Document and Entity Information
Document and Entity Information Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 04, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Independence Contract Drilling, Inc. | |
Entity Central Index Key | 1,537,028 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 24,445,380 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 12,254 | $ 10,757 |
Accounts receivable, net | 13,418 | 19,127 |
Inventory | 2,292 | 2,124 |
Deferred taxes | 402 | 323 |
Prepaid expenses and other current assets | 4,503 | 3,969 |
Total current assets | 32,869 | 36,300 |
Property, plant and equipment, net | 282,667 | 250,498 |
Other long-term assets, net | 2,461 | 2,749 |
Total assets | 317,997 | 289,547 |
Liabilities | ||
Current portion of long-term debt | 0 | 22,519 |
Accounts payable | 7,988 | 21,993 |
Accrued liabilities | 8,070 | 6,970 |
Income taxes payable | 213 | 408 |
Total current liabilities | 16,271 | 51,890 |
Long-term debt | 61,361 | 0 |
Other long-term liabilities | 347 | 598 |
Deferred taxes | 402 | 323 |
Total liabilities | $ 78,381 | $ 52,811 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 24,530,391 and 24,540,720 issued, respectively; 24,445,380 and 24,455,709 outstanding, respectively | $ 245 | $ 245 |
Additional paid-in capital | 274,908 | 272,751 |
Accumulated deficit | (34,566) | (35,289) |
Treasury shares, at cost, 85,011 shares | (971) | (971) |
Total stockholders’ equity | 239,616 | 236,736 |
Total liabilities and stockholders’ equity | $ 317,997 | $ 289,547 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Shares authorized | 100,000,000 | 100,000,000 |
Shares issued | 24,530,391 | 24,540,720 |
Shares outstanding | 24,455,380 | 24,455,709 |
Treasury stock | 85,011 | 85,011 |
Statements of Operations
Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues | $ 21,082 | $ 14,661 | $ 43,388 | $ 28,210 |
Costs and expenses | ||||
Operating costs | 12,057 | 9,283 | 25,163 | 18,060 |
Selling, general and administrative | 3,755 | 2,073 | 7,582 | 4,167 |
Depreciation and amortization | 5,169 | 3,901 | 9,458 | 7,317 |
(Insurance recoveries) asset impairment, net | 0 | (2,038) | (841) | 2,612 |
(Gain) loss on disposition of assets | (59) | (2) | 334 | (191) |
Total costs and expenses | 20,922 | 13,217 | 41,696 | 31,965 |
Operating income (loss) | 160 | 1,444 | 1,692 | (3,755) |
Interest expense | (717) | (598) | (1,029) | (992) |
Gain on warrant derivative | 0 | 1,377 | 0 | 1,380 |
(Loss) income before income taxes | (557) | 2,223 | 663 | (3,367) |
Income tax expense (benefit) | 95 | 667 | (60) | (1,218) |
Net (loss) income | $ (652) | $ 1,556 | $ 723 | $ (2,149) |
(Loss) earnings per share: | ||||
Earings (loss) per share - basic | $ (0.03) | $ 0.13 | $ 0.03 | $ (0.18) |
Earings (loss) per share - diluted | $ (0.03) | $ 0.13 | $ 0.03 | $ (0.18) |
Weighted average number of common shares outstanding: | ||||
Weighted average number of common shares outstanding - basic | 23,851 | 12,263 | 24,455 | 12,257 |
Weighted average number of shares outstanding - diluted | 23,851 | 12,306 | 24,455 | 12,257 |
Statements of Stockholders_ Equ
Statements of Stockholders’ Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2014 | 24,455,709 | ||||
Beginning balance at Dec. 31, 2014 | $ 236,736 | $ 245 | $ 272,751 | $ (35,289) | $ (971) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Restricted stock forfeited, shares | (10,329) | ||||
Restricted stock forfeited | 0 | $ 0 | 0 | ||
Stock-based compensation | 2,157 | ||||
Net income | 723 | ||||
Ending balance (in shares) at Jun. 30, 2015 | 24,445,380 | ||||
Ending balance at Jun. 30, 2015 | $ 239,616 | $ 245 | $ 274,908 | $ (34,566) | $ (971) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ 723 | $ (2,149) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||
Depreciation and amortization | 9,458 | 7,317 |
(Insurance recoveries) asset impairment, net | (841) | 2,612 |
Stock-based compensation | 1,734 | 1,022 |
Gain on warrant derivative | 0 | (1,380) |
Loss (gain) on disposition of assets | 334 | (191) |
Deferred taxes | 0 | (1,218) |
Amortization of deferred financing costs | 315 | 329 |
Bad debt expense | 80 | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | 5,629 | (1,045) |
Inventory | (253) | (958) |
Vendor advances | 0 | (1,568) |
Prepaid expenses and other current assets | (1,820) | (1,945) |
Accounts payable and accrued liabilities | 2,620 | 2,486 |
Income taxes payable | (195) | (160) |
Net cash provided by operating activities | 17,784 | 3,152 |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (58,215) | (48,731) |
Proceeds from insurance claims | 2,899 | 2,038 |
Proceeds from the sale of property, plant and equipment | 351 | 488 |
Net cash used in investing activities | (54,965) | (46,205) |
Cash flows from financing activities | ||
Borrowings under credit facility | 89,566 | 80,306 |
Repayments under credit facility | (50,724) | (35,875) |
Financing costs paid | (164) | (1,235) |
Net cash provided by financing activities | 38,678 | 43,196 |
Net increase in cash and cash equivalents | 1,497 | 143 |
Beginning of period | 10,757 | 2,730 |
End of period | 12,254 | 2,873 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for taxes | 135 | 160 |
Cash paid during the period for interest | 1,379 | 1,079 |
Supplemental disclosure of non-cash investing and financing activities | ||
Stock-based compensation capitalized as property, plant and equipment | 423 | 214 |
Change in property, plant and equipment purchases in accounts payable | $ (15,776) | $ (6,011) |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2015 | |
Nature of operations [Abstract] | |
Nature of Operations | Nature of Operations Independence Contract Drilling, Inc. (“we,” “us,” “our,” the “Company” or “ICD”) was incorporated in Delaware on November 4, 2011. We provide land-based contract drilling services for oil and natural gas producers targeting unconventional resource plays in the United States. We construct, own and operate a premium fleet comprised entirely of newly constructed, technologically advanced, custom designed ShaleDriller™ rigs that are specifically engineered and designed to optimize the development of our customers’ most technically demanding oil and gas properties. Our first rig began drilling in May 2012. Our standardized fleet consisted of fourteen premium rigs as of June 30, 2015. Of these fourteen rigs, two were completed during the first quarter of 2015 and one was under construction and scheduled for completion during the third quarter of 2015. Currently, twelve of our fourteen rigs contain our integrated multi-directional walking system that is specifically designed to optimize pad drilling for our customers. One of our two non-walking rigs is scheduled to be upgraded during the second half of 2015. Our business depends on the level of exploration and production activity by oil and gas companies operating in the U.S., and in particular, the regions where we actively market our contract drilling services. The oil and gas exploration and production industry is a historically cyclical industry characterized by significant changes in the levels of exploration and development activities. Oil and gas prices and market expectations of potential changes in those prices significantly affect the levels of those activities. Worldwide political, regulatory, economic, and military events as well as natural disasters have contributed to oil and gas price volatility and are likely to continue to do so in the future. Any prolonged reduction in the overall level of exploration and development activities in the U.S. and the regions where we market our contract drilling services, whether resulting from changes in oil and gas prices or otherwise, could materially and adversely affect our business. In this regard, oil prices declined significantly during the second half of 2014 and have remained depressed in 2015. The closing price of oil was as high as $106.06 per barrel during the third quarter of 2014, as low as $44.08 per barrel in late January 2015 and at $47.11 per barrel as of July 31, 2015 (WTI spot price as reported by the United States Energy Information Administration). As a result of the decline in oil prices, our industry is now experiencing a severe downturn. Market conditions remain very dynamic and are