187 | - | ||||||||||
Total income tax expense (benefit) | -976,337 | -852,675 | 1,244,105 | 1,848,048 | ||||||||||
Less: Income tax benefit from discontinued operations | 32,157 | -67,540 | 342,964 | 123,809 | ||||||||||
Income tax expense (benefit) from continuing operations | $ | -1,008,494 | $ | -785,135 | $ | 901,141 | $ | 1,724,239 | ||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Amounts Due from and Due to Related Parties | ' | ||||||||||||||||
The table below details amounts due from and due to related parties, including companies owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, at September 30, 2014 and December 31, 2013. These amounts are presented on the Condensed Consolidated Balance Sheet as Related parties under Accounts receivable and Accounts payable. | |||||||||||||||||
Accounts Receivable | Accounts Payable | ||||||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cobra Pipeline | $ | 178,596 | $ | 131,208 | $ | - | $ | 76,909 | |||||||||
Orwell Trumbell Pipeline | - | - | - | 122,693 | |||||||||||||
Great Plains Exploration | 7,670 | 7,033 | 9 | 73,983 | |||||||||||||
Big Oats Oil Field Supply | 5,190 | 4,945 | - | 179,447 | |||||||||||||
John D. Oil and Gas Company | 96 | 91 | - | 82,188 | |||||||||||||
OsAir | 17,152 | - | - | 12,979 | |||||||||||||
Other | 11,214 | 2,948 | - | 11,734 | |||||||||||||
Total related party balances | 219,918 | 146,225 | 9 | 559,933 | |||||||||||||
Less amounts included in discontinued operations | - | - | - | - | |||||||||||||
Total related party balances included in continuing operations | $ | 219,918 | $ | 146,225 | $ | 9 | $ | 559,933 | |||||||||
Summary of Related Parties Transactions | ' | ||||||||||||||||
The tables below detail transactions with related parties, including companies owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, for the three months ended September 30, 2014 and 2013. | |||||||||||||||||
Three Months Ended September 30, 2014 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Rental Income | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | and Other Sales | |||||||||||||
Cobra Pipeline | $ | 154,871 | $ | - | $ | 6,000 | $ | - | $ | - | |||||||
Orwell Trumbell Pipeline | 46,125 | - | - | 140 | 35,549 | ||||||||||||
Great Plains Exploration | 120,707 | - | - | 599 | 1,700 | ||||||||||||
Big Oats Oil Field Supply | - | - | - | 29 | - | ||||||||||||
John D. Oil and Gas Company | 135,237 | - | - | 144 | 6,323 | ||||||||||||
OsAir | 32,984 | - | - | 44 | 17,079 | ||||||||||||
Lake Shore Gas | - | - | - | - | - | ||||||||||||
Other | 13,839 | - | - | 2,839 | 100 | ||||||||||||
Total | $ | 503,763 | $ | - | $ | 6,000 | $ | 3,795 | $ | 60,751 | |||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Management and | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | Other Sales | |||||||||||||
Cobra Pipeline | $ | 227,381 | $ | - | $ | - | $ | 70,635 | $ | 218 | |||||||
Orwell Trumbell Pipeline | 51,621 | - | - | 115 | 31,582 | ||||||||||||
Great Plains Exploration | 189,991 | - | 1,341 | 669 | 1,500 | ||||||||||||
Big Oats Oil Field Supply | - | 603,360 | 161,597 | 78 | 800 | ||||||||||||
John D. Oil and Gas Company | 186,921 | - | - | 143 | 6,333 | ||||||||||||
OsAir | 51,891 | - | 7,198 | 139 | 22,910 | ||||||||||||
Other | 21,053 | - | 15,285 | 1,131 | 396 | ||||||||||||
Total | $ | 728,858 | $ | 603,360 | $ | 185,421 | $ | 72,910 | $ | 63,739 | |||||||
The tables below detail transactions with related parties, including companies owned or controlled by Richard M. Osborne, father of the Company’s chief executive officer and the Company’s former chairman and chief executive officer, for the nine months ended September 30, 2014 and 2013. | |||||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Rental Income | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | and Other Sales | |||||||||||||
Cobra Pipeline | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||
Orwell Trumbell Pipeline | - | - | - | - | - | ||||||||||||
Great Plains Exploration | - | - | - | - | - | ||||||||||||
Big Oats Oil Field Supply | - | - | - | - | - | ||||||||||||
John D. Oil and Gas Company | - | - | - | - | - | ||||||||||||
OsAir | - | - | - | - | - | ||||||||||||
Lake Shore Gas | - | - | - | - | - | ||||||||||||
Other | - | - | - | - | - | ||||||||||||
Total | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
Pipeline | Rent, Supplies, | ||||||||||||||||
Natural Gas | Construction | Consulting and | Management and | ||||||||||||||
Purchases | Purchases | Other Purchases | Natural Gas Sales | Other Sales | |||||||||||||
John D. Oil and Gas Marketing | $ | 952,899 | $ | - | $ | 7,271 | $ | 5,470 | $ | - | |||||||
Cobra Pipeline | 737,252 | - | - | 115,116 | 243 | ||||||||||||
Orwell Trumbell Pipeline | 469,661 | - | - | 10,883 | 31,883 | ||||||||||||
Great Plains Exploration | 506,716 | 854 | 1,341 | 13,348 | 31,809 | ||||||||||||
Big Oats Oil Field Supply | - | 2,081,043 | 465,269 | 2,824 | 925 | ||||||||||||
John D. Oil and Gas Company | 554,466 | 5,976 | - | 286 | 20,923 | ||||||||||||
OsAir | 182,871 | - | 87,671 | 762 | 54,378 | ||||||||||||
Other | 55,452 | 854 | 45,296 | 19,554 | 46,411 | ||||||||||||
Total | $ | 3,459,317 | $ | 2,088,727 | $ | 606,848 | $ | 168,243 | $ | 186,572 | |||||||
Operating_Segments_Tables
Operating Segments (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Summary of Financial Information for Operating Segments | ' | |||||||||||||
The following tables set forth summarized financial information for the Company’s natural gas, marketing and production, and corporate & other operations. | ||||||||||||||
Three Months Ended September 30, 2014 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 12,544,151 | $ | 2,134,914 | $ | - | $ | 14,679,065 | ||||||
Intersegment elimination | -1,453 | -1,062,641 | - | -1,064,094 | ||||||||||
Total operating revenue | 12,542,698 | 1,072,273 | - | 13,614,971 | ||||||||||
COST OF SALES | 5,740,883 | 1,923,541 | - | 7,664,424 | ||||||||||
