Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 12, 2016 | Jun. 30, 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 | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 24,403,659 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 145,926,499 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 5,344 | $ 10,757 |
Accounts receivable, net | 18,240 | 19,127 |
Inventory | 2,317 | 2,124 |
Deferred income taxes | 0 | 323 |
Prepaid expenses and other current assets | 3,436 | 3,969 |
Total current assets | 29,337 | 36,300 |
Property, plant and equipment, net | 283,378 | 250,498 |
Other long-term assets, net | 2,074 | 2,749 |
Total assets | 314,789 | 289,547 |
Liabilities | ||
Current portion of long-term debt | 0 | 22,519 |
Accounts payable | 8,584 | 21,993 |
Accrued liabilities | 10,206 | 6,970 |
Income taxes payable | 0 | 408 |
Total current liabilities | 18,790 | 51,890 |
Long-term debt | 62,708 | 0 |
Other long-term liabilities | 361 | 598 |
Deferred income taxes | 193 | 323 |
Total liabilities | $ 82,052 | $ 52,811 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common stock, $0.01 par value, 100,000,000 shares authorized; 24,539,937 and 24,540,720 shares issued, respectively; 24,403,659 and 24,455,709 shares outstanding, respectively | $ 244 | $ 245 |
Additional paid-in capital | 276,948 | 272,751 |
Accumulated deficit | (43,169) | (35,289) |
Treasury stock, at cost, 136,278 and 85,011 shares, respectively | (1,286) | (971) |
Total stockholders’ equity | 232,737 | 236,736 |
Total liabilities and stockholders’ equity | $ 314,789 | $ 289,547 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,539,937 | 24,540,720 |
Common stock, shares outstanding | 24,403,659 | 24,455,709 |
Treasury stock, shares | 136,278 | 85,011 |
Statements of Operations
Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Revenues | $ 88,418 | $ 70,347 | $ 42,786 |
Costs and expenses | |||
Operating costs | 52,087 | 42,654 | 28,401 |
Selling, general and administrative | 14,483 | 12,222 | 8,911 |
Depreciation and amortization | 21,151 | 16,181 | 10,186 |
Goodwill impairment and other charges | 0 | 30,627 | 0 |
Asset impairments, net of insurance recoveries | 2,708 | 1,711 | 0 |
Loss (gain) on disposition of assets | 2,940 | 19 | (55) |
Total cost and expenses | 93,369 | 103,414 | 47,443 |
Operating loss | (4,951) | (33,067) | (4,657) |
Interest expense | (3,254) | (1,648) | (257) |
Gain on warrant derivative | 0 | 3,189 | 1,035 |
Loss before income taxes | (8,205) | (31,526) | (3,879) |
Income tax benefit | (325) | (3,358) | (1,882) |
Net loss | $ (7,880) | $ (28,168) | $ (1,997) |
Loss per share: | |||
Basic and Diluted (in dollars per share) | $ (0.33) | $ (1.65) | $ (0.16) |
Weighted average number of common shares outstanding: | |||
Basic and Diluted (in shares) | 23,904 | 17,078 | 12,179 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2012 | 12,309,194 | ||||
Beginning balance at Dec. 31, 2012 | $ 144,700 | $ 123 | $ 150,447 | $ (5,124) | $ (746) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Restricted stock issued (in shares) | 88,706 | ||||
Restricted stock issued | $ 1 | (1) | |||
Stock-based compensation | 2,169 | 2,169 | |||
Net loss | (1,997) | (1,997) | |||
Ending balance (in shares) at Dec. 31, 2013 | 12,397,900 | ||||
Ending balance at Dec. 31, 2013 | 144,872 | $ 124 | 152,615 | (7,121) | (746) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Restricted stock issued (in shares) | 576,096 | ||||
Restricted stock issued | $ 6 | (6) | |||
Public offering, net of offering costs of $10,042 (in shares) | 11,500,000 | ||||
Public offering, net of offering costs of $10,042 | 116,458 | $ 115 | 116,343 | ||
Purchase of treasury stock (in shares) | (18,287) | ||||
Purchase of treasury stock | (225) | (225) | |||
Stock-based compensation | 3,799 | 3,799 | |||
Net loss | (28,168) | (28,168) | |||
Ending balance (in shares) at Dec. 31, 2014 | 24,455,709 | ||||
Ending balance at Dec. 31, 2014 | 236,736 | $ 245 | 272,751 | (35,289) | (971) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Restricted stock forfeited (in shares) | (14,419) | ||||
Restricted stock forfeited | 0 | $ 0 | 0 | ||
Restricted stock units vested (in shares) | 13,636 | ||||
Purchase of treasury stock (in shares) | (51,267) | ||||
Purchase of treasury stock | (315) | $ (1) | 1 | (315) | |
Stock-based compensation | 4,196 | 4,196 | |||
Net loss | (7,880) | (7,880) | |||
Ending balance (in shares) at Dec. 31, 2015 | 24,403,659 | ||||
Ending balance at Dec. 31, 2015 | $ 232,737 | $ 244 | $ 276,948 | $ (43,169) | $ (1,286) |
Statements of Changes in Stock6
Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Initial public offering, offering costs | $ 10,042 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net loss | $ (7,880) | $ (28,168) | $ (1,997) |
Adjustments to reconcile net loss to net cash provided by operating activities | |||
Depreciation and amortization | 21,151 | 16,181 | 10,186 |
Goodwill impairment and other charges | 0 | 30,627 | 0 |
Asset impairments, net of insurance recoveries | 2,708 | 1,711 | 0 |
Stock-based compensation | 3,542 | 3,143 | 1,751 |
Gain on warrant derivative | 0 | (3,189) | (1,035) |
Loss (gain) on disposition of assets | 2,940 | 19 | (55) |
Deferred income taxes | 193 | (3,742) | (2,043) |
Amortization of deferred financing costs | 629 | 668 | 251 |
Write-off of deferred financing costs | 394 | 0 | 0 |
Bad debt expense | 132 | 123 | 93 |
Changes in assets and liabilities | |||
Accounts receivable | 755 | (10,161) | (3,802) |
Inventory | (263) | (1,356) | (240) |
Vendor advances | 0 | 0 | (3,977) |
Prepaid expenses and other assets | (853) | (1,313) | (856) |
Accounts payable and accrued liabilities | 4,339 | (985) | 6,978 |
Income taxes payable | (408) | 251 | 157 |
Related party receivable | 0 | 0 | 586 |
Net cash provided by operating activities | 27,379 | 3,809 | 5,997 |
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (75,532) | (115,388) | (59,689) |
Proceeds from insurance claims | 2,899 | 2,038 | 0 |
Proceeds from the sale of assets | 414 | 664 | 416 |
Net cash used in investing activities | (72,219) | (112,686) | (59,273) |
Cash flows from financing activities | |||
Borrowings under credit facility | 140,610 | 137,681 | 36,986 |
Repayments under credit facility | (100,421) | (134,942) | (17,206) |
Initial public offering proceeds, net of offering costs of $10,042 | 0 | 116,458 | 0 |
Financing costs paid | (447) | (2,068) | (1,181) |
Purchase of treasury stock | (315) | (225) | 0 |
Net cash provided by financing activities | 39,427 | 116,904 | 18,599 |
Net (decrease) increase in cash and cash equivalents | (5,413) | 8,027 | (34,677) |
Cash and cash equivalents | |||
Beginning of year | 10,757 | 2,730 | 37,407 |
End of year | $ 5,344 | $ 10,757 | $ 2,730 |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Statement of Cash Flows [Abstract] | |
Initial public offering, offering costs | $ 10,042 |
Nature of Operations and Recent
Nature of Operations and Recent Developments | 12 Months Ended |
Dec. 31, 2015 | |
Nature of operations [Abstract] | |
Nature of Operations and Recent Developments | Nature of Operations and Recent Developments Except as expressly stated or the context otherwise requires, the terms "we," "us," "our," "ICD," and the "Company" refer to Independence Contract Drilling, Inc. 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 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. We are focused on creating stockholder and customer value through our commitment to operational excellence and our focus on safety. Our standardized fleet currently consists of fourteen premium ShaleDriller® rigs. Of these fourteen rigs, twelve are 200 Series rigs equipped with our integrated omni-directional walking system that is specifically designed to optimize pad drilling for our customers. We also are substantially complete with the conversion of one of our non-walking rigs to 200 Series status, which we expect will be available for operations at the end of the first quarter of 2016. We also have the option to upgrade our remaining non-walking rig to 200 Series status when market conditions improve. Every ShaleDriller® rig in our fleet is a 1500-hp, AC programmable rig (“AC rig”) designed to be fast-moving between drilling sites and is equipped with top drives, automated tubular handling systems and blowout preventer (“BOP”) handling systems. Twelve of our fourteen rigs are equipped with bi-fuel capabilities (they operate on either diesel or a natural gas-diesel blend). Our first rig began drilling in May 2012. We currently focus our operations on unconventional resource plays located in geographic regions that we can efficiently support from our Houston, Texas facilities in order to maximize economies of scale. Currently, our rigs are predominantly operating in the Permian Basin, and we have one rig operating in the Eaglebine region, however, our rigs have previously operated in the Mid-Continent region and Eagle Ford Shale, as well. 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 historically, 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. Recent Declines in Oil and Gas Prices and Drilling Activity Oil prices began to decline in the second half of 2014, declined further during 2015 and have continued to decline in 2016. The closing price of oil was as high as $106.06 per barrel during the third quarter of 2014, was $37.13 per barrel on December 31, 2015 and has fallen as low as $26.68 during January 2016 (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 an exceptional downturn, and 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 2016 will be an exceptionally challenging year for ICD and our industry. We believe the vast majority of E&P companies, including our customers, have significantly reduced their 2016 capital spending plans compared to 2015 levels. The initial impact of these spending reductions is evidenced by the published rig counts which have declined more than 60% since their peak in October 2014, and we believe the rig count in the United States may decline further in 2016 until oil and gas prices begin to stabilize and improve. As a result of this deterioration in market conditions, our customers are principally focused on their most economic wells, drilling to maintain leasehold positions and on maintaining their most cost efficient operations that deliver the overall lowest cost of producing their wells and minimize their capital expenditures. As a result, operators are focusing more of their capital spending on horizontal drilling programs compared to vertical drilling. They also 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 utilizing “pad optimal” rig technology. 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 have been 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 2015, our premium drilling fleet operated at 85% utilization, but we do not expect to maintain this level of utilization while this current market downturn continues. As of December 31, 2015, eleven of our twelve 200 series rigs were generating revenue. Since December 31, 2015, • One of our rigs operating on a farm out basis ceased operations under its contract. Although this arrangement allows us to recognize revenues and full margins for the duration of the contract, we do not expect this rig to recommence drilling operations in the near term. • Two of our customers have informed us that they intend to place our rigs operating for them under term contracts on a standby-without-crew basis until market conditions improve. Although these arrangements allow us to continue to recognize revenue and earn expected margins for the durations of these contracts, we do not expect these two rigs to recommence drilling operations in the near term. • One of our rigs operating under a term contract that expired during the first quarter of 2016 has become idle. We continue to market this rig, however, given current market conditions, we cannot accurately predict when this rig will return to work or that it can operate at profitable levels until market conditions improve. In addition, two of our rigs operating at December 31, 2015 were operating under short-term contracts expiring in March 2016, and we also have several rigs operating under term contracts with terms scheduled to expire during 2016. We expect to market our rigs rolling off contracts in 2016 at substantially lower dayrates than where they historically have operated, and there can be no assurance that these rigs will be contracted or remain operating at profitable levels. Disposal of Drilling Equipment due to Rig Conversion and Impairment of our last Remaining Non-Walking Rig During the third quarter of 2015, we began to convert one of our non-walking rigs to pad optimal status, equipped with our 200 Series substructure, omni-directional walking system and 7500psi mud system. As part of this rig conversion, key components of the prior rig were decommissioned and will be replaced, including the rig's substructure and various mud system components which are no longer compatible with the converted rig. As a result, we recorded a preliminary estimate of the related disposal loss totaling $2.5 million in "Loss (gain) on disposition of assets." During the fourth quarter we impaired the substructure, mast and various other rig components of our last remaining non-walking rig due to its limited marketability in its current configuration given market conditions. We have the ability to upgrade this rig when market conditions improve. Amendment of Revolving Credit Facility In light of declining market conditions, we amended the Credit Facility on October 20, 2015, to relax certain of our financial covenants in 2016 and 2017. As amended, the Credit Facility requires us to maintain a leverage ratio of net debt to adjusted EBITDA, not to exceed the following in the respective time periods: 1Q’16: 3.75 x; 2Q’16: 4.0 x; 3Q’16: 4.25 x; 4Q’16: 4.5 x; 1Q’17: 4.0 x; thereafter: 3.0 x. The amendment also reduced the minimum rig utilization covenant to 60% in 2016 and 70% in 2017, and provided for the exclusion of certain capital expenditures from consideration in our fixed charge coverage ratio covenant. As of December 31, 2015 the leverage ratio covenant was 3.75 x. For additional information regarding our revolving credit facility, please see “Note 7 - Long-Term Debt.” 