Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-36590 | ||
Entity Registrant Name | INDEPENDENCE CONTRACT DRILLING, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 37-1653648 | ||
Entity Address, Address Line One | 20475 State Highway 249 | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77070 | ||
City Area Code | 281 | ||
Local Phone Number | 598-1230 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | ICD | ||
Entity Public Float | $ 27,149,805 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Security Exchange Name | NYSE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 13,641,228 | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | Houston, Texas | ||
Entity Central Index Key | 0001537028 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference [Text Block] | Portions of the proxy statement for the registrant’s 2023 Annual Meeting of Stockholders (to be filed within 120 days of the close of the registrant’s fiscal year) are incorporated by reference into Part III of this Annual Report on Form 10 - K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 5,326 | $ 4,140 |
Accounts receivable | 39,775 | 22,211 |
Inventories | 1,508 | 1,171 |
Assets held for sale | 325 | |
Prepaid expenses and other current assets | 4,736 | 4,787 |
Total current assets | 51,670 | 32,309 |
Property, plant and equipment, net | 376,084 | 362,346 |
Other long-term assets, net | 1,960 | 2,449 |
Total assets | 429,714 | 397,104 |
Liabilities | ||
Current portion of long-term debt | 2,485 | 4,464 |
Accounts payable | 31,946 | 15,304 |
Accrued liabilities | 17,608 | 15,617 |
Merger consideration payable to an affiliate | 2,902 | |
Total current liabilities | 52,039 | 38,287 |
Long-term debt | 143,223 | 141,740 |
Deferred income taxes, net | 12,266 | 19,037 |
Other long-term liabilities | 7,474 | 2,811 |
Total liabilities | 215,002 | 201,875 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity | ||
Common stock, $0.01 par value, 250,000,000 shares authorized; 13,698,851 and 10,287,931 shares issued, respectively, and 13,613,759 and 10,206,085 shares outstanding, respectively | 136 | 102 |
Additional paid-in capital | 617,606 | 532,826 |
Accumulated deficit | (399,097) | (333,776) |
Treasury stock, at cost, 85,092 shares and 81,846 shares, respectively | (3,933) | (3,923) |
Total stockholders' equity | 214,712 | 195,229 |
Total liabilities and stockholders' equity | $ 429,714 | $ 397,104 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets [Abstract] | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (shares) | 13,698,851 | 10,287,931 |
Common stock, shares outstanding (shares) | 13,613,759 | 10,206,085 |
Treasury stock (shares) | 85,092 | 81,846 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Operations [Abstract] | ||
Revenues | $ 186,710 | $ 87,955 |
Costs and expenses | ||
Operating costs | 123,399 | 75,751 |
Selling, general and administrative | 24,809 | 15,699 |
Depreciation and amortization | 40,443 | 38,915 |
Asset impairment, net | 350 | 800 |
Gain on disposition of assets, net | (196) | (245) |
Other expense | 150 | |
Total costs and expenses | 188,805 | 131,070 |
Operating loss | (2,095) | (43,115) |
Interest expense | (29,575) | (15,193) |
(Loss) gain on extinguishment of debt | (46,347) | 10,128 |
Change in fair value of embedded derivative liability | (4,265) | |
Realized gain on extinguishment of derivative | 10,765 | |
Loss before income taxes | (71,517) | (48,180) |
Income tax (benefit) expense | (6,196) | 18,532 |
Net loss | $ (65,321) | $ (66,712) |
Loss per share: | ||
Basic (in dollars per share) | $ (5.01) | $ (8.89) |
Diluted (in dollars per share) | $ (5.01) | $ (8.89) |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 13,026 | 7,507 |
Diluted (in shares) | 13,026 | 7,507 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total |
Beginning balance at Dec. 31, 2020 | $ 62 | $ 517,948 | $ (267,064) | $ (3,913) | $ 247,033 |
Beginning balance (in shares) at Dec. 31, 2020 | 6,175,818 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
RSUs vested, net of shares withheld for taxes | (14) | (14) | |||
RSUs vested, net of shares withheld for taxes (in shares) | 28,611 | ||||
Purchase of treasury stock (in shares) | (3,268) | ||||
Purchase of treasury stock | (10) | (10) | |||
Issuance of common stock through at-the-market facility, net of offering costs (in shares) | 2,860,924 | ||||
Issuance of common stock through at-the-market facility, net of offering costs | $ 29 | 8,940 | 8,969 | ||
Issuance of common stock under purchase agreement (in shares) | 1,144,000 | ||||
Issuance of common stock under purchase agreement | $ 11 | 4,228 | 4,239 | ||
Stock-based compensation | 1,724 | 1,724 | |||
Net loss | (66,712) | (66,712) | |||
Ending balance at Dec. 31, 2021 | $ 102 | 532,826 | (333,776) | (3,923) | 195,229 |
Ending balance (in shares) at Dec. 31, 2021 | 10,206,085 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
RSUs vested, net of shares withheld for taxes | $ 1 | (10) | (9) | ||
RSUs vested, net of shares withheld for taxes (in shares) | 81,067 | ||||
Purchase of treasury stock (in shares) | (3,246) | ||||
Purchase of treasury stock | (10) | (10) | |||
Issuance of common stock through at-the-market facility, net of offering costs (in shares) | 1,061,853 | ||||
Issuance of common stock through at-the-market facility, net of offering costs | $ 10 | 3,028 | 3,038 | ||
Shares issued for structuring fee (in shares) | 2,268,000 | ||||
Shares issued for structuring fee | $ 23 | 9,140 | 9,163 | ||
Extinguishment of derivative | 69,232 | 69,232 | |||
Stock-based compensation | 3,390 | 3,390 | |||
Net loss | (65,321) | (65,321) | |||
Ending balance at Dec. 31, 2022 | $ 136 | $ 617,606 | $ (399,097) | $ (3,933) | $ 214,712 |
Ending balance (in shares) at Dec. 31, 2022 | 13,613,759 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (65,321) | $ (66,712) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 40,443 | 38,915 |
Asset impairment, net | 350 | 800 |
Stock-based compensation | 4,644 | 2,295 |
Gain on disposition of assets, net | (196) | (245) |
Non-cash interest expense | 15,859 | 5,883 |
Non-cash loss (gain) on extinguishment of debt | 46,347 | (10,128) |
Amortization of deferred financing costs | 346 | 1,115 |
Amortization of Convertible Notes issuance costs and debt discount | 6,714 | |
Change in fair value of embedded derivative liability | 4,265 | |
Gain on extinguishment of derivative | (10,765) | |
Deferred income taxes | (6,771) | 18,532 |
Bad debt expense (recovery) | 256 | (52) |
Changes in operating assets and liabilities | ||
Accounts receivable | (17,820) | (12,136) |
Inventories | (365) | (133) |
Prepaid expenses and other assets | 266 | 57 |
Accounts payable and accrued liabilities | 10,325 | 12,230 |
Net cash provided by (used in) operating activities | 28,577 | (9,579) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (43,047) | (16,415) |
Proceeds from the sale of assets | 4,552 | 2,037 |
Proceeds from insurance claims | 191 | |
Net cash used in investing activities | (38,304) | (14,378) |
Cash flows from financing activities | ||
Payment of merger consideration | (2,902) | |
Purchase of treasury stock | (10) | (10) |
RSUs withheld for taxes | (10) | (14) |
Payments for finance lease obligations | (5,811) | (3,594) |
Net cash provided by financing activities | 10,913 | 15,818 |
Net increase (decrease) in cash and cash equivalents | 1,186 | (8,139) |
Cash and cash equivalents | ||
Beginning of year | 4,140 | 12,279 |
End of year | 5,326 | 4,140 |
ATM Offering | ||
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 3,038 | 8,969 |
Common Stock Purchase Agreement | ||
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 0 | 4,239 |
Convertible debt | ||
Cash flows from financing activities | ||
Borrowings | 157,500 | |
Convertible debt issuance costs / Financing costs paid | (6,986) | |
Term Loan Facility | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Non-cash interest expense | 3,200 | 5,900 |
Cash flows from financing activities | ||
Repayments | (139,076) | |
Convertible debt issuance costs / Financing costs paid | (64) | |
Revolving ABL Credit Facility | ||
Cash flows from financing activities | ||
Borrowings | 5,589 | 6,309 |
Repayments | (78) | (17) |
Convertible debt issuance costs / Financing costs paid | $ (341) | $ 0 |
Nature of Operations and Recent
Nature of Operations and Recent Developments | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Recent Developments | Independence Contract Drilling, Inc. Notes to Consolidated Financial Statements 1. Nature of Operations and Recent Developments Except as expressly stated or the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “ICD” refer to Independence Contract Drilling, Inc. and its subsidiary. We provide land-based contract drilling services for oil and natural gas producers targeting unconventional resource plays in the United States. We own and operate a premium fleet comprised of modern, technologically advanced drilling rigs. We currently focus our operations on unconventional resource plays located in geographic regions that we can efficiently support from our Houston, Texas and Midland, Texas facilities in order to maximize economies of scale. Currently, our rigs are operating in the Permian Basin and the Haynesville Shale; however, our rigs have previously operated in the Eagle Ford Shale, Mid-Continent and Eaglebine regions as well. Our business depends on the level of exploration and production activity by oil and natural gas companies operating in the United States, and in particular, the regions where we actively market our contract drilling services. The oil and natural gas exploration and production industry is historically cyclical and characterized by significant changes in the levels of exploration and development activities. Oil and natural 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 natural 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 United States and the regions where we market our contract drilling services, whether resulting from changes in oil and natural gas prices or otherwise, could materially and adversely affect our business. Market Conditions Oil and natural gas prices were negatively impacted by the effects of the COVID-19 pandemic and significantly decreased the demand for drilling services in 2020 and early 2021. However, during 2022, business conditions began to improve rapidly, which has led to improved dayrates and margins for contract drilling services. In addition, the supply for pad-optimal, super-spec rigs is finite with limited spare capacity that can be reactivated without significant cost and expense. Oil prices (WTI-Cushing) reached a high of $123.64 per barrel on March 8, 2022; however, prices have fallen since those highs, reaching $76.28 per barrel as of February 21, 2023. Recently, natural gas prices have fallen dramatically. Natural gas prices (Henry Hub) reached a high of per mmcf as of February 21, 2023. These commodity price declines, as well as take away capacity issues, have caused market conditions in the Haynesville Shale to weaken rapidly, which we believe will result in a reduction in the number of drilling rigs operating in the Haynesville Shale, including a reduction in our operating rigs. We intend to relocate these rigs to the Permian Basin where market conditions remain strong and where we believe we can recontract these rigs on attractive terms, with one relocation already occurring as of March 1, 2023. However, there can be no assurance that we will be successful in marketing all of these rigs in the Permian Basin or that they will be contracted on a timely basis or upon terms that are acceptable to us. Convertible Notes On March 18, 2022, we issued $157.5 million aggregate principal amount of convertible secured PIK toggle notes due 2026 (the “Convertible Notes”), and currently have $170.2 million of Convertible Notes outstanding as of December 31, 2022. Proceeds from the private placement of the Convertible Notes were used to repay all of our outstanding indebtedness under our term loan credit agreement, to repay merger consideration payable with associated accrued interest to prior equity holders of Sidewinder Drilling LLC, and for working capital purposes. The Convertible Notes mature on March 18, 2026. The Convertible Notes have a cash interest rate of the Secured Overnight Financing Rate plus a We have the right at our option, to PIK Convertible Note interest for the entire term of the Convertible Notes. We elected to PIK outstanding interest as of September 30, 2022, resulting in an additional $12.7 million principal amount of Convertible Notes being issued as of that date. We have accrued $5.8 million of interest related to the Convertible Notes as of December 31, 2022. The next interest due date is March 31, 2023 and we have elected to pay this interest in-kind when due on March 31, 2023. As the PIK interest due as of March 31, 2023 will result in the issuance of additional Convertible Notes, we have classified the accrued interest as of December 31, 2022 as “Other Long-Term Liabilities” on our consolidated balance sheet. The effective conversion price of the Convertible Notes is $4.51 per share (221.72949 shares of Common Stock per $1,000 principal amount of Convertible Notes). We may issue up to $7.5 million of additional Convertible Notes. We may convert all Convertible Notes (including PIK notes) in connection with a Qualified Merger Conversion (as defined in the Indenture) and may issue additional shares of our common stock to the extent the number of shares issuable upon such conversion would exceed the number of shares of common stock issuable at the otherwise then-current conversion price. In connection with the placement of the Convertible Notes, we issued 2,268,000 shares of our common stock as a structuring fee. The structuring fee shares were issued on March 18, 2022, concurrent with the closing of the private placement of the Convertible Notes. See Note 8 “Long-term Debt” Derivatives We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging As described in Note 8 , we determined that certain features under our Convertible Notes required bifurcation from the debt host agreement in accordance with ASC 815 as of March 18, 2022. Accordingly, we recognized a derivative liability at fair value for this instrument in our consolidated balance sheet and adjusted the carrying value of the liability to fair value at each reporting period until the features underlying the instrument were exercised, redeemed, cancelled or expired. The changes in fair value were assessed quarterly and recorded in our consolidated statement of operations. After the approval of certain matters by our stockholders at our 2022 Annual Meeting of Stockholders held June 8, 2022, certain features under our Convertible Notes were modified and no longer met the criteria to bifurcate from the host debt agreement. Accordingly, through June 8, 2022, we recognized a loss of Financial Instruments and Fair Value “Summary of Significant Accounting Policies” Asset Impairment, net and Assets Held for Sale During the fourth quarter of 2022, we impaired certain drilling equipment that was designated held for sale as of December 31, 2022. Accordingly, we impaired the drilling equipment to fair market value less cost to sell, recorded asset impairment expense of During 2021, we impaired a damaged piece of drilling equipment million, net of insurance recoveries. During the third quarter of 2021, we initiated a plan to sell miscellaneous drilling equipment. Accordingly, we impaired the drilling equipment to fair market value less cost to sell and recorded asset impairment expense of ATM Offering In conjunction with the ATM Distribution Agreement entered into on August 19, 2021, our board of directors authorized the sale of $5.9 million and $6.5 million in December 2021 and May 2022, respectively, of common stock to be sold in transactions that are deemed to be “at-the-market offerings.” We sold shares under this program during the first quarter of 2022 and raised gross proceeds of million. We did not participate in this program in the second, third or fourth quarter of 2022. As of December 31, 2022, we have |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation These audited consolidated financial statements include all the accounts of ICD and its subsidiary. All significant intercompany accounts and transactions have been eliminated. Except for the subsidiary, we have no controlling financial interests in any other entity which would require consolidation. These audited consolidated financial statements 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 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. Allowance for doubtful accounts was zero as of December 31, 2022 and 2021, respectively. Inventories Inventory is stated at lower of cost or net realizable value and consists primarily of supplies held for use in our drilling operations. Cost is determined on an average cost basis. Property, Plant and Equipment, net 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, which range from two 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 Our operations are managed from field locations that we own or lease, that contain office, shop and yard space to support day-to-day operations, including repair and maintenance of equipment, as well as storage of equipment, materials and supplies. We currently have six such field locations. Additionally, we lease office space for our corporate headquarters in northwest Houston. Leases are evaluated at inception or at any subsequent material modification to determine if the lease should be classified as a finance or operating lease. 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 further discussion, see Asset Impairments “Nature of Operations and Recent Developments.” Construction in progress represents the costs incurred for drilling rigs and rig upgrades 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. Financial Instruments and Fair value 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. Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, certain accrued liabilities and our debt. Our debt consists primarily of our Convertible Notes and Revolving ABL Facility as of December 31, 2022 and our Term Loan and our Revolving ABL Facility as of December 31, 2021. The fair value of cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities, which are determined to be Level 1 measurements, approximate their carrying value because of the short-term nature of these instruments. The estimated fair value of our Revolving ABL Credit Facility, Term Loan Facility, and merger consideration payable to an affiliate are determined to be Level 3 measurements as our debt is not actively traded and the fair value estimate is based on discounted estimated future cash flows or a fair value in-exchange assumption, which are significant unobservable inputs in the fair value hierarchy. To determine the fair value of our outstanding floating rate debt, we utilized a credit spread of 493 bps on the Revolving ABL Credit Facility based on an analysis of credit spreads of comparably rated public debt items as well as the original issuance price of the debt (in thousands) December 31, 2022 December 31, 2021 Revolving ABL Credit Facility $ 11,870 $ 6,030 Term Loan Facility $ — $ 140,664 Merger consideration payable to an affiliate $ — $ 4,449 The fair value of the Convertible Notes was estimated as $159.2 million as of December 31, 2022. The fair value of the Convertible Notes is also determined to be a Level 3 measurement and was estimated using a binomial lattice model. The factors used to determine fair value are subject to management's judgement and expertise and include, but are not limited to our share price, expected price volatility ( Recurring Fair Value Measurements As described in Note 8 , we determined that certain features under our Convertible Notes required bifurcation from the debt host agreement in accordance with ASC 815. Accordingly, we recognized a derivative liability at fair value for this instrument in our consolidated balance sheet and adjusted the carrying value of the liability to fair value at each reporting period until the features underlying the instrument were exercised, redeemed, cancelled or expired. The changes in fair value were assessed quarterly and recorded in our consolidated statement of operations. In conjunction with the issuance of the Convertible Notes on March 18, 2022, we recorded an embedded derivative liability of $75.7 million. After the approval of our stockholders on June 8, 2022, certain features under our Convertible Notes were modified and no longer met the criteria to bifurcate from the host debt agreement. Accordingly, through June 8, 2022, we recognized a loss of embedded derivative liability recorded. The loss associated with the change in the fair value of the embedded derivative as of June 8, 2022 is reported in our consolidated statement of operations within change in fair value of embedded derivative liability. The fair value of the embedded derivative liability as of June 8, 2022 was estimated using a “with and without” approach: • “With” scenario : the fair value of the Convertible Notes as of the valuation date is estimated based on a binomial lattice model. • “Without” scenario : the fair value of the Convertible Notes “without” the embedded features was estimated using a discounted cash flow model whereby the expected cash flows absent the embedded derivative (i.e., the coupon and principal payments) are discounted at a credit-adjusted rate. The significant unobservable inputs that were used in the fair value measurement of our embedded derivative liability were a volatility rate of 58.9%, a credit spread of 3,570 basis points and a risk-free rate of 3.0%. The expected volatility was estimated based on the historical volatility of our common stock and the remaining term of the Convertible Notes of 3.7 years as of June 8, 2022. There were no transfers between fair value measurement levels during the years ended December 31, 2022, or 2021. See Note 11 “Stock-Based Compensation” for fair value of liability-based awards. Fair value measurements are applied with respect to our non-financial assets and liabilities measured on a non-recurring basis, which would consist of measurements primarily of long-lived asset impairments. Revenue and Cost Recognition We earn contract drilling revenues pursuant to drilling contracts entered into with our customers. We perform drilling services on a “daywork” basis, under which we charge a specified rate per day, or “dayrate.” The dayrate associated with each of our contracts is a negotiated price determined by the capabilities of the rig, location, depth and complexity of the wells to be drilled, operating conditions, duration of the contract and market conditions. The term of land drilling contracts may be for a defined number of wells or for a fixed time period. 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. Our contracts provide for early termination fees in the event our customers choose to cancel the contract prior to the specified contract term. We record a contract liability for such fees received up front, and recognize them ratably as contract drilling revenue over the initial term of the related drilling contract or until such time that all performance obligations are satisfied. While under contract, our rigs generally earn a reduced rate while the rig is moving between wells or drilling locations, or on standby waiting for the customer. Reimbursements for the purchase of supplies, equipment, trucking and other services that are provided at the request of our customers are recorded as revenue when incurred. The related costs are recorded as operating expenses or capitalized when appropriate when incurred. Revenue is presented net of any sales tax charged to the customer that we are required to remit to local or state governmental taxing authorities. Our operating costs include all expenses associated with operating and maintaining our drilling rigs. Operating costs include all “rig level” expenses such as labor and related payroll costs, repair and maintenance expenses, supplies, workers’ compensation and other insurance, ad valorem taxes and equipment rental costs. Also included in our operating costs are certain costs that are not incurred at the rig level. These costs include expenses directly associated with our operations management team as well as our safety and maintenance personnel who are not directly assigned to our rigs but are responsible for the oversight and support of our operations and safety and maintenance programs across our fleet. Leases Lease liabilities are measured at the lease commencement date and are based on the present value of remaining payments contractually required under the contract. Payments that are variable in nature are excluded from the measurement of our lease liabilities and are recorded as an expense as incurred. Options to renew or extend a lease are included in the measurement of our lease liabilities only when it is reasonably certain that we will exercise these rights. In estimating the present value of our lease liabilities, payments are discounted at the interest rate stated in the applicable lease agreement or, if not available, our incremental borrowing rate (“IBR”), applied utilizing a portfolio approach. To determine our IBR, we utilize information publicly available from companies within our industry with similar credit profiles to construct a company-specific yield curve in order to estimate the rate of interest we would pay to borrow at various lease terms. At lease commencement, we recognize a lease right-of-use asset equal to our lease liability, adjusted for lease payments paid to the lessor prior to the lease commencement date, and any initial direct costs incurred. Operating lease expense is recorded on a straight-line basis over the lease term. For finance leases, we amortize our right-of-use assets on a straight-line basis over the shorter of the asset’s useful life or the lease term. Additionally, interest expense is recognized each period related to the accretion of our lease liabilities over their respective lease terms. Stock-Based Compensation We record compensation expense over the 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. 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 consolidated 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 the accompanying consolidated 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 and assets held for sale, and the collectability of accounts receivable. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity 15, 2021, with early adoption permitted. For smaller reporting companies the pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. We early adopted this standard on January 1, 2022. See Note 8 “Long-term Debt” In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations . This guidance requires a business entity operating as a buyer in a supplier finance agreement to disclose qualitative and quantitative information about its supplier finance programs. This ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The adoption of this guidance will result in additional disclosures relating to our supplier financing programs and related obligations. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 3. Revenue from Contracts with Customers Drilling Services Our revenues are principally derived from contract drilling services and the activities in our drilling contracts, for which revenues may be earned, include: (i) providing a drilling rig and the crews and supplies necessary to operate the rig; (ii) mobilizing and demobilizing the rig to and from the initial and final drill site, respectively; (iii) certain reimbursable activities; (iv) performing rig modification activities required for the contract; and (v) early termination revenues. We account for these integrated services provided under our drilling contracts as a single performance obligation, satisfied over time, that is comprised of a series of distinct time increments. Consideration for activities that are not distinct within the context of our contracts, and that do not correspond to a distinct time increment within the contract term, are allocated across the single performance obligation and recognized ratably in proportion to the actual services performed over the initial term of the contract. If taxes are required to be collected from customers relating to our drilling services, they are excluded from revenue. Dayrate Drilling Revenue. Mobilization/Demobilization Revenue. In our contracts, there is generally significant uncertainty as to the amount of demobilization fee revenue that may ultimately be collected due to contractual provisions which stipulate that certain conditions be present at contract completion for such revenue to be received. For example, the amount collectible may be reduced to zero if the rig has been contracted with a new customer upon contract completion. Accordingly, the estimate for such revenue may be constrained depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions. Reimbursable Revenue. Capital Modification Revenue. Early Termination Revenue. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the years ended December 31, 2022 and 2021: Year Ended December 31, (in thousands) 2022 2021 Dayrate drilling $ 172,284 $ 79,597 Mobilization 4,719 3,283 Reimbursables 8,856 4,920 Capital modification 810 153 Other 41 2 Total revenue $ 186,710 $ 87,955 Contract Balances Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Payment terms on invoiced amounts are typically 30 days. Contract asset balances could consist of demobilization fee revenue that we expect to receive that is recognized ratably throughout the contract term, but invoiced upon completion of the demobilization activities. Once the demobilization fee revenue is invoiced the corresponding contract asset is transferred to accounts receivable. Contract liabilities include payments received for mobilization fees as well as upgrade activities, which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract. The following table provides information about receivables and contract liabilities related to contracts with customers as of December 31, 2022 and 2021, respectively. We had no contract assets in either year. December 31, December 31, (in thousands) 2022 2021 Receivables, which are included in “Accounts receivable” $ 39,732 $ 22,167 Contract liabilities, which are included in “Accrued liabilities” $ (1,158) $ (542) Significant changes in the contract liabilities balance during the years ended December 31, 2022 and 2021 are as follows: Year Ended December 31, (in thousands) 2022 2021 Revenue recognized that was included in contract liabilities at beginning of period $ 542 $ 119 Increase in contract liabilities due to cash received, excluding amounts recognized as revenue $ (1,158) $ (542) Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2022. The estimated revenue does not include amounts of variable consideration that are constrained. Year Ending December 31, (in thousands) 2023 2024 2025 Total Revenue $ 1,158 $ — $ — $ 1,158 The amounts presented in the table above consist only of fixed consideration related to fees for rig mobilizations and demobilizations, if applicable, which are allocated to the drilling services performance obligation as such performance obligation is satisfied. We have elected the exemption from disclosure of remaining performance obligations for variable consideration. Therefore, dayrate revenue to be earned on a rate scale associated with drilling conditions and level of service provided for each fractional-hour time increment over the contract term and other variable consideration such as penalties and reimbursable revenues, have been excluded from the disclosure. Contract Costs We capitalize costs incurred to fulfill our contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy our performance obligations under the contract and (iii) are expected to be recovered through revenue generated under the contract. These costs, which principally relate to rig mobilization costs at the commencement of a new contract, are deferred as a current or noncurrent asset (depending on the length of the contract term), and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Such contract costs, recorded as “Prepaid expenses and other current assets”, amounted to $0.3 million and $0.6 million on our consolidated balance sheets as of December 31, 2022 and December 31, 2021, respectively. During the year ended December 31, 2022, contract costs increased by $3.3 million and we amortized $3.6 million of contract costs. Costs incurred for the demobilization of rigs at contract completion are recognized as incurred during the demobilization process. Costs incurred for rig modifications or upgrades required for a contract, which are considered to be capital improvements, are capitalized as drilling and other property and equipment and depreciated over the estimated useful life of the improvement. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 4. Leases As a Lessor Our daywork drilling contracts, under which the vast majority of our revenues are derived, contain both a lease component and a service component. We account for these contracts using the practical expedient to not separate non-lease components from lease components and, instead, to account for those components as a single amount, if the non-lease components otherwise would be accounted for under Topic 606 and both of the following are met: (i) the timing and pattern of transfer of non-lease components and lease components are the same; (ii) the lease component, if accounted for separately, would be classified as an operating lease. If the non-lease component is the predominant component of the combined amount, an entity is required to account for the combined amount in accordance with Topic 606. Otherwise, the entity must account for the combined amount as an operating lease in accordance with Topic 842. Revenues from our daywork drilling contracts meet both of the criteria above and we have determined both quantitatively and qualitatively that the service component of our daywork drilling contracts is the predominant component. Accordingly, we combine the lease and service components of our daywork drilling contracts and account for the combined amount under Topic 606. See Note 3 “Revenue from Contracts with Customers As a Lessee We have multi-year operating and financing leases for corporate office space, field location facilities, land, vehicles and various other equipment used in our operations. We also have a significant number of rentals related to our drilling operations that are day-to-day or month-to-month arrangements. Our multi-year leases have remaining lease terms of greater than one year to three years. As a practical expedient, a lessee may elect not to apply the recognition requirements in ASC 842 to short-term leases. Instead a lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. We elected to utilize this practical expedient. The components of lease expense were as follows: Year Ended Year Ended (in thousands) December 31, 2022 December 31, 2021 Operating lease expense $ 747 $ 928 Short-term lease expense 5,697 3,033 Variable lease expense 577 431 Finance lease expense: Amortization of right-of-use assets $ 1,682 $ 1,158 Interest expense on lease liabilities 387 585 Total finance lease expense 2,069 1,743 Total lease expense $ 9,090 $ 6,135 Supplemental cash flow information related to leases is as follows: Year Ended Year Ended (in thousands) December 31, 2022 December 31, 2021 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 732 $ 964 Operating cash flows from finance leases $ 373 $ 580 Financing cash flows from finance leases $ 5,811 $ 3,594 Right-of-use assets obtained or recorded in exchange for lease obligations: Operating leases $ 153 $ — Finance leases $ 4,440 $ 1,503 Supplemental balance sheet information related to leases is as follows: (in thousands) December 31, 2022 December 31, 2021 Operating leases: Other long-term assets, net $ 976 $ 1,437 Accrued liabilities $ 751 $ 693 Other long-term liabilities 373 1,036 Total operating lease liabilities $ 1,124 $ 1,729 Finance leases: Property, plant and equipment $ 7,307 $ 14,989 Accumulated depreciation (1,994) (1,989) Property, plant and equipment, net $ 5,313 $ 13,000 Current portion of long-term debt $ 2,485 $ 4,464 Long-term debt 1,599 1,305 Total finance lease liabilities $ 4,084 $ 5,769 Weighted-average remaining lease term Operating leases 1.6 years 2.5 years Finance leases 1.6 years 1.3 years Weighted-average discount rate Operating leases 10.86 % 10.84 % Finance leases 8.12 % 8.64 % Maturities of lease liabilities as of December 31, 2022 were as follows: (in thousands) Operating Leases Finance Leases 2023 $ 833 2,743 2024 390 1,110 2025 — 549 Total cash lease payment 1,223 4,402 Less: imputed interest (99) (318) Total lease liabilities $ 1,124 $ 4,084 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories consisted of the following: December 31, (in thousands) 2022 2021 Rig components and supplies $ 1,508 $ 1,171 We determined that no reserve for obsolescence was needed as of December 31, 2022 or 2021. No inventory obsolescence expense was recognized during the years ended December 31, 2022 or 2021. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6. Property, Plant and Equipment Major classes of property, plant, and equipment, which include finance lease assets, consisted of the following (in millions): December 31, (in thousands) 2022 2021 Land $ 300 $ 300 Buildings 2,816 2,800 Drilling rigs and related equipment 611,972 558,530 Machinery, equipment and other 1,775 1,767 Finance leases 7,307 14,989 Leasehold improvements 25 17 Construction in progress 5,693 2,024 Total $ 629,888 $ 580,427 Less: Accumulated depreciation (253,804) (218,081) Total Property, plant and equipment, net $ 376,084 $ 362,346 Repairs and maintenance expense included in operating costs in our statements of operations totaled $23.3 million and $13.4 million for the years ended December 31, 2022 and 2021, respectively. Depreciation expense was $40.4 million and $38.9 million for the years ended December 31, 2022 and 2021, respectively. |