Intersegment elimination | -1,453 | -1,062,641 | - | -1,064,094 | ||||||||||
Total cost of sales | 5,739,430 | 860,900 | - | 6,600,330 | ||||||||||
GROSS MARGIN | $ | 6,803,268 | $ | 211,373 | $ | - | $ | 7,014,641 | ||||||
OPERATING EXPENSES | 8,146,216 | 372,682 | 873,202 | 9,392,100 | ||||||||||
Intersegment elimination | -26,571 | - | - | -26,571 | ||||||||||
Total operating expenses | 8,119,645 | 372,682 | 873,202 | 9,365,529 | ||||||||||
OPERATING INCOME (LOSS) | $ | -1,316,377 | $ | -161,309 | $ | -873,202 | $ | -2,350,888 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | 34,825 | $ | 34,825 | ||||||
NET INCOME (LOSS) | $ | -879,952 | $ | -108,248 | $ | -491,544 | $ | -1,479,744 | ||||||
Three Months Ended September 30, 2013 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 11,502,306 | $ | 4,036,248 | $ | - | $ | 15,538,554 | ||||||
Intersegment elimination | -2,143 | -1,919,083 | - | -1,921,226 | ||||||||||
Total operating revenue | 11,500,163 | 2,117,165 | - | 13,617,328 | ||||||||||
COST OF SALES | 4,683,408 | 3,620,637 | - | 8,304,045 | ||||||||||
Intersegment elimination | -2,143 | -1,919,083 | - | -1,921,226 | ||||||||||
Total cost of sales | 4,681,265 | 1,701,554 | - | 6,382,819 | ||||||||||
GROSS MARGIN | $ | 6,818,898 | $ | 415,611 | $ | - | $ | 7,234,509 | ||||||
OPERATING EXPENSES | 7,304,083 | 604,673 | 392,044 | 8,300,800 | ||||||||||
Intersegment elimination | -25,185 | - | - | -25,185 | ||||||||||
Total operating expenses | 7,278,898 | 604,673 | 392,044 | 8,275,615 | ||||||||||
OPERATING INCOME (LOSS) | $ | -460,000 | $ | -189,062 | $ | -392,044 | $ | -1,041,106 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | -154,292 | $ | -154,292 | ||||||
NET INCOME (LOSS) | $ | -440,255 | $ | -129,525 | $ | -434,558 | $ | -1,004,338 | ||||||
Nine Months Ended September 30, 2014 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 88,343,864 | $ | 13,136,479 | $ | - | $ | 101,480,343 | ||||||
Intersegment elimination | -16,798 | -5,851,936 | - | -5,868,734 | ||||||||||
Total operating revenue | 88,327,066 | 7,284,543 | - | 95,611,609 | ||||||||||
COST OF SALES | 56,274,466 | 12,389,959 | - | 68,664,425 | ||||||||||
Intersegment elimination | -16,798 | -5,851,936 | - | -5,868,734 | ||||||||||
Total cost of sales | 56,257,668 | 6,538,023 | - | 62,795,691 | ||||||||||
GROSS MARGIN | $ | 32,069,398 | $ | 746,520 | $ | - | $ | 32,815,918 | ||||||
OPERATING EXPENSES | 24,301,048 | 2,156,684 | 2,464,547 | 28,922,279 | ||||||||||
Intersegment elimination | -77,561 | - | - | -77,561 | ||||||||||
Total operating expenses | 24,223,487 | 2,156,684 | 2,464,547 | 28,844,718 | ||||||||||
OPERATING INCOME (LOSS) | $ | 7,845,911 | $ | -1,410,164 | $ | -2,464,547 | $ | 3,971,200 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | 581,652 | $ | 581,652 | ||||||
NET INCOME (LOSS) | $ | 4,189,646 | $ | -936,885 | $ | -1,142,632 | $ | 2,110,129 | ||||||
Nine Months Ended September 30, 2013 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
OPERATING REVENUES | $ | 64,797,098 | $ | 13,852,389 | $ | - | $ | 78,649,487 | ||||||
Intersegment elimination | -17,502 | -5,517,763 | - | -5,535,265 | ||||||||||
Total operating revenue | 64,779,596 | 8,334,626 | - | 73,114,222 | ||||||||||
COST OF SALES | 36,443,585 | 12,312,274 | - | 48,755,859 | ||||||||||
Intersegment elimination | -17,502 | -5,517,763 | - | -5,535,265 | ||||||||||
Total cost of sales | 36,426,083 | 6,794,511 | - | 43,220,594 | ||||||||||
GROSS MARGIN | $ | 28,353,513 | $ | 1,540,115 | $ | - | $ | 29,893,628 | ||||||
OPERATING EXPENSES | 21,114,497 | 1,109,762 | 1,046,918 | 23,271,177 | ||||||||||
Intersegment elimination | -71,414 | - | - | -71,414 | ||||||||||
Total operating expenses | 21,043,083 | 1,109,762 | 1,046,918 | 23,199,763 | ||||||||||
OPERATING INCOME (LOSS) | $ | 7,310,430 | $ | 430,353 | $ | -1,046,918 | $ | 6,693,865 | ||||||
DISCONTINUED OPERATIONS | $ | - | $ | - | $ | 402,062 | $ | 402,062 | ||||||
NET INCOME (LOSS) | $ | 3,787,103 | $ | 297,808 | $ | -628,442 | $ | 3,456,469 | ||||||
Schedule of Company's Assets by Operating Segment | ' | |||||||||||||
The following table shows the Company’s assets by operating segment. | ||||||||||||||
September 30, 2014 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
Investment in unconsolidated affiliate | $ | - | $ | 350,748 | $ | - | $ | 350,748 | ||||||
Goodwill | 14,891,377 | 1,376,000 | - | 16,267,377 | ||||||||||
Total assets | $ | 193,413,912 | $ | 7,963,197 | $ | 94,147,121 | $ | 295,524,230 | ||||||
Intersegment eliminations | -65,360,265 | -2,903,865 | -28,637,733 | -96,901,863 | ||||||||||
Total assets | $ | 128,053,647 | $ | 5,059,332 | $ | 65,509,388 | $ | 198,622,367 | ||||||
December 31, 2013 | ||||||||||||||
Natural Gas | Marketing & | Corporate & | ||||||||||||
Operations | Production | Other | Consolidated | |||||||||||
Investment in unconsolidated affiliate | $ | - | $ | 351,724 | $ | - | $ | 351,724 | ||||||
Goodwill | 14,891,377 | 1,376,000 | - | 16,267,377 | ||||||||||
Total assets | $ | 184,097,483 | $ | 11,633,544 | $ | 94,981,858 | $ | 290,712,885 | ||||||
Intersegment eliminations | -53,772,095 | -3,678,311 | -29,518,864 | -86,969,270 | ||||||||||
Total assets | $ | 130,325,388 | $ | 7,955,233 | $ | 65,462,994 | $ | 203,743,615 | ||||||
Summary_of_Business_and_Basis_2
Summary of Business and Basis of Presentation - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | |
Summary of Business and Accounting Policies [Line Items] | ' | ' | ' |
Number of reporting segments | ' | ' | 4 |
Number of natural gas producing wells and gas gathering assets | ' | ' | 160 |
Antidilutive securities | 322 | 1,012 | 14 |
Natural Gas Operations [Member] | ' | ' | ' |
Summary of Business and Accounting Policies [Line Items] | ' | ' | ' |
Annual distribution of natural gas | ' | ' | 35,000,000,000 |
Marketing & Production Operations [Member] | ' | ' | ' |
Summary of Business and Accounting Policies [Line Items] | ' | ' | ' |
Natural gas customers | ' | ' | 67,000 |
Annually market of natural gas | ' | ' | 1,500,000,000 |