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 Over-Allotment Option. 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. 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. Damage Sustained on Rig 102 In March 2014, one of our non-walking drilling rigs suspended drilling operations due to damage to the rig’s mast and other operating equipment. The cost to repair and replace this equipment was covered by insurance, subject to a deductible. While under repair, we upgraded this rig by adding a substructure and other equipment that included an omni-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. As a result, in 2014, we recorded an asset impairment charge of $4.7 million , representing a preliminary estimate of the damage sustained to the rig ( $2.9 million ), as well as the impairment of certain items that were discarded as a result of the upgrade ( $1.8 million ). Additionally, we recorded $3.9 million in expected insurance proceeds for which we had received a partial proof of loss from the insurance company. As of December 31, 2014, $2.3 million of insurance proceeds had been collected. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation These audited 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”). As we had no items of other comprehensive income in any period presented, no other comprehensive income or comprehensive income is presented. Cash and Cash Equivalents We consider short-term, highly liquid investments that have an original maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable is comprised primarily of amounts due from our customers for contract drilling services. Accounts receivable are reduced to reflect estimated realizable values by an allowance for doubtful accounts based on historical collection experience and specific review of current individual accounts. Receivables are written off when they are deemed to be uncollectible. The allowance for doubtful accounts totaled $8 thousand and $0.1 million as of December 31, 2015 and 2014 , respectively. Inventory Inventory is stated at lower of cost or market and consists primarily of replacement parts and supplies held for use in our drilling operations. Cost is determined on an average cost basis. Property, Plant and Equipment Property, plant and equipment, including renewals and betterments, are stated at cost less accumulated depreciation. All property, plant and equipment are depreciated using the straight-line method based on the estimated useful lives of the assets. The cost of maintenance and repairs are expensed as incurred. Major overhauls and upgrades are capitalized and depreciated over their remaining useful life. Depreciation of property, plant and equipment is recorded based on the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 20 - 39 years Drilling rigs and related equipment 3 - 20 years Machinery, equipment and other 3 - 7 years Vehicles 2 - 5 years Software 2 - 7 years We own substantially all of our rig assembly yard and corporate offices located in Houston, Texas. We lease a number of vehicles and land for equipment and inventory storage. Leases are evaluated at inception or at any subsequent material modification to determine if the lease should be classified as a capital or operating lease. We do not currently have any capital leases. We review our assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets that are held and used is measured by comparison of the estimated future undiscounted cash flows associated with the asset to the carrying amount of the asset. If the carrying value of such assets is less than the estimated undiscounted cash flow, an impairment charge is recorded in the amount by which the carrying amount of the assets exceeds their estimated fair value. For the years ended December 31, 2015 and 2014, due to depressed industry conditions, we carried out an impairment evaluation for each of our drilling rigs. Based on the evaluation, during the fourth quarter of 2015, we recorded an impairment of $3.6 million as "Asset impairments, net of insurance recoveries" related to the substructure, mast and various other rig components of our last remaining non-walking rig due to its limited marketability in its current configuration given market conditions. We have the ability to upgrade this rig when market conditions improve. Additionally, we also recorded an impairment, net of insurance recoveries, of $0.4 million associated with the damage to the driller's cabin and the impairment of various other drilling equipment during the years ended December 31, 2015. During the year ended December 31, 2014, we recorded an impairment of $4.7 million associated with the damage to one of our non-walking rigs. We did not record any asset impairment for the year ended December 31, 2013. Construction in progress represents the costs incurred for drilling rigs that remain under construction at the end of the period. This includes third party costs relating to the purchase of rig components as well as labor, material and other identifiable direct and indirect costs associated with the construction of the rig. Capitalized Interest We capitalize interest costs related to rig construction projects. Interest costs are capitalized during the construction period based on the weighted average interest rate of the related debt. Capitalized interest amounted to $0.9 million , $1.0 million , and $0.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with a business combination. Goodwill is not amortized, but rather tested and assessed for impairment annually or more frequently if certain events or changes in circumstance indicate the carrying amount may exceed fair value. The annual test for goodwill impairment is performed during the fourth quarter of each year and begins with a qualitative assessment of whether it is “more likely than not” that the fair value of our business is less than its carrying value. If the qualitative analysis indicates that it is “more likely than not” that our business’ fair value is less than its carrying value, the resulting goodwill impairment test would consist of a two-step accounting test. The first step of the goodwill impairment test identifies the potential impairment, resulting if the fair value of a reporting unit (including goodwill) is less than its carrying amount. If during testing, it is determined that the fair value of net assets (including goodwill) exceeds its carrying amount, the goodwill of such net assets are not considered impaired and the second step of the goodwill impairment test is not applicable. However, if the fair value of net assets (including goodwill) is less than its carrying amount, we would then proceed to the second step in the goodwill impairment test. The second step includes hypothetically valuing the net assets as if they had been acquired in a business combination. Then, the implied fair value of the net assets’ goodwill is compared to the carrying value of that goodwill. If the carrying value of net assets’ goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess, not to exceed the carrying value. Our analysis of goodwill in 2014 considered the discounted cash flow method, market capitalization and the guideline company method. Based on this analysis, we recorded a goodwill impairment of $11.0 million for the year ended December 31, 2014, which represents the impairment of 100% of our goodwill. This impairment was primarily the result of the significant downturn in industry conditions in late 2014 and the related uncertainty regarding demand for our contract drilling services and new rig construction, as well as the decline in the price of our common stock as of December 31, 2014. We had no goodwill recorded on our balance sheets as of December 31, 2015 and December 31, 2014. Intangible Assets Identifiable intangible assets with determinable lives have historically consisted of drilling contracts and rig manufacturing intellectual property. Intangibles related to the drilling contracts were amortized on a straight-line basis over their estimated useful lives of six months while the identified intangibles related to the rig manufacturing intellectual property were being amortized on a straight-line basis over their estimated useful lives of ten years. Identifiable intangibles are evaluated for impairment at the end of each reporting period if events occur or circumstances change that would more likely than not reduce the fair value of the intangibles below their carrying amounts. During the fourth quarter of 2014, as a result of the significant downturn in industry conditions in late 2014 and the related uncertainty regarding demand for our drilling services and new rig construction, we re-evaluated the cost efficiencies to be realized in future rig construction. As a result of this evaluation, and the economic environment, management reassessed the remaining useful life of our rig manufacturing intellectual property reducing it from 7.2 years , to zero years . As a result of this revised estimate, we recorded additional amortization expense of $19.6 million which was included in "Goodwill impairment and other charges" in the accompanying statements of operations. Amortization expense recorded in the caption depreciation and amortization in our statement of operations was $2.7 million and $2.7 million for the years ended December 31, 2014 and 2013, respectively. We had no identifiable intangible assets recorded on our balance sheets as of December 31, 2015 and December 31, 2014. Financial Instruments and Fair value In accordance with Accounting Standards Codification 815 “Accounting for Derivative Instruments and Hedging Activities,” as amended, this warrant derivative liability was marked-to-market each reporting period, with a corresponding non-cash gain or loss charged to the current 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. 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 are 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. 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 year ended December 31, 2015 and we recorded a non-cash gain on the warrant derivative associated with the changes in fair value of $3.2 million and $1.0 million for the years ended December 31, 2014 and December 31, 2013, respectively. The following provides a reconciliation of financial liabilities measured at fair value on a recurring basis using Level 3 inputs: December 31, (in thousands) 2014 2013 Beginning balance $ 3,189 $ 4,224 Issuance of GES warrant — — Gain on warrant derivative (3,189 ) (1,035 ) Ending balance $ — $ 3,189 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, and on the amount of future cash flows associated with the debt, discounted using our current borrowing rate for comparable debt instruments (the Income Method). Based on our evaluation of the risk free rate, the market yield and credit spreads on comparable company publicly traded debt issues, we used an annualized discount rate, including a credit valuation allowance, of 6.6% . The estimated fair value of our long-term debt totaled $59.7 million and $22.9 million as of December 31, 2015 and 2014, respectively, compared to a carrying amount of $62.7 million and $22.5 million as of December 31, 2015 and 2014, respectively. Fair value measurements were applied with respect to our non-financial assets and liabilities measured on a nonrecurring basis, which primarily consisted of the fair value of measurements of goodwill, intangibles and property, plant and equipment for impairment purposes. There were no transfers between levels of the hierarchy for the years ended December 31, 2015 and 2014 . Revenue and Cost Recognition Our revenues are principally derived from contract drilling services. We record contract drilling revenue for daywork contracts daily as work progresses, assuming collectability is reasonably assured. Daywork drilling contracts provide that revenue is earned daily based on a specified rate per day and the term of the contract which can be for a specific period of time or a specified number of wells. We generally receive lump-sum payments for the mobilization of rigs and other drilling equipment at the commencement of a new drilling contract. Revenue and costs associated with the initial mobilization are deferred and recognized ratably over the term of the related drilling contract once the rig spuds. Costs incurred to relocate rigs and other equipment to an area in which a contract has not been secured are expensed as incurred. If a contract is terminated prior to the specified contract term, early termination payments received from the customer are only recognized as revenues when all contractual obligations, such as mitigation requirements, are satisfied. Stock-Based Compensation We record compensation expense over the applicable requisite service period for all stock-based compensation based on the grant date fair value of the award. The expense is included in selling, general and administrative expense in our statements of operations or capitalized in connection with rig construction activity. Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, we record deferred income taxes based upon differences between the financial reporting basis and tax basis of assets and liabilities, and use enacted tax rates and laws that we expect will be in effect when we realize those assets or settle those liabilities. We review deferred tax assets for a valuation allowance based upon management’s estimates of whether it is more likely than not that a portion of the deferred tax asset will be fully realized in a future period. We recognize the financial statement benefit of a tax position only after determining that the relevant taxing authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Our policy is to include interest and penalties related to the unrecognized tax benefits within the income tax expense (benefit) line item in our statements of operations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses recognized during the reporting period. Actual results could differ from these estimates. Significant estimates made by management include depreciation of property, plant and equipment, impairment of property, plant and equipment, impairment of goodwill and intangible assets and the collectibility of accounts receivable. Recently Issued Accounting Pronouncements We have not elected to avail ourselves of the extended transition period available to emerging growth companies ("EGCs") as provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards, therefore, we will be subject to new or revised accounting standards at the same time as other public companies that are not EGCs. In May 2014, the Financial Accounting Standards Board (the "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. Adoption of this guidance is not expected to have a material impact 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 will begin performing the assessments and making the required disclosures, if applicable, beginning at the end of fiscal year 2016. 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. This guidance will affect the presentation of deferred issuance costs on the balance sheet but will not have any impact on our results of operations or financial position. Had this guidance been adopted at December 31, 2015 and 2014, respectively, $1.8 million and $2.3 million of debt issuance costs would have been reclassed from "Other long-term assets, net" to reduce "Long-term debt" and "Current portion of long-term debt" respectively. In July 2015, the FASB issued an accounting standards update requiring an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out ("LIFO") or the retail inventory method. The amendments apply 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 and 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 on our financial statements. In November 2015, the FASB issued an accounting standards update intended to simplify the presentation of deferred income taxes. This new guidance requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Current Generally Accepted Accounting Principles require an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. 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. We adopted this accounting standard for 2015. Prior periods were not retrospectively adjusted. |
Revision of Prior Year Financia
Revision of Prior Year Financial Statements | 12 Months Ended |
Dec. 31, 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 amended our credit facility in April 2015 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 years 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 ; and (ii) increase the current portion of long-term debt from zero to $22.5 million , which also increased 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. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following: December 31, (in thousands) 2015 2014 Raw materials and purchased components $ 2,317 $ 2,124 We determined that no reserve for obsolescence was needed at December 31, 2015 or December 31, 2014 . No inventory obsolescence expense was recognized during the years ended December 31, 2015 and 2014 . |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant, and equipment consisted of the following: December 31, (in thousands) 2015 2014 Land $ 1,344 $ 1,344 Buildings 4,115 2,025 Drilling rigs and related equipment 288,094 227,758 Machinery, equipment and other 1,469 1,287 Vehicles 285 266 Software 806 714 Construction in progress 28,313 38,974 Total $ 324,426 $ 272,368 Less: Accumulated depreciation (41,048 ) (21,870 ) Total Property, plant and equipment, net $ 283,378 $ 250,498 Repairs and maintenance expense included in operating costs in our statements of operations totaled $10.5 million , $7.4 million and $3.9 million for the years ended December 31, 2015 , 2014 and 2013, respectively. Depreciation expense was $21.2 million , $13.4 million , and $7.5 million for the years ended December 31, 2015 , 2014 and 2013, respectively. Amortization expense related to intangible assets recorded in the caption depreciation and amortization in our statements of operations was $0.0 million , $2.7 million and $2.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Supplemental Balance Sheet and
Supplemental Balance Sheet and Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Supplemental Balance Sheet and Cash Flow Information | Supplemental Balance Sheet and Cash Flow Information Accrued liabilities consisted of the following: December 31, (in thousands) 2015 2014 Accrued salaries and other compensation $ 2,050 $ 2,710 Insurance 600 488 Deferred revenues 4,591 1,281 Property, sales and other tax 2,585 1,710 Other 380 781 $ 10,206 $ 6,970 Supplemental cash flow information: Year Ended December 31, (in thousands) 2015 2014 2013 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 3,173 $ 1,907 $ 196 Cash paid during the year for taxes 135 135 — Cash received during the year for tax refund (113 ) — — Supplemental disclosure of non-cash investing and financing activities Stock-based compensation capitalized as property, plant and equipment 654 656 418 Change in property, plant and equipment purchases in accounts payable (14,750 ) 17,318 (6,288 ) |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 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. In November 2014, we entered into an amended and restated credit agreement (the “Credit Facility”) with a syndicate of financial institutions led by CIT Finance, LLC, that provided for a committed $155.0 million revolving credit facility and an additional uncommitted $25.0 million accordion feature that allowed for future increases in the facility. On April 23, 2015, we amended the Credit Facility to provide for a springing lock-box arrangement. On October 20, 2015 in light of current market conditions and our reduced capital plans, we entered into an amendment to the Credit Facility to reduce aggregate commitments to $125.0 million and to modify certain maintenance covenants. The obligations under the Credit Facility are secured by all our assets and are unconditionally guaranteed by all of our future direct and indirect subsidiaries. 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. Rigs that remain idle for 90 consecutive days or longer are removed from the borrowing base until they are contracted. In addition, rigs are appraised on a semi-annual basis and are subject to upward or downward revisions as a result of market conditions as well as the age of the rig. Beginning on November 5, 2015, the 75% advance rate on our eligible completed and owned drilling rigs decreased by 1.25% per quarter. The 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. As of December 31, 2015, the weighted average interest rate on our borrowings was 5.14% . 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. As mentioned above, in light of declining market conditions, we amended the Credit Facility on October 20, 2015, to relax certain of our financial covenants in 2016 and 2017. As amended, the Credit Facility requires us to maintain a leverage ratio of net debt to adjusted EBITDA, not to exceed the following in the respective time periods: 1Q’16: 3.75 x; 2Q’16: 4.0 x; 3Q’16: 4.25 x; 4Q’16: 4.5 x; 1Q’17: 4.0 x; thereafter: 3.0 x. The amendment also reduced the minimum rig utilization covenant to 60% in 2016, 70% in 2017 and 75% in 2018, and provided for the exclusion of certain capital expenditures from consideration in our fixed charge coverage ratio covenant. As of December 31, 2015 the leverage ratio covenant was 3.75 x. 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) $15.0 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 us 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 $62.7 million in outstanding borrowings under the Credit Facility at December 31, 2015. Remaining availability under the Credit Facility was $35.9 million at December 31, 2015, based on the borrowing base formula, and we are currently in compliance with all covenants under the Credit Facility. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the income tax benefit are as follows: Year Ended December 31, (in thousands) 2015 2014 2013 Current: Federal $ — $ — $ 4 State (518 ) 384 157 $ (518 ) $ 384 $ 161 Deferred: Federal $ — $ (3,656 ) $ (1,506 ) State 193 (86 ) (537 ) $ 193 $ (3,742 ) $ (2,043 ) Income tax benefit $ (325 ) $ (3,358 ) $ (1,882 ) The following is a reconciliation of the income tax benefit that was recorded compared to taxes provided at the U.S. statutory rate: Year Ended December 31, (in thousands) 2015 2014 2013 Income tax benefit at the statutory federal rate (35%) $ (2,871 ) $ (11,034 ) $ (1,358 ) Warrant — (1,116 ) (362 ) Goodwill impairment — 3,852 — Nondeductible expenses 148 143 243 Valuation allowance 2,261 4,449 — State taxes, net of federal benefit (211 ) 105 (436 ) Stock-based compensation and other 348 243 31 Income tax benefit $ (325 ) $ (3,358 ) $ (1,882 ) Effective tax rate 4.0 % 10.7 % 48.5 % Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows: December 31, (in thousands) 2015 2014 Deferred income tax assets Bad debts $ 3 $ 46 Stock-based compensation 2,740 2,061 Accrued liabilities and other 52 76 Deferred revenue 1,775 667 Net operating losses 17,402 32,199 Total net deferred tax assets $ 21,972 $ 35,049 Deferred income tax liabilities Prepaids $ (368 ) $ (300 ) Property, plant and equipment (15,087 ) (30,300 ) Total net deferred tax liabilities $ (15,455 ) $ (30,600 ) Valuation allowance $ (6,710 ) $ (4,449 ) Net deferred tax liability $ (193 ) $ — At December 31, 2015, we had a total net operating loss ("NOL") carryforward of $49.6 million of federal NOL carryforwards, which begin expiring in 2031. During 2015, we filed amended federal tax returns for 2012 and 2013 to change our method of calculating tax depreciation. This resulted in a reduction of the federal NOL and corresponding deferred income tax asset associated with it. It also resulted in an offsetting decrease in the deferred income tax liability associated with the property, plant and equipment. The net tax effect of these amended returns on our deferred income tax position is zero . Also during 2015, we changed our method of calculating our allowable deduction for the Texas Margin Tax. As a result, we filed an amended tax return in Texas for 2013 to claim a $0.1 million refund. Section 382 of the Internal Revenue Code (“Section 382”) imposes limitations on a corporation’s ability to utilize its NOLs if it experiences an ownership change. In general terms, an ownership change may result from transactions increasing the ownership percentage of certain shareholders in the stock of the corporation by more than 50 percentage points over a three year period. In the event of an ownership change, utilization of the NOLs would be subject to an annual limitation under Section 382. Management will continue to monitor the potential impact of Section 382 with respect to its NOL carryforward. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2015, we had no unrecognized tax benefits. We file income tax returns in the U.S. and in various state jurisdictions. With few exceptions, we are subject to U.S. federal, state and local income tax examinations by tax authorities for tax periods 2011 and forward. Our federal and state tax returns for 2011 and subsequent years remain subject to examination by tax authorities. Although we cannot predict the outcome of future tax examinations, we do not anticipate that the ultimate resolution of these examinations will have a material impact on our financial position, results of operations, or cash flows. In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future income in periods in which the deferred tax assets can be utilized. During 2014, we determined that the deferred tax assets did not meet the more likely than not threshold of being utilized and thus recorded a valuation allowance. We came to the same conclusion as of December 31, 2015. All of our deferred tax liability as of December 31, 2015 relates to Texas Margin Tax. Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the Statement of Operations. We have not recorded any interest or penalties associated with unrecognized tax benefits. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 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 of 2014. The 2012 Plan, as amended, permits the granting of various types of awards, including stock options, restricted stock and restricted stock unit awards, 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 purchase 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 ten years after the grant date. We have the right to satisfy option exercises from treasury shares and from authorized but unissued shares. As of December 31, 2015, approximately 879,153 shares were available for future awards. A summary of compensation cost recognized for stock-based payment arrangements is as follows: Year Ended December 31, (in thousands) 2015 2014 2013 Compensation cost recognized: Stock options $ 430 $ 1,133 $ 1,077 Restricted stock and restricted stock units 3,766 2,666 1,092 Total stock-based compensation $ 4,196 $ 3,799 $ 2,169 Approximately $0.7 million , $0.7 million and $0.4 million in stock-based compensation was capitalized in connection with rig construction activity during the years ended December 31, 2015 , 2014 and 2013 , respectively. Stock Options Certain options were granted on March 2, 2012 and began vesting on their date of grant, with 25% of such options vesting on the grant date, and 25% of such options vesting on each anniversary thereafter until fully vested on March 2, 2015. A subsequent grant of 15,700 options was made in August 2012, one third of which vest on each anniversary of the grant date over three years. In December 2012, we granted an additional 229,613 stock options that vest over five years in three equal tranches commencing on the third year anniversary date and each year thereafter. In February 2013, we granted an additional 119,320 stock options that vest over four years. No stock options were granted during the years ended December 31, 2015 or 2014. No options were exercised during the years ended December 31, 2015 , 2014 or 2013 . It is our policy that in the future any shares issued upon option exercise will be issued initially from any available treasury shares or otherwise as newly issued shares. 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 is amortized to compensation expense on a straight-line basis over the requisite service periods of the stock awards, which are generally the vesting periods. The fair value calculations for options granted are based on the following weighted-average assumptions: Year Ended December 31, 2013 Risk-free interest rate 0.83 % Expected volatility 40 % Dividend yield — Expected term 5.0 years Risk-Free Interest Rate The risk-free interest rate is based on U.S. Treasury securities with maturities that are the same as the expected term of the option. Expected Volatility Rate As we did not have a trading history in 2013, we were required to estimate the potential volatility of our common stock price. The volatility calculation was based on the average volatility of a representative sample of four companies (the “Sample Companies”) that management believes to be engaged in the land contract drilling business. We referred to the average volatility of the Sample Companies because management believed that the average volatility of such companies was a reasonable benchmark to use in estimating the expected volatility of our common stock. Expected Dividend Yield We have no plans to pay dividends in the foreseeable future. Expected Term The expected term of the options granted represents the period of time that they are expected to be outstanding. Based on these calculations, the weighted-average fair value per option granted to acquire a share of common stock was $4.08 for options granted during the years ended and December 31, 2013 . The following summary reflects the stock option activity and related information for the year ended December 31, 2015 : Options Weighted Average Exercise Price Outstanding at January 1, 2015 963,196 $ 12.74 Granted — — Exercised — — Forfeited/expired (6,543 ) 12.74 Outstanding at December 31, 2015 956,653 $ 12.74 Exercisable at December 31, 2015 852,510 $ 12.74 A summary of our unvested stock options and the changes during the year ended December 31, 2015 is presented below: Outstanding Weighted Average Grant- Date Fair Value Unvested as of January 1, 2015 360,316 $ 4.32 Granted — — Vested (249,630 ) 4.54 Forfeited/expired (6,543 ) 3.36 Unvested as of December 31, 2015 104,143 $ 3.88 The number of options exercisable at December 31, 2015 was 852,510 with a weighted average remaining contractual life of 6.3 years and a weighted-average exercise price of $12.74 per share. As of December 31, 2015 , the unrecognized compensation cost related to outstanding stock options was $0.2 million . This cost is expected to be recognized over a weighted-average period of 0.5 years . The fair value of options that vested during the years ended December 31, 2015 , 2014 and 2013 was $1.1 million , $1.2 million and $ 0.9 million , respectively. 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 vesting period. The fair value of restricted stock awards is determined based on the estimated fair market value of our shares on the grant date. As of December 31, 2015 , there was $3.5 million of total unrecognized compensation cost related to unvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 0.8 years . A summary of the status of our restricted stock awards and of changes in restricted stock outstanding for the year ended December 31, 2015 is as follows: Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2015 605,141 $ 10.82 Granted — — Vested (202,457 ) 10.85 Forfeited/expired (14,419 ) 11.04 Outstanding at December 31, 2015 388,265 $ 10.80 Restricted Stock Units We have granted restricted stock units ("RSUs") to key employees under the 2012 Plan. We have granted three year cliff vesting RSUs, as well as 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 December 31, 2015 , there was $2.3 million of total unrecognized compensation cost related to unvested RSUs. This cost is expected to be recognized over a weighted-average period of 0.8 years . The assumptions used to value our TSR market-based RSUs granted during the year ended December 31, 2014 were a a risk-free interest rate of 0.08% , an expected volatility of 44.1% and an expected dividend yield of 0.0% . Based on the Monte Carlo simulation, these RSUs were valued at $16.74 . There were no such RSU's granted during the year ended December 31, 2015. A summary of the status of our RSUs as of December 31, 2015 , and of changes in RSUs outstanding during the year ended December 31, 2015 , is as follows: RSUs Weighted Outstanding at January 1, 2015 516,774 $ 12.81 Granted — — Vested and converted (13,634 ) 11.00 Forfeited/expired (39,727 ) 11.49 Outstanding at December 31, 2015 463,413 $ 12.97 |
Stockholders' Equity and Loss p
Stockholders' Equity and Loss per Share | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Loss per Share | Stockholders’ Equity and Loss per Share As of December 31, 2015 , we had a total of 24,403,659 shares of common stock, $0.01 par value, outstanding, including 388,265 shares of restricted stock. We also had 136,278 shares held as treasury stock. Total authorized common stock is 100,000,000 shares. Basic earnings (loss) per common share (“EPS”) are 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: For the Years Ended December 31, (in thousands, except for per share data) 2015 2014 2013 Net loss (numerator) $ (7,880 ) $ (28,168 ) $ (1,997 ) Loss per share: Basic and Diluted $ (0.33 ) $ (1.65 ) $ (0.16 ) Shares (denominator): Weighted-average number of shares outstanding-basic 23,904 17,078 12,179 Net effect of dilutive stock options, warrants and restricted stock units — — — Weighted-average common shares outstanding-diluted 23,904 17,078 12,179 For all years presented, the computation of diluted 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 loss per share were 963,196 during each of the years ended December 31, 2015, 2014 and 2013. A warrant to purchase 2,198,000 shares of our common stock was anti-dilutive in each of the years ended December 31, 2015, 2014 and 2013 and expired unexercised March 31, 2015. RSUs, which are not participating securities and are excluded from our diluted loss per share because they are anti-dilutive were 463,413 , 516,774 , and zero , respectively, for the years ended December 31, 2015, 2014 and 2013, respectively. |
Segment and Geographical Inform
Segment and Geographical Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | Segment and Geographical Information We report one segment because all of our drilling operations are all located in the United States and have similar economic characteristics. We build rigs and engage in land contract drilling for oil and natural gas in the United States. 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. Allocation of capital resources is employed on a project-by-project basis across our entire asset base to maximize profitability without regard to individual areas. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments As of December 31, 2015, we had outstanding purchase commitments to a number of suppliers totaling $28.0 million related primarily to the construction of drilling rigs. Lease Commitments We lease certain land, 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 December 31, 2015 , were as follows: (in thousands) 2016 $ 493 2017 282 2018 71 2019 50 2020 — Thereafter — $ 896 Rent expense was $3.6 million , $2.9 million and $2.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. 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. There are no current legal proceedings that we expect will have a material adverse impact on our financial statements. |
Concentration of Market and Cre
Concentration of Market and Credit Risk | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentration of Market and Credit Risk | Concentration of Market and Credit Risk We derive all our revenues from drilling services contracts with companies in the oil and natural gas exploration and production industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility in oil and gas prices. We have a number of customers that account for 10% or more of our revenues. For 2015, these customers included Parsley Energy, LP ( 18% ), Pioneer Natural Resources USA, Inc. ( 18% ), Laredo Petroleum, Inc. ( 14% ), COG Operating, LLC, a subsidiary of Concho Resources, Inc. ( 13% ) and Elevation Resources, LLC ( 11% ). For 2014, these customers included Laredo Petroleum, Inc. ( 22% ), Apache Corporation ( 21% ), COG Operating, LLC, a subsidiary of Concho Resources, Inc. ( 21% ) and BOPCO, L.P. ( 20% ). For 2013, these customers included Apache Corporation ( 30% ), BOPCO, LP ( 16% ), Newfield Exploration Company ( 11% ), W&T Offshore, Inc. ( 10% ) and Anadarko Petroleum Corporation ( 10% ). As of December 31, 2015, Devon Energy Corporation ( 27% ), Parsley Energy LP ( 18% ), Pioneer Natural Resources USA, Inc. ( 17% ) and Anadarko Petroleum Corporation ( 13% ) accounted for 10% or more of our accounts receivable. As of December 31, 2014, Apache Corporation ( 22% ), COG Operating, LLC, a subsidiary of Concho Resources, Inc. ( 20% ), BOPCO, L.P. ( 18% ), Laredo Petroleum, Inc. ( 16% ) and Pioneer Natural Resources USA, Inc. ( 11% ) accounted for 10% or more of our accounts receivable. As of December 31, 2013, Apache Corporation ( 27% ), Laredo Petroleum, Inc. ( 22% ), BOPCO, LP ( 17% ) and Rosetta Resources Operating L.P. ( 10% ) accounted for 10% or more of our accounts receivable. We compete with large national and multi-national companies that have longer operating histories, greater financial, technical and other resources and greater name recognition than ICD. Our results of operations, cash flows and financial condition may be affected by these factors. Additionally, these factors could impact our ability to obtain additional debt and equity capital required to implement our rig construction and growth strategy, and the cost of that capital. We have concentrated credit risk for cash by maintaining deposits in major banks, which may at times exceed amounts covered by insurance provided by the United States Federal Deposit Insurance Corporation (“FDIC”). We monitor the financial health of the banks and have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk. As of December 31, 2015 , we had approximately $4.8 million in cash and cash equivalents in excess of FDIC limits. Our trade receivables are with a variety of E&P and other oilfield service companies. We perform ongoing credit evaluations of our customers, and we generally do not require collateral. We do occasionally require deposits from customers whose creditworthiness is in question prior to providing services to them. |
Related Parties and Other Matte
