Cover
Cover | 6 Months Ended |
Jun. 30, 2020 | |
Cover [Abstract] | |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2020 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2020 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-38091 |
Entity Registrant Name | NATIONAL ENERGY SERVICES REUNITED CORP. |
Entity Central Index Key | 0001698514 |
Entity Address, Address Line One | 777 Post Oak Blvd. |
Entity Address, Address Line Two | Suite 730 |
Entity Address, City or Town | Houston |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77056 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 79,317 | $ 73,201 |
Accounts receivable, net | 113,454 | 98,799 |
Unbilled revenue | 126,840 | 76,347 |
Service inventories, net | 91,764 | 78,841 |
Prepaid assets | 9,412 | 9,590 |
Retention withholdings | 49,671 | 40,970 |
Other receivables | 14,923 | 14,019 |
Other current assets | 5,158 | 11,442 |
Total current assets | 490,539 | 403,209 |
Non-current assets | ||
Property, plant and equipment, net | 458,161 | 419,307 |
Intangible assets, net | 119,206 | 122,714 |
Goodwill | 595,706 | 574,764 |
Other assets | 1,278 | 2,370 |
Total assets | 1,664,890 | 1,522,364 |
Liabilities | ||
Accounts payable | 123,213 | 65,704 |
Accrued expenses | 49,393 | 69,137 |
Current installments of long-term debt | 46,372 | 15,000 |
Short-term borrowings | 39,781 | 37,963 |
Income taxes payable | 9,138 | 7,542 |
Other taxes payable | 9,067 | 7,189 |
Other current liabilities | 53,272 | 25,601 |
Total current liabilities | 330,236 | 228,136 |
Long-term debt | 335,457 | 330,564 |
Deferred tax liabilities | 24,090 | 26,217 |
Employee benefit liabilities | 18,900 | 16,745 |
Other liabilities | 43,976 | 34,230 |
Total liabilities | 752,659 | 635,892 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at June 30, 2020 and December 31, 2019, respectively | ||
Common stock, no par value; unlimited shares authorized; 87,495,221 and 87,187,289 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 801,545 | 801,545 |
Additional paid in capital | 20,999 | 17,237 |
Retained earnings | 89,564 | 67,661 |
Accumulated other comprehensive income | 64 | 29 |
Total shareholders’ equity | 912,172 | 886,472 |
Non-controlling interests | 59 | |
Total equity | 912,231 | 886,472 |
Total liabilities and equity | $ 1,664,890 | $ 1,522,364 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value | $ 0 | $ 0 |
Preferred stock, authorized unlimited | Unlimited | Unlimited |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, authorized unlimited | Unlimited | Unlimited |
Common stock, shares issued | 87,495,221 | 87,187,289 |
Common stock, shares outstanding | 87,495,221 | 87,187,289 |
Condensed Consolidated Interim
Condensed Consolidated Interim Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 203,249 | $ 159,899 | $ 402,548 | $ 311,603 |
Cost of services | (164,343) | (116,893) | (322,613) | (231,390) |
Gross profit | 38,906 | 43,006 | 79,935 | 80,213 |
Selling, general and administrative expenses | (17,114) | (17,062) | (35,741) | (30,107) |
Amortization | (3,934) | (3,949) | (7,821) | (8,003) |
Operating income | 17,858 | 21,995 | 36,373 | 42,103 |
Interest expense, net | (4,165) | (5,750) | (8,675) | (9,680) |
Other income / (expense), net | (309) | (438) | (420) | (499) |
Income before income tax | 13,384 | 15,807 | 27,278 | 31,924 |
Income tax expense | (2,848) | (4,451) | (5,375) | (7,394) |
Net income / (loss) | 10,536 | 11,356 | 21,903 | 24,530 |
Net income / (loss) attributable to non-controlling interests | ||||
Net income attributable to shareholders | $ 10,536 | $ 11,356 | $ 21,903 | $ 24,530 |
Weighted average shares outstanding: | ||||
Basic | 88,232,694 | 86,896,779 | 87,731,986 | 86,895,285 |
Diluted | 88,232,694 | 86,896,779 | 87,731,986 | 86,895,285 |
Net earnings per share (Note 16): | ||||
Basic | $ 0.12 | $ 0.13 | $ 0.25 | $ 0.28 |
Diluted | $ 0.12 | $ 0.13 | $ 0.25 | $ 0.28 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Net income | $ 10,536 | $ 11,356 | $ 21,903 | $ 24,530 |
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustments | 6 | (19) | 35 | (19) |
Total Comprehensive Income, net of tax | 10,542 | 11,337 | 21,938 | 24,511 |
Comprehensive income attributable to non-controlling interest | ||||
Comprehensive income attributable to shareholders | $ 10,542 | $ 11,337 | $ 21,938 | $ 24,511 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Common Stock [Member]Successors [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Successors [Member] | AOCI Attributable to Parent [Member] | AOCI Attributable to Parent [Member]Successors [Member] | Retained Earnings [Member] | Retained Earnings [Member]Successors [Member] | Total Company Stockholders Equity [Member] | Total Company Stockholders Equity [Member]Successors [Member] | Noncontrolling Interest [Member] | Noncontrolling Interest [Member]Successors [Member] | Total | Successors [Member] |
Beginning balance, value at Dec. 31, 2018 | $ 801,545 | $ 1,034 | $ 48 | $ 28,297 | $ 830,924 | $ 67 | $ 830,991 | |||||||
Balance at beginning, shares at Dec. 31, 2018 | 85,562,769 | |||||||||||||
Share-based compensation expense | 2,113 | 2,113 | 2,113 | |||||||||||
Other | 4 | (19) | (15) | (15) | ||||||||||
Other, shares | 33,796 | 33,796 | ||||||||||||
Acquisition of non-controlling interest during the period | 67 | 67 | (67) | |||||||||||
NPS equity earn-out | 10,480 | 10,480 | 10,480 | |||||||||||
NPS equity earn-out, shares | 1,300,214 | |||||||||||||
Net income | 24,530 | 24,530 | $ 24,530 | 24,530 | ||||||||||
Ending balance, value at Jun. 30, 2019 | $ 801,545 | 13,698 | 29 | 52,827 | 868,099 | 868,099 | ||||||||
Balance at end, shares at Jun. 30, 2019 | 86,896,779 | |||||||||||||
Beginning balance, value at Mar. 31, 2019 | $ 801,545 | 12,322 | 48 | 41,472 | 855,387 | 855,387 | ||||||||
Balance at beginning, shares at Mar. 31, 2019 | 86,896,779 | |||||||||||||
Share-based compensation expense | 1,373 | 1,373 | 1,373 | |||||||||||
Other | 3 | (19) | (1) | (17) | (17) | |||||||||
Other, shares | ||||||||||||||
Net income | 11,356 | 11,356 | 11,356 | 11,356 | ||||||||||
Ending balance, value at Jun. 30, 2019 | $ 801,545 | $ 13,698 | $ 29 | $ 52,827 | $ 868,099 | $ 868,099 | ||||||||
Balance at end, shares at Jun. 30, 2019 | 86,896,779 | |||||||||||||
Beginning balance, value at Dec. 31, 2019 | $ 801,545 | $ 17,237 | $ 29 | $ 67,661 | $ 886,472 | 886,472 | ||||||||
Balance at beginning, shares at Dec. 31, 2019 | 87,187,289 | |||||||||||||
Share-based compensation expense | 3,760 | 3,760 | 3,760 | |||||||||||
Vesting of restricted share units | ||||||||||||||
Vesting of restricted share units, shares | 307,932 | |||||||||||||
Other | 2 | 35 | 37 | 59 | 96 | |||||||||
Other, shares | ||||||||||||||
Net income | 21,903 | 21,903 | 21,903 | |||||||||||
Ending balance, value at Jun. 30, 2020 | $ 801,545 | 20,999 | 64 | 89,564 | 912,172 | 59 | 912,231 | |||||||
Balance at end, shares at Jun. 30, 2020 | 87,495,221 | |||||||||||||
Beginning balance, value at Mar. 31, 2020 | $ 801,545 | 18,872 | 58 | 79,028 | 899,503 | 899,503 | ||||||||
Balance at beginning, shares at Mar. 31, 2020 | 87,495,221 | |||||||||||||
Share-based compensation expense | 2,125 | 2,125 | 2,125 | |||||||||||
Vesting of restricted share units | ||||||||||||||
Vesting of restricted share units, shares | ||||||||||||||
Other | 2 | 6 | 8 | 59 | 67 | |||||||||
Other, shares | ||||||||||||||
NPS equity earn-out, shares | ||||||||||||||
Net income | 10,536 | 10,536 | 10,536 | |||||||||||
Ending balance, value at Jun. 30, 2020 | $ 801,545 | $ 20,999 | $ 64 | $ 89,564 | $ 912,172 | $ 59 | $ 912,231 | |||||||
Balance at end, shares at Jun. 30, 2020 | 87,495,221 |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 21,903 | $ 24,530 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 59,585 | 38,476 |
Share-based compensation expense | 3,760 | 2,113 |
Loss (Gain) on disposal of assets | 240 | (356) |
Non-cash interest expense | (125) | 2,484 |
Deferred tax expense (benefit) | (2,126) | (1,077) |
Allowance for (reversal of) doubtful receivables | (26) | 476 |
Provision for obsolete service inventories | 614 | 1,057 |
Other operating activities, net | 219 | (1,848) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 1,887 | (41,440) |
(Increase) in inventories | (7,883) | (7,964) |
Decrease (increase) in prepaid assets | 857 | (2,289) |
(Increase) in other current assets | (46,533) | (8,651) |
(Increase) decrease in other long-term assets and liabilities | (2,140) | 702 |
Increase in accounts payable and accrued expenses | 23,185 | 20,009 |
(Decrease) in other current liabilities | (818) | (2,050) |
Net cash provided by operating activities | 52,599 | 24,172 |
Cash flows from investing activities: | ||
Capital expenditures | (50,661) | (56,513) |
Proceeds from disposal of assets | 1,277 | 1,273 |
Acquisition of business, net of cash acquired (Note 5) | 3,740 | |
Other investing activities | (570) | (285) |
Net cash used in investing activities | (46,214) | (55,525) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 15,000 | 365,000 |
Repayments of long-term debt | (278,039) | |
Proceeds from short-term borrowings | 3,999 | |
Repayments of short-term borrowings | (7,131) | (7,013) |
Payments on capital leases | (11,180) | |
Payments on seller-provided financing for capital expenditures | (992) | |
Other financing activities, net | (3,825) | |
Net cash (used in) provided by financing activities | (304) | 76,123 |
Effect of exchange rate changes on cash | 35 | (19) |
Net increase in cash | 6,116 | 44,751 |
Cash and cash equivalents, beginning of period | 73,201 | 24,892 |
Cash and cash equivalents, end of period | 79,317 | 69,643 |
Supplemental disclosure of cash flow information (also refer Note 3): | ||
Interest paid | 7,467 | 8,317 |
Income taxes paid | $ 6,196 | $ 13,890 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS National Energy Services Reunited Corp. (“NESR,” the “Company,” “we,” “our,” “us” or similar terms), a British Virgin Islands corporation headquartered in Houston, Texas, is one of the largest oilfield services providers in the Middle East North Africa (“MENA”) region. Formed in January 2017, NESR started as a special purpose acquisition company (“SPAC”) designed to invest in the oilfield services space globally. NESR filed a registration statement for its initial public offering in May 2017. In November 2017, NESR announced the acquisition of two oilfield services companies in the MENA region: NPS Holdings Limited (“NPS”) and Gulf Energy S.A.O.C. (“GES” and, together with NPS, the “Subsidiaries”). The formation of NESR as an operating entity was completed on June 7, 2018, after the transactions were approved by the U.S. Securities and Exchange Commission (“SEC”) and NESR shareholders. On June 1, 2020, NESR further expanded its footprint within the MENA region by acquiring Sahara Petroleum Services Company S.A.E. (“SAPESCO”). NESR’s revenues are primarily derived by providing production services (“Production Services”) such as hydraulic fracturing, cementing, coiled tubing, filtration, completions, stimulation, pumping and nitrogen services. NESR also provides drilling and evaluation services (“Drilling and Evaluation Services”) such as drilling downhole tools, directional drilling, fishing tools, testing services, wireline, slickline, fluids and rig services. NESR has significant operations throughout the MENA region including Saudi Arabia, Oman, Qatar, Iraq, Algeria, United Arab Emirates and Kuwait. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying condensed consolidated interim financial statements of the Company have been prepared in accordance with U.S. GAAP for interim financial reporting purposes. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 20-F for the year ended December 31, 2019. Emerging growth company The Company is an “emerging growth company,” as defined in Section 2(a) of the U.S. Securities Act of 1933 as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make a comparison of the Company’s condensed consolidated interim financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of estimates The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include estimates made towards the purchase price allocation for the acquisition of SAPESCO, the allowance for doubtful accounts, evaluation for impairment of property, plant and equipment, evaluation for impairment of goodwill and intangible assets, estimated useful life of property, plant, and equipment and intangible assets, provision for inventories obsolescence, recoverability of unbilled revenue, provision for unrecognized tax benefits, recoverability of deferred taxes and contingencies and actuarial assumptions in employee benefit plans. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated interim financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from the estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Supplemental cash flow information Non-cash transactions for the year-to-date period ended June 30, 2020 were as follows: ● Purchases of property, plant, and equipment in Accounts payable, Accrued expenses and Short-term borrowings at June 30, 2020 of $ 15.2 0.9 28.6 ● Capital lease obligations of $ 27.0 9.0 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 3.5 1.5 1.5 ● Obligations of $ 40.6 million classified, related to the future payments of cash and shares for the purchase of SAPESCO (Note 5), are not included under “Acquisition of business, net of cash acquired” within the Condensed Consolidated Statement of Cash Flows. Non-cash transactions for the year-to-date period ended June 30, 2019 were as follows: ● Purchases of property, plant, and equipment in accounts payable and short-term debt at June 30, 2019 of $ 28.8 5.1 Recently issued accounting standards not yet adopted The SEC permits qualifying Emerging Growth Companies (“EGC”) to defer the adoption of accounting standards updates until the time when a private company would adopt such standards. The Company continues to qualify as an EGC as of June 30, 2020. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases,” a new standard on accounting for leases. This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In June 2020, the FASB Issued ASU No. 2020-05, “Accounting Standards Update 2020-05—Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities.” ASU No. 2020-05 deferred the Company’s adoption of ASU 2016-02, as amended, to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the provisions of ASU 2016-02 and related interpretive amendments (ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” ASU 2018-20, “Leases (Topic 842): Narrow-Scope Improvements for Lessors,” and ASU 2019-01, “Leases (Topic 842): Codification Improvements,” inclusive) and assessing the impact, if any, on its condensed consolidated interim financial statements and related disclosures. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of revenue There is significant homogeneity amongst the Company’s revenue-generating activities. In all service lines, the Company provides a “suite of services” to fulfill a customer purchase/service order, encompassing personnel, use of Company equipment, and supplies required to perform the services. Over 98% percent of the Company’s revenue is from the MENA region with the majority sourced from governmental customers, predominantly in Oman and Saudi Arabia. Information regularly reviewed by the chief operating decision maker (“CODM”) for evaluating the financial performance of operating segments is focused on the timing of when the services are performed during a well’s lifecycle. Production Services are services performed during the production stage of a well’s lifecycle. Drilling and Evaluation Services are services performed during the pre-production stages of a well’s lifecycle. Based on these considerations, the following table provides disaggregated revenue data by the phase in a well’s lifecycle during which revenue has been recorded (in US$ thousands): SCHEDULE OF DISAGGREGATION OF REVENUE BY GEOGRAPHY Quarter ended Year-to-date period ended Revenue by Phase in Well’s Lifecycle: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Production Services $ 139,034 $ 95,358 $ 272,224 $ 187,471 Drilling and Evaluation Services 64,215 64,541 130,324 124,132 Total revenue by phase in well’s life cycle $ 203,249 $ 159,899 $ 402,548 $ 311,603 |
BUSINESS COMBINATION
BUSINESS COMBINATION | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION In June of 2020, NESR executed the Deed of Amendment (“Deed of Amendment”) to the Agreement dated February 13, 2020 related to the sale and purchase of 99.7 Description of the SAPESCO Transaction Under the terms of the Sale & Purchase Agreement, NESR acquired 99.7 % of the issued and outstanding shares of SAPESCO in a cash and stock transaction which comprised of $ 11.0 million to be paid at closing, an additional $ 6.0 million to be paid in three equal installments by September 1, 2020, for a total cash consideration of $ 17.0 million, and the issuance of 2,237,000 NESR shares based on a $ 10.00 per share conversion rate. The Sale & Purchase Agreement contains earn-out mechanisms that enable the sellers to receive additional consideration after the closing of the Business Combination as follows: ● Cash Earn-Out ( “Cash Earn-Out”) of up to $ 6.9 ● Additional Earn-Out Shares ( “Additional Earn-Out Shares”) based on the collection of certain receivables and only to the extent that NESR’s average share price during the fourth quarter of 2020 is less than $ 9 ● Customer Receivables Earn-Out Shares ( “Customer Receivables Earn-Out Shares”) based on the collection of certain long-dated and/or doubtful receivables for two years subsequent to the Closing Date, to be settled at the NESR Additional Share Price (“NESR Additional Share Price”) which is derived from taking the average of the price of the Company’s shares (“NESR Shares”) during each calendar quarter within the 12 months after the Closing Date and applying the average price in each quarter to the long-dated and doubtful receivables collected during the relevant quarter, provided that if such price is: (a) less than $ 10 10 11.70 11.70 Collectively, the Cash Earn-Out and Additional Earn-Out Shares were fair valued at $ 11.7 0 Financing of Business Combination Consideration for the Business Combination was funded through the following sources and transactions: ● cash and cash equivalents of $11 million, reflected in Other current liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2020; ● deferred consideration of $ 6 million ($ 5.958 million at present value on June 1, 2020), reflected in Other current liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2020; ● the issuance of 2,237,000 NESR ordinary shares to the SAPESCO selling stockholders in exchange for their SAPESCO shares also reflected in Other liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2020. The following summarizes the preliminary consideration to purchase 99.7 % of the issued and outstanding equity interests of SAPESCO: SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST SAPESCO [Member] SAPESCO Value (In US$ thousands) Shares Cash consideration $ 16,958 Total consideration – cash 16,958 NESR ordinary share consideration 12,013 2,237,000 Total consideration – equity (1) 12,013 2,237,000 Estimated earn-out mechanisms 11,678 - (2) Preliminary consideration $ 40,649 2,237,000 (1) The fair value of NESR ordinary shares was determined based upon the $ 5.37 (2) The quantity of Additional Earn-Out Shares will not be known until the fourth quarter of 2020 when this contingency is resolved. A liability totalling $ 6.4 Accounting treatment The Business Combination is accounted for under ASC 805, Business Combinations (“ASC 805”). Pursuant to ASC 805, NESR has been determined to be the accounting acquirer. SAPESCO constitutes a business, with inputs, processes, and outputs. Accordingly, the acquisition of SAPESCO constitutes the acquisition of a business for purposes of ASC 805, and due to the change in control of SAPESCO was accounted for using the acquisition method. NESR recorded the fair value of assets acquired and liabilities assumed from SAPESCO. The allocation of the consideration to the tangible and intangible assets acquired and liabilities assumed, is based on various estimates. As of June 30, 2020, management was (1) finalizing fair value of purchase consideration, (2) completing physical verifications and obsolescence assessments for Service inventories, and Property, plant and equipment, (3) evaluating the fair value of Service inventories, Property, plant and equipment, and Intangible assets, (4) completing valuation procedures for certain current assets and liabilities, (5) accounting for income taxes, and (6) concluding valuation procedures for Employee benefit liabilities and equipment capital leases recorded in Other liabilities. As such, to the extent of these estimates, the purchase price allocation is preliminary. Management expects that these values will be finalized by the fourth quarter of 2020. Any adjustments will be recognized in the reporting period in which the adjustment amounts are determined. The following table summarizes the preliminary allocation of the purchase price allocation (in US% thousands): SCHEDULE OF PURCHASE PRICE ALLOCATION Allocation of consideration Cash and cash equivalents $ 3,740 Accounts receivable, net 16,516 Unbilled revenue 5,976 Service inventories 5,654 Prepaid assets 679 Retention withholdings 279 Other current assets 551 Property, plant and equipment 34,161 Intangible assets 4,220 Other assets 200 Total identifiable assets acquired 71,976 Accounts payable 11,974 Accrued expenses 6,455 Current installments of long-term debt 5,400 Short-term borrowings 5,692 Income taxes payable 313 Other taxes payable 2,514 Other current liabilities 1,679 Long-term debt 15,582 Employee benefit liabilities 868 Other liabilities 1,733 Noncontrolling interests 59 Net identifiable liabilities acquired 52,269 Total fair value of net assets acquired 19,707 Goodwill 20,942 Preliminary consideration $ 40,649 Intangible assets Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. The preliminary allocation to intangible assets is as follows (in US$ thousands): SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS Fair Value Total Useful Life (In US$ thousands) Customer contracts $ 3,770 8 years Trademarks and trade names 450 2 years Total intangible assets $ 4,220 Goodwill As of June 30, 2020, $ 20.9 million has been allocated to goodwill. Goodwill represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable definite-lived intangible assets acquired. The goodwill is not amortizable for tax purposes. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of the strong market positions and the assembled workforces. In accordance with FASB ASC Topic 350, Goodwill and Other Intangible Assets Transaction costs The Company incurred $ 0.9 Unaudited pro-forma information The following table summarizes the supplemental consolidated results of the Company on an unaudited pro forma basis, as if the Business Combination had been consummated on January 1, 2019 for the quarter and year-to-date periods ended June 30, 2020 and June 30, 2019, respectively (in US$ thousands): SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenues $ 209,563 $ 179,557 $ 421,287 $ 347,941 Net income/(loss) 7,034 17,695 19,184 35,086 These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company been a combined company during the periods presented and are not necessarily indicative of consolidated results of operations in future periods. SAPESCO’s results for the periods presented include significant charges for restructuring and related activities that may not have been incurred had the Company been a combined company during the periods presented. The pro-forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other non-recurring charges incurred in connection with the Business Combination are included in the earliest period presented. SAPESCO revenue of $ 3.9 0.1 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The following table summarizes the accounts receivable of the Company as of the period end dates set forth below (in US$ thousands): SCHEDULE OF ACCOUNTS RECEIVABLE June 30, 2020 December 31, 2019 Trade receivables $ 115,819 $ 100,642 Less: allowance for doubtful accounts (2,365 ) (1,843 ) Total $ 113,454 $ 98,799 Trade receivables relate to the sale of services, for which credit is extended based on our evaluation of the customer’s creditworthiness. The gross contractual amounts of trade receivables at June 30, 2020 and December 31, 2019 were $ 115.8 100.6 SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Allowance for doubtful accounts at beginning of period $ (2,442 ) $ (760 ) $ (1,843 ) $ (693 ) (Increase) decrease to allowance for the year (25 ) (339 ) 26 (476 ) (Recovery) write-off of doubtful accounts 161 649 161 719 Non-cash reclass of allowance for doubtful accounts between unbilled revenue and accounts receivable (59 ) - (708 ) - Allowance for doubtful accounts at end of period $ (2,365 ) $ (450 ) $ (2,365 ) $ (450 ) |