EWR Subsidiary [Member] | ' | ' | ' |
Summary of Business and Accounting Policies [Line Items] | ' | ' | ' |
Gross Percentage Of Working Interest | ' | ' | 51.00% |
Average Net Revenue Interest, Percentage | ' | ' | 43.00% |
Discontinued_Operations_Schedu
Discontinued Operations - Schedule of Revenue and Income from Discontinued Operations Associated with Independence (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Pretax income (loss) from discontinued operations | ' | ' | ' | ' |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | $67,535 | ($149,550) | $925,170 | $598,153 |
Income tax expense (benefit) | -32,710 | -4,742 | -343,518 | -196,091 |
Income (loss) from discontiuned operations, net of tax | 34,825 | -154,292 | 581,652 | 402,062 |
Basic and diluted income (loss) from discontiuned operations per share | ' | ' | ' | ' |
Income Loss From Discontinued Operations Net Of Tax Per Basic And Diluted Share | $0.01 | ($0.02) | $0.05 | $0.05 |
Energy West Wyoming [Member] | ' | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Revenue | 1,644,296 | 1,457,619 | 6,891,206 | 5,869,145 |
Pretax income (loss) from discontinued operations | ' | ' | ' | ' |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 5,763 | -18,991 | 775,630 | 776,091 |
Basic and diluted income (loss) from discontiuned operations per share | ' | ' | ' | ' |
Income Loss From Discontinued Operations Net Of Tax Per Basic And Diluted Share | $0 | ($0.01) | $0.05 | $0.06 |
Shoshone and Glacier Pipeline [Member] | ' | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Revenue | 97,195 | 99,290 | 294,071 | 302,609 |
Pretax income (loss) from discontinued operations | ' | ' | ' | ' |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 66,209 | 63,909 | 191,745 | 186,801 |
Basic and diluted income (loss) from discontiuned operations per share | ' | ' | ' | ' |
Income Loss From Discontinued Operations Net Of Tax Per Basic And Diluted Share | $0.01 | $0.01 | $0.01 | $0.01 |
Other Discontinued Operations [Member] | ' | ' | ' | ' |
Pretax income (loss) from discontinued operations | ' | ' | ' | ' |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | ($4,437) | ($194,468) | ($42,205) | ($364,739) |
Basic and diluted income (loss) from discontiuned operations per share | ' | ' | ' | ' |
Income Loss From Discontinued Operations Net Of Tax Per Basic And Diluted Share | $0 | ($0.02) | ($0.01) | ($0.02) |
Discontinued_Operations_Schedu1
Discontinued Operations - Schedule of Major Classes of Assets and Liabilities (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets: | ' | ' |
Cash and cash equivalents | $35,113 | $406,184 |
Accounts receivable, net | 543,162 | 971,308 |
Unbilled gas | 164,608 | 557,498 |
Inventory | 372,408 | 748,482 |
Prepayments and other | 91,784 | 94,271 |
Recoverable cost of gas | 852,988 | 88,318 |
Total current assets | 11,041,679 | 12,032,203 |
Non-Current Assets: | ' | ' |
Property, plant & equipment, net | 8,787,287 | 8,932,641 |
Regulatory asset - income taxes | 155,826 | 155,826 |
Other assets | 33,318 | 43,524 |
Total non-current assets | 8,976,431 | 9,131,991 |
Total assets | 11,036,494 | 11,998,052 |
Current Liabilities: | ' | ' |
Checks in excess of amounts on deposit | 0 | 1,192 |
Accounts payable | 114,973 | 51,278 |
Accrued liabilities | 406,926 | 429,430 |
Other current assets | 63,010 | 17,729 |
Total current liabilities | 617,774 | 574,889 |
Non-Current Liabilities: | ' | ' |
Customer advances for construction | 31,815 | 29,405 |
Total liabilities | $616,724 | $529,034 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 01, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2011 | |
John D. Oil and Gas Marketing [Member] | John D. Oil and Gas Marketing [Member] | Gas Natural Resources , LIc [Member] | Gas Natural Resources , LIc [Member] | Gas Natural Resources , LIc [Member] | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition cost | ' | ' | ' | ' | $600,000 | ' | ' | ' | ' |
Number of shares issued for payment | ' | ' | ' | ' | 256,926 | ' | ' | ' | ' |
Purchase consideration paid | ' | ' | ' | ' | 2,641,199 | ' | ' | ' | ' |
Contingent earn out payment period | ' | ' | ' | ' | ' | ' | ' | ' | '5 years |
Targeted EBITDA amount for contingent earn out payments | ' | ' | ' | ' | ' | ' | ' | ' | 810,432 |
Earn out payment in case actual EBITDA meets or exceeds target EBITDA | ' | ' | ' | ' | ' | ' | ' | '575,000 | ' |
Fair value of earn-out provision | 682,000 | ' | 682,000 | ' | ' | 2,250,000 | ' | ' | ' |
Business combination estimated current liability for earn out payment | ' | ' | ' | ' | ' | 669,396 | ' | ' | ' |
Earn out payment calculated | ' | ' | 671,638 | ' | ' | ' | ' | ' | ' |
Customer contracts amortized estimated useful lives | ' | ' | '10 years | ' | ' | ' | ' | ' | ' |
Amount allocated to goodwill | ' | ' | ' | ' | ' | 2,101,744 | ' | ' | ' |
Amount contributed to the Company's revenues | ' | 500,000 | ' | 800,000 | ' | ' | 600,000 | 3,100,000 | ' |
Amount contributed to the company's net income | ($1,479,744) | ($1,004,338) | $2,110,129 | $3,456,469 | ' | ' | $8,900,000,000 | $23,179,000,000 | ' |
Marketable_Securities_Addition
Marketable Securities - Additional Information (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Common Stock [Member] | Common Stock [Member] | |||
Amortized Cost And Fair Value Debt Securities [Abstract] | ' | ' | ' | ' |
Available-for-sale securities | $421,875 | $0 | $500,000 | ' |
Unrealized gains or losses reclassified from other comprehensive income | ' | ' | ' | 100,000 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) | ' | ' | $200,000 | ' |
Marketable_Securities_Summary_
Marketable Securities - Summary of Available-For-Sale Securities Owned by Company (Detail) (Common Stock [Member], USD $) | Dec. 31, 2013 |
Common Stock [Member] | ' |
Schedule of Available-for-sale Securities [Line Items] | ' |
Investment at cost | $238,504 |
Unrealized gains | 167,630 |
Unrealized losses | 0 |
Estimated fair value | $406,134 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Derivative Instruments, Gain (Loss) (Details) | 9 Months Ended |