Related Parties and Other Matters | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Parties and Other Matters | Related Parties and Other Matters 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 December 31, 2015, and one of our directors was a director of the ultimate parent company of GES through May 31, 2015. 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 December 31, 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 and was no longer a related party. Total purchases from the vendor while it was a related party amounted to $1.2 million , $2.2 million and $10,000 , during the twelve months ended December 31, 2015, 2014 and 2013, respectively. We had outstanding payables with this vendor totaling $0.5 million and zero as of December 31, 2014 and 2013, respectively. One of our directors is also a director of one of our vendors from which we purchase oilfield equipment and related supplies. Total purchases from this vendor were $5.1 million and $8.6 million in 2015 and 2014, respectively. We had outstanding payables of $0.1 million and $0.4 million as of December 31, 2015 and 2014, respectively. During 2015, the son of an executive officer and director of the Company began working in a sales capacity at, and became a minority owner of, a vendor from which we purchase oilfield equipment and related supplies. Total purchases from this vendor during 2015 were $0.1 million and we had outstanding accounts payables of $0.1 million dollars as of December 31, 2015. Prior to 2015, the son of this executive officer and director worked in a sales capacity at a separate vendor from whom we purchase oilfield equipment and related supplies. Total purchases from that vendor were $1.7 million and $0.6 million in 2014 and 2013 respectively. We had outstanding payables with that vendor of $0.6 million and $12,000 as of December 31, 2014 and 2013, respectively. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data A summary of our unaudited quarterly financial data is as follows: Year Ended December 31, 2015 Quarter Ended (in thousands, except for per share data) March 31 June 30 September 30 December 31 Revenue $ 22,306 $ 21,082 $ 21,344 $ 23,686 Operating income (loss) 1,532 160 (2,841 ) (3,802 ) Income tax (benefit) expense (155 ) 95 (326 ) 61 Net income (loss) 1,375 (652 ) (3,377 ) (5,226 ) Earnings (loss) per share: Basic and Diluted $ 0.06 $ (0.03 ) $ (0.14 ) $ (0.22 ) Year Ended December 31, 2014 Quarter Ended (in thousands, except for per share data) March 31 June 30 September 30 December 31 Revenue $ 13,549 $ 14,661 $ 19,123 $ 23,014 Operating (loss) income (5,199 ) 1,444 (672 ) (28,640 ) Income tax (benefit) expense (1,885 ) 667 (352 ) (1,788 ) Net (loss) income (3,705 ) 1,556 (1,413 ) (24,606 ) Earnings (loss) per share: Basic and Diluted $ (0.30 ) $ 0.13 $ (0.07 ) $ (1.00 ) |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period Year Ended December 31, 2015 Allowance for doubtful accounts $ 129 $ 132 $ (253 ) $ 8 Valuation allowance for deferred tax assets $ 4,449 $ 2,261 $ — $ 6,710 Year Ended December 31, 2014 Allowance for doubtful accounts $ 93 $ 123 $ (87 ) $ 129 Valuation allowance for deferred tax assets $ — $ 4,449 $ — $ 4,449 Year Ended December 31, 2013 Allowance for doubtful accounts $ 256 $ 93 $ (256 ) $ 93 Valuation allowance for deferred tax assets $ — $ — $ — $ — |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These audited 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”). As we had no items of other comprehensive income in any period presented, no other comprehensive income or comprehensive income is presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider short-term, highly liquid investments that have an original maturity of three months or less to be cash equivalents. |
Accounts Receivables | Accounts Receivable Accounts receivable is comprised primarily of amounts due from our customers for contract drilling services. Accounts receivable are reduced to reflect estimated realizable values by an allowance for doubtful accounts based on historical collection experience and specific review of current individual accounts. Receivables are written off when they are deemed to be uncollectible. The allowance for doubtful accounts totaled $8 thousand and $0.1 million as of December 31, 2015 and 2014 , respectively. |
Inventory | Inventory Inventory is stated at lower of cost or market and consists primarily of replacement parts and supplies held for use in our drilling operations. Cost is determined on an average cost basis. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, including renewals and betterments, are stated at cost less accumulated depreciation. All property, plant and equipment are depreciated using the straight-line method based on the estimated useful lives of the assets. The cost of maintenance and repairs are expensed as incurred. Major overhauls and upgrades are capitalized and depreciated over their remaining useful life. Depreciation of property, plant and equipment is recorded based on the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 20 - 39 years Drilling rigs and related equipment 3 - 20 years Machinery, equipment and other 3 - 7 years Vehicles 2 - 5 years Software 2 - 7 years We own substantially all of our rig assembly yard and corporate offices located in Houston, Texas. We lease a number of vehicles and land for equipment and inventory storage. Leases are evaluated at inception or at any subsequent material modification to determine if the lease should be classified as a capital or operating lease. We do not currently have any capital leases. We review our assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets that are held and used is measured by comparison of the estimated future undiscounted cash flows associated with the asset to the carrying amount of the asset. If the carrying value of such assets is less than the estimated undiscounted cash flow, an impairment charge is recorded in the amount by which the carrying amount of the assets exceeds their estimated fair value. For the years ended December 31, 2015 and 2014, due to depressed industry conditions, we carried out an impairment evaluation for each of our drilling rigs. Based on the evaluation, during the fourth quarter of 2015, we recorded an impairment of $3.6 million as "Asset impairments, net of insurance recoveries" related to the substructure, mast and various other rig components of our last remaining non-walking rig due to its limited marketability in its current configuration given market conditions. We have the ability to upgrade this rig when market conditions improve. Additionally, we also recorded an impairment, net of insurance recoveries, of $0.4 million associated with the damage to the driller's cabin and the impairment of various other drilling equipment during the years ended December 31, 2015. During the year ended December 31, 2014, we recorded an impairment of $4.7 million associated with the damage to one of our non-walking rigs. We did not record any asset impairment for the year ended December 31, 2013. Construction in progress represents the costs incurred for drilling rigs that remain under construction at the end of the period. This includes third party costs relating to the purchase of rig components as well as labor, material and other identifiable direct and indirect costs associated with the construction of the rig. |
Property, Plant and Equipment, Impairment | We review our assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets that are held and used is measured by comparison of the estimated future undiscounted cash flows associated with the asset to the carrying amount of the asset. If the carrying value of such assets is less than the estimated undiscounted cash flow, an impairment charge is recorded in the amount by which the carrying amount of the assets exceeds their estimated fair value. |
Capitalized Interest | Capitalized Interest We capitalize interest costs related to rig construction projects. Interest costs are capitalized during the construction period based on the weighted average interest rate of the related debt. Capitalized interest amounted to $0.9 million , $1.0 million , and $0.4 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with a business combination. Goodwill is not amortized, but rather tested and assessed for impairment annually or more frequently if certain events or changes in circumstance indicate the carrying amount may exceed fair value. The annual test for goodwill impairment is performed during the fourth quarter of each year and begins with a qualitative assessment of whether it is “more likely than not” that the fair value of our business is less than its carrying value. If the qualitative analysis indicates that it is “more likely than not” that our business’ fair value is less than its carrying value, the resulting goodwill impairment test would consist of a two-step accounting test. The first step of the goodwill impairment test identifies the potential impairment, resulting if the fair value of a reporting unit (including goodwill) is less than its carrying amount. If during testing, it is determined that the fair value of net assets (including goodwill) exceeds its carrying amount, the goodwill of such net assets are not considered impaired and the second step of the goodwill impairment test is not applicable. However, if the fair value of net assets (including goodwill) is less than its carrying amount, we would then proceed to the second step in the goodwill impairment test. The second step includes hypothetically valuing the net assets as if they had been acquired in a business combination. Then, the implied fair value of the net assets’ goodwill is compared to the carrying value of that goodwill. If the carrying value of net assets’ goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess, not to exceed the carrying value. Our analysis of goodwill in 2014 considered the discounted cash flow method, market capitalization and the guideline company method. Based on this analysis, we recorded a goodwill impairment of $11.0 million for the year ended December 31, 2014, which represents the impairment of 100% of our goodwill. This impairment was primarily the result of the significant downturn in industry conditions in late 2014 and the related uncertainty regarding demand for our contract drilling services and new rig construction, as well as the decline in the price of our common stock as of December 31, 2014. |
Intangible Assets | Intangible Assets Identifiable intangible assets with determinable lives have historically consisted of drilling contracts and rig manufacturing intellectual property. Intangibles related to the drilling contracts were amortized on a straight-line basis over their estimated useful lives of six months while the identified intangibles related to the rig manufacturing intellectual property were being amortized on a straight-line basis over their estimated useful lives of ten years. Identifiable intangibles are evaluated for impairment at the end of each reporting period if events occur or circumstances change that would more likely than not reduce the fair value of the intangibles below their carrying amounts. During the fourth quarter of 2014, as a result of the significant downturn in industry conditions in late 2014 and the related uncertainty regarding demand for our drilling services and new rig construction, we re-evaluated the cost efficiencies to be realized in future rig construction. As a result of this evaluation, and the economic environment, management reassessed the remaining useful life of our rig manufacturing intellectual property reducing it from 7.2 years , to zero years . As a result of this revised estimate, we recorded additional amortization expense of $19.6 million which was included in "Goodwill impairment and other charges" in the accompanying statements of operations. |
Financial Instruments and Fair Value | Financial Instruments and Fair value In accordance with Accounting Standards Codification 815 “Accounting for Derivative Instruments and Hedging Activities,” as amended, this warrant derivative liability was marked-to-market each reporting period, with a corresponding non-cash gain or loss charged to the current 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. 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 are 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. 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 year ended December 31, 2015 and we recorded a non-cash gain on the warrant derivative associated with the changes in fair value of $3.2 million and $1.0 million for the years ended December 31, 2014 and December 31, 2013, respectively. The following provides a reconciliation of financial liabilities measured at fair value on a recurring basis using Level 3 inputs: December 31, (in thousands) 2014 2013 Beginning balance $ 3,189 $ 4,224 Issuance of GES warrant — — Gain on warrant derivative (3,189 ) (1,035 ) Ending balance $ — $ 3,189 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, and on the amount of future cash flows associated with the debt, discounted using our current borrowing rate for comparable debt instruments (the Income Method). Based on our evaluation of the risk free rate, the market yield and credit spreads on comparable company publicly traded debt issues, we used an annualized discount rate, including a credit valuation allowance, of 6.6% . The estimated fair value of our long-term debt totaled $59.7 million and $22.9 million as of December 31, 2015 and 2014, respectively, compared to a carrying amount of $62.7 million and $22.5 million as of December 31, 2015 and 2014, respectively. Fair value measurements were applied with respect to our non-financial assets and liabilities measured on a nonrecurring basis, which primarily consisted of the fair value of measurements of goodwill, intangibles and property, plant and equipment for impairment purposes. There were no transfers between levels of the hierarchy for the years ended December 31, 2015 and 2014 . |
Revenue and Cost Recognition | Revenue and Cost Recognition Our revenues are principally derived from contract drilling services. We record contract drilling revenue for daywork contracts daily as work progresses, assuming collectability is reasonably assured. Daywork drilling contracts provide that revenue is earned daily based on a specified rate per day and the term of the contract which can be for a specific period of time or a specified number of wells. We generally receive lump-sum payments for the mobilization of rigs and other drilling equipment at the commencement of a new drilling contract. Revenue and costs associated with the initial mobilization are deferred and recognized ratably over the term of the related drilling contract once the rig spuds. Costs incurred to relocate rigs and other equipment to an area in which a contract has not been secured are expensed as incurred. If a contract is terminated prior to the specified contract term, early termination payments received from the customer are only recognized as revenues when all contractual obligations, such as mitigation requirements, are satisfied. |