changing quickly. Although the magnitude as well as the duration of this downturn are not yet known, we believe that 2015 will continue to be a very challenging year for our industry. We believe the vast majority of exploration and production companies, including our customers, have significantly reduced their 2015 capital spending plans. The initial impact of these spending reductions is evidenced by the active rig count in the United States, which has declined more than 50% since its recent peak in October 2014, and we believe the active rig count in the United States may decline further during the remainder of 2015 if oil prices remain at current levels. As a result of this deterioration in market conditions, our customers are principally focused on their most economic wells and on maintaining their most cost efficient operations that deliver the overall lowest cost of production. As a result, operators are focusing more of their capital spending on horizontal drilling programs on multi-well pads compared to vertical drilling and are more focused on utilizing drilling equipment and techniques that optimize costs and efficiency. Thus, we believe this rapid market deterioration has significantly accelerated the pace of the ongoing land rig replacement cycle and continued shift to horizontal drilling from multi-well pads. Although we believe that the current market downturn is rapidly increasing the focus of our customers towards the use of premium drilling rigs such as our ShaleDriller™, and that premium operations such as ours will be less affected by the downturn relative to operations conducted by legacy fleets, the rapid pace and level of the market decline has negatively impacted pricing, utilization and contract tenors for premium rigs, including our ShaleDriller™ rig. During 2014, we operated our premium drilling fleet with 99.7% utilization, but we have not been able to maintain this level of utilization during the current market downturn. In the first half of 2015, two non-walking rigs and two walking rigs became idle. We will be upgrading one of our idle rigs with our multi-directional walking system during the second half of 2015 and we are evaluating whether to upgrade the other idle non-walking rig. We expect to market our idle rigs at substantially lower dayrates than their expired contracts and at lower utilization rates than where we historically have operated, and there can be no assurance that these rigs will remain operating at profitable levels. Damage Sustained on Rig 102 On March 9, 2014, one of our non-walking drilling rigs (Rig 102) suspended drilling operations due to damage to the rig’s mast and other operating equipment. While under repair, we upgraded this rig by adding a substructure and other equipment that includes a multi-directional walking system. The cost of the upgrades were not covered by insurance. The repairs and upgrades were completed in October 2014 and the upgraded rig was renamed Rig 208. We recorded an asset impairment charge of $4.7 million during the three months ended March 31, 2014, representing a preliminary estimate of the damage sustained to the rig ( $2.9 million ), as well as the impairment of certain non-damaged items associated with the upgrade ( $1.8 million ). During the three months ended June 30, 2014, we recorded approximately $2.3 million in insurance proceeds related to repairing damage to the rig ( $2.0 million ) as well as the recovery of certain out-of-pocket expenses ( $0.3 million ), for which we had received a partial proof of loss from the insurance company. As of September 30, 2014, all of the $2.3 million had been collected. In the fourth quarter of 2014, we recorded an additional $1.6 million in insurance recoveries related to repairing damage to the rig ( $1.0 million ) as well as the recovery of out-of-pocket expenses ( $0.6 million ), for which we had received a second partial proof of loss from the insurance company. During the first quarter of 2015, we received a final payment of $2.9 million from the insurance company, and recognized an additional $1.3 million insurance recovery, representing the excess of the insurance recovery over the total impairment attributable to the damage to the rig. Stock Split On July 14, 2014, our board of directors approved a resolution to effect a 1.57 -for-1 stock split of our common stock in the form of a stock dividend. The dividend was distributed on July 24, 2014 to holders of record as of July 21, 2014. The earnings per share information and all common stock information in these financial statements have been retroactively restated for all periods presented to reflect this stock split. Initial Public Offering On August 7, 2014, our registration statement on Form S-1 (File No. 333-196914) (the "Form S-1") was declared effective by the Securities and Exchange Commission for our initial public offering, pursuant to which we sold an aggregate of 11,500,000 shares of our common stock at a price to the public of $11.00 per share, which included 1,500,000 shares of our common stock sold pursuant to the exercise by the underwriters in full of their option to purchase additional shares of common stock to cover over-allotments (the "Over-Allotment Option"). Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Tudor, Pickering, Holt & Co. Securities, Inc. acted as book runners. We completed our initial public offering of 10,000,000 shares of our common stock on August 13, 2014 and subsequently closed the issuance and sale of the additional 1,500,000 shares of our common stock pursuant to the Over-Allotment Option on August 29, 2014. Our common stock trades on the New York Stock Exchange under the ticker symbol "ICD." Net proceeds from the offering were $116.5 million after deducting $7.6 million of underwriting discounts and commissions, as well as legal, accounting, printing and other expenses directly associated with the offering totaling $2.4 million . All of the outstanding borrowings on our revolving credit facility were repaid immediately following the offering. |
Interim Financial Information
Interim Financial Information | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information These unaudited financial statements include all the accounts of ICD, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These financial statements should be read along with our audited financial statements for the year ended December 31, 2014 , included in our Annual Report on Form 10-K, as certain information and footnote disclosures included in annual financial statements prepared in accordance with GAAP have been omitted. In management’s opinion, these financial statements contain all adjustments necessary to fairly present our financial position, results of operations, cash flows and changes in equity for all periods presented. As we had no items of other comprehensive income in any period presented, no other components of comprehensive income or comprehensive income is presented. Interim results for the three and six months ended June 30, 2015 may not be indicative of results that will be realized for the full year ending December 31, 2015 . Segment and Geographical Information Our operations consist of one reportable segment because all of our drilling operations are located in the United States and have similar economic characteristics. Corporate management administers all properties as a whole rather than as discrete operating segments. Operational data is tracked by rig; however, financial performance is measured as a single enterprise and not on a rig-by-rig basis. Further, the allocation of capital resources is employed on a project-by-project basis across our entire asset base to maximize profitability without regard to individual geographic areas. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update to provide guidance on the recognition of revenue from customers. Under this guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. This guidance also requires more detailed disclosures to enable users of the financial statements to understand the nature, amount, timing and uncertainty, if any, of revenue and cash flows arising from contracts with customers. This guidance is effective for interim and annual periods beginning after December 15, 2017. We are currently evaluating the impact this guidance will have on our financial statements. In June 2014, the FASB issued an accounting standards update to provide guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. This guidance is effective for interim and annual periods beginning after December 15, 2015. We are currently evaluating the impact this guidance will have on our financial statements. In August 2014, the FASB issued guidance requiring management to perform interim and annual assessments of an entity’s ability to continue as a going-concern within one year of the date the financial statements are issued. The standard also provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. An entity must provide certain disclosures if there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going-concern. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The new guidance applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We are currently evaluating the impact this will have on our financial statements. In April 2015, the FASB issued an accounting standards update intended to simplify the presentation of debt issuance costs. This new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. This guidance is effective for public companies for fiscal years beginning after December 15, 2015. We believe the guidance will affect the presentation of deferred issuance costs in the balance sheet but will not have any impact on the Company’s results of operations or financial position. In April 2015, the FASB issued an accounting standards update intended to provide guidance about whether a cloud computing arrangement includes a software license and the related accounting treatment. The pronouncement is effective for annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact this guidance will have on our financial statements. In July 2015, the FASB issued an accounting standards update requiring an entity to measure inventory at the lower of cost or net realizable value versus lower of cost or market. Previously, market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendment does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendment applies to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. Management should measure in scope inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. This guidance is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. Adoption of this pronouncement is not expected to have a material impact upon our consolidated financial statements or notes thereto. |
Revision of Prior Year Financia
Revision of Prior Year Financial Statements | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision of Prior Year Financial Statements | Revision of Prior Year Financial Statements We revised the classification of long-term debt in our balance sheet as of December 31, 2014 from long-term debt to current portion of long-term debt due to our credit facility including both a required lock-box payment method and a subjective acceleration clause permitting the lenders to declare an event of default in the event of a material adverse change. We subsequently amended our credit facility to provide for a springing lock-box arrangement to permit the long-term classification of the debt, subject to the credit facility’s ultimate maturity and our compliance with its terms and conditions. The correction of the misclassification did not affect previously reported net income, total assets, total liabilities or stockholders' equity or cash flows as of and for the year ended December 31, 2014 or 2013. The net impact of the reclassification to the balance sheet at December 31, 2014, was to (i) reduce long-term debt from $22.5 million to zero ; (ii) increase the current portion of long-term debt from zero to $22.5 million; and (iii) increase current liabilities from $29.4 million to $51.9 million. We analyzed the reclassifications under SEC staff guidance and determined that the impact of the reclassification was not material to previously issued financial statements. |
Financial Instruments and Fair
Financial Instruments and Fair Value | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value | Financial Instruments and Fair Value The carrying value of certain of our assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable and accounts payable, approximates their fair value due to the short-term nature of such instruments. Our financial instruments that are subject to fair value measurements consist of a warrant to purchase approximately 2.2 million shares of our common stock, held by Global Energy Services Operating, LLC ("GES"), which expired unexercised on March 2, 2015,(the "GES Warrant") and long-term debt. The GES Warrant contained a provision that protected the holder from a decline in the issue price of our common stock, or a “down-round” provision. Down-round provisions reduce the exercise or conversion price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise or conversion price of those instruments or issues new warrants or convertible instruments that have a lower exercise or conversion price. As a result of this provision, we accounted for this warrant as a liability. Following our initial public offering completed on August 13, 2014, and the full exercise of the Over-Allotment Option on August 29, 2014, the exercise price of the GES Warrant was reduced from $12.74 per share to $11.37 per share. In accordance with Accounting Standards Codification ("ASC") 815 “Accounting for Derivative Instruments and Hedging Activities,” as amended, our warrant derivative liability was marked-to-market each reporting period, with a corresponding non-cash gain or loss charged to earnings (loss) in the applicable period. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1- Unadjusted quoted market prices for identical assets or liabilities in an active market; Level 2- Quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and Level 3- Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Prior to the completion of our initial public offering on August 13, 2014, the warrant liability was recorded at fair value using Level 3 inputs. Significant Level 3 inputs used to calculate the fair value of the warrant included the estimated share price on the valuation date, expected volatility, risk-free interest rate and management’s assumptions regarding the likelihood of a future repricing of these warrants pursuant to the down-round provision. After the initial public offering was completed on August 13, 2014, the warrant liability was recorded at fair value using Level 1 inputs. As of December 31, 2014 , the fair value of the GES Warrant was estimated at zero , and the warrant expired unexercised on March 2, 2015. There was no gain or loss associated with the warrant for the three or six months ended June 30, 2015 and we recorded a non-cash gain on the warrant derivative of $1.4 million during the three and six months ended June 30, 2014 . The following provides a reconciliation of financial liabilities measured at fair value on a recurring basis: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Beginning balance $ — $ 3,186 $ — $ 3,189 Gain on warrant derivative — (1,377 ) — (1,380 ) Ending balance $ — $ 1,809 $ — $ 1,809 The fair value of our long-term debt is determined by Level 3 measurements based on quoted market prices and terms for similar instruments, where available, or on the amount of future cash flows associated with the debt, discounted using the current borrowing rate for comparable debt instruments. The estimated fair value of our long-term debt totaled $63.4 million and $22.9 million as of June 30, 2015 and December 31, 2014 , respectively, compared to a carrying amount of $61.4 million and $22.5 million as of June 30, 2015 and December 31, 2014 , respectively. Fair value measurements are applied with respect to our non-financial assets and liabilities measured on a non-recurring basis, which would consist of measurements primarily of other long-lived assets. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following: (in thousands) June 30, 2015 December 31, 2014 Rig components and supplies $ 2,292 $ 2,124 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: (in thousands) June 30, 2015 December 31, 2014 Accrued salaries and other compensation $ 2,398 $ 2,710 Insurance 2,153 488 Deferred mobilization revenues 1,457 1,281 Property, sales and other taxes 1,522 1,710 Other 540 781 $ 8,070 $ 6,970 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt On May 10, 2013, we entered into a credit agreement (the “Credit Facility”) with a syndicate of financial institutions led by CIT Finance LLC that provided for a committed $60.0 million revolving credit facility and an additional uncommitted $20.0 million accordion feature that allowed for future increases in the facility. On February 21, 2014 we amended the Credit Facility in order to increase the aggregate commitments from $60.0 million to $125.0 million . The final $25.0 million of commitments under the amended Credit Facility was subject to our obtaining additional equity or indebtedness, subordinated to the Credit Facility, of at least $40.0 million (the “Junior Event”). The Credit Facility, as amended, also provided for an additional uncommitted $25.0 million accordion feature that allowed for future increases in the facility. On May 12, 2014, we amended the Credit Facility again, to expand the commitments not subject to the Junior Event from $100.0 million to $110.0 million . The amendment also adjusted the minimum EBITDA covenants contained in the Credit Facility to reflect the removal of Rig 102 from service during the pendency of its upgrade. As a result of our initial public offering, completed on August 13, 2014, the final $25.0 of our $125.0 million Credit Facility became available to us. On November 5, 2014, we amended the Credit Facility again to increase the commitments under the facility from $125.0 million to $155.0 million . In addition, the amendment provides for an additional uncommitted $25.0 million accordion feature that allows for future increases in borrowing availability. On March 4, 2015, we further amended the Credit Facility to revise the definition of Eligible Completed Drilling Rigs and to reduce the Rig Utilization Ratio covenant through January 31, 2017. On April 23, 2015, we amended the Credit Facility to provide for a springing lock-box arrangement. Borrowings under the Credit Facility are subject to a borrowing base formula that allows for borrowings of up to 85% of eligible trade accounts receivable not more than 90 days outstanding, plus up to 75% of the appraised forced liquidation value of our eligible, completed and owned drilling rigs. Beginning on November 5, 2015, the 75% advance rate on our eligible completed and owned drilling rigs decreases by 1.25% per quarter. The amended Credit Facility matures on November 5, 2018. At our election, interest under the Credit Facility is determined by reference at our option to either (i) the London Interbank Offered Rate (“LIBOR”), plus 4.5% or (ii) a “base rate” equal to the higher of the prime rate published by JP Morgan Chase Bank or three-month LIBOR plus 1% , plus in each case, 3.5% , the federal funds effective rate plus 0.05% . We also pay, on a quarterly basis, a commitment fee of 0.50% per annum on the unused portion of the Credit Facility commitment. The obligations under the Credit Facility are secured by all our assets and is unconditionally guaranteed by all of our future direct and indirect subsidiaries. The amended Credit Facility contains various financial covenants including a leverage covenant, springing fixed charge coverage ratio and rig utilization ratio. Additionally, there are restrictive covenants that limit our ability to, among other things: incur or guarantee additional indebtedness or issue disqualified capital stock; transfer or sell assets; pay dividends or distributions; redeem subordinated indebtedness; make certain types of investments or make other restricted payments; create or incur liens; consummate a merger, consolidation or sale of all or substantially all assets; and engage in business other than a business that is the same or similar to the current business and reasonably related businesses. The Credit Facility does, however, permit us to incur up to $20.0 million of additional indebtedness for the purchase of additional rigs or rig equipment. The Credit Facility provides for a springing lock-box arrangement that is only triggered upon the occurrence of an event of default under the Credit Facility or availability under the Credit Facility falls below the greater of (A) $15 million and (B) the lesser of 15% of the borrowing base or 15% of the total commitments under the facility. The Credit Facility provides that an event of default may occur if a material adverse change to the Company occurs, which is considered a subjective acceleration clause under applicable accounting rules. Under ASC 470-10-45, because of the existence of this clause, borrowings under the Credit Facility will be required to be classified as current in the event the springing lock-box event occurs, regardless of the actual maturity of the borrowings. We had $61.4 million in outstanding borrowings under the Credit Facility at June 30, 2015 . Remaining availability under the Credit Facility was $63.3 million at June 30, 2015 , based on the borrowing base formula, and we are currently in compliance with all covenants under the Credit Facility and expect to remain in compliance throughout 2015. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In March 2012, we adopted the 2012 Omnibus Long-Term Incentive Plan (the “2012 Plan”) providing for common stock-based awards to employees and to non-employee directors. The 2012 Plan was subsequently amended in August 2014. The 2012 Plan, as amended, permits the granting of various types of awards, including stock options, restricted stock and restricted stock units and up to 3,454,000 shares were authorized for issuance. Restricted stock and restricted stock units may be granted for no consideration other than prior and future services. The exercise price per share for stock options may not be less than the market price of the underlying stock on the date of grant. Stock options expire 10 years after the grant date. We have the right to satisfy option exercises from treasury shares and from authorized but unissued shares. As of June 30, 2015, approximately 799,074 shares were available for future awards. A summary of compensation cost recognized for stock-based payment arrangements is as follows: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Compensation cost recognized: Stock options $ 74 $ 420 $ 288 $ 692 Restricted stock and restricted stock units 929 262 1,869 544 Total stock-based compensation $ 1,003 $ 682 $ 2,157 $ 1,236 Approximately $0.2 million and $0.4 million in stock-based compensation was capitalized in connection with rig construction activity during the three and six months ended June 30, 2015 , respectively. Approximately $0.1 million and $0.2 million in stock-based compensation was capitalized in connection with rig construction activity during the three and six months ended June 30, 2014 , respectively. Stock Options We use the Black-Scholes option pricing model to estimate the fair value of stock options granted to employees and non-employee directors. The fair value of the options are amortized to compensation expense on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. There were no stock options granted during the six months ended June 30, 2015 or the six months ended June 30, 2014 . A summary of stock option activity and related information for the six months ended June 30, 2015 is as follows: Six Months Ended June 30, 2015 Options Weighted Average Exercise Price Outstanding at January 1, 2015 963,196 $ 12.74 Granted — — Exercised — — Forfeited/expired — — Outstanding at June 30, 2015 963,196 $ 12.74 Exercisable at June 30, 2015 801,485 $ 12.74 A summary of our unvested stock options as of June 30, 2015 , and the changes during the six months then ended is presented below: Six Months Ended June 30, 2015 Outstanding Weighted Average Grant-Date Fair Value Unvested as of January 1, 2015 360,316 $ 4.32 Granted — — Vested (198,605 ) 4.84 Forfeited/expired — — Unvested as of June 30, 2015 161,711 $ 3.70 The number of options vested at June 30, 2015 was 801,485 with a weighted average remaining contractual life of 6.8 years and a weighted-average exercise price of $12.74 per share. As of June 30, 2015 , the unrecognized compensation cost related to outstanding stock