Supplemental Consolidated Balan
Supplemental Consolidated Balance Sheet and Cash Flow Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Consolidated Balance Sheet and Cash Flow Information [Abstract] | |
Supplemental Consolidated Balance Sheet and Cash Flow Information | 7. Supplemental Consolidated Balance Sheet and Cash Flow Information Prepaid expenses and other current assets consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Prepaid insurance $ 3,796 $ 3,463 Prepaid other 656 575 Deferred mobilization costs 283 618 Insurance claim receivable — 122 Other current assets 1 9 $ 4,736 $ 4,787 Accrued liabilities consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Accrued salaries and other compensation $ 6,908 $ 4,154 Insurance 3,002 2,523 Deferred mobilization revenues 1,003 542 Property and other taxes 3,621 2,594 Interest 101 4,372 Operating lease liability - current 751 693 Other 2,222 739 $ 17,608 $ 15,617 Supplemental consolidated cash flow information: Year Ended December 31, (in thousands) 2022 2021 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 5,084 $ 6,918 Supplemental disclosure of non-cash investing and financing activities Change in property, plant and equipment purchases in accounts payable $ 11,686 $ 3,564 Additions to property, plant & equipment through finance leases $ 4,440 $ 1,503 Transfer of assets from held and used to held for sale $ (325) $ (1,082) Extinguishment of finance lease obligations from sale of assets classified as finance leases $ (281) $ (65) Gain on extinguishment of debt $ — $ 10,000 Initial embedded derivative liability upon issuance of Convertible Notes $ 75,733 $ — Extinguishment of embedded derivative liability $ (69,232) $ — Shares issued for structuring fee $ 9,163 $ — |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 8. Long-term Debt Our Long-term Debt consisted of the following: December 31, (in thousands) 2022 2021 Convertible Notes due March 18, 2026 $ 170,166 $ — Revolving ABL Credit Facility due September 30, 2025 11,811 6,300 Term Loan Facility due October 1, 2023 — 135,883 Finance lease obligations 4,084 5,769 186,061 147,952 Less: Convertible Notes issuance costs and debt discount (40,353) — Less: Term Loan Facility deferred financing costs — (1,748) Less: current portion of finance leases (2,485) (4,464) Long-term debt $ 143,223 $ 141,740 Presented below is a schedule of the principal repayment requirements of long-term debt by fiscal year as of December 31, 2022: (in thousands) 2023 2024 2025 2026 Total Convertible Notes $ — $ — $ — $ 170,166 $ 170,166 Revolving ABL Credit Facility — — 11,811 — 11,811 Total $ — $ — $ 11,811 $ 170,166 $ 181,977 Future payments of finance leases are included in Note 4 “Leases.” Convertible Notes On March 18, 2022, we entered into a subscription agreement with affiliates of MSD Partners, L.P. and an affiliate of Glendon Capital Management L.P. (the “Subscription Agreement”) for the placement of $157.5 million aggregate principal amount of convertible secured PIK toggle notes due 2026 (the “Convertible Notes”), and currently have $170.2 million of Convertible Notes outstanding as of December 31, 2022. The Convertible Notes were issued pursuant to an Indenture, dated as of March 18, 2022 (the “Indenture”). The obligations under the Convertible Notes are secured by a first priority lien on collateral other than accounts receivable, deposit accounts and other related collateral pledged as first priority collateral (“Priority Collateral”) under the Revolving ABL Credit Facility (defined below). Proceeds from the private placement of the Convertible Notes were used to repay all of our outstanding indebtedness under our term loan credit agreement, to repay obligations to prior equity holders of Sidewinder Drilling LLC, and for working capital purposes. In connection with the placement of the Convertible Notes, we issued The Convertible Notes have a cash interest rate of the Secured Overnight Financing Rate plus a 10 basis point credit spread, with a floor of 1% (collectively, “SOFR”) plus 12.5%. The Convertible Notes had an initial payment in-kind, or “PIK,” interest rate of SOFR plus 14.0% through September 30, 2022. The PIK interest rate decreased to SOFR plus 9.5% as of September 30, 2022. We have the right at our option, to PIK interest under the Convertible Notes for the entire term of the Convertible Notes. We elected to PIK outstanding interest as of September 30, 2022, resulting in an additional $12.7 million principal amount of Convertible Notes being issued as of that date. We have accrued million of interest related to the Convertible Notes as of December 31, 2022. The next interest due date is March 31, 2023 and we have elected to pay this interest in-kind when due on March 31, 2023. As the PIK interest due as of March 31, 2023 will result in the issuance of additional Convertible Notes, we have classified the accrued interest as of December 31, 2022 as “Other Long-Term Liabilities” on our consolidated balance sheet. The effective conversion price of the Convertible Notes is $4.51 per share (221.72949 shares of Common Stock per $1,000 principal amount of Convertible Notes). We may issue up to The following changes to the terms of the Convertible Notes and Indenture, and to the shares issuable upon conversion of the Convertible Notes, became effective based on approvals of matters by our stockholders at our 2022 Annual Meeting of Stockholders held on June 8, 2022 (constituting “Shareholder Approval” as defined in the Indenture): (a) the Convertible Notes initial PIK interest rate of SOFR plus 14.0% decreased to SOFR plus 9.5% as of September 30, 2022; (b) our initial option to pay interest in additional PIK notes for a period of 18 months was increased to 48 months (the entire term of the Convertible Notes); (c) the effective conversion price of $5.07 per share (197.23866 shares of common stock per $1,000 principal amount of Convertible Notes) was decreased to $4.51 per share (221.72949 shares of Common Stock per $1,000 principal amount of Convertible Notes); (d) the issuance by us of up to $7.5 million of additional Convertible Notes, if and when issued by us; and (e) the issuance of additional shares of common stock upon conversion of Convertible Notes in connection with a Qualified Merger Conversion (as defined in the Indenture) to the extent the number of shares issuable upon such conversion would exceed the number of shares of common stock issuable at the otherwise then-current conversion price. Each noteholder has a right to convert our Convertible Notes for shares of ICD common stock at any time after issuance through maturity. The conversion price is $4.51 per share. Interest on the Convertible Notes is due on March 31 and September 30 each year, beginning on September 30, 2022. Under the Indenture, a holder is not entitled to receive shares of our common stock upon conversion of any Convertible Notes to the extent to which the aggregate number of shares of common stock that may be acquired by such beneficial owner upon conversion of Convertible Notes, when added to the aggregate number of shares of common stock deemed beneficially owned, directly or indirectly, by such beneficial owner and each person subject to aggregation of Common Stock with such beneficial owner under Section 13 or Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules promulgated thereunder at such time (an “Aggregated Person”) (other than by virtue of the ownership of securities or rights to acquire securities that have limitations on such beneficial owner’s or such person’s right to convert, exercise or purchase similar to this limitation), as determined pursuant to the rules and regulations promulgated under Section 13(d) of the Exchange Act, would exceed 9.9% (the “Restricted Ownership Percentage”) of the total issued and outstanding shares of Common Stock (the “Section 16 Conversion Blocker”); provided that any holder has the right to elect for the Restricted Ownership Percentage to be 19.9% with respect to such Holder, (x) at any time, in which case, such election will become effective sixty-one days following written notice thereof to us or (y) in the case of a holder acquiring Convertible Notes on the Issue Date, in such Holder’s Subscription Agreement. In lieu of any shares of common stock not delivered to a converting holder by operation of the Restricted Ownership Percentage limitation, we will deliver to such Holder Pre-Funded Warrants in respect of any equal number of shares of common stock. Such Pre-Funded Warrants will contain substantially similar Restricted Ownership Percentage terms. The Indenture includes a mandatory redemption offer requirement (the “Mandatory Offer Requirement”). Beginning June 30, 2023, we are obligated to offer to redeem $5.0 million of Convertible Notes on a quarterly basis through December 31, 2023, and $3.5 million of Convertible Notes on a quarterly basis through March 31, 2025. The mandatory offer price is an amount in cash equal to the principal amount of such Note plus accrued and unpaid interest on such Note. The Indenture also includes an optional redemption right (the “Company Redemption Right”) that permits us to redeem on one or more occasions during the period beginning September 19, 2022 and ending September 19, 2023, up to $25 million aggregate principal amount of notes at redemption price of 104 % of par, plus accrued and unpaid interest. The Mandatory Offer Requirement is reduced by the amount of any Convertible Notes repurchased pursuant to our Redemption Right. We have the ability and intent to refinance the mandatory redemption offers that occur within the next twelve months under our Revolving ABL Credit Facility and as a result such amounts have been classified as long-term debt. The Indenture contains financial covenants, including a liquidity covenant of $10.0 million beginning September 30, 2022; a springing fixed charge coverage ratio covenant of 1.00 to 1.00 that is tested when availability under the Revolving ABL Credit Facility (defined below) is below $5.0 million at any time that the Convertible Notes are outstanding; and capital expenditure limits of $25.0 million during 2022 and $15.0 million during 2023 and 2024, subject to adjustment upward by $500,000 per year for each rig above 17 that operates during each year. In addition, capital expenditures are excluded from this covenant (a) if funded from equity proceeds, (b) if relating to the reactivation of a rig so long as (i) we have a signed contract with a customer with respect to each such rig of at least one (1) year duration providing for early termination payments consistent with past practice equal to at least the expected margin on the contract, (ii) the expected margin on such rig contract will be equal to or exceed such reactivation capital expenditures, and (iii) the reactivation capital expenditures, rig contract and the expected margin calculation are approved by our board of directors or (c) relate to other capital expenditures specifically approved by written or electronic consent by both (i) the required holders (which approval may, for the avoidance of doubt, be provided by the required holders in their sole discretion for an amount of capital expenditures to be committed or made by the Company or a subsidiary of the Company within ninety (90) days after the date of such consent) and (ii) the Board of Directors of the Company. During 2022, the holders of our Convertible Notes consented to capital expenditure adjustments under this covenant aggregating million of capital expenditures in February 2023. The Indenture also contains other customary affirmative and negative covenants, including limitations on indebtedness, liens, fundamental changes, asset dispositions, restricted payments, investments and transactions with affiliates. The Indenture also provides for customary events of default, including breaches of material covenants, defaults under the Revolving ABL Credit Facility or other material agreements for indebtedness, and a change of control. Beginning On February 24, 2023, we entered into a Second Supplemental Indenture relating to our Convertible Notes. The Second Supplemental Indenture (i) amends the Indenture to permit notice communications to a noteholder to be provided electronically at the election of a noteholder, (ii) amends the definition of “Redemption Multiplier” with respect to any Redemption Date from clarify procedures and obligations with respect to the information sharing requirements under the Indenture. The Second Supplemental Indenture was entered into in connection with a consent from the Required Holders regarding an increase in the Capex Adjustment under the Indenture for fiscal year 2023 in an amount equal to $16.9 million. Such consent was given pursuant to Section 3.39 of the Indenture and relates to capital expenditures committed to during 2023 for (i) planned maintenance capital expenditures and other miscellaneous items, (ii) tubular purchases and modifications, and (iii) completion costs relating to reactivation of our 21st drilling rig. Upon a Qualified Merger (defined below), we may elect to convert all, but not less than all, of the Convertible Notes at a Conversion Rate equal to our Conversion Rate on the date on which the relevant “Qualified Merger” is consummated (a “Qualified Merger Conversion”), so long as the “MOIC Condition” is satisfied with respect to such potential Qualified Merger Conversion. A “Qualified Merger” means a Common Stock Change Event consolidation, merger, combination or binding or statutory share exchange of the Company with a Qualified Acquirer. A “Qualified Merger Conversion Date” means the date on which the relevant Qualified Merger is consummated. A “Qualified Acquirer” means any entity that (i) has its common equity listed on the New York Stock Exchange, the NYSE American, Nasdaq Global Market or Nasdaq Global Select Market, or Toronto Stock Exchange, (ii) has an aggregate equity market capitalization of at least $350 million, and (iii) has a “public float” (as defined in Rule 12b-2 under the Securities Act of 1933) of at least $250 million in each case, as determined by the calculation agent based on the last reported sale price of such common equity on date of the signing of the definitive agreement in respect of the relevant Common Stock Change Event. A “Common Stock Change Event” means the occurrence of any: (i) recapitalization, reclassification or change of our common stock (other than (x) changes solely resulting from a subdivision or combination of the common stock, (y) a change only in par value or from par value to no par value or no par value to par value and (z) stock splits and stock combinations that do not involve the issuance of any other series or class of securities); (ii) consolidation, merger, combination or binding or statutory share exchange involving us; (iii) sale, lease or other transfer of all or substantially all of the assets of ours and our Subsidiaries, taken as a whole, to any person; or (iv) other similar event, and, as a result of which, the common stock is converted into, or is exchanged for, or represents solely the right to receive, other securities, cash or other property, or any combination of the foregoing. A “Company Conversion Rate” means, in respect of any Qualified Merger, the greater of (a) the relevant Conversion Rate, (b) (5) VWAP Trading Days prior to the earlier of signing or public announcement (by any party, and whether formal or informal, including for the avoidance of doubt any media reports thereof) of a definitive agreement in respect of such Qualified Merger as calculated by the Calculation Agent. The “MOIC Condition” means, with respect to any potential Qualified Merger Conversion, MOIC is greater than or equal to the MOIC Required Level. The “MOIC Required Level” means We early adopted ASU 2020-06 as of January 1, 2022 and concluded the Convertible Notes are accounted for as debt, with embedded features. As a consequence of