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Concentrations
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9 Months Ended |
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Sep. 30, 2014
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| Risks and Uncertainties [Abstract] | |
| CONCENTRATIONS |
CONCENTRATIONS
Prior to 2013, the Company had historically invested in securities of privately-held and publicly-traded companies in the midstream and downstream segments of the U.S. energy infrastructure sector. As of September 30, 2014, investments in securities of energy infrastructure companies represented approximately 8 percent of the Company’s total assets. Subsequent to September 30, 2014, the Company liquidated its investment in VantaCore Partners LP as a result of the acquisition of VantaCore by Natural Resource Partners L.P., thereby reducing its remaining investments in securities of energy infrastructure companies. See Note 17 to the Consolidated Financial Statements included in this report for additional information. The Company is now focused on identifying and acquiring real property assets in the U.S. energy infrastructure sector that are REIT-qualified.
Mowood, a wholly-owned TRS of the Company, has a ten-year contract, expiring on January 31, 2015, with the Department of Defense (“DOD”) to provide natural gas and gas distribution services to Fort Leonard Wood. On October 21, 2014, the DOD formally solicited qualifications and proposals from other parties that may be interested in providing the services Omega currently provides. In this solicitation, the DOD states that Omega is the owner of the distribution system, and that any interested party must have a feasible plan to either procure the existing system from Omega, partner with Omega, install a new natural gas distribution system or create another alternative to natural gas. It also states that if no acceptable alternatives come forward, it is the DOD’s intent to award a new 10 year contract to Omega. Based on theses statements from the DOD and its knowledge of the local market, Mowood currently expects that an additional ten-year term will be agreed to by the DOD in second quarter 2015. The DOD expects that the solicitation and contract negotiation process it has undertaken will go beyond January 31, 2015. Accordingly, the DOD and Omega expect to agree to a 90 day bridge extension of the current agreement for Omega to continue providing natural gas and gas distribution services until a new agreement is reached.
Revenue related to the DOD contract accounted for 85 percent and 88 percent of our sales revenue for the three and nine months ended September 30, 2014, respectively, as compared to 64 percent and 79 percent for the three and nine months ended September 30, 2013, respectively. Mowood, through its wholly-owned subsidiary Omega, performs management and supervision services related to the expansion of the natural gas distribution system used by the DOD. The amount due from the DOD accounts for 83 percent and 91 percent of the consolidated accounts receivable balances at September 30, 2014 and December 31, 2013, respectively.
Mowood’s contracts for its supply of natural gas are concentrated among select providers. Purchases from its largest supplier of natural gas accounted for 40 percent and 63 percent of our cost of sales for the three and nine months ended September 30, 2014. This compares to 34 percent and 32 percent for the three and nine months ended September 30, 2013.
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