options was $0.4 million . This cost is expected to be recognized over a weighted-average period of 0.7 years. Restricted Stock Restricted stock awards consist of grants of our common stock that vest ratably over three to four years . We recognize compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of restricted stock awards is determined based on the fair market value of our shares on the grant date. As of June 30, 2015 , there was $4.7 million of total unrecognized compensation cost related to unvested restricted stock awards. This cost is expected to be recognized over a weighted-average period of 1.1 years . A summary of the status of our restricted stock awards as of June 30, 2015 , and of changes in restricted stock outstanding during the six months ended June 30, 2015 , is as follows: Six Months Ended June 30, 2015 Shares Weighted Average Grant-Date Fair Value Per Share Outstanding at January 1, 2015 605,141 $ 10.82 Granted — — Vested — — Forfeited (10,329 ) 11.00 Outstanding at June 30, 2015 594,812 $ 10.82 Restricted Stock Units We have granted restricted stock units ("RSUs") to key employees under the 2012 Plan. We have granted cliff vesting RSUs and performance-based and market-based RSUs, where each unit represents the right to receive, at the end of a vesting period, up to two shares of ICD common stock with no exercise price. Vesting of the market-based RSUs is based on our three year total shareholder return ("TSR") as measured against a three year TSR of a defined peer group and vesting of the performance-based RSUs is based on our cumulative EBITDA ("CEBITDA"), as defined in the restricted stock unit agreement, over a three year period. We used a Monte Carlo simulation model to value the TSR market-based RSUs. The fair value of the CEBITDA performance-based RSUs is based on the market price of our common stock on the date of grant. During the restriction period, the RSUs may not be transferred or encumbered, and the recipient does not receive dividend equivalents or have voting rights until the units vest. As of June 30, 2015 , there was $3.3 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted-average period of 1.1 years . A summary of the status of our RSUs as of June 30, 2015 , and of changes in RSUs outstanding during the six months ended June 30, 2015 , is as follows: Six Months Ended June 30, 2015 RSUs Weighted Outstanding at January 1, 2015 516,774 $ 12.81 Granted — — Vested and converted — — Forfeited (21,547 ) 11.90 Outstanding at June 30, 2015 495,227 $ 12.85 |
Stockholders_ Equity and Earnin
Stockholders’ Equity and Earnings (Loss) per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Stockholders' Equity and Earnings (Loss) per Share | Stockholders’ Equity and Earnings (Loss) per Share As of June 30, 2015 , we had a total of 24,445,380 shares of common stock, $0.01 par value outstanding, including 594,812 shares of restricted stock, and 85,011 shares held as treasury stock. Total authorized common stock is 100,000,000 shares. Basic earnings (loss) per common share (“EPS”) is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. A reconciliation of the numerators and denominators of the basic and diluted losses per share computations is as follows: (in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net income (loss) (numerator): $ (652 ) $ 1,556 $ 723 $ (2,149 ) Earnings (loss) per share: Basic $ (0.03 ) $ 0.13 $ 0.03 $ (0.18 ) Diluted $ (0.03 ) $ 0.13 $ 0.03 $ (0.18 ) Shares (denominator): Weighted-average number of shares outstanding - basic 23,851 12,263 24,455 12,257 Net effect of dilutive stock options, warrants and restricted stock units — 43 — — Weighted-average number of shares outstanding - diluted 23,851 12,306 24,455 12,257 For all periods presented, the computation of diluted earnings (loss) per share excludes the effect of certain outstanding stock options and warrants because their inclusion would be anti-dilutive. The number of options that were excluded from diluted earnings (loss) per share were 963,196 during each of the three months ended June 30, 2015 and 2014, and 963,196 during each of the six months ended June 30, 2015 and 2014. A warrant to purchase 2,198,000 shares of our common stock was anti-dilutive in both periods and expired unexercised on March 2, 2015. Restricted stock units, which are not participating securities and are excluded from our basic and diluted earnings (loss) per share because they are anti-dilutive, were 495,227 and zero for the three months ended June 30, 2015 and 2014, respectively, and 495,227 and zero for the six months ended June 30, 2015 and 2014, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate was (17.1)% and (9.0)% for the three and six months ended June 30, 2015 , respectively. The rate is primarily comprised of the effect of the Texas margin tax, due to our valuation allowance for federal income tax purposes being applied against any potential deferred tax asset which would have ordinarily resulted. While we do not expect to receive a benefit for the full year, the negative effective tax rate is determined by applying the guidance in ASC 740-270. We expect to owe Texas margin tax for the full year 2015. We were not subject to a valuation allowance for federal taxes in the prior year comparable quarter. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments As of June 30, 2015 , we had outstanding purchase commitments to a number of suppliers totaling $40.6 million , net of deposits previously made, related primarily to the construction of drilling rigs. Of these commitments, $13.5 million relates to equipment currently scheduled for delivery in 2016 and $13.6 million relates to equipment scheduled for delivery in 2017. Lease Commitments We lease certain equipment and vehicles under non-cancelable operating leases. The minimum rental commitments under non-cancelable operating leases, with lease terms in excess of one year subsequent to June 30, 2015 , were as follows: (in thousands) 2015 $ 375 2016 467 2017 280 2018 60 2019 50 Thereafter — $ 1,232 Contingencies Our operations inherently expose us to various liabilities and exposures that could result in third party lawsuits, claims and other causes of action. While we insure against the risk of these proceedings to the extent deemed prudent by our management, we can offer no assurance that the type or value of this insurance will meet the liabilities that may arise from any pending or future legal proceedings related to our business activities. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties During 2011, we entered into an asset contribution and share subscription agreement that involved our acquiring certain assets and liabilities from GES and Independence Contract Drilling LLC. One of our directors, was a director of the ultimate parent company of GES as of June 30, 2015 , and one of our directors was a director of the ultimate parent company of GES through May 31, 2015, upon which date he resigned. The director who continues to serve as a director of the ultimate parent company of GES is also the director of a fund that owned approximately 36% of the ultimate parent company of GES as of June 30, 2015 . We purchased certain items used in the construction of our drilling rigs from a former affiliate of GES. This vendor was sold by GES to a third-party during the second quarter of 2015. Total purchases from this vendor amounted to $1.2 million and $0.6 million during the six months ended June 30, 2015 and June 30, 2014 , respectively. We had outstanding payables with this vendor totaling $0.2 million and $0.5 million as of June 30, 2015 and December 31, 2014 , respectively. The son of an executive officer and director of the Company has worked in a sales capacity at two vendors from which we purchase oilfield equipment and related supplies and currently is a minority owner of one of these vendors. Total purchases from one of the vendors amounted to $0.6 million and $0.5 million during the six months ended June 30, 2015 and June 30, 2014 , respectively. We had outstanding payables with this vendor totaling $0.1 million and $0.6 million as of June 30, 2015 and December 31, 2014 , respectively. During the six months ended June 30, 2015 and June 30, 2014 , we did not make any purchases from the second vendor, in which the related party owns a minority interest, and we did not have any outstanding payables with them. We did have a purchase commitment for $.03 million outstanding as of June 30, 2015 with this vendor. We did not do any business with this vendor during the six months ended June 30, 2014 . |