SERVICE INVENTORIES
SERVICE INVENTORIES | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
SERVICE INVENTORIES | SERVICE INVENTORIES The following table summarizes the service inventories for the periods as set forth below (in US$ thousands): SCHEDULE OF SERVICE INVENTORIES June 30, December 31, 2020 2019 Spare parts $ 54,739 $ 39,428 Chemicals 24,589 22,852 Raw materials 911 2,441 Consumables 13,916 15,897 Total 94,155 80,618 Less: allowance for obsolete and slow-moving inventories (2,391 ) (1,777 ) Total $ 91,764 $ 78,841 |
PROPERTY, PLANT, & EQUIPMENT
PROPERTY, PLANT, & EQUIPMENT | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, & EQUIPMENT | PROPERTY, PLANT, & EQUIPMENT Property, plant and equipment, net of accumulated depreciation, of the Company consists of the following as of the period end dates set forth below (in US$ thousands): SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated Useful Lives (in years) June 30, 2020 December 31, 2019 Buildings and leasehold improvements 5 25 $ 38,701 $ 36,853 Oilfield equipment 3 15 505,504 411,984 Furniture and fixtures 5 1,503 3,720 Office equipment and tools 3 6 39,589 35,991 Vehicles and cranes 5 8 8,262 12,292 Less: Accumulated depreciation (151,440 ) (104,689 ) Land 5,104 5,104 Capital work in progress 10,938 18,052 Total $ 458,161 $ 419,307 The Company recorded depreciation expense of $ 26.4 16.0 51.8 30.5 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill of the Company between December 31, 2019, and June 30, 2020 are as follows (in US$ thousands): SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL Production Services Drilling and Evaluation Services Goodwill Balance as of December 31, 2019 $ 419,646 $ 155,118 $ 574,764 SAPESCO Business Combination 8,263 12,679 20,942 Balance as of June 30, 2020 $ 427,909 $ 167,797 $ 595,706 Intangible assets subject to amortization, net The following is the weighted average amortization period for intangible assets of the Company subject to amortization (in years): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION Amortization Customer contracts 9.9 Trademarks and trade names 7.9 Total intangible assets 9.6 The details of our intangible assets subject to amortization are set forth below (in US$ thousands): June 30, 2020 December 31, 2019 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer contracts $ 125,270 $ (25,355 ) $ 99,916 $ 121,500 $ (19,239 ) $ 102,261 Trademarks and trade names 25,950 (6,660 ) 19,290 25,500 (5,047 ) 20,453 Total intangible assets $ 151,220 $ (32,014 ) $ 119,206 $ 147,000 $ (24,286 ) $ 122,714 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt The Company’s long-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF LONG TERM DEBT OBLIGATIONS June 30, 2020 December 31, 2019 Secured Term Loan $ 300,000 $ 300,000 Secured Revolving Credit Facility 65,000 50,000 CIB Long-Term Debt 20,972 - Less: unamortized debt issuance costs (4,143 ) (4,436 ) Total loans and borrowings 381,829 345,564 Less: current portion of long-term debt (46,372 ) (15,000 ) Long-term debt, net of unamortized debt issuance costs and excluding current installments $ 335,457 $ 330,564 Secured Facilities Agreement On May 5, 2019, the Company entered into a $ 450.0 million term loan, revolving credit, and working capital facilities agreement (the “Secured Facilities Agreement”) with Arab Petroleum Investments Corporation (“APICORP”) – Bahrain Banking Branch, HSBC Bank Middle East Limited (“HSBC”), Mashreqbank PSC and Saudi British Bank acting as initial mandated lead arrangers and bookrunners, Mashreqbank PSC acting as global agent, APICORP and Mashreqbank PSC acting as security agents, NPS Bahrain for Oil & Gas Wells Services WLL (“NPS Bahrain”) and its Kuwait branch, Gulf Energy SAOC and National Petroleum Technology Company as borrowers, and HSBC, Mashreqbank PSC, APICORP and Saudi British Bank, as the “Lenders.” On May 23, 2019 and June 20, 2019, the Company entered into $ 35.0 million and $ 40.0 million Incremental Facilities Agreements, respectively, increasing the size of the Secured Facilities Agreement to $ 485.0 million and $ 525.0 million, respectively. During the quarter ended June 30, 2020, the Secured Facilities Agreement was reduced to $ 520.6 million primarily as a result of the non-renewal of a project-specific letter of credit. The $ 520.6 million Secured Facilities Agreement consists of a $ 300.0 million term loan due 2025 (the “Term Loan” or “Secured Term Loan”), a $ 65.0 million revolving credit facility due 2023 (“RCF” or “Secured Revolving Credit Facility”), and a $ 155.6 million working capital facility. Borrowings under the Term Loan and RCF incur interest at the rate of three-month LIBOR plus 2.4 % to 2.7 % per annum, varying based on the Company’s Net Debt / EBITDA ratio as defined in the Secured Facilities Agreement. As of June 30, 2020, and December 31, 2019, this resulted in an interest rate of 2.9 % and 4.3 %, respectively. As of June 30, 2020, and December 31, 2019, the Company had drawn $ 300.0 million and $ 300.0 million, respectively, of the Term Loan and $ 65 million and $ 50.0 million, respectively, of the RCF. The RCF was obtained for general corporate and working capital purposes including capital expenditure related requirements and acquisitions (including transaction related expenses). The RCF requires the payment of a commitment fee each quarter. The commitment fee is computed at the rate of 0.60 May 6, 2023 The Company is permitted to make any prepayment under this RCF in multiples of $ 5.0 0 15.0 The Secured Facilities Agreement also includes a working capital facility of $155.6 million for issuance of letters of guarantee and letters of credit and refinancing letters of credit over a period of one year, which carries an interest rate equal to three-month U.S. Dollar LIBOR for the applicable interest period, plus a margin of 1.00% to 1.25% per annum. 127.4 134.2 28.2 25.8 The Company has also retained legacy bilateral working capital facilities from HSBC totaling $ 24.4 30.4 10.4 16.4 13.9 0.1 19.4 24.1 5.0 6.3 Utilization of the working capital facilities under both the legacy arrangement and Secured Facilities Agreement comprises letters of credit issued to vendors, guarantees issued to customers, vendors, and others, and short-term borrowings used to settle letters of credit. Once a letter of credit is presented for payment by the vendor, the Company at its election can settle the letter of credit from available cash or leverage short-term borrowings that will be repaid quarterly over a one-year period. Until a letter of credit is presented for payment by the vendor, it is disclosed as an off-balance sheet obligation. For additional discussion of outstanding letters of credit and guarantees, see Note 14, Commitments and Contingencies. The Secured Facilities Agreement includes covenants that specify maximum leverage (Net Debt / EBITDA) up to 3.50, minimum debt service coverage ratio (Cash Flow / Debt Service) of at least 1.25, and interest coverage (EBITDA / Interest) of at least 4.00. The Company was in compliance with all financial covenants as of both June 30, 2020 and December 31, 2019 CIB Long-Term Debt As part of the SAPESCO transaction, the Company assumed a $ 21 million debt obligation with Commercial International Bank (collectively, “CIB Long-Term Debt”). Under the terms of its arrangement with CIB, the Company will repay $ 11 million of this balance during the third quarter of 2020 with the remaining $ 10 million due on July 20, 2021 . Borrowings under the CIB Long-Term Debt incur interest at 2 % per annum over 6 months LIBOR (to be settled on quarterly basis) plus 50 basis points per annum. As of June 30, 2020, this resulted in an interest rate of 4.4 %. The CIB Long-Term Debt (collectively with the CIB Short-Term Debt, discussed below) includes covenants that specify maximum leverage (Total Liabilities / Equity) up to 1.3, minimum debt service coverage ratio ((Cash operating profits after tax + depreciation - annual maintenance for equipment)/(Financial payments + profit sharing for the same period)) of at least 1, and minimum current rate (Current Assets / Current Liabilities) of at least 1.00. The Company was in compliance with all financial covenants as of June 30, 2020. . Short-term debt The Company’s short-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF SHORT TERM DEBT OBLIGATIONS June 30, December 31, CIB Short-Term Debt $ 2,177 $ - ABK Short-Term Debt 2,964 - Other short-term borrowings 34,640 37,963 Short-term debt, excluding current installments of long-term debt $ 39,781 $ 37,963 Short-term borrowings primarily consist of financing for capital equipment and inventory purchases. CIB Short-Term Debt As part of the SAPESCO transaction, the Company assumed a $ 2.6 September 16, 2020 1.5 2 10 13.8 The U.S. Dollar time loan facility accrues interest at 2.25% per annum over 3 months LIBOR plus 50 basis points per annum of the Highest Monthly Debit Balance (“HMDB”) commission. The Egyptian Pound time loan and overdraft facilities accrue interest at 0.75% per annum over Corridor Offer Rate plus 50 basis points per annum, HMDB commission As of June 30, 2020, the CIB Short-Term Debt resulted in an interest rate of 4.6 10.6 1.3 2.0 7.8 8.5 0.2 0 2.2 5.3 ABK Short-Term Debt As part of the SAPESCO transaction, the Company assumed a $ 3.1 September 16, 2020 3.2 0.2 The ABK Short-Term Debt accrues interest at 1.65% per annum over Corridor Offer Rate 10.9 2.9 0.2 0 0 Other debt information Scheduled principal payments of long-term debt for periods subsequent to June 30, 2020 are as follows (in US$ thousands): SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT 2020 $ 25,972 2021 47,500 2022 45,000 2023 110,000 2024 45,000 2025 112,500 Thereafter - Total $ 385,972 As part of the SAPESCO transaction, the Company also assumed other working capital facilities totaling $ 0.8 0.8 0 |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE ACCOUNTING | FAIR VALUE ACCOUNTING The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, capital leases and loans and borrowings. The fair value of the Company’s financial instruments approximates the carrying amounts represented in the accompanying Condensed Consolidated Balance Sheets, primarily due to their short-term nature. The fair value of the Company’s long-term borrowings also approximates the carrying amounts as these loans are carrying interest at the market rate. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS Defined benefit plan The Company provides defined benefit plan of severance pay to eligible employees. The severance pay plan provides for a lump sum payment to employees on separation (retirement, resignation, death while in employment or on termination of employment) of an amount based upon the employees last drawn salary and length of service, subject to the completion of minimum service period (1-2 years) and taking into account the provisions of local applicable law or as per employee contract. The Company records annual amounts relating to these long-term employee benefits based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in the Condensed Consolidated Interim Statement of Operations. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The net periodic costs are recognized as employees render the services necessary to earn these benefits. The Components of net period benefit cost were as follows (in US$ thousands): SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Service cost $ 761 $ 591 $ 1,900 $ 1,440 Interest cost 190 43 475 176 Other - 66 - 55 Net cost $ 951 $ 700 $ 2,375 $ 1,671 The Company made employer contributions (direct payment of benefits) to its defined benefit plan of $ 0.9 0.1 1.2 1.1 Defined contribution plan The Company also provides a defined contribution retirement plan and occupational hazard insurance for Omani employees. Contributions to a defined contribution retirement plan and occupational hazard insurance for Omani employees in accordance with the Omani Social Insurances Law are recognized as an expense in the Condensed Consolidated Interim Statement of Operations as incurred. Total contributions were of $ 0.8 0.8 1.6 1.6 |