the embedded features, the Convertible Notes gave rise to a derivative liability. See Embedded Derivative Liability . We recorded a derivative liability of $75.7 million at the time of the issuance and a debt discount of $37.8 million uance costs consisting of cash fees of $7.4 million and a non-cash structuring fee settled in shares of $2.3 million along with the debt discount are recorded as a direct deduction from the Convertible Notes in the consolidated balance sheet. The debt discount is amortized to interest expense using the effective interest rate method over the term of the Convertible Notes. The effective interest rate for the Convertible Notes as of December 31, 2022 is 22.1% . For the year ended December 31, 2022, the contractual interest expense was $18.5 million; the amortization of the debt discount was $4.9 million; and the amortization of the issuance costs was $1.8 million. Embedded Derivative Liability The Convertible Notes contained the following embedded features upon issuance (i) an increase of the noteholder’s optional conversion rate for the Convertible Notes from 197.23866 shares of common stock per $1,000 principal amount of Convertible Notes ($5.07 per share) to 221.72949 shares of Common Stock per $1,000 principal amount of Convertible Notes ($4.51 per share) following the receipt of the Shareholder Approval, (ii) a decrease in the PIK interest rate from SOFR plus 14.0% to SOFR plus 9.5% following receipt of the Shareholder Approval, (iii) a conversion feature associated with the MOIC condition in the event of a Qualified Merger and (iv) a contingent interest feature as a result of violations of credit-risk related covenants. We evaluated these embedded features under the guidance of ASC 815 and determined that they required bifurcation at fair value. However, management determined the probability of a Qualified Merger to be remote and as such the fair value of the embedded conversion feature has been estimated to be zero. Management also evaluated the contingent interest feature and determined the likelihood of payment to be remote. Accordingly, the fair value of the contingent interest feature was also estimated to be zero. Lastly, management evaluated the conversion rate feature and the decrease in PIK interest feature and determined that these embedded features met all three criteria in ASC 815-15-25-1 and therefore required bifurcation. Accordingly, as of the Convertible Notes issuance date, we recorded a derivative liability representing the increase in the conversion rate feature and the decrease in PIK interest feature. The derivative liability was presented as a non-current liability in our consolidated balance sheet and was adjusted to reflect fair value at each period end with changes in fair value recorded in the “Change in fair value of embedded derivative liability” financial statement line item of our consolidated statements of operations. After the approval of certain matters by our stockholders at our 2022 Annual Meeting of Stockholders held June 8, 2022, certain features under our Convertible Notes were modified and no longer met the criteria to bifurcate from the host debt agreement. Accordingly, through June 8, 2022, we recognized a loss of million on our consolidated statement of operations associated with the PIK interest rate feature of the derivative liability. See Financial Instruments and Fair Value “Summary of Significant Accounting Policies” Term Loan Facility On October 1, 2018, we entered into a term loan Credit Agreement (the “Term Loan Credit Agreement”) for an initial term loan in an aggregate principal amount of $130.0 million, (the “Term Loan Facility”) and (b) a delayed draw term loan facility in an aggregate principal amount of up to $15.0 million (the “DDTL Facility”, and together with the Term Loan Facility, the “Term Facilities”). The Term Facilities had a maturity date of October 1, 2023, but were repaid in their entirety on March 18, 2022 with proceeds from the issuance of the Convertible Notes. Interest under the Term Loan Facility was determined by reference, at our option, to either (i) a “base rate” equal to the higher of (a) the federal funds effective rate plus 0.05%, (b) the London Interbank Offered Rate (“LIBOR”) with an interest period of one month, plus 1.0%, and (c) the rate of interest as publicly quoted from time to time by the Wall Street Journal as the “prime rate” in the United States, plus an applicable margin of 6.5%, or (ii) a “LIBOR rate” equal to LIBOR with an interest period of one month, plus an applicable margin of 7.5%. For the years ended December 31, 2022 and 2021, we elected to PIK interest of $3.2 million and $5.9 million, respectively, which increased our Term Loan balance accordingly. Revolving ABL Credit Facility On October 1, 2018, we entered into a $40.0 million revolving credit agreement (the “Revolving ABL Credit Facility”), including availability for letters of credit in an aggregate amount at any time outstanding not to exceed $7.5 million. Availability under the Revolving ABL Credit Facility is subject to a borrowing base calculated based on 85% of the net amount of our eligible accounts receivable, minus reserves. The Revolving ABL Credit Facility had a maturity date of October 1, 2023. Interest under the Revolving ABL Credit Facility is determined by reference, at our option, to either (i) a “base rate” equal to the higher of (a) the floor, or 0.0%, (b) the federal funds effective rate plus 0.05%, (c) term SOFR for a one month tenor plus 1.0% based on availability and (d) the prime rate of Wells Fargo, plus in each case, an applicable base rate margin ranging from 1.0% to 1.5% based on quarterly availability, or (ii) a revolving loan rate equal to SOFR for the applicable interest period plus an applicable SOFR margin ranging from 2.36% to 2.86% based on quarterly availability. We also pay, on a quarterly basis, a commitment fee of 0.375% (or 0.25% at any time when revolver usage is greater than 50% of the maximum credit) per annum on the unused portion of the Revolving ABL Credit Facility commitment. The Revolving ABL Credit Facility contains a springing fixed charge coverage ratio covenant of 1.00 to 1.00 that is tested when availability is less than 10% of the maximum credit. The Revolving ABL Credit Facility also contains other customary affirmative and negative covenants, including limitations on indebtedness, liens, fundamental changes, asset dispositions, restricted payments, investments and transactions with affiliates. The Revolving ABL Credit Facility also provides for customary events of default, including breaches of material covenants, defaults under the Term Loan Credit Agreement or other material agreements for indebtedness, and a change of control. We are in compliance with our financial covenants as of December 31, 2022. The obligations under the Revolving ABL Credit Facility are secured by a first priority lien on Priority Collateral, which includes all accounts receivable and deposit accounts, and a second priority lien on the Term Priority Collateral, and are unconditionally guaranteed by all of our current and future direct and indirect subsidiaries. As of December 31, 2022, the weighted-average interest rate on our borrowings was 13.30%. As of December 31, 2022, the borrowing base under our Revolving ABL Credit Facility was $33.1 million, and we had $21.3 million of availability remaining of our $40.0 million commitment on that date. On March 18, 2022, we entered into a third amendment to that certain Credit Agreement, dated as of October 1, 2018 (the “Third Amendment to the Credit Agreement”), by and among us, Sidewinder Drilling LLC (“Sidewinder”), the Lenders named therein and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent. The Third Amendment to the Credit Agreement amends the original credit agreement, dated as of October 1, 2018 (the “Credit Agreement”) by deleting references to the “Term Loan Agreement” and related definitions and adding certain references and clauses related to our placement of $157.5 million aggregate principal amount of convertible secured PIK toggle notes due 2026 (the “Convertible Notes”), which were issued pursuant to an Indenture, dated as of March 18, 2022 (the “Indenture”), with U.S. Bank Trust Company, National Association as trustee and collateral agent. On September 22, 2022, we amended our Revolving ABL Credit Facility Agreement, which included extending the maturity date by two years to September 30, 2025, replacing references to LIBOR interest rates with SOFR interest rates and amending the applicable margin for which interest is calculated. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The components of the income tax expense are as follows: Year Ended December 31, (in thousands) 2022 2021 Current: Federal $ — $ — State 575 — $ 575 $ — Deferred: Federal $ (7,480) $ 17,417 State 709 1,115 $ (6,771) $ 18,532 Income tax (benefit) expense $ (6,196) $ 18,532 The effective tax rate (as a percentage of net loss before income taxes) is reconciled to the U.S. federal statutory rate as follows: Year Ended December 31, (in thousands) 2022 2021 Income tax benefit at the statutory federal rate (21%) $ (15,019) $ (10,128) Nondeductible expenses 3 147 PPP Loan Forgiveness — (2,127) Valuation allowance (1,200) 29,268 Derivatives 7,629 — State taxes, net of federal benefit 1,518 882 Stock-based compensation and other 873 490 Income tax expense (benefit) $ (6,196) $ 18,532 Effective tax rate 8.7 % (38.5) % 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) 2022 2021 Deferred income tax assets Merger-related expenses $ 894 $ 960 Stock-based compensation 1,349 1,247 Accrued liabilities and other 613 292 Deferred revenue 228 119 Interest limitation 8,024 3,281 ROU Asset 255 379 Debt Instruments 2,026 — Net operating losses 96,142 93,733 Total net deferred tax assets $ 109,531 $ 100,011 Deferred income tax liabilities Prepaids $ (845) $ (740) Property, plant and equipment (41,937) (38,000) ROU Liability (222) (315) Total net deferred tax liabilities $ (43,004) $ (39,055) Valuation allowance $ (78,793) $ (79,993) Net deferred tax liability $ (12,266) $ (19,037) As of December 31, 2022, we had a total of $444.5 million of net operating loss carryforwards, of which $134.1 million will begin to expire in 2031 and $310.4 million will be carried forward indefinitely. 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. We believe we had an ownership change in April 2016, October 2018 in connection with the Sidewinder Merger, and in October 2021. We are subject to an annual limitation on the usage of our NOL and as a result of our limitation from the ownership change in October 2021, we expect to have approximately $94.8 million of NOLs expire before becoming available to be utilized by us. Management will continue to monitor the potential impact of Section 382 with respect to our 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, 2022, we had no unrecognized tax benefits. We file income tax returns in the United States and in various state jurisdictions. With few exceptions, we are subject to United States federal, state and local income tax examinations by tax authorities for tax periods 2012 and forward. Our federal and state tax returns for 2012 and subsequent years remain subject to examination by tax authorities due to existence of NOLs in each jurisdiction. 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. Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the consolidated statement of operations. We have not recorded any interest or penalties associated with unrecognized tax benefits. 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. In prior years, 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. However, due to the IRC Section 382 change and the annual limitation on our NOL, we do not anticipate having enough NOL available to offset our deferred tax liabilities in the appropriate years. Therefore, we have adjusted our valuation allowance to reflect such. On August 16, 2022, Inflation Reduction Act of 2022 was enacted and signed into law and includes targeted tax provisions. We do not anticipate these tax provisions will have a material impact on our financial statements. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation Prior to June 2019, we issued common stock-based awards to employees and non-employee directors under our 2012 Long-Term Incentive Plan adopted in March 2012 (the “2012 Plan”). In June 2019, we adopted the 2019 Omnibus Incentive Plan (the “2019 Plan”) providing for common stock-based awards to employees and non-employee directors. The 2019 Plan permits the granting of various types of awards, including stock options, restricted stock, restricted stock unit awards, and stock appreciation rights (“SARs”), and up to 275,000 shares were authorized for issuance. On June 8, 2022, an additional 4.3 million 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 and SARs may not be less than the market price of the underlying stock on the date of grant. As of December 31, 2022, approximately shares were available for future awards under the 2019 Plan. In connection with the adoption of the 2019 Plan, no further awards will be made under the 2012 Plan. Our policy is to account for forfeitures of share-based compensation awards as they occur. A summary of compensation cost recognized for stock-based payment arrangements is as follows: Year Ended December 31, (in thousands) 2022 2021 Compensation cost recognized: Restricted stock, restricted stock units and stock-settled stock appreciation rights $ 3,390 $ 1,724 Cash-settled stock appreciation rights 1,254 571 Total stock-based compensation $ 4,644 $ 2,295 Stock Options Prior to 2016, we granted stock options that remain outstanding. No options were exercised or granted during the years ended December 31, 2022 or 2021. 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 following summary reflects the stock option activity and related information for the year ended December 31, 2022: Weighted Average Exercise Options Price Outstanding at January 1, 2022 27,867 $ 254.80 Granted — — Exercised — — Forfeited/expired (27,867) 254.80 Outstanding at December 31, 2022 — $ — Exercisable at December 31, 2022 — $ — As of December 31, 2022, there were no stock options outstanding and there was no unrecognized compensation cost related to outstanding stock options. No options vested during the years ended December 31, 2022 and 2021. Time-Based Restricted Stock and Restricted Stock Units We have granted time-based restricted stock and restricted stock units to key employees under the 2012 plan and the 2019 plan. Time-Based Restricted Stock Time-based restricted stock awards consist of grants of our common stock that vest over three A summary of the status of our time-based restricted stock awards and of changes in our time-based restricted stock awards outstanding for the year ended December 31, 2022 and 2021 is as follows: Weighted Average Grant-Date Fair Value Shares Per Share Outstanding at January 1, 2021 40,334 $ 64.40 Granted — — Vested (10,176) 64.40 Forfeited/expired (3,268) 64.40 Outstanding at January 1, 2022 26,890 $ 64.40 Granted — — Vested (10,198) 64.40 Forfeited (3,246) 64.40 Outstanding at December 31, 2022 13,446 $ 64.40 Time-Based Restricted Stock Units We have granted three-year time-based vested restricted stock unit awards where each unit represents the right to receive, at the end of a vesting period, one share of ICD common stock with no exercise price. The fair value of time- based restricted stock unit awards is determined based on the estimated fair market value of our shares on the grant date. As of December 31, 2022, there was $4.8 million of total unrecognized compensation cost related to unvested time-based restricted stock unit awards. This cost is expected to be recognized over a weighted-average period of 1.0 years. A summary of the status of our time-based restricted stock unit awards and of changes in our time-based restricted stock unit awards outstanding for the year ended December 31, 2022 and 2021 is as follows: Weighted Average Grant-Date Fair Value RSUs Per Share Outstanding at January 1, 2021 63,897 $ 22.78 Granted 77,938 4.95 Vested and converted (28,611) 25.75 Forfeited/expired (3,313) 51.34 Outstanding at January 1, 2022 109,911 $ 8.50 Granted 1,526,385 4.16 Vested and converted (78,011) 7.78 Forfeited (2,743) 38.80 Outstanding at December 31, 2022 1,555,542 $ 4.22 Performance-Based and Market-Based Restricted Stock Units We have granted three-year performance-based and market-based restricted stock unit awards, 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. Exercisability of the market-based restricted stock unit awards is based on our total shareholder return ("TSR") as measured against the TSR of a defined peer group and vesting of the performance-based restricted stock unit awards is based on our cumulative return on invested capital ("ROIC") as measured against ROIC performance goals determined by the compensation committee of our Board of Directors, over a three-year period. We used a Monte Carlo simulation model to value the TSR market-based restricted stock unit awards. The fair value of the performance-based restricted stock unit awards is based on the market price of our common stock on the date of grant. During the restriction period, the performance-based and market-based restricted stock unit awards 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, 2022, unrecognized compensation cost related to unvested performance-based and market-based restricted stock unit awards was de minimis, which is expected to be recognized over a weighted-average period of 0.1 years. The assumptions used to value our TSR market-based restricted stock unit awards granted during the year ended December 31, 2020 were a risk-free interest rate of 1.38%, an expected volatility of 68.5% and an expected dividend yield of 0.0%. Based on the Monte Carlo simulation, these restricted stock unit awards were valued at $12.42. A summary of the status of our performance-based and market-based restricted stock unit awards and