Interim Financial Information (
Interim Financial Information (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Segment and Geographical Information | Segment and Geographical Information Our operations consist of one reportable segment because all of our drilling operations are located in the United States and have similar economic characteristics. Corporate management administers all properties as a whole rather than as discrete operating segments. Operational data is tracked by rig; however, financial performance is measured as a single enterprise and not on a rig-by-rig basis. Further, the allocation of capital resources is employed on a project-by-project basis across our entire asset base to maximize profitability without regard to individual geographic areas. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update to provide guidance on the recognition of revenue from customers. Under this guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. This guidance also requires more detailed disclosures to enable users of the financial statements to understand the nature, amount, timing and uncertainty, if any, of revenue and cash flows arising from contracts with customers. This guidance is effective for interim and annual periods beginning after December 15, 2017. We are currently evaluating the impact this guidance will have on our financial statements. In June 2014, the FASB issued an accounting standards update to provide guidance on the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. This guidance is effective for interim and annual periods beginning after December 15, 2015. We are currently evaluating the impact this guidance will have on our financial statements. In August 2014, the FASB issued guidance requiring management to perform interim and annual assessments of an entity’s ability to continue as a going-concern within one year of the date the financial statements are issued. The standard also provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. An entity must provide certain disclosures if there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going-concern. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The new guidance applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We are currently evaluating the impact this will have on our financial statements. In April 2015, the FASB issued an accounting standards update intended to simplify the presentation of debt issuance costs. This new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. This guidance is effective for public companies for fiscal years beginning after December 15, 2015. We believe the guidance will affect the presentation of deferred issuance costs in the balance sheet but will not have any impact on the Company’s results of operations or financial position. In April 2015, the FASB issued an accounting standards update intended to provide guidance about whether a cloud computing arrangement includes a software license and the related accounting treatment. The pronouncement is effective for annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact this guidance will have on our financial statements. In July 2015, the FASB issued an accounting standards update requiring an entity to measure inventory at the lower of cost or net realizable value versus lower of cost or market. Previously, market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendment does not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendment applies to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. Management should measure in scope inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. This guidance is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. Adoption of this pronouncement is not expected to have a material impact upon our consolidated financial statements or notes thereto. |
Financial Instruments and Fai20
Financial Instruments and Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Reconciliation of Financial Liabilities | The following provides a reconciliation of financial liabilities measured at fair value on a recurring basis: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Beginning balance $ — $ 3,186 $ — $ 3,189 Gain on warrant derivative — (1,377 ) — (1,380 ) Ending balance $ — $ 1,809 $ — $ 1,809 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: (in thousands) June 30, 2015 December 31, 2014 Rig components and supplies $ 2,292 $ 2,124 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: (in thousands) June 30, 2015 December 31, 2014 Accrued salaries and other compensation $ 2,398 $ 2,710 Insurance 2,153 488 Deferred mobilization revenues 1,457 1,281 Property, sales and other taxes 1,522 1,710 Other 540 781 $ 8,070 $ 6,970 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Long-term Line of Credit | $ 61,361 | $ 0 |
Summary of Compensation Cost | A summary of compensation cost recognized for stock-based payment arrangements is as follows: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Compensation cost recognized: Stock options $ 74 $ 420 $ 288 $ 692 Restricted stock and restricted stock units 929 262 1,869 544 Total stock-based compensation $ 1,003 $ 682 $ 2,157 $ 1,236 | |
Summary of Stock Option Activity and Related Information | A summary of stock option activity and related information for the six months ended June 30, 2015 is as follows: Six Months Ended June 30, 2015 Options Weighted Average Exercise Price Outstanding at January 1, 2015 963,196 $ 12.74 Granted — — Exercised — — Forfeited/expired — — Outstanding at June 30, 2015 963,196 $ 12.74 Exercisable at June 30, 2015 801,485 $ 12.74 | |
Unvested Stock Option Activity | A summary of our unvested stock options as of June 30, 2015 , and the changes during the six months then ended is presented below: Six Months Ended June 30, 2015 Outstanding Weighted Average Grant-Date Fair Value Unvested as of January 1, 2015 360,316 $ 4.32 Granted — — Vested (198,605 ) 4.84 Forfeited/expired — — Unvested as of June 30, 2015 161,711 $ 3.70 | |
Schedule of Restricted Stock Activity | A summary of the status of our restricted stock awards as of June 30, 2015 , and of changes in restricted stock outstanding during the six months ended June 30, 2015 , is as follows: Six Months Ended June 30, 2015 Shares Weighted Average Grant-Date Fair Value Per Share Outstanding at January 1, 2015 605,141 $ 10.82 Granted — — Vested — — Forfeited (10,329 ) 11.00 Outstanding at June 30, 2015 594,812 $ 10.82 A summary of the status of our RSUs as of June 30, 2015 , and of changes in RSUs outstanding during the six months ended June 30, 2015 , is as follows: Six Months Ended June 30, 2015 RSUs Weighted Outstanding at January 1, 2015 516,774 $ 12.81 Granted — — Vested and converted — — Forfeited (21,547 ) 11.90 Outstanding at June 30, 2015 495,227 $ 12.85 |
Stockholders_ Equity and Earn24
Stockholders’ Equity and Earnings (Loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators of Basic and Diluted Losses Per Share | A reconciliation of the numerators and denominators of the basic and diluted losses per share computations is as follows: (in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net income (loss) (numerator): $ (652 ) $ 1,556 $ 723 $ (2,149 ) Earnings (loss) per share: Basic $ (0.03 ) $ 0.13 $ 0.03 $ (0.18 ) Diluted $ (0.03 ) $ 0.13 $ 0.03 $ (0.18 ) Shares (denominator): Weighted-average number of shares outstanding - basic 23,851 12,263 24,455 12,257 Net effect of dilutive stock options, warrants and restricted stock units — 43 — — Weighted-average number of shares outstanding - diluted 23,851 12,306 24,455 12,257 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Rental Commitments Under Non-Cancelable Operating Leases | The minimum rental commitments under non-cancelable operating leases, with lease terms in excess of one year subsequent to June 30, 2015 , were as follows: (in thousands) 2015 $ 375 2016 467 2017 280 2018 60 2019 50 Thereafter — $ 1,232 |
Nature of Operations (Narrative