SHARE-BASED COMPENSATION EXPENS
SHARE-BASED COMPENSATION EXPENSE | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION EXPENSE | SHARE-BASED COMPENSATION EXPENSE In 2018, the NESR shareholders approved the 2018 Long Term Incentive Plan (the “LTIP”). A total of 5,000,000 1 3 The purpose of the LTIP is to enhance NESR’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to NESR by providing these individuals with equity ownership opportunities. The Company intends to use time-based restricted stock unit awards to reward long-term performance of the executive officers. The Company believes that providing a meaningful portion of the total compensation package in the form of share-based awards will align the incentives of its executive officers with the interests of its shareholders and serve to motivate and retain the individual executive officers. The following tables set forth the LTIP activity for the periods indicated (in US$ thousands, except share and per share amounts): SCHEDULE OF UNVESTED RESTRICTED STOCK Quarter ended June 30, 2020 June 30, 2019 Number of Restricted Shares Weighted Average Value per Share Number of Restricted Shares Weighted Average Value per Share Unvested at Beginning of Period 2,244,662 $ 7.72 725,200 $ 11.15 Granted - $ - 970,000 $ 10.36 Vested and issued - $ - - $ - Forfeited - $ - (95,000 ) $ 10.86 Unvested at End of Period 2,244,662 $ 7.72 1,600,200 $ 10.59 Year-to-date period ended June 30, 2020 June 30, 2019 Number of Restricted Shares Weighted Average Number of Restricted Shares Weighted Average Unvested at Beginning of Period 1,502,690 $ 10.25 725,200 $ 11.15 Granted 1,080,905 $ 4.96 970,000 $ 10.36 Vested and issued (307,932 ) $ 10.36 - $ - Forfeited (31,001 ) $ 10.45 (95,000 ) $ 10.86 Unvested at End of Period 2,244,662 $ 7.72 1,600,200 $ 10.59 At June 30, 2020 and December 31, 2019, the Company had unrecognized compensation expense of $ 12.8 11.7 1.9 2.0 SCHEDULE OF STOCK-BASED COMPENSATION Quarter ended Year-to-date period ended June 30, June 30, 2019 June 30, June 30, 2019 Cost of Services $ 938 $ 654 $ 1,665 $ 968 Selling, general and administrative expenses 1,187 719 2,095 1,145 Net cost $ 2,125 $ 1,373 $ 3,760 $ 2,113 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Capital expenditure commitments The Company was committed to incur capital expenditures of $ 22.5 22.1 Capital lease commitments The Company leases certain hydraulic fracturing equipment under capital leases that expire between 2021 and 2023 24 36 4.3 6.5 32.6 33.7 25.3 20.5 7.3 13.1 0.6 0.0 1.0 0.0 The Company also leases certain equipment in Egypt under capital leases that expire between 2020 and 2024 3.3 0 $1.7 0 1.6 0 0.1 0.0 0.1 0.0 Future minimum lease payments and future interest payments under non-cancellable equipment capital leases at June 30, 2020 and December 31, 2019, are payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES As of June 30, 2020 As of December 31, 2019 Future Minimum Lease Payments Future Interest Payments Total Payments Future Minimum Lease Payments Future Interest Payments Total Payments 2020 $ 15,948 $ 1,414 $ 17,362 $ 22,930 $ 1,070 $ 24,000 2021 14,835 836 15,671 10,743 1,257 12,000 2022 3,214 445 3,659 - - - 2023 1,611 344 1,955 - - - 2024 315 133 448 - - - 2025 - - - - - - Thereafter - - - - - - Total $ 35,923 $ 3,172 $ 39,095 $ 33,673 $ 2,327 $ 36,000 Operating lease commitments Future minimum lease commitments under non-cancellable operating leases with initial or remaining terms of one year or more at June 30, 2020 and December 31, 2019, respectively, are payable as follows (in US$ thousands): June 30, 2020 December 31, 2019 2020 $ 19,092 $ 23,201 2021 18,781 18,560 2022 2,820 2,780 2023 1,338 2,291 2024 1,338 2,292 2025 1,342 2,296 Thereafter 3,281 1,629 Total $ 47,992 $ 53,049 The Company recorded rental expense of $ 34.6 million, $ 30.9 million, $ 68.9 million and $ 56.4 million for the quarter ended June 30, 2020, the quarter ended June 30, 2019, the year-to-date period ended June 30, 2020, and the year-to-date period ended June 30, 2019, respectively, in the Condensed Consolidated Interim Statement of Operations. Other commitments The Company purchases certain property, plant, and equipment using seller-provided installment financing with payment terms extending to 24 months. The amounts due to the vendors at June 30, 2020, and December 31, 2019, were $ 6.4 6.0 1.5 3.5 1.5 0 3.0 3.0 The Company has outstanding letters of credit amounting to $ 16.3 21.2 In the normal course of business with customers, vendors and others, the Company has entered into off-balance sheet arrangements, such as surety bonds for performance, and other bank issued guarantees which totaled $ 105.7 99.1 5.2 5.8 As of June 30, 2020, and June 30, 2019, the Company had liabilities of $ 6.7 6.7 Legal proceedings The Company is involved in certain legal proceedings which arise in the ordinary course of business and the outcomes of which are currently subject to uncertainties and therefore the probability of a loss, if any, being sustained and an estimate of the amount of any loss are difficult to ascertain. Consequently, it is not possible to make a reasonable estimate of the expected financial effect, if any, that will result from ultimate resolution of these disputes. The Company is contesting these claims/disputes and the Company’s management currently believes that provision against these potential claims is not required as the ultimate outcome of these disputes would not have a material impact on the Company’s business, financial condition or results of operations. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
EQUITY | 15. EQUITY The Company is authorized to issue an unlimited number of ordinary shares, no par value, and preferred shares, no par value. The Company’s ordinary shares are entitled to one vote for each share. As of June 30, 2020, there were 87,495,221 22,921,700 12,618,680 5.75 June 6, 2023 The Company is authorized to issue an unlimited number of preferred shares divided into five classes with designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of June 30, 2020, or December 31, 2019, there were no In February 2019, pursuant to the NPS Stock Purchase Agreement, the Company issued 1,300,214 The issuance of 2,237,000 NESR ordinary shares to the SAPESCO selling stockholders in exchange for their SAPESCO shares is reflected in Other liabilities in the Condensed Consolidated Balance Sheet as of June 30, 2020. The shares are expected to be issued in the third quarter of 2020 at which time purchase consideration will be transferred from Other liabilities to Additional paid in capital. As the Company is contractually obligated to settle this purchase consideration in shares, we believe that presentation as a non-current liability best matches the contingency with the long-term nature of equity financing. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE Basic earnings per common share was computed using the two-class method by dividing basic net income attributable to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net income attributable to common shareholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding contracts to issue common shares as if they were exercised or converted. The following tables provide a reconciliation of the data used in the calculation of basic and diluted ordinary shares outstanding for the period (in US$ thousands except shares and per share amounts). SCHEDULE OF A RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING Date Transaction Detail Change in Shares Quarter ended June 30, 2020 March 31, 2020 Beginning Balance 87,495,221 June 1, 2020 Shares to be issued in SAPESCO transaction (Note 5) (1) 2,237,000 737,473 June 30, 2020 Ending Balance 88,232,694 (1) Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued, as such 2,237,000 Date Transaction Detail Change in Shares Quarter ended June 30, 2019 Weighted Average Ordinary Shares Outstanding March 31, 2019 Beginning Balance 86,896,779 June 30, 2019 Ending Balance 86,896,779 Date Transaction Detail Change in Shares Year-to-date period ended June 30, 2020 December 31, 2019 Beginning Balance 87,187,289 March 18, 2020 Restricted stock vesting 307,932 175,961 June 1, 2020 Shares to be issued in SAPESCO transaction (Note 5) (1) 2,237,000 368,736 June 30, 2020 Ending Balance 87,731,986 (1) Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued, as such 2,237,000 Date Transaction Detail Change in Shares Year-to-date period ended June 30, 2019 Weighted Average Ordinary Shares Outstanding December 31, 2018 Beginning Balance 85,562,769 January 9, 2019 Other 33,796 32,302 February 19, 2019 NPS equity stock earn-out 1,300,214 1,300,214 June 30, 2019 Ending Balance 86,895,285 Quarter ended Year-to-date period ended Shares for Use in Allocation of Participating Earnings: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Weighted average ordinary shares outstanding 88,232,694 86,896,779 87,731,986 86,895,285 Non-vested, participating restricted shares 1,163,757 1,600,200 1,163,757 1,600,200 Shares for use in allocation of participating earnings 89,396,451 88,496,979 88,895,743 88,495,485 Basic earnings per share (EPS): SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE Quarter ended Year-to-date Period Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Net income $ 10,536 $ 11,356 $ 21,903 $ 24,530 Less dividends to: Ordinary Shares - - - - Non-vested participating shares - - - - Total Undistributed Earnings $ 10,536 $ 11,356 $ 21,903 $ 24,530 Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Allocation of undistributed earnings to Ordinary Shares $ 10,399 $ 11,151 $ 21,616 $ 24,086 Allocation of undistributed earnings to Non-vested Shares 137 205 287 444 Total Undistributed Earnings $ 10,536 $ 11,356 $ 21,903 $ 24,530 Quarter ended Year-to-date period ended Ordinary Shares: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Distributed Earnings $ - $ - $ - $ - Undistributed Earnings 0.12 0.13 0.25 0.28 Total $ 0.12 $ 0.13 $ 0.25 $ 0.28 Diluted earnings per share (EPS): Quarter ended June 30, 2020 Quarter ended June 30, 2019 Ordinary shares Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS As reported — basic $ 10,399 88,232,694 $ 0.12 $ 11,151 86,896,779 $ 0.13 Add-back: Undistributed earnings allocated to non-vested shareholders 137 - 205 - 12,618,680 5.75 (1) - - - - 22,921,700 5.75 (1) - - - - Less: Undistributed earnings reallocated to non-vested shareholders (137 ) - (205 ) - Diluted EPS — Ordinary shares $ 10,399 88,232,694 $ 0.12 $ 11,151 86,896,779 $ 0.13 Year-to-date period ended Year-to-date period ended Ordinary shares Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS As reported — basic $ 21,616 87,731,986 $ 0.25 $ 24,086 86,865,285 $ 0.28 Add-back: Undistributed earnings allocated to non-vested shareholders 287 - 444 - 12,618,680 5.75 (1) - - - - 22,921,700 Public Warrants $5.75 per half share (anti-dilutive) (1) - - - - Less: Undistributed earnings reallocated to non-vested shareholders (287 ) - (444 ) - Diluted EPS — Ordinary shares $ 21,616 87,731,986 $ 0.25 $ 24,086 86,895,285 $ 0.28 (1) Non-participating warrants that could be converted into as many as 17,770,190 1,080,905 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 17. INCOME TAXES NESR is a holding company incorporated in the British Virgin Islands, which imposes a zero percent statutory corporate income tax rate on income generated