Sep. 30, 2014 | |
MMBTuPerDay | |
Product One [Member] | ' |
Derivative [Line Items] | ' |
Derivative Volume | 500 |
Derivative, Swap Type, Average Fixed Price | 3.98 |
Product One [Member] | Contract Start Date [Member] | ' |
Derivative [Line Items] | ' |
Derivative, Inception Date | 1-Nov-14 |
Product One [Member] | Contract End Date [Member] | ' |
Derivative [Line Items] | ' |
Derivative, Inception Date | 31-Mar-15 |
Product Two [Member] | ' |
Derivative [Line Items] | ' |
Derivative Volume | 500 |
Derivative, Swap Type, Average Fixed Price | 4.075 |
Product Two [Member] | Contract Start Date [Member] | ' |
Derivative [Line Items] | ' |
Derivative, Inception Date | 1-Nov-14 |
Product Two [Member] | Contract End Date [Member] | ' |
Derivative [Line Items] | ' |
Derivative, Inception Date | 31-Mar-15 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Schedule of Derivative Instruments) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Derivative Instruments Not Designated as Hedging Instruments, Type | ' | ' | 'Commodity swap contracts | ' |
Line Item in Financial Statements for Gain (Loss) on Hybrid Instruments | ' | ' | 'Other income, net | ' |
Derivative Instruments Not Designated as Hedging Instruments, Gain | $8,419 | $0 | $8,419 | $0 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value) (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Derivative Instruments Not Designated as Hedging Instruments, Type | 'Commodity swap contracts | ' |
Derivative Asset, Current | $8,419 | $0 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value Hierarchy of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
ASSETS: | ' | ' |
Commodity swap contracts | $8,419 | $0 |
LIABILITIES: | ' | ' |
Contingent consideration | 682,000 | ' |
Fair Value, Measurements, Recurring [Member] | ' | ' |
ASSETS: | ' | ' |
Commodity swap contracts | 8,419 | 406,134 |
LIABILITIES: | ' | ' |
Contingent consideration | 682,000 | 685,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' |
ASSETS: | ' | ' |
Commodity swap contracts | 0 | 406,134 |
LIABILITIES: | ' | ' |
Contingent consideration | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ' | ' |
ASSETS: | ' | ' |
Commodity swap contracts | 8,419 | 0 |
LIABILITIES: | ' | ' |
Contingent consideration | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' |
ASSETS: | ' | ' |
Commodity swap contracts | 0 | 0 |
LIABILITIES: | ' | ' |
Contingent consideration | $682,000 | $685,000 |
Fair_Value_Measurements_Reconc
Fair Value Measurements - Reconciliation of Beginning and Ending Balances of Contingent Consideration Liability Categorized Under Level 3 of Fair Value (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Total (gains) losses for period: Included in net income | $3,000 | ($215,000) |
Contingent Consideration [Member] | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' |
Opening balance | 685,000 | ' |
Transfers into level 3 | 0 | ' |
Transfers out of level 3 | 0 | ' |
Total (gains) losses for period: Included in net income | -3,000 | ' |
Total gains or losses for period Included in other comprehensive income | 0 | ' |
Purchases | 0 | ' |
Sales | 0 | ' |
Settlements | 0 | ' |
Issuances | 0 | ' |
Closing balance | $682,000 | ' |
Fair_Value_Measurements_Quanti
Fair Value Measurements - Quantitative Information about Level 3 Fair Value Measures (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
Fair Value | $682,000 |
Monte Carlo Analysis [Member] | Minimum [Member] | ' |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
Forecasted annual EBITDA | 400,000 |
Weighted average cost of capital | 14.50% |
U.S. Treasury yields | 0.20% |
Monte Carlo Analysis [Member] | Maximum [Member] | ' |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
Forecasted annual EBITDA | $600,000 |
Weighted average cost of capital | 14.50% |
U.S. Treasury yields | 1.20% |
Discounted Cash Flow [Member] | Minimum [Member] | ' |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
U.S. Treasury yields | 0.20% |
Credit spread | 2.00% |
Discounted Cash Flow [Member] | Maximum [Member] | ' |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
U.S. Treasury yields | 1.20% |
Credit spread | 2.50% |
Regulatory_Assets_Additional_I
Regulatory Assets - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Jun. 27, 2014 |
Natural Gas Transition Cost [Member] | ||
Regulatory Assets [Line Items] | ' | ' |
Transfer of recoverable cost to regulatory asset | $2.30 | $2.50 |
Period of amortization of regulatory assets | '5 years | ' |
Build_to_Suit_Lease_Additional
Build to Suit Lease - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Leases [Line Items] | ' | ' |
Built to suit lease agreement included in Property, plant and equipment | $137,125,834 | $124,587,645 |
Build To Suit Liability | $4,148,469 | $0 |
Restricted_Cash_Additional_Inf
Restricted Cash - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Sun Life Assurance Company Of Canada [Member] | ' | ' |
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' |
Additional restricted cash balance | $1.90 | $1.10 |
Restricted Cash Balance Related To Debt Covenants | 0.9 | 1.1 |
Subsidiaries [Member] | Verso Bucksport Power Llc [Member] | ' | ' |
Restricted Cash and Cash Equivalents Items [Line Items] | ' | ' |
Additional restricted cash balance | $0.90 | ' |
Credit_Facilities_and_LongTerm2
Credit Facilities and Long-Term Debt - Lines of Credit - Additional Information (Detail) (Bank of America [Member], USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' |
Interest on amount outstanding | ' | ' | 'LIBOR plus 175 to 225 basis points | ' | ' |
Revolving Credit Facility [Member] | ' | ' | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' |
Maximum borrowing credit facility | $30 | ' | $30 | ' | ' |
Line of credit maturity date | ' | ' | 1-Apr-17 | ' | ' |
Outstanding borrowings | 24.1 | ' | 24.1 | ' | 24.5 |
Interest expense related to line of credit | $0.10 | $0.10 | $0.40 | $0.40 | ' |