of changes in our restricted stock unit awards outstanding for the year ended December 31, 2022 and 2021 is as follows: Weighted Average Grant-Date Fair Value RSUs Per Share Outstanding at January 1, 2021 38,559 $ 22.95 Granted — — Vested and converted — — Forfeited/expired (11,274) 19.20 Outstanding at January 1, 2022 27,285 $ 24.50 Granted — — Vested and converted (3,056) 29.00 Forfeited (13,486) 33.10 Outstanding at December 31, 2022 10,743 $ 12.42 Time-Based Stock-Settled Stock Appreciation Rights We have granted time-based, stock-settled stock appreciation rights (“SARs”) to certain employees. The SARs have a term of seven years, an exercise price of $5.19 per share, and vest one The assumptions used in calculating the fair value of time-based stock-settled SARs granted during the year ended December 31, 2022 were a risk-free interest rate of 3.03%, an expected volatility factor of 103.3% and an expected dividend yield of 0.0%. Changes to our time-based stock-settled SARs for the year ended December 31, 2022 are as follows: Weighted Average Grant Date Stock-settled SARs Fair Value (in thousands) Per Share Outstanding at January 1, 2022 — $ — Granted 1,422 2.83 Vested — — Forfeited/Expired — — Outstanding at December 31, 2022 1,422 $ 2.83 As of December 31, 2022, there was $3.1 million of unrecognized compensation cost related to time-based stock-settled SARs that is expected to be recognized over a weighted-average period of 1.2 years. Time-Based Cash-Settled Stock Appreciation Rights We have granted time-based, cash-settled stock appreciation rights (“SARs”) to certain employees. The SARs have a term of per share, and vest ratably on the first, second and third anniversaries of the date of grant. Because these SARs are cash- settled, they are classified as “liability-classified awards” which are remeasured at their fair value at the end of each reporting period until settlement. Time-based, cash-settled SARs have no effect on dilutive shares or shares outstanding as any appreciation of our common stock over the exercise price is paid in cash and not in common stock. The fair value of time-based cash-settled SARs is revalued (mark-to-market) each reporting period using a Monte Carlo simulation model based on period-end stock price. Expected term of the SARs is calculated as the average of each vesting tranche’s midpoint between vesting date and expiration date plus the vesting period. Expected volatility is based on the historical volatility of our stock for the length of time corresponding to the expected term of the SARs. The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs. The following weighted-average assumptions were used in calculating the fair value of time-based cash-settled SARs outstanding during the year ended December 31, 2022 using the Monte Carlo simulation model: Year Ended December 31, 2022 Remaining term to maturity 5.1 years Expected volatility factor 113.0 % Expected dividend yield — % Risk-free interest rate 3.95 % Changes to our non-vested time-based cash-settled SARs during the year ended December 31, 2022 are as follows: Weighted Average Cash-settled SARs Exercise Price (in thousands) Per Share Outstanding at January 1, 2022 2,913 $ 5.73 Granted — — Exercised — — Forfeited/Expired (27) 5.73 Outstanding at December 31, 2022 2,886 $ 5.73 Exercisable at December 31, 2022 971 $ 5.73 The number of cash-settled SARs exercisable as of December 31, 2022 was 1.0 million with a weighted average remaining contractual life of 5.1 years and a weighted average exercise price of $5.73 per share. As of December 31, 2022, |
Stockholders' Equity and Loss p
Stockholders' Equity and Loss per Share | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Loss per Share | 11. Stockholders’ Equity and Loss per Share As of December 31, 2022, we had a total of 13,613,759 shares of common stock, $0.01 par value, outstanding, including 13,446 shares of restricted stock. We also had 85,092 shares held as treasury stock. Total authorized common stock is 250,000,000 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: Year Ended December 31, (in thousands, except per share data) 2022 2021 Net loss (numerator): $ (65,321) $ (66,712) Loss per share: Basic and diluted $ (5.01) $ (8.89) Shares (denominator): Weighted average common shares outstanding - basic 13,026 7,507 Weighted average common shares outstanding - diluted 13,026 7,507 The following numbers of potential common shares at the end of each year presented were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive. Year Ended December 31, (in thousands) 2022 2021 Convertible Notes 28,374 — RSUs 1,566 137 SARs 1,422 — Stock options — 28 |
Segment and Geographical Inform
Segment and Geographical Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | 12. 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, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Purchase Commitments As of December 31, 2022, we had outstanding purchase commitments to a number of suppliers totaling $7.6 million related primarily to rig equipment or components ordered but not received. We have paid deposits of $0.9 million related to these commitments. Letters of Credit As of December 31, 2022, we had outstanding letters of credit totaling $14.0 thousand as collateral for Sidewinder’s pre-acquisition insurance programs. As of December 31, 2022, no amounts had been drawn under these letters of credit. Employment Agreements We have entered into employment agreements with six key executives, with original terms of three years, that automatically extend a year prior to expiration, provided that neither party has provided a written notice of termination before that date. As of December 31, 2022, these agreements in aggregate provide for minimum annual cash compensation of $1.9 million and cash severance payments totaling $4.9 million for termination by ICD without cause, or termination by the employee for good reason, both as defined in the agreements. 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 consolidated financial statements. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Defined Contribution Plan [Abstract] | |
Defined Contribution Plan | 14. Defined Contribution Plan Substantially all employees may elect to participate in our 401(k) plan by contributing a portion of their earnings. We contribute an amount equal to 100 percent of the first six percent of the participant’s compensation subject to certain limitations. The annual expense incurred for this defined contribution plan was $1.4 million for the year ended December 31, 2022. For the year ended December 31, 2021, we had |
Concentration of Market and Cre
Concentration of Market and Credit Risk | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration of Market and Credit Risk | 15. 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 natural gas prices. We have a number of customers that account for 10% or more of our revenues. For 2022, these customers included Paloma Natural Gas, LLC (20%), Endeavor Energy Resources (13%), and Diamondback Energy, Inc. (12%). For 2021, these customers included Indigo Minerals, LLC, a subsidiary of Southwestern Energy Company (25%) and Endeavor Energy Resources (10%). 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. As of December 31, 2022, Paloma Natural Gas, LLC (19%) and Diamondback Energy, Inc. (15%) accounted for 10% or more of our accounts receivable. As of December 31, 2021, Indigo Minerals, LLC, a subsidiary of Southwestern Energy Company (23%), Endeavor Energy Resources (21%) and Bayswater Operating Company, LLC (12%) accounted for 10% or more of our accounts receivable. 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, 2022, we had approximately $5.0 million in cash and cash equivalents in excess of FDIC limits. |
Related Parties and Other Matte
Related Parties and Other Matters | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties and Other Matters | 16. Related Parties and Other Matters In connection with the issuance of the Convertible Notes on March 18, 2022, we issued to affiliates of MSD Partners, L.P. (the “MSD Investors”) $78.9 million principal amount of Convertible Notes and entered into an Investor’s Rights Agreement permitting MSD Partners, L.P. to nominate one director to our Board so long as MSD Partners, L.P. and its affiliates continue to own $25.0 million principal amount of Convertible Notes (the “Sunset Date”). We also entered into an Investor’s Rights Agreement with Glendon Capital Management L.P. (“GCM”) that permits GCM to designate additional representative as a director, provided that the third representative must be an independent director unless one of the MSD Investors and the GCM representatives is independent for New York Stock Exchange purposes. The proposed representatives are subject to review by our Nominating and Corporate Governance Committee. Following the Sunset Date for the applicable party, MSD Investors and/or GCM, as applicable, will cause its designee to offer to tender his or her resignation, unless otherwise requested by the Board, and the third representative may be removed by the Board. pursuant to the Investor’s Rights Agreement, and the third representative was appointed in connection with an increase in the number of directors from six to seven members effective July 1, 2022. As of December 31, 2022, accrued interest payable on the Convertible Notes was |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Balance at Charged to Beginning of Costs and Balance at (in thousands) Period Expenses Deductions End of Period Year Ended December 31, 2022: Allowance for doubtful accounts $ — $ — $ — $ — Valuation allowance for deferred tax assets $ 79,993 $ (1,200) $ — $ 78,793 Year Ended December 31, 2021: Allowance for doubtful accounts $ 518 $ (52) $ (466) $ — Valuation allowance for deferred tax assets $ 49,647 $ 30,346 $ — $ 79,993 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These audited consolidated financial statements include all the accounts of ICD and its subsidiary. All significant intercompany accounts and transactions have been eliminated. Except for the subsidiary, we have no controlling financial interests in any other entity which would require consolidation. These audited consolidated financial statements 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 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. Allowance for doubtful accounts was zero as of December 31, 2022 and 2021, respectively. |
Inventories | Inventories Inventory is stated at lower of cost or net realizable value and consists primarily of supplies held for use in our drilling operations. Cost is determined on an average cost basis. |
Property, Plant and Equipment, net | Property, Plant and Equipment, net 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, which range from two 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 Our operations are managed from field locations that we own or lease, that contain office, shop and yard space to support day-to-day operations, including repair and maintenance of equipment, as well as storage of equipment, materials and supplies. We currently have six such field locations. Additionally, we lease office space for our corporate headquarters in northwest Houston. Leases are evaluated at inception or at any subsequent material modification to determine if the lease should be classified as a finance or operating lease. 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 further discussion, see Asset Impairments “Nature of Operations and Recent Developments.” Construction in progress represents the costs incurred for drilling rigs and rig upgrades 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. |
Financial Instruments and Fair Value | Financial Instruments and Fair value 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. Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, certain accrued liabilities and our debt. Our debt consists primarily of our Convertible Notes and Revolving ABL Facility as of December 31, 2022 and our Term Loan and our Revolving ABL Facility as of December 31, 2021. The fair value of cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities, which are determined to be Level 1 measurements, approximate their carrying value because of the short-term nature of these instruments. The estimated fair value of our Revolving ABL Credit Facility, Term Loan Facility, and merger consideration payable to an affiliate are determined to be Level 3 measurements as our debt is not actively traded and the fair value estimate is based on discounted estimated future cash flows or a fair value in-exchange assumption, which are significant unobservable inputs in the fair value hierarchy. To determine the fair value of our outstanding floating rate debt, we utilized a credit spread of 493 bps on the Revolving ABL Credit Facility based on an analysis of credit spreads of comparably rated public debt items as well as the original issuance price of the debt (in thousands) December 31, 2022 December 31, 2021 Revolving ABL Credit Facility $ 11,870 $ 6,030 Term Loan Facility $ — $ 140,664 Merger consideration payable to an affiliate $ — $ 4,449 The fair value of the Convertible Notes was estimated as $159.2 million as of December 31, 2022. The fair value of the Convertible Notes is also determined to be a Level 3 measurement and was estimated using a binomial lattice model. The factors used to determine fair value are subject to management's judgement and expertise and include, but are not limited to our share price, expected price volatility ( Recurring Fair Value Measurements As described in Note 8 , we determined that certain features under our Convertible Notes required bifurcation from the debt host agreement in accordance with ASC 815. Accordingly, we recognized a derivative liability at fair value for this instrument in our consolidated balance sheet and adjusted the carrying value of the liability to fair value at each reporting period until the features underlying the instrument were exercised, redeemed, cancelled or expired. The changes in fair value were assessed quarterly and recorded in our consolidated statement of operations. In conjunction with the issuance of the Convertible Notes on March 18, 2022, we recorded an embedded derivative liability of $75.7 million. After the approval of our stockholders on June 8, 2022, certain features under our Convertible Notes were modified and no longer met the criteria to bifurcate from the host debt agreement. Accordingly, through June 8, 2022, we recognized a loss of embedded derivative liability recorded. The loss associated with the change in the fair value of the embedded derivative as of June 8, 2022 is reported in our consolidated statement of operations within change in fair value of embedded derivative liability. The fair value of the embedded derivative liability as of June 8, 2022 was estimated using a “with and without” approach: • “With” scenario : the fair value of the Convertible Notes as of the valuation date is estimated based on a binomial lattice model. • “Without” scenario : the fair value of the Convertible Notes “without” the embedded features was estimated using a discounted cash flow model whereby the expected cash flows absent the embedded derivative (i.e., the coupon and principal payments) are discounted at a credit-adjusted rate. The significant unobservable inputs that were used in the fair value measurement of our embedded derivative liability were a volatility rate of 58.9%, a credit spread of 3,570 basis points and a risk-free rate of 3.0%. The expected volatility was estimated based on the historical volatility of our common stock and the remaining term of the Convertible Notes of 3.7 years as of June 8, 2022. There were no transfers between fair value measurement levels during the years ended December 31, 2022, or 2021. See Note 11 “Stock-Based Compensation” for fair value of liability-based awards. Fair value measurements are applied with respect to our non-financial assets and liabilities measured on a non-recurring basis, which would consist of measurements primarily of long-lived asset impairments. |
Revenue and Cost Recognition | Revenue and Cost Recognition We earn contract drilling revenues pursuant to drilling contracts entered into with our customers. We perform drilling services on a “daywork” basis, under which we charge a specified rate per day, or “dayrate.” The dayrate associated with each of our contracts is a negotiated price determined by the capabilities of the rig, location, depth and complexity of the wells to be drilled, operating conditions, duration of the contract and market conditions. The term of land drilling contracts may be for a defined number of wells or for a fixed time period. 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. Our contracts provide for early termination fees in the event our customers choose to cancel the contract prior to the specified contract term. We record a contract liability for such fees received up front, and recognize them ratably as contract drilling revenue over the initial term of the related drilling contract or until such time that all performance obligations are satisfied. While under contract, our rigs generally earn a reduced rate while the rig is moving between wells or drilling locations, or on standby waiting for the customer. Reimbursements for the purchase of supplies, equipment, trucking and other services that are provided at the request of our customers are recorded as revenue when incurred. The related costs are recorded as operating expenses or capitalized when appropriate when incurred. Revenue is presented net of any sales tax charged to the customer that we are required to remit to local or state governmental taxing authorities. Our operating costs include all expenses associated with operating and maintaining our drilling rigs. Operating costs include all “rig level” expenses such as labor and related payroll costs, repair and maintenance expenses, supplies, workers’ compensation and other insurance, ad valorem taxes and equipment rental costs. Also included in our operating costs are certain costs that are not incurred at the rig level. These costs include expenses directly associated with our operations management team as well as our safety and maintenance personnel who are not directly assigned to our rigs but are responsible for the oversight and support of our operations and safety and maintenance programs across our fleet. |