outside of the British Virgin Islands. The subsidiaries operate in multiple tax jurisdictions throughout the MENA and Asia Pacific regions where statutory tax rates generally vary from 12 35 In the British Virgin Islands, the statutory rate is effectively 0% as tax is not applied on extra territorial activity. The Company’s effective tax rate was 21 28 20 23 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Mubbadrah Investment LLC (“Mubbadrah”) GES leases office space in a building it owns in Muscat, Oman to Mubbadrah along with other Mubbadrah group entities (collectively, the “Mubbadrah group entities”). GES charges rental income to the Mubbadrah group entities for the occupation of the office space, based on usage. Rental income charged by GES to the Mubbadrah group entities amounted to $ 0.04 0.1 0.1 0.1 0.6 0.6 17 Heavy Equipment Manufacturing & Trading LLC (“HEMT”) HEMT is a majority owned by Mubbadrah and Hilal Al Busaidy. HEMT is engaged by various subsidiaries of GES for services such as fabrication, manufacturing and maintenance of tools and equipment. HEMT has charged GES $ 0.02 0.04 0.04 0.05 Prime Business Solutions LLC (“PBS”) PBS is 100 PBS has developed and implemented the GEARS (ERP) system for GES and is currently engaged to maintain it. Charges totaling $ 0.2 0 0.8 0 0.4 0.4 Nine Energy Service, Inc. (“Nine”) The Company purchased $ 0.3 0 1.4 0 5.3 6.8 Basin Holdings US LLC (“Basin”) The Company purchased $0.02 0 $0.45 0 0.1 0 |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS Operating segments are components of an enterprise where separate financial information is available and that are evaluated regularly by the Company’s CODM in deciding how to allocate resources and in assessing performance. The Company reports segment information based on the “management” approach and its CODM is its Chief Executive Officer. The Company’s services are similar to one another in that they consist of oilfield services and related offerings, whose customers are oil and gas companies. The results of operations of the service offerings are regularly reviewed by the CODM for the Company for the purposes of determining resource and asset allocation and assessing performance. The Company has determined that it has two reportable segments, Production Services and Drilling and Evaluation Services. The CODM evaluates the operating results of its reportable segments primarily based on revenue and segment operating income. During the year-to-date period ended June 30, 2020, the Company modified its segment reporting disclosure to present segment operating income. The change better aligns the Company’s disclosure with the U.S. GAAP measure of profit used by the CODM in making decisions about allocating resources and assessing performance. Segment operating income does not include general corporate expenses as these expenses are not allocated to the Company’s reportable segments and not reported to the Company’s CODM. Production Services that are offered depend on the well life cycle in which the services may fall. They include, but are not limited to, the following types of service offerings: coil tubing, stimulation and pumping, nitrogen services, completions, pipelines, cementing, laboratory services and filtration services. Drilling and Evaluation Services generates its revenue from the following service offerings: drilling and workover rigs, rig services, drilling services and rentals, fishing and remedials, directional drilling, turbines drilling, drilling fluids, wireline logging services, slickline services and well testing services. The Company’s operations and activities are located within certain geographies, primarily the MENA region and the Asia Pacific region, which includes Malaysia, Indonesia and India. SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS Revenue from operations Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Reportable Segment: Production Services $ 139,034 $ 95,358 $ 272,224 $ 187,471 Drilling and Evaluation Services 64,215 64,541 130,324 124,132 Total revenue $ 203,249 $ 159,899 $ 402,548 $ 311,603 Long-lived assets June 30, 2020 December 31, Reportable Segment: Production Services $ 308,746 $ 290,765 Drilling and Evaluation Services 137,193 115,241 Total Reportable Segments 445,939 406,006 Unallocated assets 12,222 13,301 Total long-lived assets $ 458,161 $ 419,307 Operating income Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Reportable Segment: Production Services $ 20,217 $ 23,192 $ 41,545 $ 44,514 Drilling and Evaluation Services 8,334 9,413 16,202 14,892 Total Reportable Segments 28,551 32,605 57,747 59,406 Unallocated expenses (10,693 ) (10,610 ) (21,374 ) (17,303 ) Total operating income $ 17,858 $ 21,995 $ 36,373 $ 42,103 Revenue by geographic area SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Geographic Area: MENA $ 200,737 $ 158,082 $ 396,798 $ 307,627 Rest of World 2,512 1,817 5,750 3,976 Total revenue $ 203,249 $ 159,899 $ 402,548 $ 311,603 Long-lived assets by geographic area June 30, 2020 December 31, 2019 Geographic area: MENA $ 449,029 $ 409,139 Rest of World 9,132 10,168 Total long-lived assets $ 458,161 $ 419,307 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Supplemental cash flow information | Supplemental cash flow information Non-cash transactions for the year-to-date period ended June 30, 2020 were as follows: ● Purchases of property, plant, and equipment in Accounts payable, Accrued expenses and Short-term borrowings at June 30, 2020 of $ 15.2 0.9 28.6 ● Capital lease obligations of $ 27.0 9.0 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 3.5 1.5 1.5 ● Obligations of $ 40.6 million classified, related to the future payments of cash and shares for the purchase of SAPESCO (Note 5), are not included under “Acquisition of business, net of cash acquired” within the Condensed Consolidated Statement of Cash Flows. Non-cash transactions for the year-to-date period ended June 30, 2019 were as follows: ● Purchases of property, plant, and equipment in accounts payable and short-term debt at June 30, 2019 of $ 28.8 5.1 |
Recently issued accounting standards not yet adopted | Recently issued accounting standards not yet adopted The SEC permits qualifying Emerging Growth Companies (“EGC”) to defer the adoption of accounting standards updates until the time when a private company would adopt such standards. The Company continues to qualify as an EGC as of June 30, 2020. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases,” a new standard on accounting for leases. This update increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In June 2020, the FASB Issued ASU No. 2020-05, “Accounting Standards Update 2020-05—Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities.” ASU No. 2020-05 deferred the Company’s adoption of ASU 2016-02, as amended, to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the provisions of ASU 2016-02 and related interpretive amendments (ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” ASU 2018-10, “Codification Improvements to Topic 842, Leases,” ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” ASU 2018-20, “Leases (Topic 842): Narrow-Scope Improvements for Lessors,” and ASU 2019-01, “Leases (Topic 842): Codification Improvements,” inclusive) and assessing the impact, if any, on its condensed consolidated interim financial statements and related disclosures. All other new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations. |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE BY GEOGRAPHY | Based on these considerations, the following table provides disaggregated revenue data by the phase in a well’s lifecycle during which revenue has been recorded (in US$ thousands): SCHEDULE OF DISAGGREGATION OF REVENUE BY GEOGRAPHY Quarter ended Year-to-date period ended Revenue by Phase in Well’s Lifecycle: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Production Services $ 139,034 $ 95,358 $ 272,224 $ 187,471 Drilling and Evaluation Services 64,215 64,541 130,324 124,132 Total revenue by phase in well’s life cycle $ 203,249 $ 159,899 $ 402,548 $ 311,603 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST | The following summarizes the preliminary consideration to purchase 99.7 % of the issued and outstanding equity interests of SAPESCO: SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST SAPESCO [Member] SAPESCO Value (In US$ thousands) Shares Cash consideration $ 16,958 Total consideration – cash 16,958 NESR ordinary share consideration 12,013 2,237,000 Total consideration – equity (1) 12,013 2,237,000 Estimated earn-out mechanisms 11,678 - (2) Preliminary consideration $ 40,649 2,237,000 (1) The fair value of NESR ordinary shares was determined based upon the $ 5.37 (2) The quantity of Additional Earn-Out Shares will not be known until the fourth quarter of 2020 when this contingency is resolved. A liability totalling $ 6.4 |
SCHEDULE OF PURCHASE PRICE ALLOCATION | The following table summarizes the preliminary allocation of the purchase price allocation (in US% thousands): SCHEDULE OF PURCHASE PRICE ALLOCATION Allocation of consideration Cash and cash equivalents $ 3,740 Accounts receivable, net 16,516 Unbilled revenue 5,976 Service inventories 5,654 Prepaid assets 679 Retention withholdings 279 Other current assets 551 Property, plant and equipment 34,161 Intangible assets 4,220 Other assets 200 Total identifiable assets acquired 71,976 Accounts payable 11,974 Accrued expenses 6,455 Current installments of long-term debt 5,400 Short-term borrowings 5,692 Income taxes payable 313 Other taxes payable 2,514 Other current liabilities 1,679 Long-term debt 15,582 Employee benefit liabilities 868 Other liabilities 1,733 Noncontrolling interests 59 Net identifiable liabilities acquired 52,269 Total fair value of net assets acquired 19,707 Goodwill 20,942 Preliminary consideration $ 40,649 |
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS | The preliminary allocation to intangible assets is as follows (in US$ thousands): SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS Fair Value Total Useful Life (In US$ thousands) Customer contracts $ 3,770 8 years Trademarks and trade names 450 2 years Total intangible assets $ 4,220 |
SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS | The following table summarizes the supplemental consolidated results of the Company on an unaudited pro forma basis, as if the Business Combination had been consummated on January 1, 2019 for the quarter and year-to-date periods ended June 30, 2020 and June 30, 2019, respectively (in US$ thousands): SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenues $ 209,563 $ 179,557 $ 421,287 $ 347,941 Net income/(loss) 7,034 17,695 19,184 35,086 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | The following table summarizes the accounts receivable of the Company as of the period end dates set forth below (in US$ thousands): SCHEDULE OF ACCOUNTS RECEIVABLE June 30, 2020 December 31, 2019 Trade receivables $ 115,819 $ 100,642 Less: allowance for doubtful accounts (2,365 ) (1,843 ) Total $ 113,454 $ 98,799 |
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS | SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Allowance for doubtful accounts at beginning of period $ (2,442 ) $ (760 ) $ (1,843 ) $ (693 ) (Increase) decrease to allowance for the year (25 ) (339 ) 26 (476 ) (Recovery) write-off of doubtful accounts 161 649 161 719 Non-cash reclass of allowance for doubtful accounts between unbilled revenue and accounts receivable (59 ) - (708 ) - Allowance for doubtful accounts at end of period $ (2,365 ) $ (450 ) $ (2,365 ) $ (450 ) |
SERVICE INVENTORIES (Tables)
SERVICE INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF SERVICE INVENTORIES | The following table summarizes the service inventories for the periods as set forth below (in US$ thousands): SCHEDULE OF SERVICE INVENTORIES June 30, December 31, 2020 2019 Spare parts $ 54,739 $ 39,428 Chemicals 24,589 22,852 Raw materials 911 2,441 Consumables 13,916 15,897 Total 94,155 80,618 Less: allowance for obsolete and slow-moving inventories (2,391 ) (1,777 ) Total $ 91,764 $ 78,841 |
PROPERTY, PLANT, & EQUIPMENT (T