Credit_Facilities_and_LongTerm3
Credit Facilities and Long-Term Debt - Summary of Outstanding Long-Term Debt Balances (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | $40,398,583 | $43,700,742 |
Less: current portion | 542,156 | 3,502,190 |
Notes payable, long-term portion | 39,856,427 | 40,198,552 |
Vehicle & Equipment Financing Loans [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | 75,031 | 2,190 |
LIBOR Plus 1.75 to 2.25%, Bank of America Amortizing Term Loan, Due April 1, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | 9,000,000 | 9,375,000 |
6.16%, Allstate/ CUNA Senior Unsecured Notes, Due June 29, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | 13,000,000 | 13,000,000 |
5.38%, Sun Life Fixed Rate Note, Due June 1, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | 15,334,000 | 15,334,000 |
LIBOR Plus 3.85%, Sun Life Floating Rate Note, Due May 3, 2014 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | 0 | 3,000,000 |
4.15% Sun Life Senior Secured Guaranteed Note, Due June 1, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Total notes payable | $2,989,552 | $2,989,552 |
Credit_Facilities_and_LongTerm4
Credit Facilities and Long-Term Debt - Summary of Outstanding Long-Term Debt Balances (Parenthetical) (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
LIBOR Plus 1.75 to 2.25%, Bank of America Amortizing Term Loan, Due April 1, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Notes payable, maturity date | 1-Apr-17 | 1-Apr-17 |
LIBOR Plus 1.75 to 2.25%, Bank of America Amortizing Term Loan, Due April 1, 2017 [Member] | Maximum [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Changes in interest rate, percentage | 2.25% | 2.25% |
LIBOR Plus 1.75 to 2.25%, Bank of America Amortizing Term Loan, Due April 1, 2017 [Member] | Minimum [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Changes in interest rate, percentage | 1.75% | 1.75% |
6.16%, Allstate/ CUNA Senior Unsecured Notes, Due June 29, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Notes payable, maturity date | 29-Jun-17 | 29-Jun-17 |
Changes in interest rate, percentage | 6.16% | 6.16% |
5.38%, Sun Life Fixed Rate Note, Due June 1, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Notes payable, maturity date | 1-Jun-17 | 1-Jun-17 |
Changes in interest rate, percentage | 5.38% | 5.38% |
LIBOR Plus 3.85%, Sun Life Floating Rate Note, Due May 3, 2014 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Notes payable, maturity date | 3-May-14 | 3-May-14 |
Changes in interest rate, percentage | 3.85% | 3.85% |
4.15% Sun Life Senior Secured Guaranteed Note, Due June 1, 2017 [Member] | ' | ' |
Summary of outstanding long-term debt balances | ' | ' |
Notes payable, maturity date | 1-Jun-17 | 1-Jun-17 |
Changes in interest rate, percentage | 4.15% | 4.15% |
Credit_Facilities_and_LongTerm5
Credit Facilities and Long-Term Debt - Debt Covenants - Additional Information (Detail) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2011 | |
Sun Life Assurance Company of Canada [Member] | ' | ' | ' |
Summary of outstanding long-term debt balances | ' | ' | ' |
Interest coverage ratio | 'at least 2.0 to 1.0 | ' | ' |
Debt to capitalization rate | 60.00% | ' | ' |
Number of debt service reserve accounts | 2 | ' | ' |
Interest payment period | '1 year | ' | ' |
Debt service reserve account | $900,000 | $1,100,000 | ' |
Maximum percentage of dividend distribution redemptions of net income | 70.00% | ' | ' |
Maximum capitalized leases and purchase money obligations | ' | ' | 500,000 |
Maximum limit for sale or transfer of assets | 1.00% | ' | ' |
Percentage of maximum limit of making acquisition | 10.00% | ' | ' |
Bank of America [Member] | ' | ' | ' |
Summary of outstanding long-term debt balances | ' | ' | ' |
Minimum Debt To Capital Ratio | 0.55 | ' | ' |
Maximum debt to capital ratio | 1 | ' | ' |
Interest coverage ratio | 'no less than 2.0-to-1.0 | ' | ' |
Maximum capital lease borrowing obligation | 500,000 | ' | ' |
Maximum other borrowing obligation | $1,000,000 | ' | ' |
Period consider for distribution and redemption restriction | '60 months | ' | ' |
Percent of net income consider for distribution and redemption restriction | 80.00% | ' | ' |
Maximum percent of assets disposal restriction in fiscal year | 5.00% | ' | ' |
Allstate/CUNA [Member] | ' | ' | ' |
Summary of outstanding long-term debt balances | ' | ' | ' |
Total dividends and distributions made in the immediately preceding period | '60 months | ' | ' |
Aggregate consolidated net income | 100.00% | ' | ' |
Allstate/CUNA [Member] | Maximum [Member] | ' | ' | ' |
Summary of outstanding long-term debt balances | ' | ' | ' |
Debt to capitalization rate | 65.00% | ' | ' |
Debt Instrument Interest Coverage Ratio | 150.00% | ' | ' |
Stock_Compensation_Additional_
Stock Compensation - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Mar. 26, 2014 | Sep. 30, 2014 | Jul. 21, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
2002 Stock Option Plan [Member] | 2012 Incentive and Equity Award Plan [Member] | 2012 Incentive and Equity Award Plan [Member] | 2012 Incentive and Equity Award Plan [Member] | 2012 Non-Employee Director Stock Award Plan [Member] | Minimum [Member] | Maximum [Member] | |
Chief Executive Officer [Member] | 2002 Stock Option Plan [Member] | 2002 Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Number of common shares issued subject to adjustment | 300,000 | ' | 500,000 | ' | 250,000 | ' | ' |
Number of shares granted during period | ' | 30,833 | ' | ' | ' | ' | ' |
Number of shares granted fair value | ' | $300,000 | ' | ' | ' | ' | ' |
Options vest period | ' | ' | ' | ' | ' | '4 years | '5 years |
Options exercisable period | ' | ' | ' | ' | ' | '5 years | '10 years |
StockIssuedDuringPeriodValueRestrictedStockAwardNetOfForfeitures | ' | ' | ' | $58,000 | ' | ' | ' |
StockIssuedDuringPeriodSharesRestrictedStockAwardNetOfForfeitures | ' | ' | ' | 5,000 | ' | ' | ' |
Stock_Compensation_Summary_of_