Leases | Leases Lease liabilities are measured at the lease commencement date and are based on the present value of remaining payments contractually required under the contract. Payments that are variable in nature are excluded from the measurement of our lease liabilities and are recorded as an expense as incurred. Options to renew or extend a lease are included in the measurement of our lease liabilities only when it is reasonably certain that we will exercise these rights. In estimating the present value of our lease liabilities, payments are discounted at the interest rate stated in the applicable lease agreement or, if not available, our incremental borrowing rate (“IBR”), applied utilizing a portfolio approach. To determine our IBR, we utilize information publicly available from companies within our industry with similar credit profiles to construct a company-specific yield curve in order to estimate the rate of interest we would pay to borrow at various lease terms. At lease commencement, we recognize a lease right-of-use asset equal to our lease liability, adjusted for lease payments paid to the lessor prior to the lease commencement date, and any initial direct costs incurred. Operating lease expense is recorded on a straight-line basis over the lease term. For finance leases, we amortize our right-of-use assets on a straight-line basis over the shorter of the asset’s useful life or the lease term. Additionally, interest expense is recognized each period related to the accretion of our lease liabilities over their respective lease terms. |
Stock-Based Compensation | Stock-Based Compensation We record compensation expense over the 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. |
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 consolidated 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 the accompanying consolidated 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 and assets held for sale, and the collectability of accounts receivable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity 15, 2021, with early adoption permitted. For smaller reporting companies the pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. We early adopted this standard on January 1, 2022. See Note 8 “Long-term Debt” In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations . This guidance requires a business entity operating as a buyer in a supplier finance agreement to disclose qualitative and quantitative information about its supplier finance programs. This ASU does not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The adoption of this guidance will result in additional disclosures relating to our supplier financing programs and related obligations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 |
Schedule of Fair Value of Long-term Debt | (in thousands) December 31, 2022 December 31, 2021 Revolving ABL Credit Facility $ 11,870 $ 6,030 Term Loan Facility $ — $ 140,664 Merger consideration payable to an affiliate $ — $ 4,449 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the years ended December 31, 2022 and 2021: Year Ended December 31, (in thousands) 2022 2021 Dayrate drilling $ 172,284 $ 79,597 Mobilization 4,719 3,283 Reimbursables 8,856 4,920 Capital modification 810 153 Other 41 2 Total revenue $ 186,710 $ 87,955 |
Summary of Contract with Customer, Asset and Liability | The following table provides information about receivables and contract liabilities related to contracts with customers as of December 31, 2022 and 2021, respectively. We had no contract assets in either year. December 31, December 31, (in thousands) 2022 2021 Receivables, which are included in “Accounts receivable” $ 39,732 $ 22,167 Contract liabilities, which are included in “Accrued liabilities” $ (1,158) $ (542) Significant changes in the contract liabilities balance during the years ended December 31, 2022 and 2021 are as follows: Year Ended December 31, (in thousands) 2022 2021 Revenue recognized that was included in contract liabilities at beginning of period $ 542 $ 119 Increase in contract liabilities due to cash received, excluding amounts recognized as revenue $ (1,158) $ (542) |
Estimated Revenue Expected to be Recognized in the Future | Year Ending December 31, (in thousands) 2023 2024 2025 Total Revenue $ 1,158 $ — $ — $ 1,158 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, cost | The components of lease expense were as follows: Year Ended Year Ended (in thousands) December 31, 2022 December 31, 2021 Operating lease expense $ 747 $ 928 Short-term lease expense 5,697 3,033 Variable lease expense 577 431 Finance lease expense: Amortization of right-of-use assets $ 1,682 $ 1,158 Interest expense on lease liabilities 387 585 Total finance lease expense 2,069 1,743 Total lease expense $ 9,090 $ 6,135 Supplemental cash flow information related to leases is as follows: Year Ended Year Ended (in thousands) December 31, 2022 December 31, 2021 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 732 $ 964 Operating cash flows from finance leases $ 373 $ 580 Financing cash flows from finance leases $ 5,811 $ 3,594 Right-of-use assets obtained or recorded in exchange for lease obligations: Operating leases $ 153 $ — Finance leases $ 4,440 $ 1,503 |
Assets and liabilities, lessee | Supplemental balance sheet information related to leases is as follows: (in thousands) December 31, 2022 December 31, 2021 Operating leases: Other long-term assets, net $ 976 $ 1,437 Accrued liabilities $ 751 $ 693 Other long-term liabilities 373 1,036 Total operating lease liabilities $ 1,124 $ 1,729 Finance leases: Property, plant and equipment $ 7,307 $ 14,989 Accumulated depreciation (1,994) (1,989) Property, plant and equipment, net $ 5,313 $ 13,000 Current portion of long-term debt $ 2,485 $ 4,464 Long-term debt 1,599 1,305 Total finance lease liabilities $ 4,084 $ 5,769 Weighted-average remaining lease term Operating leases 1.6 years 2.5 years Finance leases 1.6 years 1.3 years Weighted-average discount rate Operating leases 10.86 % 10.84 % Finance leases 8.12 % 8.64 % |
Maturity of finance lease liability | Maturities of lease liabilities as of December 31, 2022 were as follows: (in thousands) Operating Leases Finance Leases 2023 $ 833 2,743 2024 390 1,110 2025 — 549 Total cash lease payment 1,223 4,402 Less: imputed interest (99) (318) Total lease liabilities $ 1,124 $ 4,084 |
Maturity of operating lease liability | (in thousands) Operating Leases Finance Leases 2023 $ 833 2,743 2024 390 1,110 2025 — 549 Total cash lease payment 1,223 4,402 Less: imputed interest (99) (318) Total lease liabilities $ 1,124 $ 4,084 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: December 31, (in thousands) 2022 2021 Rig components and supplies $ 1,508 $ 1,171 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Major classes of property, plant, and equipment, which include finance lease assets, consisted of the following (in millions): December 31, (in thousands) 2022 2021 Land $ 300 $ 300 Buildings 2,816 2,800 Drilling rigs and related equipment 611,972 558,530 Machinery, equipment and other 1,775 1,767 Finance leases 7,307 14,989 Leasehold improvements 25 17 Construction in progress 5,693 2,024 Total $ 629,888 $ 580,427 Less: Accumulated depreciation (253,804) (218,081) Total Property, plant and equipment, net $ 376,084 $ 362,346 |
Supplemental Consolidated Bal_2
Supplemental Consolidated Balance Sheet and Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Consolidated Balance Sheet and Cash Flow Information [Abstract] | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Prepaid insurance $ 3,796 $ 3,463 Prepaid other 656 575 Deferred mobilization costs 283 618 Insurance claim receivable — 122 Other current assets 1 9 $ 4,736 $ 4,787 |
Schedule of accrued Liabilities | Accrued liabilities consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Accrued salaries and other compensation $ 6,908 $ 4,154 Insurance 3,002 2,523 Deferred mobilization revenues 1,003 542 Property and other taxes 3,621 2,594 Interest 101 4,372 Operating lease liability - current 751 693 Other 2,222 739 $ 17,608 $ 15,617 |
Schedule of supplemental consolidated cash flow information | Supplemental consolidated cash flow information: Year Ended December 31, (in thousands) 2022 2021 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 5,084 $ 6,918 Supplemental disclosure of non-cash investing and financing activities Change in property, plant and equipment purchases in accounts payable $ 11,686 $ 3,564 Additions to property, plant & equipment through finance leases $ 4,440 $ 1,503 Transfer of assets from held and used to held for sale $ (325) $ (1,082) Extinguishment of finance lease obligations from sale of assets classified as finance leases $ (281) $ (65) Gain on extinguishment of debt $ — $ 10,000 Initial embedded derivative liability upon issuance of Convertible Notes $ 75,733 $ — Extinguishment of embedded derivative liability $ (69,232) $ — Shares issued for structuring fee $ 9,163 $ — |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Our Long-term Debt consisted of the following: December 31, (in thousands) 2022 2021 Convertible Notes due March 18, 2026 $ 170,166 $ — Revolving ABL Credit Facility due September 30, 2025 11,811 6,300 Term Loan Facility due October 1, 2023 — 135,883 Finance lease obligations 4,084 5,769 186,061 147,952 Less: Convertible Notes issuance costs and debt discount (40,353) — Less: Term Loan Facility deferred financing costs — (1,748) Less: current portion of finance leases (2,485) (4,464) Long-term debt $ 143,223 $ 141,740 |
Schedule of Maturities of Long-term Debt | Presented below is a schedule of the principal repayment requirements of long-term debt by fiscal year as of December 31, 2022: (in thousands) 2023 2024 2025 2026 Total Convertible Notes $ — $ — $ — $ 170,166 $ 170,166 Revolving ABL Credit Facility — — 11,811 — 11,811 Total $ — $ — $ 11,811 $ 170,166 $ 181,977 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The components of the income tax expense are as follows: Year Ended December 31, (in thousands) 2022 2021 Current: Federal $ — $ — State 575 — $ 575 $ — Deferred: Federal $ (7,480) $ 17,417 State 709 1,115 $ (6,771) $ 18,532 Income tax (benefit) expense $ (6,196) $ 18,532 |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate (as a percentage of net loss before income taxes) is reconciled to the U.S. federal statutory rate as follows: Year Ended December 31, (in thousands) 2022 2021 Income tax benefit at the statutory federal rate (21%) $ (15,019) $ (10,128) Nondeductible expenses 3 147 PPP Loan Forgiveness — (2,127) Valuation allowance (1,200) 29,268 Derivatives 7,629 — State taxes, net of federal benefit 1,518 882 Stock-based compensation and other 873 490 Income tax expense (benefit) $ (6,196) $ 18,532 Effective tax rate 8.7 % (38.5) % |
Schedule of Deferred Tax Assets and Liabilities | December 31, (in thousands) 2022 2021 Deferred income tax assets Merger-related expenses $ 894 $ 960 Stock-based compensation 1,349 1,247 Accrued liabilities and other 613 292 Deferred revenue 228 119 Interest limitation 8,024 3,281 ROU Asset 255 379 Debt Instruments 2,026 — Net operating losses 96,142 93,733 Total net deferred tax assets $ 109,531 $ 100,011 Deferred income tax liabilities Prepaids $ (845) $ (740) Property, plant and equipment (41,937) (38,000) ROU Liability (222) (315) Total net deferred tax liabilities $ (43,004) $ (39,055) Valuation allowance $ (78,793) $ (79,993) Net deferred tax liability $ (12,266) $ (19,037) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Compensation Cost | A summary of compensation cost recognized for stock-based payment arrangements is as follows: Year Ended December 31, (in thousands) 2022 2021 Compensation cost recognized: Restricted stock, restricted stock units and stock-settled stock appreciation rights $ 3,390 $ 1,724 Cash-settled stock appreciation rights 1,254 571 Total stock-based compensation $ 4,644 $ 2,295 |
Summary of Stock Option Activity and Related Information | The following summary reflects the stock option activity and related information for the year ended December 31, 2022: Weighted Average Exercise Options Price Outstanding at January 1, 2022 27,867 $ 254.80 Granted — — Exercised — — Forfeited/expired (27,867) 254.80 Outstanding at December 31, 2022 — $ — Exercisable at December 31, 2022 — $ — |
Schedule of Restricted Stock Activity | A summary of the status of our time-based restricted stock awards and of changes in our time-based restricted stock awards outstanding for the year ended December 31, 2022 and 2021 is as follows: Weighted Average Grant-Date Fair Value Shares Per Share Outstanding at January 1, 2021 40,334 $ 64.40 Granted — — Vested (10,176) 64.40 Forfeited/expired (3,268) 64.40 Outstanding at January 1, 2022 26,890 $ 64.40 Granted — — Vested (10,198) 64.40 Forfeited (3,246) 64.40 Outstanding at December 31, 2022 13,446 $ 64.40 |
Schedule of Restricted Stock Unit Activity | A summary of the status of our time-based restricted stock unit awards and of changes in our time-based restricted stock unit awards outstanding for the year ended December 31, 2022 and 2021 is as follows: Weighted Average Grant-Date Fair Value RSUs Per Share Outstanding at January 1, 2021 63,897 $ 22.78 Granted 77,938 4.95 Vested and converted (28,611) 25.75 Forfeited/expired (3,313) 51.34 Outstanding at January 1, 2022 109,911 $ 8.50 Granted 1,526,385 4.16 Vested and converted (78,011) 7.78 Forfeited (2,743) 38.80 Outstanding at December 31, 2022 1,555,542 $ 4.22 A summary of the status of our performance-based and market-based restricted stock unit awards and of changes in our restricted stock unit awards outstanding for the year ended December 31, 2022 and 2021 is as follows: Weighted Average Grant-Date Fair Value RSUs Per Share Outstanding at January 1, 2021 38,559 $ 22.95 Granted — — Vested and converted — — Forfeited/expired (11,274) 19.20 Outstanding at January 1, 2022 27,285 $ 24.50 Granted — — Vested and converted (3,056) 29.00 Forfeited (13,486) 33.10 Outstanding at December 31, 2022 10,743 $ 12.42 |
Stock-settled stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Appreciation Rights | Changes to our time-based stock-settled SARs for the year ended December 31, 2022 are as follows: Weighted Average Grant Date Stock-settled SARs Fair Value (in thousands) Per Share Outstanding at January 1, 2022 — $ — Granted 1,422 2.83 Vested — — Forfeited/Expired — — Outstanding at December 31, 2022 1,422 $ 2.83 |
Cash-settled stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used in Calculation of SARs Granted | The following weighted-average assumptions were used in calculating the fair value of time-based cash-settled SARs outstanding during the year ended December 31, 2022 using the Monte Carlo simulation model: Year Ended December 31, 2022 Remaining term to maturity 5.1 years Expected volatility factor 113.0 % Expected dividend yield — % Risk-free interest rate 3.95 % |
Schedule of Stock Appreciation Rights | Changes to our non-vested time-based cash-settled SARs during the year ended December 31, 2022 are as follows: Weighted Average Cash-settled SARs Exercise Price (in thousands) Per Share Outstanding at January 1, 2022 2,913 $ 5.73 Granted — — Exercised — — Forfeited/Expired (27) 5.73 Outstanding at December 31, 2022 2,886 $ 5.73 Exercisable at December 31, 2022 971 $ 5.73 |
Stockholders' Equity and Loss_2
Stockholders' Equity and Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Reconciliation of Numerators and Denominators of Basic and Diluted (Loss) Earnings Per Share | Year Ended December 31, (in thousands, except per share data) 2022 2021 Net loss (numerator): $ (65,321) $ (66,712) Loss per share: Basic and diluted $ (5.01) $ (8.89) Shares (denominator): Weighted average common shares outstanding - basic 13,026 7,507 Weighted average common shares outstanding - diluted 13,026 7,507 |
Schedule of Antidilutive Securities excluded from computation of earnings per share | Year Ended December 31, (in thousands) 2022 2021 Convertible Notes 28,374 — RSUs 1,566 137 SARs 1,422 — Stock options — 28 |
Nature of Operations and Rece_2
Nature of Operations and Recent Developments (Market Conditions and ATM Distribution) (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Feb. 21, 2023 $ / MMcf $ / bbl | Dec. 31, 2022 $ / shares $ / MMcf shares | Sep. 22, 2022 | Jun. 08, 2022 shares | Mar. 08, 2022 $ / bbl | Aug. 31, 2022 $ / MMcf | May 31, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Jun. 30, 2019 shares | |
Market price of oil (in dollars per barrel) | $ / bbl | 76.28 | 123.64 | |||||||||
Natural gas price (in dollars per mmcf) | $ / MMcf | 2.12 | 3.52 | 9.85 | ||||||||
Maximum aggregate offering price for sale of additional stock | $ | $ 6.5 | $ 5.9 | |||||||||
Common stock, par value (USD per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Common stock, shares authorized (shares) | shares | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||
Revolving ABL Credit Facility | |||||||||||
Debt maturity extended term | 2 years | ||||||||||
2019 Plan | |||||||||||
Number of shares authorized (in shares) | shares | 275,000 | ||||||||||
Number of additional shares authorized (in shares) | shares | 4,300,000 | ||||||||||
ATM Offering | |||||||||||
Maximum aggregate offering price for sale of additional stock | $ | $ 8.8 | ||||||||||
Gross proceeds on sale of stock | $ | $ 3.6 |
Nature of Operations and Rece_3
Nature of Operations and Recent Developments (Convertible Notes) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Jun. 08, 2022 $ / shares | Jun. 07, 2022 $ / shares | Mar. 18, 2022 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Aggregate principal amount | $ 78,900 | |||||
Accrued interest | $ 101 | $ 4,372 | ||||
Convertible notes, outstanding | 181,977 | |||||