PROPERTY, PLANT, & EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment, net of accumulated depreciation, of the Company consists of the following as of the period end dates set forth below (in US$ thousands): SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated Useful Lives (in years) June 30, 2020 December 31, 2019 Buildings and leasehold improvements 5 25 $ 38,701 $ 36,853 Oilfield equipment 3 15 505,504 411,984 Furniture and fixtures 5 1,503 3,720 Office equipment and tools 3 6 39,589 35,991 Vehicles and cranes 5 8 8,262 12,292 Less: Accumulated depreciation (151,440 ) (104,689 ) Land 5,104 5,104 Capital work in progress 10,938 18,052 Total $ 458,161 $ 419,307 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL | Changes in the carrying amount of goodwill of the Company between December 31, 2019, and June 30, 2020 are as follows (in US$ thousands): SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL Production Services Drilling and Evaluation Services Goodwill Balance as of December 31, 2019 $ 419,646 $ 155,118 $ 574,764 SAPESCO Business Combination 8,263 12,679 20,942 Balance as of June 30, 2020 $ 427,909 $ 167,797 $ 595,706 |
SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION | The following is the weighted average amortization period for intangible assets of the Company subject to amortization (in years): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION Amortization Customer contracts 9.9 Trademarks and trade names 7.9 Total intangible assets 9.6 The details of our intangible assets subject to amortization are set forth below (in US$ thousands): June 30, 2020 December 31, 2019 Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer contracts $ 125,270 $ (25,355 ) $ 99,916 $ 121,500 $ (19,239 ) $ 102,261 Trademarks and trade names 25,950 (6,660 ) 19,290 25,500 (5,047 ) 20,453 Total intangible assets $ 151,220 $ (32,014 ) $ 119,206 $ 147,000 $ (24,286 ) $ 122,714 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG TERM DEBT OBLIGATIONS | The Company’s long-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF LONG TERM DEBT OBLIGATIONS June 30, 2020 December 31, 2019 Secured Term Loan $ 300,000 $ 300,000 Secured Revolving Credit Facility 65,000 50,000 CIB Long-Term Debt 20,972 - Less: unamortized debt issuance costs (4,143 ) (4,436 ) Total loans and borrowings 381,829 345,564 Less: current portion of long-term debt (46,372 ) (15,000 ) Long-term debt, net of unamortized debt issuance costs and excluding current installments $ 335,457 $ 330,564 |
SCHEDULE OF SHORT TERM DEBT OBLIGATIONS | The Company’s short-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF SHORT TERM DEBT OBLIGATIONS June 30, December 31, CIB Short-Term Debt $ 2,177 $ - ABK Short-Term Debt 2,964 - Other short-term borrowings 34,640 37,963 Short-term debt, excluding current installments of long-term debt $ 39,781 $ 37,963 |
SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT | Scheduled principal payments of long-term debt for periods subsequent to June 30, 2020 are as follows (in US$ thousands): SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT 2020 $ 25,972 2021 47,500 2022 45,000 2023 110,000 2024 45,000 2025 112,500 Thereafter - Total $ 385,972 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST | The Components of net period benefit cost were as follows (in US$ thousands): SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Service cost $ 761 $ 591 $ 1,900 $ 1,440 Interest cost 190 43 475 176 Other - 66 - 55 Net cost $ 951 $ 700 $ 2,375 $ 1,671 |
SHARE-BASED COMPENSATION EXPE_2
SHARE-BASED COMPENSATION EXPENSE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF UNVESTED RESTRICTED STOCK | The following tables set forth the LTIP activity for the periods indicated (in US$ thousands, except share and per share amounts): SCHEDULE OF UNVESTED RESTRICTED STOCK Quarter ended June 30, 2020 June 30, 2019 Number of Restricted Shares Weighted Average Value per Share Number of Restricted Shares Weighted Average Value per Share Unvested at Beginning of Period 2,244,662 $ 7.72 725,200 $ 11.15 Granted - $ - 970,000 $ 10.36 Vested and issued - $ - - $ - Forfeited - $ - (95,000 ) $ 10.86 Unvested at End of Period 2,244,662 $ 7.72 1,600,200 $ 10.59 Year-to-date period ended June 30, 2020 June 30, 2019 Number of Restricted Shares Weighted Average Number of Restricted Shares Weighted Average Unvested at Beginning of Period 1,502,690 $ 10.25 725,200 $ 11.15 Granted 1,080,905 $ 4.96 970,000 $ 10.36 Vested and issued (307,932 ) $ 10.36 - $ - Forfeited (31,001 ) $ 10.45 (95,000 ) $ 10.86 Unvested at End of Period 2,244,662 $ 7.72 1,600,200 $ 10.59 |
SCHEDULE OF STOCK-BASED COMPENSATION | SCHEDULE OF STOCK-BASED COMPENSATION Quarter ended Year-to-date period ended June 30, June 30, 2019 June 30, June 30, 2019 Cost of Services $ 938 $ 654 $ 1,665 $ 968 Selling, general and administrative expenses 1,187 719 2,095 1,145 Net cost $ 2,125 $ 1,373 $ 3,760 $ 2,113 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES | Future minimum lease payments and future interest payments under non-cancellable equipment capital leases at June 30, 2020 and December 31, 2019, are payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES As of June 30, 2020 As of December 31, 2019 Future Minimum Lease Payments Future Interest Payments Total Payments Future Minimum Lease Payments Future Interest Payments Total Payments 2020 $ 15,948 $ 1,414 $ 17,362 $ 22,930 $ 1,070 $ 24,000 2021 14,835 836 15,671 10,743 1,257 12,000 2022 3,214 445 3,659 - - - 2023 1,611 344 1,955 - - - 2024 315 133 448 - - - 2025 - - - - - - Thereafter - - - - - - Total $ 35,923 $ 3,172 $ 39,095 $ 33,673 $ 2,327 $ 36,000 Operating lease commitments Future minimum lease commitments under non-cancellable operating leases with initial or remaining terms of one year or more at June 30, 2020 and December 31, 2019, respectively, are payable as follows (in US$ thousands): June 30, 2020 December 31, 2019 2020 $ 19,092 $ 23,201 2021 18,781 18,560 2022 2,820 2,780 2023 1,338 2,291 2024 1,338 2,292 2025 1,342 2,296 Thereafter 3,281 1,629 Total $ 47,992 $ 53,049 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF A RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING | The following tables provide a reconciliation of the data used in the calculation of basic and diluted ordinary shares outstanding for the period (in US$ thousands except shares and per share amounts). SCHEDULE OF A RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING Date Transaction Detail Change in Shares Quarter ended June 30, 2020 March 31, 2020 Beginning Balance 87,495,221 June 1, 2020 Shares to be issued in SAPESCO transaction (Note 5) (1) 2,237,000 737,473 June 30, 2020 Ending Balance 88,232,694 (1) Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued, as such 2,237,000 Date Transaction Detail Change in Shares Quarter ended June 30, 2019 Weighted Average Ordinary Shares Outstanding March 31, 2019 Beginning Balance 86,896,779 June 30, 2019 Ending Balance 86,896,779 Date Transaction Detail Change in Shares Year-to-date period ended June 30, 2020 December 31, 2019 Beginning Balance 87,187,289 March 18, 2020 Restricted stock vesting 307,932 175,961 June 1, 2020 Shares to be issued in SAPESCO transaction (Note 5) (1) 2,237,000 368,736 June 30, 2020 Ending Balance 87,731,986 (1) Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued, as such 2,237,000 Date Transaction Detail Change in Shares Year-to-date period ended June 30, 2019 Weighted Average Ordinary Shares Outstanding December 31, 2018 Beginning Balance 85,562,769 January 9, 2019 Other 33,796 32,302 February 19, 2019 NPS equity stock earn-out 1,300,214 1,300,214 June 30, 2019 Ending Balance 86,895,285 Quarter ended Year-to-date period ended Shares for Use in Allocation of Participating Earnings: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Weighted average ordinary shares outstanding 88,232,694 86,896,779 87,731,986 86,895,285 Non-vested, participating restricted shares 1,163,757 1,600,200 1,163,757 1,600,200 Shares for use in allocation of participating earnings 89,396,451 88,496,979 88,895,743 88,495,485 |
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE | Basic earnings per share (EPS): SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE Quarter ended Year-to-date Period Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Net income $ 10,536 $ 11,356 $ 21,903 $ 24,530 Less dividends to: Ordinary Shares - - - - Non-vested participating shares - - - - Total Undistributed Earnings $ 10,536 $ 11,356 $ 21,903 $ 24,530 Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Allocation of undistributed earnings to Ordinary Shares $ 10,399 $ 11,151 $ 21,616 $ 24,086 Allocation of undistributed earnings to Non-vested Shares 137 205 287 444 Total Undistributed Earnings $ 10,536 $ 11,356 $ 21,903 $ 24,530 Quarter ended Year-to-date period ended Ordinary Shares: June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Distributed Earnings $ - $ - $ - $ - Undistributed Earnings 0.12 0.13 0.25 0.28 Total $ 0.12 $ 0.13 $ 0.25 $ 0.28 Diluted earnings per share (EPS): Quarter ended June 30, 2020 Quarter ended June 30, 2019 Ordinary shares Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS As reported — basic $ 10,399 88,232,694 $ 0.12 $ 11,151 86,896,779 $ 0.13 Add-back: Undistributed earnings allocated to non-vested shareholders 137 - 205 - 12,618,680 5.75 (1) - - - - 22,921,700 5.75 (1) - - - - Less: Undistributed earnings reallocated to non-vested shareholders (137 ) - (205 ) - Diluted EPS — Ordinary shares $ 10,399 88,232,694 $ 0.12 $ 11,151 86,896,779 $ 0.13 Year-to-date period ended Year-to-date period ended Ordinary shares Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS As reported — basic $ 21,616 87,731,986 $ 0.25 $ 24,086 86,865,285 $ 0.28 Add-back: Undistributed earnings allocated to non-vested shareholders 287 - 444 - 12,618,680 5.75 (1) - - - - 22,921,700 Public Warrants $5.75 per half share (anti-dilutive) (1) - - - - Less: Undistributed earnings reallocated to non-vested shareholders (287 ) - (444 ) - Diluted EPS — Ordinary shares $ 21,616 87,731,986 $ 0.25 $ 24,086 86,895,285 $ 0.28 (1) Non-participating warrants that could be converted into as many as 17,770,190 1,080,905 |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS | The Company’s operations and activities are located within certain geographies, primarily the MENA region and the Asia Pacific region, which includes Malaysia, Indonesia and India. SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS Revenue from operations Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Reportable Segment: Production Services $ 139,034 $ 95,358 $ 272,224 $ 187,471 Drilling and Evaluation Services 64,215 64,541 130,324 124,132 Total revenue $ 203,249 $ 159,899 $ 402,548 $ 311,603 Long-lived assets June 30, 2020 December 31, Reportable Segment: Production Services $ 308,746 $ 290,765 Drilling and Evaluation Services 137,193 115,241 Total Reportable Segments 445,939 406,006 Unallocated assets 12,222 13,301 Total long-lived assets $ 458,161 $ 419,307 Operating income Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Reportable Segment: Production Services $ 20,217 $ 23,192 $ 41,545 $ 44,514 Drilling and Evaluation Services 8,334 9,413 16,202 14,892 Total Reportable Segments 28,551 32,605 57,747 59,406 Unallocated expenses (10,693 ) (10,610 ) (21,374 ) (17,303 ) Total operating income $ 17,858 $ 21,995 $ 36,373 $ 42,103 |
SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS | Revenue by geographic area SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS Quarter ended Year-to-date period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Geographic Area: MENA $ 200,737 $ 158,082 $ 396,798 $ 307,627 Rest of World 2,512 1,817 5,750 3,976 Total revenue $ 203,249 $ 159,899 $ 402,548 $ 311,603 Long-lived assets by geographic area June 30, 2020 December 31, 2019 Geographic area: MENA $ 449,029 $ 409,139 Rest of World 9,132 10,168 Total long-lived assets $ 458,161 $ 419,307 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Extinguishment of Debt [Line Items] | ||
Capital lease obligations, current | $ 27 | |
Long term obligations | 9 | |
SAPESCO [Member] | ||