Stock Compensation - Summary of Status of Outstanding Stock Options (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Number of Shares Outstanding, Beginning Balance | 5,000 |
Granted, Number of Shares | 0 |
Exercised, Number of Shares | -5,000 |
Expired, Number of Shares | 0 |
Number of Shares Outstanding, Ending Balance | 0 |
Exercisable, Number of Shares Outstanding | 0 |
Weighted Average Exercise Price Outstanding, Beginning Balance | $8.44 |
Exercised, Weighted Average Exercise Price | $8.44 |
Weighted Average Exercise Price Outstanding, Ending Balance | $0 |
Exercisable, Weighted Average Exercise Price | $0 |
Aggregate Intrinsic Value Outstanding, Beginning Balance | $0 |
Aggregate Intrinsic Value Outstanding, Ending Balance | 0 |
Exercisable, Aggregate Intrinsic Value | $0 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Annual contribution of employees salaries | ' | ' | 3.00% | ' | ' |
Discretionary contributions made by an employer to a defined contribution plan | ' | ' | 3.00% | ' | ' |
Expense related to plan | $115,297 | $108,950 | $376,123 | $306,467 | ' |
Company makes matching contributions in form of common stock, percent | ' | ' | 10.00% | ' | ' |
Company makes matching contributions in form of common stock | 15,954 | 14,475 | 41,104 | 41,912 | ' |
Contribution to ESOP by company | ' | ' | 0 | 0 | ' |
Maximum age criteria for retirees to remain on the same medical plan to retain coverage | ' | ' | '65 years | ' | ' |
Defined postretirement health benefit plan | ' | ' | 125 | ' | ' |
Minimum age criteria for retirees to remain on the same medical plan to retain coverage | ' | ' | '60 years | ' | ' |
Percentage rate of contribution retirees health plan | ' | ' | 125.00% | ' | ' |
Value of plan assets | $137,318 | ' | $137,318 | ' | $155,750 |
Income_Taxes_Federal_Statutory
Income Taxes - Federal Statutory Rate to Pre-Tax Income from Continuing Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Tax expense at statutory rate of 34% | ($834,880) | ($671,409) | $1,140,627 | $1,763,512 |
State income tax, net of Federal tax expense | -82,641 | -80,135 | 112,905 | 210,480 |
Amortization of deferred investment tax credits | -5,265 | -5,265 | -15,794 | -15,794 |
Adjustment to tax return filed | -70,734 | -110,150 | -29,820 | -110,150 |
Other | 17,183 | 14,284 | 36,187 | 0 |
Total income tax expense (benefit) | -976,337 | -852,675 | 1,244,105 | 1,848,048 |
Less: Income tax benefit from discontinued operations | 32,157 | -67,540 | 342,964 | 123,809 |
Income tax expense (benefit) from continuing operations | ($1,008,494) | ($785,135) | $901,141 | $1,724,239 |
Income_Taxes_Federal_Statutory1
Income Taxes - Federal Statutory Rate to Pre-Tax Income from Continuing Operations (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statutory income tax rate | 34.00% | 34.00% | 34.00% | 34.00% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income tax adjustments | ($70,734) | ($110,150) | ($29,820) | ($110,150) |
Adjustments recognized for uncertain tax benefits | $70,734 | ' | ' | ' |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 05, 2013 | 5-May-13 | 5-May-13 |
8500 Station Street [Member] | 8500 Station Street [Member] | 8500 Station Street [Member] | |||
Land [Member] | Building [Member] | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Purchase of Matchworks Building in Mentor, Ohio | ' | ' | $1,900,000 | ' | ' |
Property, plant and equipment purchased | 137,125,834 | 124,587,645 | ' | 244,859 | 1,607,915 |
Accrued liability, related parties | 69,253 | ' | ' | ' | ' |
Energy Related Inventory, Natural Gas in Storage | $383,648 | $151,780 | ' | ' | ' |
Related_Party_Transactions_Amo
Related Party Transactions - Amounts Due from and Due to Related Parties (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | $219,918 | $146,225 |
Accounts Payable, Total | 9 | 559,933 |
Amounts included in discontinued operations [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 0 | 0 |
Accounts Payable, Total | 0 | 0 |
Amounts included in continuing operations [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 219,918 | 146,225 |
Accounts Payable, Total | 9 | 559,933 |
Cobra Pipeline [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 178,596 | 131,208 |
Accounts Payable, Total | 0 | 76,909 |
Orwell Trumbell Pipeline [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 0 | 0 |
Accounts Payable, Total | 0 | 122,693 |
Great Plains Exploration [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 7,670 | 7,033 |
Accounts Payable, Total | 9 | 73,983 |
Big Oats Oil Field Supply [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 5,190 | 4,945 |
Accounts Payable, Total | 0 | 179,447 |
John D. Oil and Gas Company [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 96 | 91 |
Accounts Payable, Total | 0 | 82,188 |
OsAir [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 17,152 | 0 |
Accounts Payable, Total | 0 | 12,979 |
Other [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 11,214 | 2,948 |
Accounts Payable, Total | 0 | 11,734 |
Total related party balances [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Accounts Receivable, Total | 219,918 | 146,225 |
Accounts Payable, Total | $9 | $559,933 |
Related_Party_Transactions_Sum
Related Party Transactions - Summary of Related Parties Transactions (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | $503,763 | $728,858 | $3,190,312 | $3,459,317 |
Pipeline Construction Purchases | 0 | 603,360 | 254,752 | 2,088,727 |
Rent, Supplies, Consulting and Other Purchases | 6,000 | 185,421 | 136,550 | 606,848 |
Natural Gas Sales | 3,795 | 72,910 | 147,820 | 168,243 |
Rental Income and Other Sales | 60,751 | 63,739 | 133,168 | 186,572 |
Cobra Pipeline [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 154,871 | 227,381 | 864,118 | 737,252 |
Pipeline Construction Purchases | 0 | 0 | 0 | 0 |
Rent, Supplies, Consulting and Other Purchases | 6,000 | 0 | 14,000 | 0 |
Natural Gas Sales | 0 | 70,635 | 104,623 | 115,116 |
Rental Income and Other Sales | 0 | 218 | 13,400 | 243 |