Nature of Operations (Narrative) (Details) $ / shares in Units, $ in Millions | Jul. 31, 2015$ / bbl | Aug. 29, 2014USD ($)shares | Jul. 14, 2014 | Jan. 31, 2015$ / bbl | Mar. 31, 2015USD ($)drilling_rig | Dec. 31, 2014USD ($)shares | Sep. 30, 2014USD ($)$ / bbl | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2014shares | Jun. 30, 2015drilling_rigshares | Aug. 13, 2014shares | Aug. 07, 2014$ / sharesshares |
Property, Plant and Equipment [Line Items] | |||||||||||||
Average production costs per barrel of oil equivalents (BOE) | $ / bbl | 44.08 | 106.06 | |||||||||||
Drilling rigs, utilization | 99.70% | ||||||||||||
Number of idle rigs | 1 | ||||||||||||
Cost of rig repairs | $ | $ 1 | $ 2 | $ 2.9 | ||||||||||
Impairment of non-damaged items | $ | 1.8 | ||||||||||||
Insurance proceeds related to damaged rig | $ | $ 2.9 | 1.6 | $ 2.3 | 2.3 | |||||||||
Out of pocket expense, rig repair | $ | $ 0.6 | $ 0.3 | |||||||||||
Additional proceeds from insurance settlements, gross | $ | $ 1.3 | ||||||||||||
Stock split conversion ratio | 1.57 | ||||||||||||
Shares issued | shares | 24,540,720 | 24,540,720 | 24,530,391 | ||||||||||
Proceeds from issuance initial public offering | $ | $ 116.5 | ||||||||||||
IPO | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Shares issued | shares | 10,000,000 | 11,500,000 | |||||||||||
Share price (in usd per share) | $ / shares | $ 11 | ||||||||||||
Underwriting discounts and commissions expense | $ | 7.6 | ||||||||||||
Expenses directly associated with the offering | $ | $ 2.4 | ||||||||||||
Over-allotment option | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Shares issued | shares | 1,500,000 | 1,500,000 | |||||||||||
Operating rig | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Number of rigs | 14 | ||||||||||||
Non-walking rig | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Number of rigs | 2 | ||||||||||||
Number of rIgs to be upgraded | 1 | ||||||||||||
Number of idle rigs | 2 | ||||||||||||
Completed rig | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Number of rigs completed | 2 | ||||||||||||
Under repair rig | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Impairment charge | $ | $ 4.7 | ||||||||||||
Multi-directional walking system | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Number of rigs | 12 | ||||||||||||
Number of idle rigs | 2 | ||||||||||||
Construction in progress rig | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Number of rigs | 1 | ||||||||||||
Subsequent Event | |||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||
Average production costs per barrel of oil equivalents (BOE) | $ / bbl | 47.11 |
Interim Financial Information27
Interim Financial Information (Details) | 6 Months Ended |
Jun. 30, 2015segment | |
Accounting Policies [Abstract] | |
Reportable segments | 1 |
Revision of Prior Year Financ28
Revision of Prior Year Financial Statements (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Long-term debt | $ 61,361,000 | $ 0 |
Current portion of long-term debt | 0 | 22,519,000 |
Total current liabilities | $ 16,271,000 | 51,890,000 |
Previously reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Long-term debt | 22,500,000 | |
Current portion of long-term debt | 0 | |
Total current liabilities | $ 29,400,000 |
Financial Instruments and Fai29
Financial Instruments and Fair Value (Reconciliation of Financial Liabilities) (Details) - Derivative warrant - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Level 1 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 0 | $ 0 | ||
Gain on warrant derivative | 0 | $ (1,377,000) | 0 | $ (1,400,000) |
Ending balance | $ 0 | 0 | ||
Level 3 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 3,186,000 | $ 0 | 3,189,000 | |
Gain on warrant derivative | (1,380,000) | |||
Ending balance | $ 1,809,000 | $ 1,809,000 |
Financial Instruments and Fai30
Financial Instruments and Fair Value (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Aug. 29, 2014 | Aug. 28, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Gain on warrant derivative | $ 0 | $ 1,377,000 | $ 0 | $ 1,380,000 | ||||||
Long-term debt, fair value | 63,400,000 | 63,400,000 | $ 22,900,000 | |||||||
Long-term Line of Credit | 61,361,000 | 61,361,000 | 0 | |||||||
Current portion of long-term debt | $ 0 | $ 0 | 22,519,000 | |||||||
GES warrant | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Number of shares under warrant | 2.2 | 2.2 | ||||||||
Exercise price GES Warrant (in usd per share) | $ 11.37 | $ 12.74 | ||||||||
Gain on warrant derivative | $ 0 | $ 0 | ||||||||
Derivative warrant | Level 1 | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Fair value GES Warrant | 0 | 0 | $ 0 | 0 | ||||||
Gain on warrant derivative | 0 | 1,377,000 | 0 | 1,400,000 | ||||||
Derivative warrant | Level 3 | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Fair value GES Warrant | $ 1,809,000 | 1,809,000 | 0 | $ 3,186,000 | $ 3,189,000 | |||||
Gain on warrant derivative | $ 1,380,000 | |||||||||
Line of credit | Revolving credit facility | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Long-term Line of Credit | $ 61,400,000 | $ 61,400,000 | ||||||||
Current portion of long-term debt | $ 22,519,000 |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Rig components and supplies | $ 2,292 | $ 2,124 |
Accrued Liabilities (Accrued Li
Accrued Liabilities (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued salaries and other compensation | $ 2,398 | $ 2,710 |
Insurance | 2,153 | 488 |
Deferred mobilization revenues | 1,457 | 1,281 |
Property, sales and other taxes | 1,522 | 1,710 |
Other | 540 | 781 |
Accrued liabilities | $ 8,070 | $ 6,970 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | 6 Months Ended | |||||||
Jun. 30, 2015 | Nov. 05, 2015 | Dec. 31, 2014 | Nov. 05, 2014 | Aug. 13, 2014 | May. 12, 2014 | Feb. 21, 2014 | May. 10, 2013 | |
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 61,361,000 | $ 0 | ||||||
Revolving credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing limit based on eligible trade accounts | 85.00% | |||||||
Eligible trade accounts receivable days outstanding limit | 90 days | |||||||
Borrowing limit based on appraised forced liquidation of eligible completed and owned drilling rigs | 75.00% | |||||||
Commitment fee on unused capacity (as a percentage) | 0.50% | |||||||
Revolving credit facility | Line of credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate, basis spread based on availability | 3.50% | |||||||
Line of credit facility, higher borrowing capacity option | $ 20,000,000 | |||||||
Line of credit facility, springing lock box arrangement, threshold | $ 15,000,000 | |||||||
Line of credit facility, springing lock box arrangement, threshold, percentage of borrowing base | 15.00% | |||||||
LIne of credit facility, springing lock box arrangement, threshold, percentage of total commitments | 15.00% | |||||||
Long-term debt | $ 61,400,000 | |||||||
Remaining availability | $ 63,300,000 | |||||||
Revolving credit facility | Line of credit | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate, basis spread | 4.50% | |||||||
Revolving credit facility | Line of credit | Three-month LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate, basis spread | 1.00% | |||||||
Revolving credit facility | Line of credit | Federal funds, effective rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate, basis spread | 0.05% | |||||||
Revolving credit facility | Line of credit | CIT Finance, LLC syndicate | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility, maximum borrowing capacity | $ 155,000,000 | $ 125,000,000 | $ 125,000,000 | $ 60,000,000 | ||||
Maximum borrowing capacity not subject to restrictions | $ 110,000,000 | 100,000,000 | ||||||
Revolving credit facility | Line of credit | CIT Finance, LLC syndicate | Accordion feature | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility, maximum borrowing capacity | $ 25,000,000 | |||||||
Debt instrument, face amount | 25,000,000 | $ 20,000,000 | ||||||
Revolving credit facility | Junior subordinated debt | CIT Finance, LLC syndicate | ||||||||
Debt Instrument [Line Items] | ||||||||
Contingent commitments | $ 25,000,000 | 25,000,000 | ||||||
Junior event | $ 40,000,000 | |||||||
Scenario, forecast | Revolving credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing limit based on appraised forced liquidation of eligible completed and owned drilling rigs | 75.00% | |||||||