Extinguishment of Debt [Line Items] | ||
Capital lease obligations, current | 40.6 | |
Other Current Liabilities [Member] | ||
Extinguishment of Debt [Line Items] | ||
Purchases of property, plant, and equipment | 3.5 | |
Other Liabilities [Member] | ||
Extinguishment of Debt [Line Items] | ||
Purchases of property, plant, and equipment | 1.5 | |
Accounts Payable [Member] | ||
Extinguishment of Debt [Line Items] | ||
Purchases of property, plant, and equipment | 15.2 | $ 28.8 |
Additional purchase of property, plant, and equipment | 1.5 | |
Accrued Liabilities [Member] | ||
Extinguishment of Debt [Line Items] | ||
Purchases of property, plant, and equipment | 0.9 | |
Short-term Debt [Member] | ||
Extinguishment of Debt [Line Items] | ||
Purchases of property, plant, and equipment | $ 28.6 | $ 5.1 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY GEOGRAPHY (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 203,249 | $ 159,899 | $ 402,548 | $ 311,603 |
Production Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 139,034 | 95,358 | 272,224 | 187,471 |
Drilling and Evaluation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 64,215 | $ 64,541 | $ 130,324 | $ 124,132 |
SCHEDULE OF CONSIDERATION TO PU
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 02, 2020 | ||
Business Acquisition [Line Items] | |||
NESR ordinary share consideration, shares | 2,237,000 | ||
Other liabilities | $ 6,400 | ||
SAPESCO [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | 16,958 | ||
Total consideration - cash | 16,958 | ||
NESR ordinary share consideration | $ 12,013 | ||
NESR ordinary share consideration, shares | 2,237,000 | ||
Total consideration - equity | [1] | $ 12,013 | |
Total consideration - equity, shares | [1] | 2,237,000 | |
Estimated earn-out mechanisms | $ 11,678 | ||
Estimated earn-out mechanisms, shares | [2] | ||
Preliminary consideration | $ 40,649 | ||
Preliminary consideration, shares | 2,237,000 | ||
Business Acquisition, Share Price | $ 5.37 | ||
[1] | The fair value of NESR ordinary shares was determined based upon the $ 5.37 | ||
[2] | The quantity of Additional Earn-Out Shares will not be known until the fourth quarter of 2020 when this contingency is resolved. A liability totalling $ 6.4 |
SCHEDULE OF PURCHASE PRICE ALLO
SCHEDULE OF PURCHASE PRICE ALLOCATION (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Business Combinations [Abstract] | |
Cash and cash equivalents | $ 3,740 |
Accounts receivable, net | 16,516 |
Unbilled revenue | 5,976 |
Service inventories | 5,654 |
Prepaid assets | 679 |
Retention withholdings | 279 |
Other current assets | 551 |
Property, plant and equipment | 34,161 |
Intangible assets | 4,220 |
Other assets | 200 |
Total identifiable assets acquired | 71,976 |
Accounts payable | 11,974 |
Accrued expenses | 6,455 |
Current installments of long-term debt | 5,400 |
Short-term borrowings | 5,692 |
Income taxes payable | 313 |
Other taxes payable | 2,514 |
Other current liabilities | 1,679 |
Long-term debt | 15,582 |
Employee benefit liabilities | 868 |
Other liabilities | 1,733 |
Noncontrolling interests | 59 |
Net identifiable liabilities acquired | 52,269 |
Total fair value of net assets acquired | 19,707 |
Goodwill | 20,942 |
Preliminary consideration | $ 40,649 |
SCHEDULE OF PRELIMINARY ALLOCAT
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 4,220 |
Sahara Petroleum Services Company [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | 4,220 |
Sahara Petroleum Services Company [Member] | Customer Contracts [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 3,770 |
Total intangible assets, term | 8 years |
Sahara Petroleum Services Company [Member] | Trademarks and Trade Names [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 450 |
Total intangible assets, term | 2 years |
SCHEDULE OF PROFORMA INFORMATIO
SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Business Combinations [Abstract] | ||||
Revenues | $ 209,563 | $ 179,557 | $ 421,287 | $ 347,941 |
Net income/(loss) | $ 7,034 | $ 17,695 | $ 19,184 | $ 35,086 |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 02, 2020 | Jun. 01, 2020 | Feb. 13, 2020 |
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,237,000 | |||||||||
[custom:BusinessCombinationOfDeferredConsideration-0] | $ 6,000 | $ 6,000 | $ 5,958 | |||||||
Amount allocated to goodwill | 20,900 | 20,900 | ||||||||
Business Acquisition, Transaction Costs | 900 | 900 | ||||||||
Revenue | 209,563 | $ 179,557 | 421,287 | $ 347,941 | ||||||
Net income | 7,034 | $ 17,695 | 19,184 | $ 35,086 | ||||||
SAPESCO [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Consideration Transferred | 16,958 | |||||||||
Payments to Acquire Businesses, Gross | $ 16,958 | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,237,000 | |||||||||
Average per share price | $ 5.37 | |||||||||
Revenue | 3,900 | $ 3,900 | ||||||||
Net income | $ 100 | $ 100 | ||||||||
Sale and Purchase Agreement [Member] | Forecast [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination issued in equity earn-outs | $ 11,700 | |||||||||
Receivables earn-eut shares contingency fair value | $ 0 | |||||||||
Sale and Purchase Agreement [Member] | Forecast [Member] | Minimum [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Average per share price | $ 10 | |||||||||
Sale and Purchase Agreement [Member] | Forecast [Member] | Maximum [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Average per share price | 11.70 | |||||||||
Sale and Purchase Agreement [Member] | Additional Earn-Out Shares [Member] | Forecast [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Average per share price | $ 9 | |||||||||
Sale and Purchase Agreement [Member] | NESR Additional Shares [Member] | Forecast [Member] | Minimum [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Average per share price | 10 | |||||||||
Sale and Purchase Agreement [Member] | NESR Additional Shares [Member] | Forecast [Member] | Maximum [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Average per share price | $ 11.70 | |||||||||
Sale and Purchase Agreement [Member] | Subsequent Event [Member] | Cash Earn-Out [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Receivables | $ 6,900 | |||||||||
Sale and Purchase Agreement [Member] | SAPESCO [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 99.70% | |||||||||
Sale and Purchase Agreement [Member] | SAPESCO [Member] | Subsequent Event [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Sale of Stock, Percentage of Ownership after Transaction | 99.70% | |||||||||
Business Combination, Consideration Transferred | $ 11,000 | |||||||||
Payments to Acquire Businesses, Gross | $ 17,000 | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,237,000 | |||||||||
Sale and Purchase Agreement [Member] | SAPESCO [Member] | Subsequent Event [Member] | Three Equal Installments [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Consideration Transferred | $ 6,000 | |||||||||
[custom:ConversionPricePerShare-0] | $ 10 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivables, gross | $ 115,800 | $ 100,600 |
Less: allowance for doubtful accounts | (2,365) | (1,843) |
Total | 113,454 | 98,799 |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivables, gross | $ 115,819 | $ 100,642 |
SCHEDULE OF ALLOWANCE FOR DOUBT
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Receivables [Abstract] | ||||
Allowance for doubtful accounts at beginning of period | $ (2,442) | $ (760) | $ (1,843) | $ (693) |
(Increase) decrease to allowance for the year | (25) | (339) | 26 | (476) |
(Recovery) write-off of doubtful accounts | 161 | 649 | 161 | 719 |
Non-cash reclass of allowance for doubtful accounts between unbilled revenue and accounts receivable | (59) | (708) | ||
Allowance for doubtful accounts at end of period | $ (2,365) | $ (450) | $ (2,365) | $ (450) |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Gross contractual amounts of trade receivables | $ 115.8 | $ 100.6 |
SCHEDULE OF SERVICE INVENTORIES
SCHEDULE OF SERVICE INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | $ 94,155 | $ 80,618 |
Less: allowance for obsolete and slow-moving inventories | (2,391) | (1,777) |
Service inventories, net | 91,764 | 78,841 |
Spare Parts [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | 54,739 | 39,428 |
Chemicals [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | 24,589 | 22,852 |
Raw Materials [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | 911 | 2,441 |
Consumables [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | $ 13,916 | $ 15,897 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation | $ (151,440) | $ (104,689) |
Land | 5,104 | 5,104 |
Capital work in progress | 10,938 | 18,052 |
Property, plant and equipment net | 458,161 | 419,307 |
Buildings And Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 38,701 | 36,853 |
Buildings And Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 5 years | |
Buildings And Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 25 years | |
Oilfield Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 505,504 | 411,984 |
Oilfield Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 3 years | |
Oilfield Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 15 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 5 years | |
Property, plant and equipment gross | $ 1,503 | 3,720 |
Office Equipment and Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 39,589 | 35,991 |
Office Equipment and Tools [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 3 years | |
Office Equipment and Tools [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 6 years | |
Vehicles and Cranes [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 8,262 | $ 12,292 |
Vehicles and Cranes [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 5 years | |
Vehicles and Cranes [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 8 years |
PROPERTY, PLANT, & EQUIPMENT (D
PROPERTY, PLANT, & EQUIPMENT (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 26.4 | $ 16 | $ 51.8 | $ 30.5 |
SCHEDULE OF CHANGES IN CARRYING
SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance as of December 31, 2019 | $ 574,764 |
SAPESCO Business Combination | 20,942 |
Balance as of March 31, 2020 | 595,706 |
Production Services [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance as of December 31, 2019 | 419,646 |
SAPESCO Business Combination | 8,263 |
Balance as of March 31, 2020 | 427,909 |
Drilling and Evaluation Services [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance as of December 31, 2019 | 155,118 |
SAPESCO Business Combination | 12,679 |
Balance as of March 31, 2020 | $ 167,797 |
SCHEDULE OF INTANGIBLE ASSETS S
SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, term | 9 years 7 months 6 days | |
Intangible assets, gross carrying amount | $ 151,220 | $ 147,000 |
Intangible assets, accumulated amortization | (32,014) | (24,286) |
Intangible assets, net carrying amount | $ 119,206 | 122,714 |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, term | 9 years 10 months 24 days | |
Intangible assets, gross carrying amount | $ 125,270 | 121,500 |
Intangible assets, accumulated amortization | (25,355) | (19,239) |
Intangible assets, net carrying amount | $ 99,916 | 102,261 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, term | 7 years 10 months 24 days | |
Intangible assets, gross carrying amount | $ 25,950 | 25,500 |
Intangible assets, accumulated amortization | (6,660) | (5,047) |
Intangible assets, net carrying amount | $ 19,290 | $ 20,453 |
SCHEDULE OF LONG TERM DEBT OBLI
SCHEDULE OF LONG TERM DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||
Less: unamortized debt issuance costs | $ (4,143) | $ (4,436) |
Total loans and borrowings | 381,829 | 345,564 |
Less: current portion of long-term debt | (46,372) | (15,000) |
Long-term debt, net of unamortized debt issuance costs and excluding current installments | 335,457 | 330,564 |
CIB Long-Term Debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Loans and borrowings, gross | 20,972 | |
Secured Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Loans and borrowings, gross | 300,000 | 300,000 |
Secured Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Loans and borrowings, gross | $ 65,000 | $ 50,000 |