Stock-Based Compensation | Stock-Based Compensation We record compensation expense over the applicable requisite service period for all stock-based compensation based on the grant date fair value of the award. The expense is included in selling, general and administrative expense in our statements of operations or capitalized in connection with rig construction activity. |
Income Taxes | Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, we record deferred income taxes based upon differences between the financial reporting basis and tax basis of assets and liabilities, and use enacted tax rates and laws that we expect will be in effect when we realize those assets or settle those liabilities. We review deferred tax assets for a valuation allowance based upon management’s estimates of whether it is more likely than not that a portion of the deferred tax asset will be fully realized in a future period. We recognize the financial statement benefit of a tax position only after determining that the relevant taxing authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Our policy is to include interest and penalties related to the unrecognized tax benefits within the income tax expense (benefit) line item in our statements of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date, and the reported amounts of revenues and expenses recognized during the reporting period. Actual results could differ from these estimates. Significant estimates made by management include depreciation of property, plant and equipment, impairment of property, plant and equipment, impairment of goodwill and intangible assets and the collectibility of accounts receivable. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements We have not elected to avail ourselves of the extended transition period available to emerging growth companies ("EGCs") as provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards, therefore, we will be subject to new or revised accounting standards at the same time as other public companies that are not EGCs. In May 2014, the Financial Accounting Standards Board (the "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. Adoption of this guidance is not expected to have a material impact 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 will begin performing the assessments and making the required disclosures, if applicable, beginning at the end of fiscal year 2016. 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. This guidance will affect the presentation of deferred issuance costs on the balance sheet but will not have any impact on our results of operations or financial position. Had this guidance been adopted at December 31, 2015 and 2014, respectively, $1.8 million and $2.3 million of debt issuance costs would have been reclassed from "Other long-term assets, net" to reduce "Long-term debt" and "Current portion of long-term debt" respectively. In July 2015, the FASB issued an accounting standards update requiring an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out ("LIFO") or the retail inventory method. The amendments apply 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 and 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 on our financial statements. In November 2015, the FASB issued an accounting standards update intended to simplify the presentation of deferred income taxes. This new guidance requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Current Generally Accepted Accounting Principles require an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. 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. We adopted this accounting standard for 2015. Prior periods were not retrospectively adjusted. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Assets | Depreciation of property, plant and equipment is recorded based on the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 20 - 39 years Drilling rigs and related equipment 3 - 20 years Machinery, equipment and other 3 - 7 years Vehicles 2 - 5 years Software 2 - 7 years Property, plant, and equipment consisted of the following: December 31, (in thousands) 2015 2014 Land $ 1,344 $ 1,344 Buildings 4,115 2,025 Drilling rigs and related equipment 288,094 227,758 Machinery, equipment and other 1,469 1,287 Vehicles 285 266 Software 806 714 Construction in progress 28,313 38,974 Total $ 324,426 $ 272,368 Less: Accumulated depreciation (41,048 ) (21,870 ) Total Property, plant and equipment, net $ 283,378 $ 250,498 |
Reconciliation of Financial Liabilities Measured at Fair Value on Recurring Basis Using Level 3 Inputs | The following provides a reconciliation of financial liabilities measured at fair value on a recurring basis using Level 3 inputs: December 31, (in thousands) 2014 2013 Beginning balance $ 3,189 $ 4,224 Issuance of GES warrant — — Gain on warrant derivative (3,189 ) (1,035 ) Ending balance $ — $ 3,189 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: December 31, (in thousands) 2015 2014 Raw materials and purchased components $ 2,317 $ 2,124 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Depreciation of property, plant and equipment is recorded based on the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 20 - 39 years Drilling rigs and related equipment 3 - 20 years Machinery, equipment and other 3 - 7 years Vehicles 2 - 5 years Software 2 - 7 years Property, plant, and equipment consisted of the following: December 31, (in thousands) 2015 2014 Land $ 1,344 $ 1,344 Buildings 4,115 2,025 Drilling rigs and related equipment 288,094 227,758 Machinery, equipment and other 1,469 1,287 Vehicles 285 266 Software 806 714 Construction in progress 28,313 38,974 Total $ 324,426 $ 272,368 Less: Accumulated depreciation (41,048 ) (21,870 ) Total Property, plant and equipment, net $ 283,378 $ 250,498 |
Supplemental Balance Sheet an29
Supplemental Balance Sheet and Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: December 31, (in thousands) 2015 2014 Accrued salaries and other compensation $ 2,050 $ 2,710 Insurance 600 488 Deferred revenues 4,591 1,281 Property, sales and other tax 2,585 1,710 Other 380 781 $ 10,206 $ 6,970 |
Supplemental Cash Flow Disclosures | Supplemental cash flow information: Year Ended December 31, (in thousands) 2015 2014 2013 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 3,173 $ 1,907 $ 196 Cash paid during the year for taxes 135 135 — Cash received during the year for tax refund (113 ) — — Supplemental disclosure of non-cash investing and financing activities Stock-based compensation capitalized as property, plant and equipment 654 656 418 Change in property, plant and equipment purchases in accounts payable (14,750 ) 17,318 (6,288 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Benefit | The components of the income tax benefit are as follows: Year Ended December 31, (in thousands) 2015 2014 2013 Current: Federal $ — $ — $ 4 State (518 ) 384 157 $ (518 ) $ 384 $ 161 Deferred: Federal $ — $ (3,656 ) $ (1,506 ) State 193 (86 ) (537 ) $ 193 $ (3,742 ) $ (2,043 ) Income tax benefit $ (325 ) $ (3,358 ) $ (1,882 ) |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the income tax benefit that was recorded compared to taxes provided at the U.S. statutory rate: Year Ended December 31, (in thousands) 2015 2014 2013 Income tax benefit at the statutory federal rate (35%) $ (2,871 ) $ (11,034 ) $ (1,358 ) Warrant — (1,116 ) (362 ) Goodwill impairment — 3,852 — Nondeductible expenses 148 143 243 Valuation allowance 2,261 4,449 — State taxes, net of federal benefit (211 ) 105 (436 ) Stock-based compensation and other 348 243 31 Income tax benefit $ (325 ) $ (3,358 ) $ (1,882 ) Effective tax rate 4.0 % 10.7 % 48.5 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows: December 31, (in thousands) 2015 2014 Deferred income tax assets Bad debts $ 3 $ 46 Stock-based compensation 2,740 2,061 Accrued liabilities and other 52 76 Deferred revenue 1,775 667 Net operating losses 17,402 32,199 Total net deferred tax assets $ 21,972 $ 35,049 Deferred income tax liabilities Prepaids $ (368 ) $ (300 ) Property, plant and equipment (15,087 ) (30,300 ) Total net deferred tax liabilities $ (15,455 ) $ (30,600 ) Valuation allowance $ (6,710 ) $ (4,449 ) Net deferred tax liability $ (193 ) $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Compensation Cost | A summary of compensation cost recognized for stock-based payment arrangements is as follows: Year Ended December 31, (in thousands) 2015 2014 2013 Compensation cost recognized: Stock options $ 430 $ 1,133 $ 1,077 Restricted stock and restricted stock units 3,766 2,666 1,092 Total stock-based compensation $ 4,196 $ 3,799 $ 2,169 |
Fair Value Assumptions for Stock Options Granted | The fair value calculations for options granted are based on the following weighted-average assumptions: Year Ended December 31, 2013 Risk-free interest rate 0.83 % Expected volatility 40 % Dividend yield — Expected term 5.0 years |
Schedule of Stock Options Activity | The following summary reflects the stock option activity and related information for the year ended December 31, 2015 : Options Weighted Average Exercise Price Outstanding at January 1, 2015 963,196 $ 12.74 Granted — — Exercised — — Forfeited/expired (6,543 ) 12.74 Outstanding at December 31, 2015 956,653 $ 12.74 Exercisable at December 31, 2015 852,510 $ 12.74 A summary of our unvested stock options and the changes during the year ended December 31, 2015 is presented below: Outstanding Weighted Average Grant- Date Fair Value Unvested as of January 1, 2015 360,316 $ 4.32 Granted — — Vested (249,630 ) 4.54 Forfeited/expired (6,543 ) 3.36 Unvested as of December 31, 2015 104,143 $ 3.88 |
Schedule of Restricted Stock Activity | A summary of the status of our restricted stock awards and of changes in restricted stock outstanding for the year ended December 31, 2015 is as follows: Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2015 605,141 $ 10.82 Granted — — Vested (202,457 ) 10.85 Forfeited/expired (14,419 ) 11.04 Outstanding at December 31, 2015 388,265 $ 10.80 |
Schedule of Restricted Stock Unit Activity | A summary of the status of our RSUs as of December 31, 2015 , and of changes in RSUs outstanding during the year ended December 31, 2015 , is as follows: RSUs Weighted Outstanding at January 1, 2015 516,774 $ 12.81 Granted — — Vested and converted (13,634 ) 11.00 Forfeited/expired (39,727 ) 11.49 Outstanding at December 31, 2015 463,413 $ 12.97 |
Stockholders' Equity and Loss32
Stockholders' Equity and Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Earnings Per Share | A reconciliation of the numerators and denominators of the basic and diluted losses per share computations is as follows: For the Years Ended December 31, (in thousands, except for per share data) 2015 2014 2013 Net loss (numerator) $ (7,880 ) $ (28,168 ) $ (1,997 ) Loss per share: Basic and Diluted $ (0.33 ) $ (1.65 ) $ (0.16 ) Shares (denominator): Weighted-average number of shares outstanding-basic 23,904 17,078 12,179 Net effect of dilutive stock options, warrants and restricted stock units — — — Weighted-average common shares outstanding-diluted 23,904 17,078 12,179 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2015 , were as follows: (in thousands) 2016 $ 493 2017 282 2018 71 2019 50 2020 — Thereafter — $ 896 |
Unaudited Quarterly Financial34
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | A summary of our unaudited quarterly financial data is as follows: Year Ended December 31, 2015 Quarter Ended (in thousands, except for per share data) March 31 June 30 September 30 December 31 Revenue $ 22,306 $ 21,082 $ 21,344 $ 23,686 Operating income (loss) 1,532 160 (2,841 ) (3,802 ) Income tax (benefit) expense (155 ) 95 (326 ) 61 Net income (loss) 1,375 (652 ) (3,377 ) (5,226 ) Earnings (loss) per share: Basic and Diluted $ 0.06 $ (0.03 ) $ (0.14 ) $ (0.22 ) Year Ended December 31, 2014 Quarter Ended (in thousands, except for per share data) March 31 June 30 September 30 December 31 Revenue $ 13,549 $ 14,661 $ 19,123 $ 23,014 Operating (loss) income (5,199 ) 1,444 (672 ) (28,640 ) Income tax (benefit) expense (1,885 ) 667 (352 ) (1,788 ) Net (loss) income (3,705 ) 1,556 (1,413 ) (24,606 ) Earnings (loss) per share: Basic and Diluted $ (0.30 ) $ 0.13 $ (0.07 ) $ (1.00 ) |
Nature of Operations and Rece35
Nature of Operations and Recent Developments (Rig Disclosures) (Details) $ in Millions | Dec. 31, 2015drilling_rig$ / bbl | Jan. 31, 2016$ / bbl | Mar. 31, 2014drilling_rig | Dec. 31, 2015USD ($)drilling_rig | Sep. 30, 2015USD ($)drilling_rig | Mar. 31, 2015USD ($) | Sep. 30, 2014$ / bbl | Dec. 31, 2015drilling_rig | Dec. 31, 2014USD ($) | Feb. 19, 2016customerdrilling_rig |
Property, Plant and Equipment [Line Items] | ||||||||||
Price per barrel | $ / bbl | 37.13 | 106.06 | ||||||||
Published rig count, decrease (as a percent) (more than) | 60.00% | |||||||||
Drilling rigs, contractual utilization (as a percent) | 85.00% | |||||||||
Number of rigs operating under short-term contracts | 2 | 2 | 2 | |||||||
Operating Rig | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Number of rigs | 14 | 14 | 14 | |||||||
Omni-directional Walking System | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Number of rigs | 12 | 12 | 12 | |||||||
200 Series Rig | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Number of rigs | 12 | 12 | 12 | |||||||
Number of rigs completed | 1 | 1 | 1 | |||||||
Number of rigs generating revenue | 11 | 11 | 11 | |||||||
Non-Walking Rig | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Rigs converted to pad optimal status | 1 | |||||||||
Loss on disposal of assets | $ | $ 2.5 | |||||||||
Impairment charge | $ | $ 3.6 | |||||||||