Convertible Notes | ||||||
Aggregate principal amount | $ 157,500 | $ 12,700 | ||||
Accrued interest | $ 5,800 | |||||
Conversion ratio | 0.22172949 | 0.19723866 | 0.22172949 | 0.22172949 | ||
Threshold additional shares to be issued, value | $ 7,500 | $ 7,500 | ||||
Convertible conversion price | $ / shares | $ 4.51 | $ 5.07 | $ 4.51 | $ 4.51 | ||
Issuance of common stock through at-the-market facility, net of offering costs (in shares) | shares | 2,268,000 | |||||
Convertible notes, outstanding | $ 170,200 | |||||
Convertible Notes | SOFR | ||||||
Interest rate, basis spread (as a percent) | 10% | |||||
Debt instrument, variable rate, cash interest | 12.50% | |||||
Debt instrument, variable rate, paid in kind interest | 9.50% | 14% | 14% | |||
Debt instrument, decreased variable rate, paid in kind | 9.50% | |||||
Convertible Notes | Floor Rate | ||||||
Interest rate, basis spread (as a percent) | 1% |
Nature of Operations and Rece_4
Nature of Operations and Recent Developments - Derivatives and Asset impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Change in fair value of the embedded derivative | $ 4,300 | ||||
Fair value of the embedded derivative extinguished | 69,200 | ||||
Gain on extinguishment of derivatives | $ 10,800 | $ 10,765 | |||
Asset impairment, net | 350 | $ 800 | |||
Assets held for sale | $ 325 | 325 | |||
Impairment of assets held for use | $ 300 | ||||
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset impairment, net | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Miscellaneous Drilling Equipment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Assets held for sale | $ 50 | ||||
Impairment of assets held for sale | $ 500 | ||||
Drilling equipment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Assets held for sale | 300 | $ 300 | |||
Drilling equipment | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment of assets held for sale | $ 400 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Accounts Receivable) (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Property, Plant and Equipment) (Details) | 12 Months Ended |
Dec. 31, 2022 location | |
Property, Plant and Equipment [Line Items] | |
Field locations | 6 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 2 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 39 years |
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 | 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 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Financial Instruments and Fair Value (Details) $ in Thousands | 12 Months Ended | |||
Jun. 08, 2022 USD ($) | Dec. 31, 2022 USD ($) | Mar. 18, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair value assets transfer | $ 0 | $ 0 | ||
Notes term | 3 years 8 months 12 days | |||
Change in fair value of the embedded derivative | $ 4,300 | |||
Fair value of the embedded derivative extinguished | 69,200 | |||
Realized gain on extinguishment of derivative | $ 10,800 | 10,765 | ||
Convertible Notes | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Fair value of convertible notes | $ 159,200 | |||
Convertible Debt Facility | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Embedded derivative liability | $ 75,700 | |||
Volatility rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative liability measurement input | 0.589 | |||
Volatility rate | Convertible Notes | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Debt instrument, measurement input | 0.590 | |||
Risk-free rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative liability measurement input | 0.030 | |||
Risk-free rate | Convertible Notes | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Debt instrument, measurement input | 0.042 | |||
Credit Spread | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative liability measurement input | 0.3570 | |||
Credit Spread | Convertible Notes | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Debt instrument, measurement input | 0.3262 | |||
Measurement Input Yield Rate | Revolving ABL Credit Facility | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Debt instrument, measurement input | 0.0493 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Financial Instruments and Fair Value (Estimated Fair Value) (Details) - Fair Value - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Merger consideration payable to an affiliate | $ 4,449 | |
Revolving ABL Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 11,870 | 6,030 |
Term Loan Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 140,664 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Financial Instruments and Fair Value (Fair Value Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Recurring | ||
Financial liability: | ||
Embedded derivative liability | $ 0 | $ 0 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Disaggregation of Revenues and Concentration Risk) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 186,710 | $ 87,955 |
Dayrate drilling | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 172,284 | 79,597 |
Mobilization | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 4,719 | 3,283 |
Reimbursables | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8,856 | 4,920 |
Capital modification | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 810 | 153 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 41 | $ 2 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Receivables, Contract Assets and Liabilities) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Receivables, which are included in "Accounts receivable" | $ 39,732,000 | $ 22,167,000 |
Contract assets | 0 | 0 |
Contract liabilities, which are included in "Accrued liabilities" | $ (1,158,000) | $ (542,000) |
Revenue from Contracts with C_5
Revenue from Contracts with Customers (Changes in Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that was included in contract liabilities at beginning of period | $ 542 | $ 119 |
Increase in contract liabilities due to cash received, excluding amounts recognized as revenue | $ (1,158) | $ (542) |
Revenue from Contracts with C_6
Revenue from Contracts with Customers (Remaining Performance Obligation) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 1,158 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, remaining performance obligation, amount | $ 1,158 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue, remaining performance obligation, amount | $ 0 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Capitalized contract cost, current | $ 0.3 | $ 0.6 |
Capitalized contract cost, increase | 3.3 | |
Amortization of contract costs | $ 3.6 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | Dec. 31, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of lease, finance | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of lease, finance | 3 years |
Leases (Lease Cost) (Details)
Leases (Lease Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease expense | $ 747 | $ 928 |
Short-term lease expense | 5,697 | 3,033 |
Variable lease expense | 577 | 431 |
Finance lease expense: | ||
Amortization of right-of-use assets | 1,682 | 1,158 |
Interest expense on lease liabilities | 387 | 585 |
Total finance lease expense | 2,069 | 1,743 |
Total lease expense | 9,090 | 6,135 |
Cash paid for amounts included in measurement of lease liabilities: | ||
Operating cash flows from operating leases | 732 | 964 |
Operating cash flows from finance leases | 373 | 580 |
Financing cash flows from finance leases | 5,811 | 3,594 |
Right-of-use assets obtained or recorded in exchange for lease obligations: | ||
Operating leases | 153 | |
Finance leases | $ 4,440 | $ 1,503 |
Leases (Lease Assets and Liabil
Leases (Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases: | ||
Other long-term assets, net | $ 976 | $ 1,437 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Accrued liabilities | $ 751 | $ 693 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Other long-term liabilities | $ 373 | $ 1,036 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total operating lease liabilities | $ 1,124 | $ 1,729 |
Finance leases: | ||
Property, plant and equipment | 7,307 | 14,989 |
Accumulated depreciation | (1,994) | (1,989) |
Property, plant and equipment, net | $ 5,313 | $ 13,000 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Current portion of long-term debt | $ 2,485 | $ 4,464 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Lease Obligation, Current | Long-term Debt and Lease Obligation, Current |
Long-term debt | $ 1,599 | $ 1,305 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Lease Obligation | Long-term Debt and Lease Obligation |
Total finance lease liabilities | $ 4,084 | $ 5,769 |
Weighted-average remaining lease term | ||
Operating leases | 1 year 7 months 6 days | 2 years 6 months |
Finance leases | 1 year 7 months 6 days | 1 year 3 months 18 days |
Weighted-average discount rate | ||
Operating leases | 10.86% | 10.84% |
Finance leases | 8.12% | 8.64% |
Leases (Lease Maturities) (Deta
Leases (Lease Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 833 | |
2024 | 390 | |
2025 | 0 | |
Total cash lease payment | 1,223 | |
Less: imputed interest | (99) | |
Total lease liabilities | 1,124 | $ 1,729 |
Finance Leases | ||
2023 | 2,743 | |
2024 | 1,110 | |
2025 | 549 | |
Total cash lease payment | 4,402 | |
Less: imputed interest | (318) | |
Total lease liabilities | $ 4,084 | $ 5,769 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||
Rig components and supplies | $ 1,508 | $ 1,171 |
Reserve for obsolescence | 0 | 0 |
Inventory obsolescence expense | $ 0 | $ 0 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total | $ 629,888 | $ 580,427 |
Less: Accumulated depreciation | (253,804) | (218,081) |
Total Property, plant and equipment, net | 376,084 | 362,346 |
Repairs and maintenance expense | 23,300 | 13,400 |
Depreciation | 40,400 | 38,900 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 300 | 300 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,816 | 2,800 |
Drilling rigs and related equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 611,972 | 558,530 |
Machinery, equipment and other | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,775 | 1,767 |
Finance leases | ||
Property, Plant and Equipment [Line Items] | ||
Finance leases | 7,307 | 14,989 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 25 | 17 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 5,693 | $ 2,024 |
Supplemental Consolidated Bal_3
Supplemental Consolidated Balance Sheet and Cash Flow Information (Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Supplemental Consolidated Balance Sheet and Cash Flow Information [Abstract] | ||
Prepaid insurance | $ 3,796 | $ 3,463 |
Prepaid other | 656 | 575 |
Deferred mobilization costs | 283 | 618 |
Insurance claim receivable | 122 | |
Other current assets | 1 | 9 |
Prepaid expenses and other current assets | $ 4,736 | $ 4,787 |
Supplemental Consolidated Bal_4
Supplemental Consolidated Balance Sheet and Cash Flow Information (Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Supplemental Consolidated Balance Sheet and Cash Flow Information [Abstract] | ||
Accrued salaries and other compensation | $ 6,908 | $ 4,154 |
Insurance | 3,002 | 2,523 |
Deferred mobilization revenues | 1,003 | 542 |
Property and other taxes | 3,621 | 2,594 |
Interest | 101 | 4,372 |
Operating lease liability - current | 751 | 693 |
Other | 2,222 | 739 |
Accrued liabilities | $ 17,608 | $ 15,617 |
Supplemental Consolidated Bal_5
Supplemental Consolidated Balance Sheet and Cash Flow Information (Supplemental Cash Flow) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Cash paid during the year for interest | $ 5,084 | $ 6,918 |
Supplemental disclosure of non-cash investing and financing activities | ||
Change in property, plant and equipment purchases in accounts payable | 11,686 | 3,564 |
Additions to property, plant and equipment through finance leases | 4,440 | 1,503 |
Transfer of assets from held and used to held for sale | (325) | (1,082) |
Extinguishment of finance lease obligations from sale of assets classified as finance leases | (281) | (65) |
Gain on extinguishment of debt | $ 10,000 | |
Initial embedded derivative liability upon issuance of convertible notes | 75,733 | |
Extinguishment of embedded derivative liability | (69,232) | |
Shares issued for structuring fee | $ 9,163 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Convertible debt principal notes | $ 181,977 | |
Finance lease obligations | 4,084 | $ 5,769 |
Long-term debt and finance lease obligations, including current maturities | 186,061 | 147,952 |
Less: Convertible Notes issuance costs and debt discount | (40,353) | |
Less: Term Loan Facility deferred financing costs | (1,748) | |
Less: current portion of finance leases | (2,485) | (4,464) |
Long-term debt | 143,223 | 141,740 |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Convertible debt principal notes | 170,166 | |
Revolving ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Convertible debt principal notes | 11,811 | |
Line of credit | Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Convertible debt principal notes | 135,883 | |
Line of credit | Revolving ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Convertible debt principal notes | $ 11,811 | $ 6,300 |
Long-term Debt (Future Long-ter
Long-term Debt (Future Long-term Debt Payments) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
2025 | $ 11,811 |
2026 | 170,166 |
Total | 181,977 |
Convertible Notes | |
Debt Instrument [Line Items] | |
2026 | 170,166 |
Total | 170,166 |
Revolving ABL Credit Facility | |
Debt Instrument [Line Items] | |
2025 | 11,811 |
Total | $ 11,811 |
Long-term Debt (Narrative) (Det
Long-term Debt (Narrative) (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||
Feb. 24, 2023 USD ($) | Feb. 23, 2023 | Sep. 22, 2022 | Jun. 08, 2022 USD ($) $ / shares | Jun. 07, 2022 $ / shares | Mar. 18, 2022 USD ($) D $ / shares shares | Mar. 17, 2022 $ / shares | Oct. 01, 2018 USD ($) | Feb. 28, 2023 USD ($) | Mar. 31, 2022 USD ($) | Sep. 19, 2023 | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 78,900,000 | |||||||||||||
Accrued interest | $ 101,000 | $ 4,372,000 | ||||||||||||
Amortization of deferred financing costs | 346,000 | 1,115,000 | ||||||||||||
Notes term | 3 years 8 months 12 days | |||||||||||||
Convertible debt principal notes | 181,977,000 | |||||||||||||
Change in fair value of the embedded derivative | $ 4,300,000 | |||||||||||||
Fair value of the embedded derivative extinguished | 69,200,000 | |||||||||||||
Realized gain on extinguishment of derivative | $ 10,800,000 | 10,765,000 | ||||||||||||
Paid-in-kind interest | 15,859,000 | 5,883,000 | ||||||||||||
(Loss) gain on extinguishment of debt | (46,347,000) | 10,128,000 | ||||||||||||
Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 130,000,000 | |||||||||||||
Paid-in-kind interest | 3,200,000 | 5,900,000 | ||||||||||||
Delayed Draw Term Loan | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 15,000,000 | |||||||||||||
Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible debt principal notes | $ 11,811,000 | |||||||||||||
Debt maturity extended term | 2 years | |||||||||||||
Line of credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Weighted average interest rate | 13.30% | |||||||||||||
Line of credit | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible debt principal notes | 135,883,000 | |||||||||||||
Line of credit | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible debt principal notes | $ 11,811,000 | $ 6,300,000 | ||||||||||||
Fixed charge coverage ratio | 1 | |||||||||||||
Line of credit facility, borrowing base threshold, percentage | 85% | |||||||||||||
Commitment fee on unused capacity (as a percent) | 0.375% | |||||||||||||
Line of credit facility, unused commitment fee percentage, revolver contingency | 0.25% | |||||||||||||
Fixed charge coverage ratio, maximum credit threshold | 10% | |||||||||||||
Borrowing base | 33,100,000 | |||||||||||||
Line of credit | Federal funds, effective rate | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 0.05% | |||||||||||||
Line of credit | LIBOR | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 7.50% | |||||||||||||
Line of credit | Prime Rate | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 6.50% | |||||||||||||
Line of credit | SOFR | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 1% | |||||||||||||
Revolving credit facility | Line of credit | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Revolving credit facility, maximum borrowing capacity | $ 40,000,000 | 40,000,000 | ||||||||||||
Remaining availability | 21,300,000 | |||||||||||||
Letter of Credit | Line of credit | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Revolving credit facility, maximum borrowing capacity | $ 7,500,000 | |||||||||||||
Minimum | Line of credit | Prime Rate | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 1% | |||||||||||||
Minimum | Revolving credit facility | Line of credit | SOFR | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 2.36% | |||||||||||||
Maximum | Line of credit | Federal funds, effective rate | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 0.05% | |||||||||||||
Maximum | Line of credit | LIBOR | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 1% | |||||||||||||
Maximum | Line of credit | Prime Rate | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 1.50% | |||||||||||||
Maximum | Line of credit | Base Rate | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 0% | |||||||||||||
Maximum | Revolving credit facility | Line of credit | SOFR | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stated interest rate (as a percent) | 2.86% | |||||||||||||
Convertible Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 157,500,000 | $ 12,700,000 | ||||||||||||
Accrued interest | $ 5,800,000 | |||||||||||||
Issuance of common stock through at-the-market facility, net of offering costs (in shares) | shares | 2,268,000 | |||||||||||||
Derivative liability | $ 75,700,000 | |||||||||||||
Conversion ratio | 0.22172949 | 0.19723866 | 0.22172949 | 0.22172949 | ||||||||||