Decrease borrowing limit | 1.25% |
Stock-Based Compensation (Compe
Stock-Based Compensation (Compensation Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 1,003 | $ 682 | $ 2,157 | $ 1,236 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 74 | 420 | 288 | 692 |
Restricted stock and restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 929 | $ 262 | $ 1,869 | $ 544 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) - Jun. 30, 2015 - $ / shares | Total |
Options | |
Options, beginning balance | 963,196 |
Options, granted | 0 |
Options, exercised | 0 |
Options, forfeited/expired | 0 |
Options, ending balance | 963,196 |
Options, exercisable | 801,485 |
Weighted Average Exercise Price | |
Weighted average exercise price, beginning balance | $ 12.74 |
Weighted average exercise price, granted | 0 |
Weighted average exercise price, exercised | 0 |
Weighted average exercise price, forfeited/expired | 0 |
Weighted average exercise price, ending balance | 12.74 |
Weighted-average exercise price, exercisable | $ 12.74 |
Stock-Based Compensation (Unves
Stock-Based Compensation (Unvested Stock Option Activity) (Details) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Outstanding | |
Options, beginning balance | 360,316 |
Options, granted | 0 |
Options, vested | (198,605) |
Options, forfeited/expired | 0 |
Options, ending balance | 161,711 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant date fair value, beginning balance | $ 4.32 |
Weighted average grant date fair value, Granted | 0 |
Weighted average grant date fair value, vested | 4.84 |
Weighted average grant date fair value, forfeited/expired | 0 |
Weighted average grant date fair value, ending balance | $ 3.70 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Activity) (Details) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Shares | |
Number, beginning balance | 516,774 |
Number, granted | 0 |
Number, vested | 0 |
Number, forfeited | (21,547) |
Number, ending balance | 495,227 |
Weighted Average Grant-Date Fair Value Per Share | |
Weighted average grant date fair value per share, beginning balance | $ 12.81 |
Weighted average grant date fair value per share, granted | 0 |
Weighted average grant date fair value per share, vested | 0 |
Weighted average grant date fair value per share, forfeited | 11.90 |
Weighted average grant date fair value per share, ending balance | $ 12.85 |
Restricted stock and restricted stock units | |
Shares | |
Number, beginning balance | 605,141 |
Number, granted | 0 |
Number, vested | 0 |
Number, forfeited | (10,329) |
Number, ending balance | 594,812 |
Weighted Average Grant-Date Fair Value Per Share | |
Weighted average grant date fair value per share, beginning balance | $ 10.82 |
Weighted average grant date fair value per share, granted | 0 |
Weighted average grant date fair value per share, vested | 0 |
Weighted average grant date fair value per share, forfeited | 11 |
Weighted average grant date fair value per share, ending balance | $ 10.82 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options, granted | 0 | |||
Employee service share-based compensation, allocation of recognized period costs, capitalized amount | $ 200 | $ 100 | $ 423 | $ 214 |
Weighted average grant date fair value, Granted | $ 0 | |||
Options, exercisable | 801,485 | 801,485 | ||
Remaining contractual life | 6 years 9 months | |||
Weighted-average exercise price | $ 12.74 | $ 12.74 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 400 | $ 400 | ||
Weighted average recognition period | 8 months 18 days | |||
Restricted stock and restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | 4,700 | $ 4,700 | ||
Weighted average recognition period | 1 year 1 month | |||
Restricted stock and restricted stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Restricted stock and restricted stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Restricted stock units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 3,300 | $ 3,300 | ||
Weighted average recognition period | 1 year 1 month | |||
Vesting period | 3 years | |||
2012 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 3,454,000 | 3,454,000 | ||
Number of shares available for future awards | 799,074 | 799,074 | ||
Options, granted | 0 | 0 | ||
2012 Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option expiration period | 10 years |
Stockholders_ Equity and Earn39
Stockholders’ Equity and Earnings (Loss) per Share (Basic and Diluted Computation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator [Abstract] | ||||
Net income | $ (652) | $ 1,556 | $ 723 | $ (2,149) |
Basic | $ (0.03) | $ 0.13 | $ 0.03 | $ (0.18) |
Diluted | $ (0.03) | $ 0.13 | $ 0.03 | $ (0.18) |
Denominator [Abstract] | ||||
Weighted-average number of shares outstanding - basic | 23,851 | 12,263 | 24,455 | 12,257 |
Net effect of dilutive stock options, warrants and restricted stock units | 0 | 43 | 0 | 0 |
Weighted-average number of shares outstanding - diluted | 23,851 | 12,306 | 24,455 | 12,257 |
Stockholders_ Equity and Earn40
Stockholders’ Equity and Earnings (Loss) per Share (Narrative) (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Common stock, par value per share | $ 0.01 | $ 0.01 | $ 0.01 | ||
Number of shares of restricted stock | 495,227 | 495,227 | 516,774 | ||
Treasury stock, number of shares held | 85,011 | 85,011 | |||
Shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||
Equity Option | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities | 963,196 | 963,196 | 963,196 | 963,196 | |
Restricted stock and restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities | 495,227 | 0 | 495,227 | 0 | |
Warrant | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities | 2,198,000 | ||||
Common Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Shares, outstanding | 24,445,380 | 24,445,380 | 24,455,709 | ||
Restricted stock and restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of shares of restricted stock | 594,812 | 594,812 | 605,141 |
Income Taxes (Details)
Income Taxes (Details) - Jun. 30, 2015 | Total | Total |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (17.10%) | (9.00%) |
Commitments and Contingencies42
Commitments and Contingencies (Narrative) (Details) - Jun. 30, 2015 - USD ($) $ in Thousands | Total |
Long-term Purchase Commitment [Line Items] | |
Outstanding purchase commitments | $ 40,600 |
2,015 | 375 |
2,016 | 467 |
2,017 | 280 |
2,018 | 60 |
2,019 | 50 |
Thereafter | 0 |
Total future lease payments | 1,232 |
Equipment, Scheduled for Delivery, Year One | |
Long-term Purchase Commitment [Line Items] | |
Outstanding purchase commitments | 13,500 |
Equipment, Scheduled for Delivery, Year Two | |
Long-term Purchase Commitment [Line Items] | |
Outstanding purchase commitments | $ 13,600 |
Related Parties (Narrative) (De
Related Parties (Narrative) (Details) | 6 Months Ended | |
Jun. 30, 2015USD ($)vendorDirector | Jun. 30, 2014USD ($) | |
Related Party Transaction [Line Items] | ||
Outstanding purchase commitments | $ 40,600,000 | |
Affiliated entity | ||
Related Party Transaction [Line Items] | ||
Purchases | 1,200,000 | $ 600,000 |
Outstanding payables | $ 200,000 | 500,000 |
Number of vendors | vendor | 2 | |
Global Energy Services Operating, LLC | Affiliated entity | ||
Related Party Transaction [Line Items] | ||
Number of directors | Director | 1 | |
Ownership percentage | 36.00% | |
Immediate Family Member of Management or Principal Owner | ||
Related Party Transaction [Line Items] | ||
Number of Entities, immediate Family Member, Minority Owner | 1 | |
Vendor One | Purchases of Oilfield Equipment and Related Supplies [Member] | Affiliated entity | ||
Related Party Transaction [Line Items] | ||
Purchases | $ 600,000 | 500,000 |
Outstanding payables | 100,000 | 600,000 |
Vendor Two | Purchases of Oilfield Equipment and Related Supplies [Member] | Affiliated entity | ||
Related Party Transaction [Line Items] | ||
Purchases | 0 | 0 |
Outstanding payables | 0 | $ 0 |
Vendor Two | Vendor Two | Affiliated entity | ||
Related Party Transaction [Line Items] | ||
Outstanding purchase commitments | $ 30,000 |
Uncategorized Items - icd-20150
Label | Element | Value |
Retained Earnings [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ (652) |