Bi-fuel Capabilities | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Number of rigs | 12 | 12 | 12 | |||||||
Rig 102, Under Repair | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Number of suspended rigs | 1 | |||||||||
Impairment charge | $ | $ 4.7 | |||||||||
Cost of rig repairs | $ | 2.9 | |||||||||
Proceeds from insurance recoveries | $ | $ 2.9 | 2.3 | ||||||||
Impairment of discarded items | $ | 1.8 | |||||||||
Additional proceeds from insurance recoveries | $ | $ 1.3 | $ 3.9 | ||||||||
Eaglebine Region | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Number of rigs | 1 | 1 | 1 | |||||||
Subsequent Event | ||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||
Price per barrel | $ / bbl | 26.68 | |||||||||
Number of rigs that ceased operations | 1 | |||||||||
Number of customers intending to hold rigs under term contracts on a standby-without-crew basis | customer | 2 | |||||||||
Number of rigs under term contracts on a standby-without-crew basis | 2 | |||||||||
Number of idle rigs | 1 |
Nature of Operations and Rece36
Nature of Operations and Recent Developments (Amendment of Revolving Credit Facility) (Details) - Revolving Credit Facility - Line of Credit | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||||||||
Maximum leverage ratio | 3.75 | |||||||||
Scenario, Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum leverage ratio | 4 | 4.5 | 4.25 | 4 | 3.75 | 3 | ||||
Minimum rig utilization covenant (as a percent) | 75.00% | 70.00% | 60.00% |
Nature of Operations and Rece37
Nature of Operations and Recent Developments (Stock Split and Initial Public Offering) (Details) $ / shares in Units, $ in Thousands | Jul. 14, 2014 | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) | Aug. 29, 2014shares | Aug. 13, 2014shares | Aug. 07, 2014$ / sharesshares |
Class of Stock [Line Items] | |||||||
Common stock, shares issued | shares | 24,539,937 | 24,540,720 | |||||
Proceeds from issuance initial public offering | $ | $ 0 | $ 116,458 | $ 0 | ||||
Stock split conversion ratio | 1.57 | ||||||
IPO | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued | shares | 10,000,000 | 11,500,000 | |||||
Share price | $ / shares | $ 11 | ||||||
Underwriting discounts and commissions expense | $ | 7,600 | ||||||
Expenses directly associated with the offering | $ | $ 2,400 | ||||||
Over-Allotment Option | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued | shares | 1,500,000 | 1,500,000 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Accounts Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 8 | $ 100 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets held-for-use | $ 2,708 | $ 1,711 | $ 0 | |
Buildings | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 20 years | |||
Buildings | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 39 years | |||
Drilling rigs and related equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets held-for-use | $ 400 | |||
Drilling rigs and related equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 3 years | |||
Drilling rigs and related equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 20 years | |||
Machinery, equipment and other | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 3 years | |||
Machinery, equipment and other | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 7 years | |||
Vehicles | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 2 years | |||
Vehicles | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 5 years | |||
Software | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 2 years | |||
Software | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful life (in years) | 7 years | |||
Non-Walking Rig | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment charge | $ 3,600 | |||
Impairment of long-lived assets held-for-use | $ 4,700 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Capitalized Interest) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Capitalized interest | $ 0.9 | $ 1 | $ 0.4 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Goodwill) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 0 | $ 0 |
Global Energy Services Operating, LLC (GES) | ||
Business Acquisition [Line Items] | ||
Goodwill impairment and other charges | $ 11,000,000 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies (Intangible Assets) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 0 | $ 2,700,000 | $ 2,700,000 | ||
Identifiable intangible assets | $ 0 | $ 0 | $ 0 | ||
Drilling contracts | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful lives | 6 months | ||||
Rig manufacturing intellectual property | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated useful lives | 10 years | ||||
Remaining useful life | 0 years | 7 years 2 months 12 days | |||
Goodwill Impairment and Other Charges | Rig manufacturing intellectual property | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 19,600,000 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Financial Instruments and Fair Value) (Details) - USD ($) $ / shares in Units, shares in Millions | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 02, 2015 | Aug. 29, 2014 | Aug. 28, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Gain on warrant derivative | $ 0 | $ 3,189,000 | $ 1,035,000 | |||
Fair value inputs, discount rate (as a percent) | 6.60% | |||||
Estimate of Fair Value Measurement | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Long-term debt, fair value | $ 59,700,000 | 22,900,000 | ||||
Reported Value Measurement | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Long-term debt, fair value | 62,700,000 | 22,500,000 | ||||
GES Warrant | Level 3 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 0 | 3,189,000 | 4,224,000 | |||
Issuance of GES warrant | 0 | 0 | ||||
Gain on warrant derivative | 3,189,000 | 1,035,000 | ||||
Ending balance | 0 | 3,189,000 | ||||
GES Warrant | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Warrants outstanding (in shares) | 2.2 | |||||
Exercise price of warrant | $ 11.37 | $ 12.74 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 0 | |||||
Gain on warrant derivative | $ 0 | 3,189,000 | $ 1,035,000 | |||
Ending balance | $ 0 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Recently Issued Accounting Pronouncements) (Details) - New Accounting Pronouncement, Early Adoption, Effect - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Other Long-term Assets | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance cost | $ (1.8) | $ (2.3) |
Long-term Debt | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance cost | $ 1.8 | $ 2.3 |
Revision of Prior Year Financ45
Revision of Prior Year Financial Statements (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Long-term debt | $ 62,708,000 | $ 0 |
Current portion of long-term debt | 0 | 22,519,000 |
Total current liabilities | $ 18,790,000 | 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 |
Inventory (Details)
Inventory (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Inventory Disclosure [Abstract] | ||
Raw materials and purchased components | $ 2,317,000 | $ 2,124,000 |
Reserve for obsolescence | 0 | 0 |
Inventory obsolescence expense | $ 0 | $ 0 |
Property, Plant and Equipment47
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 324,426 | $ 272,368 | |
Less: Accumulated depreciation | (41,048) | (21,870) | |
Total Property, plant and equipment, net | 283,378 | 250,498 | |
Repairs and maintenance expense | 10,500 | 7,400 | $ 3,900 |
Depreciation | 21,200 | 13,400 | 7,500 |
Amortization expense | 0 | 2,700 | $ 2,700 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,344 | 1,344 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 4,115 | 2,025 | |
Drilling rigs and related equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 288,094 | 227,758 | |
Machinery, equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,469 | 1,287 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 285 | 266 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 806 | 714 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 28,313 | $ 38,974 |
Supplemental Balance Sheet an48
Supplemental Balance Sheet and Cash Flow Information (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued salaries and other compensation | $ 2,050 | $ 2,710 |
Insurance | 600 | 488 |
Deferred revenues | 4,591 | 1,281 |
Property, sales and other tax | 2,585 | 1,710 |
Other | 380 | 781 |
Accrued liabilities | $ 10,206 | $ 6,970 |
Supplemental Balance Sheet an49
Supplemental Balance Sheet and Cash Flow Information (Supplemental Cash Flow) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for interest | $ 3,173 | $ 1,907 | $ 196 |
Cash paid during the year for taxes | 135 | 135 | 0 |
Cash received during the year for tax refund | (113) | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities | |||
Stock-based compensation capitalized as property, plant and equipment | 654 | 656 | 418 |
Change in property, plant and equipment purchases in accounts payable | $ (14,750) | $ 17,318 | $ (6,288) |
Long-Term Debt (Details)
Long-Term Debt (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015USD ($) | Nov. 05, 2015 | Oct. 20, 2015USD ($) | Dec. 31, 2014USD ($) | Nov. 30, 2014USD ($) | May. 10, 2013USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||
Long-term debt | $ 62,708,000 | $ 0 | |||||||||||||
Revolving Credit Facility | Line of Credit | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Borrowing limit based on eligible trade accounts (up to) (as a percent) | 85.00% | ||||||||||||||
Eligible trade accounts receivable days outstanding limit (not more than) | 90 days | ||||||||||||||
Borrowing limit based on appraised forced liquidation of eligible completed and owned drilling rigs (up to) (as a percent) | 75.00% | 75.00% | |||||||||||||
Decrease borrowing limit quarterly (as a percent) | 1.25% | ||||||||||||||
Interest rate, basis spread based on availability (as a percent) | 3.50% | ||||||||||||||
Commitment fee on unused capacity (as a percent) | 0.50% | ||||||||||||||
Weighted average interest rate on borrowings (as a percent) | 5.14% | ||||||||||||||
Line of credit facility, higher borrowing capacity option (up to) | $ 20,000,000 | ||||||||||||||
Maximum leverage ratio | 3.75 | ||||||||||||||
Line of credit facility, springing lock box arrangement, threshold | $ 15,000,000 | ||||||||||||||
Line of credit facility, springing lock box arrangement, threshold, percentage of lesser of borrowing base or total commitments | 15.00% | ||||||||||||||
Long-term debt | $ 62,700,000 | ||||||||||||||
Remaining availability | $ 35,900,000 | ||||||||||||||
Revolving Credit Facility | Line of Credit | LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate, basis spread (as a percent) | 4.50% | ||||||||||||||
Revolving Credit Facility | Line of Credit | Three-month LIBOR | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate, basis spread (as a percent) | 1.00% | ||||||||||||||
Revolving Credit Facility | Line of Credit | Federal funds, effective rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate, basis spread (as a percent) | 0.05% | ||||||||||||||
Revolving Credit Facility | Line of Credit | CIT Finance, LLC Syndicate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Revolving credit facility, maximum borrowing capacity | $ 125,000,000 | $ 155,000,000 | $ 60,000,000 | ||||||||||||
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 | $ 20,000,000 | |||||||||||||
Scenario, Forecast | Revolving Credit Facility | Line of Credit | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Maximum leverage ratio | 4 | 4.5 | 4.25 | 4 | 3.75 | 3 | |||||||||
Minimum rig utilization covenant (as a percent) | 75.00% | 70.00% | 60.00% |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||||||
Federal | $ 0 | $ 0 | $ 4 | ||||||||
State | (518) | 384 | 157 | ||||||||
Current income tax expense (benefit) | (518) | 384 | 161 | ||||||||
Deferred: | |||||||||||
Federal | 0 | (3,656) | (1,506) | ||||||||
State | 193 | (86) | (537) | ||||||||
Deferred income tax expense (benefit) | 193 | (3,742) | (2,043) | ||||||||
Income tax benefit | $ 61 | $ (326) | $ 95 | $ (155) | $ (1,788) | $ (352) | $ 667 | $ (1,885) | $ (325) | $ (3,358) | $ (1,882) |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Income Tax Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax benefit at the statutory federal rate (35%) | $ (2,871) | $ (11,034) | $ (1,358) | ||||||||
Warrant | 0 | (1,116) | (362) | ||||||||
Goodwill impairment | 0 | 3,852 | 0 | ||||||||
Nondeductible expenses | 148 | 143 | 243 | ||||||||
Valuation allowance | 2,261 | 4,449 | 0 | ||||||||
State taxes, net of federal benefit | (211) | 105 | (436) | ||||||||
Stock-based compensation and other | 348 | 243 | 31 | ||||||||
Income tax benefit | $ 61 | $ (326) | $ 95 | $ (155) | $ (1,788) | $ (352) | $ 667 | $ (1,885) | $ (325) | $ (3,358) | $ (1,882) |
Effective tax rate (as a percent) | 4.00% | 10.70% | 48.50% | ||||||||
Statutory tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred income tax assets | ||
Bad debts | $ 3 | $ 46 |
Stock-based compensation | 2,740 | 2,061 |
Accrued liabilities and other | 52 | 76 |
Deferred revenue | 1,775 | 667 |
Net operating losses | 17,402 | 32,199 |
Total net deferred tax assets | 21,972 | 35,049 |
Deferred income tax liabilities | ||
Prepaids | (368) | (300) |
Property, plant and equipment | (15,087) | (30,300) |
Total net deferred tax liabilities | (15,455) | (30,600) |
Valuation allowance | (6,710) | (4,449) |
Net deferred tax liability | $ (193) | $ 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | Dec. 31, 2015USD ($) |
Investments, Owned, Federal Income Tax Note [Line Items] | |
Income tax refund claimed | $ 100,000 |
Unrecognized tax benefits | 0 |