Threshold additional shares to be issued, value | $ 7,500,000 | $ 7,500,000 | ||||||||||||
Amortization of deferred financing costs | 1,800,000 | |||||||||||||
Interest expenses | $ 18,500,000 | |||||||||||||
Notes term | 48 months | 18 months | ||||||||||||
Convertible conversion price | $ / shares | $ 4.51 | $ 5.07 | $ 4.51 | $ 4.51 | ||||||||||
Convertible debt principal notes | $ 170,200,000 | |||||||||||||
Percentage of note holders | 50.10% | |||||||||||||
(Loss) gain on extinguishment of debt | $ (46,300,000) | |||||||||||||
Debt discounts | $ 37,800,000 | |||||||||||||
Cash fee | 7,400,000 | |||||||||||||
Non cash structuring fee | $ 2,300,000 | |||||||||||||
Effective interest rate | 22.10% | |||||||||||||
Amortization of debt discount | $ 4,900,000 | |||||||||||||
Convertible Notes | Term Loan Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 157,500,000 | |||||||||||||
Convertible Notes | SOFR | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 10% | |||||||||||||
Debt instrument, variable rate, cash interest | 12.50% | |||||||||||||
Debt instrument, variable rate, paid in kind interest | 9.50% | 14% | 14% | |||||||||||
Debt instrument, decreased variable rate, paid in kind | 9.50% | |||||||||||||
Convertible Notes | Floor Rate | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate, basis spread (as a percent) | 1% | |||||||||||||
Convertible Notes | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Threshold additional shares to be issued, value | 7,500,000 | |||||||||||||
Convertible Notes | Subscription Agreement | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Aggregate principal amount | $ 157,500,000 | |||||||||||||
Convertible conversion price | $ / shares | $ 4.51 | |||||||||||||
Holder elected restricted ownership percentage | 19.90% | |||||||||||||
Convertible debt principal notes | $ 25,000,000 | |||||||||||||
Redemption price percentage | 104% | |||||||||||||
Redemption Multiplier | 1.08 | 1.04 | ||||||||||||
Increase in the Capex Adjustment | $ 16,900,000 | |||||||||||||
Threshold period following written notice after which the election becomes effective | 61 days | |||||||||||||
Principal amount of debt that is used in conversion calculations | $ 1,000 | |||||||||||||
Threshold volume-weighted average price trading days under debt conversion | D | 5 | |||||||||||||
MOIC Required Level | $ 1,350 | |||||||||||||
Convertible Notes | Subscription Agreement | Scenario of Redemption of Debt, After June,30 2023 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption amount on quarterly basis | 5,000,000 | |||||||||||||
Convertible Notes | Subscription Agreement | Scenario of Redemption of Debt, After March 31, 2025 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Redemption amount on quarterly basis | 3,500,000 | |||||||||||||
Convertible Notes | Subscription Agreement | Line of credit | Revolving ABL Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Liquidity covenant | $ 10,000,000 | |||||||||||||
Fixed charge coverage ratio | 1 | |||||||||||||
Minimum availability | $ 5,000,000 | |||||||||||||
Maximum capital expenditure next twelve month | 25,000,000 | |||||||||||||
Maximum capital expenditure next year two | 15,000,000 | |||||||||||||
Maximum capital expenditure year three | 15,000,000 | |||||||||||||
Subjective increase in capital expenditures | $ 500,000 | |||||||||||||
Suspend convertible debt period | 18 months | |||||||||||||
Debt covenant, consented capital expenditure adjustments | $ 16,900,000 | $ 10,600,000 | ||||||||||||
Convertible Notes | Embedded Derivative Liability | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion ratio | 0.22172949 | 0.19723866 | ||||||||||||
Convertible conversion price | $ / shares | $ 4.51 | $ 5.07 | ||||||||||||
Fair value of embedded conversion feature | $ 0 | |||||||||||||
Fair value of contingent interest feature | $ 0 | |||||||||||||
Convertible Notes | Embedded Derivative Liability | SOFR | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, variable rate, paid in kind interest | 14% | |||||||||||||
Debt instrument, decreased variable rate, paid in kind | 9.50% |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
State | $ 575 | |
Current income tax expense (benefit) | 575 | |
Deferred: | ||
Federal | (7,480) | $ 17,417 |
State | 709 | 1,115 |
Deferred income tax expense (benefit) | (6,771) | 18,532 |
Income tax expense (benefit) | $ (6,196) | $ 18,532 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Income Tax Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax rate (as a percent) | 21% | 21% |
Income tax benefit at the statutory federal rate (21%) | $ (15,019) | $ (10,128) |
Nondeductible expenses | 3 | 147 |
PPP Loan Forgiveness | (2,127) | |
Valuation allowance | (1,200) | 29,268 |
Derivatives | 7,629 | |
State taxes, net of federal benefit | 1,518 | 882 |
Stock-based compensation and other | 873 | 490 |
Income tax expense (benefit) | $ (6,196) | $ 18,532 |
Effective income tax rate (as a percent) | 8.70% | (38.50%) |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets | ||
Merger-related expenses | $ 894 | $ 960 |
Stock-based compensation | 1,349 | 1,247 |
Accrued liabilities and other | 613 | 292 |
Deferred revenue | 228 | 119 |
Interest limitation | 8,024 | 3,281 |
ROU Asset | 255 | 379 |
Debt Instruments | 2,026 | |
Net operating losses | 96,142 | 93,733 |
Total net deferred tax assets | 109,531 | 100,011 |
Deferred income tax liabilities | ||
Prepaids | (845) | (740) |
Property, plant and equipment | (41,937) | (38,000) |
ROU Liability | (222) | (315) |
Total net deferred tax liabilities | (43,004) | (39,055) |
Valuation allowance | (78,793) | (79,993) |
Net deferred tax liability | $ (12,266) | $ (19,037) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 444.5 |
Net operating loss carryforwards, subject to expiration | 134.1 |
Net operating loss carryforwards, not subject to expiration | 310.4 |
Unrecognized Tax Benefits | 0 |
NOL expiration amount | $ 94.8 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) | 12 Months Ended | ||||
Jun. 08, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted (in shares) | 0 | ||||
Weighted-average exercise price (in dollars per share) | $ 0 | ||||
Stock options, outstanding | 0 | 27,867 | |||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options, outstanding | 0 | ||||
Unrecognized compensation costs | $ 0 | ||||
Options vested (in shares) | 0 | 0 | |||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs | $ 500,000 | ||||
Period for recognition (in years) | 6 months | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs | $ 4,800,000 | ||||
Vesting period (years) | 3 years | ||||
Period for recognition (in years) | 1 year | ||||
Shares received per restricted stock unit (in shares) | 1 | ||||
Performance-based RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (years) | 3 years | ||||
Period for recognition (in years) | 1 month 6 days | ||||
Shares received per restricted stock unit (in shares) | 2 | ||||
Cash-settled stock appreciation rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable (in shares) | 971,000 | ||||
Weighted average remaining contractual life | 5 years 1 month 6 days | ||||
Exercisable (in dollar per share) | $ 5.73 | ||||
Unrecognized compensation costs | $ 1,100,000 | ||||
Period for recognition (in years) | 7 months 6 days | ||||
Risk-free interest rate (as percent) | 3.95% | ||||
Expected volatility factor (as percent) | 113% | ||||
TSR market-based RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value assumptions, exercise price (in dollars per share) | $ 12.42 | ||||
Risk-free interest rate (as percent) | 1.38% | ||||
Expected volatility factor (as percent) | 68.50% | ||||
Expected dividend yield (as percent) | 0% | ||||
Stock-settled stock appreciation rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation costs | $ 3,100,000 | ||||
Period for recognition (in years) | 1 year 2 months 12 days | ||||
Risk-free interest rate (as percent) | 3.03% | ||||
Expected volatility factor (as percent) | 103.30% | ||||
Expected dividend yield (as percent) | 0% | ||||
Minimum | Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (years) | 3 years | ||||
Maximum | Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (years) | 5 years | ||||
2019 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 275,000 | ||||
Number of additional shares authorized (in shares) | 4,300,000 | ||||
Number of shares available for future awards (in shares) | 1,429,059 |
Stock-Based Compensation (Compe
Stock-Based Compensation (Compensation Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 4,644 | $ 2,295 |
Restricted stock, restricted stock units and stock-settled stock appreciation rights | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 3,390 | 1,724 |
Cash-settled stock appreciation rights | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 1,254 | $ 571 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Option Activity) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options | ||
Beginning balance (in shares) | 27,867 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | 0 |
Forfeited/expired (in shares) | (27,867) | |
Ending balance (in shares) | 0 | 27,867 |
Exercisable (in shares) | 0 | |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 254.80 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Forfeited/expired (in dollars per share) | 254.80 | |
Ending balance (in dollars per share) | 0 | $ 254.80 |
Exercisable (in dollars per share) | $ 0 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock and Restricted Stock Units Activity) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted stock | ||
Shares | ||
Outstanding at Beginning balance (in shares) | 26,890 | 40,334 |
Vested (in shares) | (10,198) | (10,176) |
Forfeited/Expired (in shares) | (3,246) | (3,268) |
Outstanding at Ending balance (in shares) | 13,446 | 26,890 |
Weighted Average Grant-Date Fair Value Per Share | ||
Outstanding at Beginning balance (in dollars per share) | $ 64.40 | $ 64.40 |
Vested and converted (in dollars per share) | 64.40 | 64.40 |
Forfeited/Expired (in dollars per share) | 64.40 | 64.40 |
Outstanding at Ending balance (in dollars per share) | $ 64.40 | $ 64.40 |
Restricted Stock Units (RSUs) | ||
Shares | ||
Outstanding at Beginning balance (in shares) | 109,911 | 63,897 |
Granted (in shares) | 1,526,385 | 77,938 |
Vested (in shares) | (78,011) | (28,611) |
Forfeited/Expired (in shares) | (2,743) | (3,313) |
Outstanding at Ending balance (in shares) | 1,555,542 | 109,911 |
Weighted Average Grant-Date Fair Value Per Share | ||
Outstanding at Beginning balance (in dollars per share) | $ 8.50 | $ 22.78 |
Granted (in dollars per share) | 4.16 | 4.95 |
Vested and converted (in dollars per share) | 7.78 | 25.75 |
Forfeited/Expired (in dollars per share) | 38.80 | 51.34 |
Outstanding at Ending balance (in dollars per share) | $ 4.22 | $ 8.50 |
Performance-based RSUs | ||
Shares | ||
Outstanding at Beginning balance (in shares) | 27,285 | 38,559 |
Vested (in shares) | (3,056) | |
Forfeited/Expired (in shares) | (13,486) | (11,274) |
Outstanding at Ending balance (in shares) | 10,743 | 27,285 |
Weighted Average Grant-Date Fair Value Per Share | ||
Outstanding at Beginning balance (in dollars per share) | $ 24.50 | $ 22.95 |
Vested and converted (in dollars per share) | 29 | |
Forfeited/Expired (in dollars per share) | 33.10 | 19.20 |
Outstanding at Ending balance (in dollars per share) | $ 12.42 | $ 24.50 |
Stock-Based Compensation (Sto_2
Stock-Based Compensation (Stock Appreciation Rights) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Stock-settled stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period (in years) | 7 years |
Exercise price (in dollars per share) | $ 5.19 |
Weighted-Average Assumptions | |
Expected volatility factor (as percent) | 103.30% |
Expected dividend yield (as percent) | 0% |
Risk-free interest rate (as percent) | 3.03% |
Stock-settled and Cash-settled SARs | |
Granted (in shares) | shares | 1,422 |
Outstanding at Ending balance (in shares) | shares | 1,422 |
Weighted Average Fair Value Price Per Share | |
Granted (in dollars per share) | $ 2.83 |
Outstanding at Ending balance (in dollars per share) | $ 2.83 |
Stock-settled stock appreciation rights | March 18, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 33.33% |
Cash-settled stock appreciation rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period (in years) | 7 years |
Exercise price (in dollars per share) | $ 5.73 |
Market cap price per share | $ 10 |
Weighted-Average Assumptions | |
Expected term of SARs (in years) | 5 years 1 month 6 days |
Expected volatility factor (as percent) | 113% |
Risk-free interest rate (as percent) | 3.95% |
Stock-settled and Cash-settled SARs | |
Outstanding at Beginning balance (in shares) | shares | 2,913 |
Forfeited/Expired (in shares) | shares | (27) |
Outstanding at Ending balance (in shares) | shares | 2,886 |
Exercisable (in shares) | shares | 971 |
Weighted Average Fair Value Price Per Share | |
Outstanding at Beginning balance (in dollars per share) | $ 5.73 |
Forfeited/Expired (in dollars per share) | 5.73 |
Outstanding at Ending balance (in dollars per share) | 5.73 |
Exercisable (in dollar per share) | $ 5.73 |
Stockholders' Equity and Loss_3
Stockholders' Equity and Loss per Share (Narrative) (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
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 (shares) | 85,092 | 81,846 | |
Shares authorized (in shares) | 250,000,000 | 250,000,000 | |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restricted stock outstanding (in shares) | 13,446 | 26,890 | 40,334 |
Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Shares outstanding (in shares) | 13,613,759 | 10,206,085 | 6,175,818 |
Stockholders' Equity and Loss_4
Stockholders' Equity and Loss per Share (Basic and Diluted Losses per Share Computations) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | ||
Net loss (numerator): | $ (65,321) | $ (66,712) |
Loss per share: | ||
Basic (in dollars per share) | $ (5.01) | $ (8.89) |
Diluted (in dollars per share) | $ (5.01) | $ (8.89) |
Shares (denominator): | ||
Weighted average common shares outstanding - basic (in shares) | 13,026 | 7,507 |
Weighted average common shares outstanding - diluted (in shares) | 13,026 | 7,507 |
Stockholders' Equity and Loss_5
Stockholders' Equity and Loss per Share (Anti-dilutive) (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 28,374 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,566 | 137 |
Stock Appreciation Rights (SARs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,422 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 28 |
Segment and Geographical Info_2
Segment and Geographical Information (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Reportable segments | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) item | |
Debt Instrument [Line Items] | |
Purchase commitments | $ 7,600,000 |
Payments for Deposits | 900,000 |
Letters of Credit Outstanding, Amount | $ 14,000 |
Employment agreement, number of executives | item | 6 |
Employment agreement term | 3 years |
Employment Agreement, Minimum Annual Cash Compensation | $ 1,900,000 |
Employment agreement severance amount | 4,900,000 |
Letter of Credit | |
Debt Instrument [Line Items] | |
Borrowings under Revolving ABL Credit Facility | $ 0 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - 401 (k) Plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan | ||
Defined contribution plan, Contribution percentage | 100% | |
Defined Contribution Plan, Matching contribution percentage | 6% | |
Defined contribution plan, Expense | $ 1.4 | $ 0 |
Concentration of Market and C_2
Concentration of Market and Credit Risk (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||
Cash, uninsured amount | $ 5 | |
Revenues | Customer Concentration Risk | Paloma Natural Gas | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20% | |
Revenues | Customer Concentration Risk | Diamondback Energy | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12% | |
Revenues | Customer Concentration Risk | Indigo Minerals | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25% | |
Revenues | Customer Concentration Risk | Endeavor Energy Resources | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13% | 10% |
Accounts Receivable | Customer Concentration Risk | Paloma Natural Gas | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 19% | |
Accounts Receivable | Customer Concentration Risk | Diamondback Energy | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15% | |
Accounts Receivable | Customer Concentration Risk | Indigo Minerals | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23% | |
Accounts Receivable | Customer Concentration Risk | Endeavor Energy Resources | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 21% | |
Accounts Receivable | Customer Concentration Risk | Bayswater Operating Company, LLC | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12% |
Related Parties and Other Mat_2
Related Parties and Other Matters (Details) $ in Millions | Mar. 18, 2022 USD ($) director | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jul. 01, 2022 director |
Aggregate principal amount | $ | $ 78.9 | |||
Number of directors who can be nominated | director | 1 | |||
Merger consideration payable to an affiliate | $ | $ 25 | |||
Number of holder representatives that have the right to nominate additional representative as director | director | 2 | |||
Number of additional representatives to be appointed as individual director | director | 1 | |||
Number of directors | director | 6 | 7 | ||
Convertible Notes | ||||
Aggregate principal amount | $ | $ 157.5 | $ 12.7 | ||
Interest | $ | $ 5.8 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for doubtful accounts | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | $ 518 | |
Charged to Costs and Expenses | (52) | |
Deductions | (466) | |
Valuation allowance for deferred tax assets | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | $ 79,993 | 49,647 |
Charged to Costs and Expenses | (1,200) | 30,346 |
Balance at End of Period | $ 78,793 | $ 79,993 |