Orwell Trumbell Pipeline [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 46,125 | 51,621 | 562,728 | 469,661 |
Pipeline Construction Purchases | 0 | 0 | 0 | 0 |
Rent, Supplies, Consulting and Other Purchases | 0 | 0 | 0 | 0 |
Natural Gas Sales | 140 | 115 | 1,595 | 10,883 |
Rental Income and Other Sales | 35,549 | 31,582 | 37,124 | 31,883 |
Great Plains Exploration [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 120,707 | 189,991 | 611,187 | 506,716 |
Pipeline Construction Purchases | 0 | 0 | 0 | 854 |
Rent, Supplies, Consulting and Other Purchases | 0 | 1,341 | 0 | 1,341 |
Natural Gas Sales | 599 | 669 | 12,735 | 13,348 |
Rental Income and Other Sales | 1,700 | 1,500 | 4,700 | 31,809 |
Big Oats Oil Field Supply [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 0 | 0 | 0 | 0 |
Pipeline Construction Purchases | 0 | 603,360 | 254,752 | 2,081,043 |
Rent, Supplies, Consulting and Other Purchases | 0 | 161,597 | 93,741 | 465,269 |
Natural Gas Sales | 29 | 78 | 4,482 | 2,824 |
Rental Income and Other Sales | 0 | 800 | 850 | 925 |
John D. Oil and Gas Company [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 135,237 | 186,921 | 737,522 | 554,466 |
Pipeline Construction Purchases | 0 | 0 | 0 | 5,976 |
Rent, Supplies, Consulting and Other Purchases | 0 | 0 | 0 | 0 |
Natural Gas Sales | 144 | 143 | 431 | 286 |
Rental Income and Other Sales | 6,323 | 6,333 | 35,473 | 20,923 |
OsAir [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 32,984 | 51,891 | 176,116 | 182,871 |
Pipeline Construction Purchases | 0 | 0 | 0 | 0 |
Rent, Supplies, Consulting and Other Purchases | 0 | 7,198 | 6,001 | 87,671 |
Natural Gas Sales | 44 | 139 | 2,889 | 762 |
Rental Income and Other Sales | 17,079 | 22,910 | 39,945 | 54,378 |
Lake Shore Gas [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 0 | ' | 162,360 | ' |
Pipeline Construction Purchases | 0 | ' | 0 | ' |
Rent, Supplies, Consulting and Other Purchases | 0 | ' | 0 | ' |
Natural Gas Sales | 0 | ' | 0 | ' |
Rental Income and Other Sales | 0 | ' | 0 | ' |
Other [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | 13,839 | 21,053 | 76,281 | 55,452 |
Pipeline Construction Purchases | 0 | 0 | 0 | 854 |
Rent, Supplies, Consulting and Other Purchases | 0 | 15,285 | 22,808 | 45,296 |
Natural Gas Sales | 2,839 | 1,131 | 21,065 | 19,554 |
Rental Income and Other Sales | 100 | 396 | 1,676 | 46,411 |
John D. Oil and Gas Marketing [Member] | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Natural Gas Purchases | ' | ' | ' | 952,899 |
Pipeline Construction Purchases | ' | ' | ' | 0 |
Rent, Supplies, Consulting and Other Purchases | ' | ' | ' | 7,271 |
Natural Gas Sales | ' | ' | ' | 5,470 |
Rental Income and Other Sales | ' | ' | ' | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||
Dec. 10, 2013 | Feb. 25, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 15, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Minimum [Member] | Minimum [Member] | Maximum [Member] | Subsequent Event [Member] | Shareholders Suit [Member] | NEO [Member] | NEO [Member] | NEO [Member] | NEO [Member] | Orwell [Member] | Orwell [Member] | ||||||
Commitments Contingencies And Litigation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Severance payment | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | ' | ' | ' | ' | ' | ' | ' |
Number of individuals filing suit | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of claims pending | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance premium paid before any losses covered | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' |
Minimum period of relief for economic loss | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Over (under) recovered gas costs | ' | ' | 624,880 | 778,963 | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' |
Unrecovered costs for purchased gas amount for audit adjustment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 84,463 | 234,253 | ' | ' | ' |
Liability of customers | ' | ' | ' | ' | ' | ' | 1,500,000 | 1,900,000 | ' | ' | 0.7 | ' | 800,000 | 943,550 | 251,081 | 200,000 |
Valuation adjustments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | 200,000 | ' |
Increase in initial estimated liability | ' | ' | ' | ' | ' | 300,000 | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Audit fees | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional audit fees | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable trade from large industrial customer under chapter 11 bankruptcy protection | ' | ' | ' | ' | 1,059,224 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for doubtful accounts receivable for large industrial customer covered under bankruptcy protection act | ' | ' | ' | ' | $1,421,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating_Segments_Summary_of_
Operating Segments - Summary of Financial Information for Operating Segments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | $13,614,971 | $13,617,328 | $95,611,609 | $73,114,222 |
Total cost of sales | 6,600,330 | 6,382,819 | 62,795,691 | 43,220,594 |
GROSS MARGIN | 7,014,641 | 7,234,509 | 32,815,918 | 29,893,628 |
Total operating expenses | 9,365,529 | 8,275,615 | 28,844,718 | 23,199,763 |
OPERATING INCOME (LOSS) | -2,350,888 | -1,041,106 | 3,971,200 | 6,693,865 |
DISCONTINUED OPERATIONS | 34,825 | -154,292 | 581,652 | 402,062 |
NET INCOME (LOSS) | -1,479,744 | -1,004,338 | 2,110,129 | 3,456,469 |
Operating Segments [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 14,679,065 | 15,538,554 | 101,480,343 | 78,649,487 |
Total cost of sales | 7,664,424 | 8,304,045 | 68,664,425 | 48,755,859 |
Total operating expenses | 9,392,100 | 8,300,800 | 28,922,279 | 23,271,177 |
Intersegment Elimination [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | -1,064,094 | -1,921,226 | -5,868,734 | -5,535,265 |
Total cost of sales | -1,064,094 | -1,921,226 | -5,868,734 | -5,535,265 |
Total operating expenses | -26,571 | -25,185 | -77,561 | -71,414 |
Natural Gas Operations [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 12,542,698 | 11,500,163 | 88,327,066 | 64,779,596 |