Federal | |
Investments, Owned, Federal Income Tax Note [Line Items] | |
Net operating loss carryforwards | $ 49,600,000 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2013shares | Dec. 31, 2012trancheshares | Aug. 31, 2012shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation capitalized | $ | $ 654 | $ 656 | $ 418 | |||
Options granted (in shares) | 0 | 0 | ||||
Weighted-average fair value per option granted (in dollars per share) | $ / shares | $ 0 | $ 4.08 | ||||
Options exercised (in shares) | 0 | 0 | 0 | |||
Options exercisable (in shares) | 852,510 | |||||
Weighted average remaining contractual life (in years) | 6 years 3 months 12 days | |||||
Weighted-average exercise price (in dollars per share) | $ / shares | $ 12.74 | |||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation costs | $ | $ 200 | |||||
Weighted average recognition period (in years) | 6 months 9 days | |||||
Options vested in period, fair value | $ | $ 1,100 | $ 1,200 | $ 900 | |||
Risk-free interest rate (as a percent) | 0.83% | |||||
Expected volatility (as a percent) | 40.00% | |||||
Dividend yield (as a percent) | 0.00% | |||||
Stock options | Granted on March 2, 2012 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting (as a percent) | 25.00% | |||||
Stock options | Granted in August 2012 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting (as a percent) | 33.33% | |||||
Options granted (in shares) | 15,700 | |||||
Vesting period (in years) | 3 years | |||||
Stock options | Granted in December 2012 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted (in shares) | 229,613 | |||||
Vesting period (in years) | 5 years | |||||
Number of tranches | tranche | 3 | |||||
Stock options | Granted in February 2013 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted (in shares) | 119,320 | |||||
Vesting period (in years) | 4 years | |||||
Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation costs | $ | $ 3,500 | |||||
Weighted average recognition period (in years) | 10 months | |||||
RSU's granted (in shares) | 0 | |||||
Restricted stock units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation costs | $ | $ 2,300 | |||||
Weighted average recognition period (in years) | 10 months | |||||
RSU's granted (in shares) | 0 | |||||
TSR market-based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Risk-free interest rate (as a percent) | 0.08% | |||||
Expected volatility (as a percent) | 44.10% | |||||
Dividend yield (as a percent) | 0.00% | |||||
Fair value assumptions, exercise price (in dollars per share) | $ / shares | $ 16.74 | |||||
RSU's granted (in shares) | 0 | |||||
2012 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of additional shares authorized (up to) | 3,454,000 | |||||
Number of shares available for grant | 879,153 | |||||
2012 Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option expiration period (in years) | 10 years | |||||
2012 Plan | Restricted stock units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
Common stock per unit (in shares per unit) | 2 | |||||
2012 Plan | TSR market-based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
2012 Plan | Performance-based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
Minimum | Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 3 years | |||||
Maximum | Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period (in years) | 4 years |
Stock-Based Compensation (Compe
Stock-Based Compensation (Compensation Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 4,196 | $ 3,799 | $ 2,169 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 430 | 1,133 | 1,077 |
Restricted stock and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 3,766 | $ 2,666 | $ 1,092 |
Stock-Based Compensation (Fair
Stock-Based Compensation (Fair Value Assumptions) (Details) - Stock options | 12 Months Ended |
Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate (as a percent) | 0.83% |
Expected volatility (as a percent) | 40.00% |
Dividend yield (as a percent) | 0.00% |
Expected term (in years) | 5 years |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options (in shares) | |||
Beginning balance (in shares) | 963,196 | ||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | 0 | 0 |
Forfeited/expired (in shares) | (6,543) | ||
Ending balance (in shares) | 956,653 | 963,196 | |
Exercisable (in shares) | 852,510 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 12.74 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 0 | ||
Forfeited/expired (in dollars per share) | 12.74 | ||
Ending balance (in dollars per share) | 12.74 | $ 12.74 | |
Exercisable (in dollars per share) | $ 12.74 |
Stock-Based Compensation (Unves
Stock-Based Compensation (Unvested Stock Option Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Outstanding (in shares) | |||
Beginning balance (in shares) | 360,316 | ||
Granted (in shares) | 0 | 0 | |
Vested (in shares) | (249,630) | ||
Forfeited/expired (in shares) | (6,543) | ||
Ending balance (in shares) | 104,143 | 360,316 | |
Weighted Average Grant- Date Fair Value | |||
Beginning balance (in dollars per share) | $ 4.32 | ||
Granted (in dollars per share) | 0 | $ 4.08 | |
Vested (in dollars per share) | 4.54 | ||
Forfeited/expired (in dollars per share) | 3.36 | ||
Ending balance (in dollars per share) | $ 3.88 | $ 4.32 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Activity) (Details) - Restricted stock | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Shares | |
Beginning balance (in shares) | shares | 605,141 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (202,457) |
Forfeited/expired (in shares) | shares | (14,419) |
Ending balance (in shares) | shares | 388,265 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 10.82 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 10.85 |
Forfeited/expired (in dollars per share) | $ / shares | 11.04 |
Ending balance (in dollars per share) | $ / shares | $ 10.80 |
Stock-Based Compensation (Res61
Stock-Based Compensation (Restricted Stock Unit Activity) (Details) - Restricted stock units (RSUs) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
RSUs | |
Beginning balance (in shares) | shares | 516,774 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (13,634) |
Forfeited/expired (in shares) | shares | (39,727) |
Ending balance (in shares) | shares | 463,413 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 12.81 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 11 |
Forfeited/expired (in dollars per share) | $ / shares | 11.49 |
Ending balance (in dollars per share) | $ / shares | $ 12.97 |
Stockholders' Equity and Loss62
Stockholders' Equity and Loss per Share (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Treasury stock, number of shares held | 136,278 | |||
Shares authorized | 100,000,000 | 100,000,000 | ||
Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock outstanding (in shares) | 24,403,659 | 24,455,709 | 12,397,900 | 12,309,194 |
Restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Restricted stock outstanding (in shares) | 388,265 | 605,141 |
Stockholders' Equity and Loss63
Stockholders' Equity and Loss per Share (Loss Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | |||||||||||
Net loss (numerator) | $ (5,226) | $ (3,377) | $ (652) | $ 1,375 | $ (24,606) | $ (1,413) | $ 1,556 | $ (3,705) | $ (7,880) | $ (28,168) | $ (1,997) |
Loss per share: | |||||||||||
Basic and Diluted (in dollars per share) | $ (0.22) | $ (0.14) | $ (0.03) | $ 0.06 | $ (1) | $ (0.07) | $ 0.13 | $ (0.30) | $ (0.33) | $ (1.65) | $ (0.16) |
Shares (denominator): | |||||||||||
Weighted-average number of shares outstanding-basic (in shares) | 23,904,000 | 17,078,000 | 12,179,000 | ||||||||
Net effect of dilutive stock options, warrants and restricted stock units (in shares) | 0 | 0 | 0 | ||||||||
Weighted-average common shares outstanding-diluted (in shares) | 23,904,000 | 17,078,000 | 12,179,000 | ||||||||
Equity Option | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 963,196 | 963,196 | 963,196 | ||||||||
Warrant | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,198,000 | 2,198,000 | 2,198,000 | ||||||||
Restricted stock units (RSUs) | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 463,413 | 516,774 | 0 |
Segment and Geographical Info64
Segment and Geographical Information (Details) | 12 Months Ended |
Dec. 31, 2015segment | |
Segment Reporting [Abstract] | |
Number of segments | 1 |
Commitments and Contingencies65
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Purchase commitments | $ 28,000 | ||
Future Minimum Payments: | |||
2,016 | 493 | ||
2,017 | 282 | ||
2,018 | 71 | ||
2,019 | 50 | ||
2,020 | 0 | ||
Thereafter | 0 | ||
Total future lease payments | 896 | ||
Rent expense | $ 3,600 | $ 2,900 | $ 2,100 |
Concentration of Market and C66
Concentration of Market and Credit Risk (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | |||
Cash, uninsured amount | $ 4.8 | ||
Revenues | Customer Concentration Risk | Parsley Energy, LP | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | ||
Revenues | Customer Concentration Risk | Pioneer Natural Resources USA, Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | ||
Revenues | Customer Concentration Risk | Laredo Petroleum, Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 14.00% | 22.00% | |
Revenues | Customer Concentration Risk | COG Operating, LLC | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 13.00% | 21.00% | |
Revenues | Customer Concentration Risk | Elevation Resources LLC | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | ||
Revenues | Customer Concentration Risk | Apache Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 21.00% | 30.00% | |
Revenues | Customer Concentration Risk | BOPCO, LP | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 20.00% | 16.00% | |
Revenues | Customer Concentration Risk | Newfield Exploration Company | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | ||
Revenues | Customer Concentration Risk | W&T Offshore, Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Revenues | Customer Concentration Risk | Anadarko Petroleum Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Accounts Receivable | Customer Concentration Risk | Devon Energy Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 27.00% | ||
Accounts Receivable | Customer Concentration Risk | Parsley Energy, LP | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | ||
Accounts Receivable | Customer Concentration Risk | Pioneer Natural Resources USA, Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 17.00% | 11.00% | |
Accounts Receivable | Customer Concentration Risk | Laredo Petroleum, Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | 22.00% | |
Accounts Receivable | Customer Concentration Risk | COG Operating, LLC | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 20.00% | ||
Accounts Receivable | Customer Concentration Risk | Apache Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 22.00% | 27.00% | |
Accounts Receivable | Customer Concentration Risk | BOPCO, LP | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | 17.00% | |
Accounts Receivable | Customer Concentration Risk | Rosetta Resources Operating L.P. | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Accounts Receivable | Customer Concentration Risk | Anadarko Petroleum Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 13.00% |
Related Parties and Other Mat67
Related Parties and Other Matters (Details) | 12 Months Ended | |||
Dec. 31, 2015USD ($)Director | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | May. 31, 2015Director | |
Affiliated Entity | Global Energy Services Operating, LLC (GES) | ||||
Related Party Transaction [Line Items] | ||||
Number of directors | Director | 1 | 1 | ||
Ownership percentage | 36.00% | |||
Purchases | $ 1,200,000 | $ 2,200,000 | $ 10,000 | |
Outstanding payables | 500,000 | 0 | ||
Vendor One | Purchases of Oilfield Equipment and Related Supplies | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 1,700,000 | 600,000 | ||
Outstanding payables | 600,000 | $ 12,000 | ||
Vendor Two | Purchases of Oilfield Equipment and Related Supplies | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 100,000 | |||
Outstanding payables | $ 100,000 | |||
Vendor Three | Purchases of Oilfield Equipment and Related Supplies | Director | ||||
Related Party Transaction [Line Items] | ||||
Number of directors | Director | 1 | |||
Purchases | $ 5,100,000 | 8,600,000 | ||
Outstanding payables | $ 100,000 | $ 400,000 |
Unaudited Quarterly Financial68
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 23,686 | $ 21,344 | $ 21,082 | $ 22,306 | $ 23,014 | $ 19,123 | $ 14,661 | $ 13,549 | $ 88,418 | $ 70,347 | $ 42,786 |
Operating income (loss) | (3,802) | (2,841) | 160 | 1,532 | (28,640) | (672) | 1,444 | (5,199) | (4,951) | (33,067) | (4,657) |
Income tax (benefit) expense | 61 | (326) | 95 | (155) | (1,788) | (352) | 667 | (1,885) | (325) | (3,358) | (1,882) |
Net loss | $ (5,226) | $ (3,377) | $ (652) | $ 1,375 | $ (24,606) | $ (1,413) | $ 1,556 | $ (3,705) | $ (7,880) | $ (28,168) | $ (1,997) |
Earnings (loss) per share: | |||||||||||
Basic and Diluted (in dollars per share) | $ (0.22) | $ (0.14) | $ (0.03) | $ 0.06 | $ (1) | $ (0.07) | $ 0.13 | $ (0.30) | $ (0.33) | $ (1.65) | $ (0.16) |
Schedule II - Valuation and Q69
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 129 | $ 93 | $ 256 |
Charged to Costs and Expenses | 132 | 123 | 93 |
Deductions | (253) | (87) | (256) |
Balance at End of Period | 8 | 129 | 93 |
Valuation allowance for deferred tax assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 4,449 | 0 | 0 |
Charged to Costs and Expenses | 2,261 | 4,449 | 0 |
Deductions | 0 | 0 | 0 |
Balance at End of Period | $ 6,710 | $ 4,449 | $ 0 |