Total cost of sales | 5,739,430 | 4,681,265 | 56,257,668 | 36,426,083 |
GROSS MARGIN | 6,803,268 | 6,818,898 | 32,069,398 | 28,353,513 |
Total operating expenses | 8,119,645 | 7,278,898 | 24,223,487 | 21,043,083 |
OPERATING INCOME (LOSS) | -1,316,377 | -460,000 | 7,845,911 | 7,310,430 |
DISCONTINUED OPERATIONS | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) | -879,952 | -440,255 | 4,189,646 | 3,787,103 |
Natural Gas Operations [Member] | Operating Segments [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 12,544,151 | 11,502,306 | 88,343,864 | 64,797,098 |
Total cost of sales | 5,740,883 | 4,683,408 | 56,274,466 | 36,443,585 |
Total operating expenses | 8,146,216 | 7,304,083 | 24,301,048 | 21,114,497 |
Natural Gas Operations [Member] | Intersegment Elimination [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | -1,453 | -2,143 | -16,798 | -17,502 |
Total cost of sales | -1,453 | -2,143 | -16,798 | -17,502 |
Total operating expenses | -26,571 | -25,185 | -77,561 | -71,414 |
Marketing and Production [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 1,072,273 | 2,117,165 | 7,284,543 | 8,334,626 |
Total cost of sales | 860,900 | 1,701,554 | 6,538,023 | 6,794,511 |
GROSS MARGIN | 211,373 | 415,611 | 746,520 | 1,540,115 |
Total operating expenses | 372,682 | 604,673 | 2,156,684 | 1,109,762 |
OPERATING INCOME (LOSS) | -161,309 | -189,062 | -1,410,164 | 430,353 |
DISCONTINUED OPERATIONS | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) | -108,248 | -129,525 | -936,885 | 297,808 |
Marketing and Production [Member] | Operating Segments [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 2,134,914 | 4,036,248 | 13,136,479 | 13,852,389 |
Total cost of sales | 1,923,541 | 3,620,637 | 12,389,959 | 12,312,274 |
Total operating expenses | 372,682 | 604,673 | 2,156,684 | 1,109,762 |
Marketing and Production [Member] | Intersegment Elimination [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | -1,062,641 | -1,919,083 | -5,851,936 | -5,517,763 |
Total cost of sales | -1,062,641 | -1,919,083 | -5,851,936 | -5,517,763 |
Total operating expenses | 0 | 0 | 0 | 0 |
Corporate and Other [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 0 | 0 | 0 | 0 |
Total cost of sales | 0 | 0 | 0 | 0 |
GROSS MARGIN | 0 | 0 | 0 | 0 |
Total operating expenses | 873,202 | 392,044 | 2,464,547 | 1,046,918 |
OPERATING INCOME (LOSS) | -873,202 | -392,044 | -2,464,547 | -1,046,918 |
DISCONTINUED OPERATIONS | 34,825 | -154,292 | 581,652 | 402,062 |
NET INCOME (LOSS) | -491,544 | -434,558 | -1,142,632 | -628,442 |
Corporate and Other [Member] | Operating Segments [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 0 | 0 | 0 | 0 |
Total cost of sales | 0 | 0 | 0 | 0 |
Total operating expenses | 873,202 | 392,044 | 2,464,547 | 1,046,918 |
Corporate and Other [Member] | Intersegment Elimination [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total operating revenue | 0 | 0 | 0 | 0 |
Total cost of sales | 0 | 0 | 0 | 0 |
Total operating expenses | $0 | $0 | $0 | $0 |
Operating_Segments_Schedule_of
Operating Segments - Schedule of Company's Asset by Operating Segment (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Investment in unconsolidated affiliate | $350,748 | $351,724 |
Goodwill | 16,267,377 | 16,267,377 |
Total assets | 198,622,437 | 203,731,797 |
Operating Segments [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Goodwill | 16,267,377 | 16,267,377 |
Total assets | 295,524,230 | 290,712,885 |
Intersegment Elimination [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total assets | -96,901,863 | -86,969,270 |
Natural Gas Operations [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Investment in unconsolidated affiliate | 0 | 0 |
Total assets | 128,053,647 | 130,325,388 |
Natural Gas Operations [Member] | Operating Segments [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Goodwill | 14,891,377 | 14,891,377 |
Total assets | 193,413,912 | 184,097,483 |
Natural Gas Operations [Member] | Intersegment Elimination [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total assets | -65,360,265 | -53,772,095 |
Marketing and Production [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total assets | 5,059,332 | 7,955,233 |
Marketing and Production [Member] | Operating Segments [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Investment in unconsolidated affiliate | 350,748 | 351,724 |
Goodwill | 1,376,000 | 1,376,000 |
Total assets | 7,963,197 | 11,633,544 |
Marketing and Production [Member] | Intersegment Elimination [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total assets | -2,903,865 | -3,678,311 |
Corporate and Other [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total assets | 65,509,388 | 65,462,994 |
Corporate and Other [Member] | Operating Segments [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Investment in unconsolidated affiliate | 0 | 0 |
Goodwill | 0 | 0 |
Total assets | 94,147,121 | 94,981,858 |
Corporate and Other [Member] | Intersegment Elimination [Member] | ' | ' |
Segment Reporting, Asset Reconciling Item [Line Items] | ' | ' |
Total assets | ($28,637,733) | ($29,518,864) |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 9 Months Ended | 9 Months Ended | 1 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Nov. 30, 2014 | Oct. 01, 2014 | Oct. 10, 2014 | Oct. 10, 2014 | Oct. 15, 2014 | |
EWW and Pipeline Assets [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Energy West Wyoming [Member] | Shoshone and Glacier Pipeline [Member] | Participating Securities [Member] | |||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend declared per share | ' | ' | ' | ' | ' | $0.05 | ' | ' | ' |
Shares outstanding | 10,487,511 | ' | 10,451,678 | ' | ' | ' | ' | ' | 10,492,511 |
Dividend paid | $4,242,608 | $3,598,449 | ' | ' | $472,163 | ' | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Consideration | ' | ' | ' | ' | ' | ' | 15,800,000 | 1,200,000 | ' |
Sale Termination Clause Excess Losses | ' | ' | ' | $750,000 | ' | ' | ' | ' | ' |