SCHEDULE OF SHORT TERM DEBT OBL
SCHEDULE OF SHORT TERM DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Short-term Debt [Line Items] | ||
Other short-term borrowings | $ 34,640 | $ 37,963 |
Short-term debt, excluding current installments of long-term debt | 39,781 | 37,963 |
Commercial International Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short-Term Debt | 2,177 | |
Al Ahli Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short-Term Debt | $ 2,964 |
SCHEDULE PRINCIPAL PAYMENTS OF
SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 25,972 |
2021 | 47,500 |
2022 | 45,000 |
2023 | 110,000 |
2024 | 45,000 |
2025 | 112,500 |
Thereafter | |
Total | $ 385,972 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | Jun. 20, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 20, 2020 | May 23, 2019 | May 05, 2019 |
Debt Instrument [Line Items] | ||||||
Long-term Line of Credit | $ 300,000,000 | $ 300,000,000 | ||||
Line of Credit Facility, Interest Rate During Period | 2.90% | 4.30% | ||||
Withdrawn term loan | $ 65,000,000 | $ 50,000,000 | ||||
Short-term debt, outstanding | $ 39,781,000 | 37,963,000 | ||||
CIB Long-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt maturity date | Jul. 20, 2021 | |||||
Debt obligation | $ 21,000,000 | |||||
Repayments of Debt | 11,000,000 | |||||
Remaining debt obligation amount | $ 10 | |||||
Debt interest rate | 4.40% | |||||
Long-term Debt, Description | % per annum over 6 months LIBOR (to be settled on quarterly basis) plus 50 basis points per annum. As of June 30, 2020, this resulted in an interest rate of | |||||
CIB Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt maturity date | Sep. 16, 2020 | |||||
Debt obligation | $ 2,600,000 | |||||
Debt interest rate | 2.00% | |||||
Short term debt description | The U.S. Dollar time loan facility accrues interest at 2.25% per annum over 3 months LIBOR plus 50 basis points per annum of the Highest Monthly Debit Balance (“HMDB”) commission. The Egyptian Pound time loan and overdraft facilities accrue interest at 0.75% per annum over Corridor Offer Rate plus 50 basis points per annum, HMDB commission | |||||
CIB Short-Term Debt [Member] | Letters of Guarantee [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | $ 8,500,000 | |||||
CIB Short-Term Debt [Member] | Egyptian [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | 1,300,000 | |||||
CIB Short-Term Debt One [Member] | Egyptian [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | 2,000,000 | |||||
CIB Short-Term Debt One [Member] | Egyptian [Member] | Loan Overdraft Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | $ 7,800,000 | |||||
ABK Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt maturity date | Sep. 16, 2020 | |||||
Debt obligation | $ 3,100,000 | |||||
Debt interest rate | 10.90% | |||||
Short term debt description | The ABK Short-Term Debt accrues interest at 1.65% per annum over Corridor Offer Rate | |||||
ABK Short-Term Debt [Member] | Letters of Guarantee [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | $ 200,000 | |||||
Short-term debt, outstanding | 200,000 | |||||
Debt, available balance | 0 | |||||
ABK Short-Term Debt [Member] | Time Loan Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | 3,200,000 | |||||
Short-term debt, outstanding | 2,900,000 | |||||
Debt, available balance | 0 | |||||
CIB Short-Term and ABK Short Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 800,000 | |||||
Utilized working capital facility | 800,000 | |||||
Available working capital facility | 0 | |||||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | $ 1,500,000 | |||||
Debt interest rate | 4.60% | |||||
Short-term debt, outstanding | $ 200,000 | |||||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | Letters of Guarantee [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | 13,800,000 | |||||
Short-term debt, outstanding | 5,300,000 | |||||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | Egyptian [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | $ 2,000,000 | |||||
Debt interest rate | 10.60% | |||||
Short-term debt, outstanding | $ 0 | |||||
Time Loan Facility [Member] | CIB Short-Term Debt One [Member] | Egyptian [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt obligation | 10,000,000 | |||||
Short-term debt, outstanding | 2,200,000 | |||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Interest Rate During Period | 2.40% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Interest Rate During Period | 2.70% | |||||
Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term of agreements | 2025 | |||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term of agreements | 2023 | |||||
Long-term Line of Credit | $ 65,000,000 | |||||
Commitment fee percentage | 0.60% | |||||
Debt maturity date | May 6, 2023 | |||||
Prepayment under revolving credit facility, description | The Company is permitted to make any prepayment under this RCF in multiples of $5.0 million during this 4-year period up to May 6, 2023 | |||||
Prepayment of borrowings | $ 5,000,000 | |||||
Line of credit available to be drawn | 0 | 15,000,000 | ||||
Secured Facilities Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 525,000,000 | $ 520,600,000 | $ 485,000,000 | $ 450,000,000 | ||
Reduced term loan amount | 520,600,000 | |||||
Term loan amount | 300,000,000 | |||||
Working capital facility | 155,600,000 | $ 24,400,000 | $ 30,400,000 | |||
Service coverage ratio, description | The Secured Facilities Agreement includes covenants that specify maximum leverage (Net Debt / EBITDA) up to 3.50, minimum debt service coverage ratio (Cash Flow / Debt Service) of at least 1.25, and interest coverage (EBITDA / Interest) of at least 4.00. The Company was in compliance with all financial covenants as of both June 30, 2020 and December 31, 2019 | The Secured Facilities Agreement includes covenants that specify maximum leverage (Net Debt / EBITDA) up to 3.50, minimum debt service coverage ratio (Cash Flow / Debt Service) of at least 1.25, and interest coverage (EBITDA / Interest) of at least 4.00. The Company was in compliance with all financial covenants as of both June 30, 2020 and December 31, 2019 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | $ 19,400,000 | $ 24,100,000 | ||||
Utilized working capital facility | 5,000,000 | 6,300,000 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | QATAR | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 16,400,000 | $ 10,400,000 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | UNITED ARAB EMIRATES | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 13,900,000 | 13,900,000 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | KUWAIT | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 100,000 | 100,000 | ||||
Secured Facilities Agreement [Member] | Lenders [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | $ 127,400,000 | 134,200,000 | ||||
Line of credit, description | letters of guarantee and letters of credit and refinancing letters of credit over a period of one year, which carries an interest rate equal to three-month U.S. Dollar LIBOR for the applicable interest period, plus a margin of 1.00% to 1.25% per annum. | |||||
Utilized working capital facility | $ 28,200,000 | $ 25,800,000 | ||||
Incremental Facilities Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | $ 35,000,000 |
SCHEDULE OF COMPONENTS OF NET P
SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 761 | $ 591 | $ 1,900 | $ 1,440 |
Interest cost | 190 | 43 | 475 | 176 |
Other | 66 | 55 | ||
Net cost | $ 951 | $ 700 | $ 2,375 | $ 1,671 |
EMPLOYEE BENEFITS (Details Narr
EMPLOYEE BENEFITS (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Retirement Benefits [Abstract] | ||||
Employer Contributions to benefit plans | $ 0.9 | $ 0.1 | $ 1.2 | $ 1.1 |
Total contributions | $ 0.8 | $ 0.8 | $ 1.6 | $ 1.6 |
SCHEDULE OF UNVESTED RESTRICTED
SCHEDULE OF UNVESTED RESTRICTED STOCK (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Restricted Shares, Unvested, Beginning Balance | 2,244,662 | 725,200 | 1,502,690 | 725,200 |
Weighted Average Grant Date Fair Value per Share, Unvested, Beginning Balance | $ 7.72 | $ 11.15 | $ 10.25 | $ 11.15 |
Number of Restricted Shares, Granted | 970,000 | 1,080,905 | 970,000 | |
Weighted Average Grant Date Fair Value per Share, Granted | $ 10.36 | $ 4.96 | $ 10.36 | |
Number of Restricted Shares, Vested and issued | (307,932) | |||
Weighted Average Grant Date Fair Value per Share, Vested and issued | $ 10.36 | |||
Number of Restricted Shares, Forfeited | (95,000) | (31,001) | (95,000) | |
Weighted Average Grant Date Fair Value per Share, Forfeited | $ 10.86 | $ 10.45 | $ 10.86 | |
Number of Restricted Shares, Unvested, Ending Balance | 2,244,662 | 1,600,200 | 2,244,662 | 1,600,200 |
Weighted Average Grant Date Fair Value per Share, Unvested, Ending Balance | $ 7.72 | $ 10.59 | $ 7.72 | $ 10.59 |
SCHEDULE OF STOCK-BASED COMPENS
SCHEDULE OF STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | $ 2,125 | $ 1,373 | $ 3,760 | $ 2,113 |
Cost of Services [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 938 | 654 | 1,665 | 968 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | $ 1,187 | $ 719 | $ 2,095 | $ 1,145 |
SHARE-BASED COMPENSATION EXPE_3
SHARE-BASED COMPENSATION EXPENSE (Details Narrative) - 2018 Long Term Incentive Plan [Member] - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Ordinary shares reserved for issuance | 5,000,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 12.8 | $ 11.7 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 1 year 10 months 24 days | 2 years | |
Board of Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Time-based and vest ratably period | 1 year | ||
Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Time-based and vest ratably period | 3 years |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Future Minimum Lease Payments 2020 | $ 15,948 | $ 22,930 |
Future Interest Payments 2020 | 1,414 | 1,070 |
Total Payments 2020 | 17,362 | 24,000 |
Future Minimum Lease Payments 2021 | 14,835 | 10,743 |
Future Interest Payments 2021 | 836 | 1,257 |
Total Payments 2021 | 15,671 | 12,000 |
Future Minimum Lease Payments 2022 | 3,214 | |
Future Interest Payments 2022 | 445 | |
Total Payments 2022 | 3,659 | |
Future Minimum Lease Payments 2023 | 1,611 | |
Future Interest Payments 2023 | 344 | |
Total Payments 2023 | 1,955 | |
Future Minimum Lease Payments 2024 | 315 | |
Future Interest Payments 2024 | 133 | |
Total Payments 2024 | 448 | |
Future Minimum Lease Payments 2025 | ||
Future Interest Payments 2025 | ||
Total Payments 2025 | ||
Future Minimum Lease Payments Thereafter | ||
Future Interest Payments Thereafter | ||
Total Payments Thereafter | ||
Future Minimum Lease Payments Total | 35,923 | 33,673 |
Future Interest Payments Total | 3,172 | 2,327 |
Total | 39,095 | 36,000 |
2020 | 19,092 | 23,201 |
2021 | 18,781 | 18,560 |
2022 | 2,820 | 2,780 |
2023 | 1,338 | 2,291 |
2024 | 1,338 | 2,292 |
2025 | 1,342 | 2,296 |
Thereafter | 3,281 | 1,629 |
Total | $ 47,992 | $ 53,049 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | |||||
Capital expenditure commitments | $ 22.5 | $ 22.1 | |||
Capital lease expired date | expire between 2021 and 2023 | ||||
Capital lease term | 24 months | ||||
Capital lease imputed interest rate | 6.50% | 6.50% | |||
Lease remaining principal balance outstanding | $ 32.6 | $ 32.6 | 33.7 | ||
Short term capital lease obligation | 25.3 | 25.3 | 20.5 | ||
Long term capital lease obligation | 7.3 | 7.3 | 13.1 | ||
Operating Leases, Rent Expense, Net | 34.6 | $ 30.9 | 68.9 | $ 56.4 | |
Due to vendor | 6.4 | 6.4 | 6 | ||
Letters of credit outstanding amount | 16.3 | 16.3 | 21.2 | ||
Surety bonds and other bank issued guarantees | 105.7 | 105.7 | 99.1 | ||
Cash margin guarantees | 5.2 | 5.2 | 5.8 | ||
Liability | 6.7 | 6.7 | 6.7 | 6.7 | |
Accounts Payable [Member] | |||||
Loss Contingencies [Line Items] | |||||
Due to vendor | 1.5 | 1.5 | 0 | ||
Other Current Liabilities [Member] | |||||
Loss Contingencies [Line Items] | |||||
Due to vendor | 3.5 | 3.5 | 3 | ||
Other Liabilities [Member] | |||||
Loss Contingencies [Line Items] | |||||
Due to vendor | 1.5 | 1.5 | 3 | ||
Second Capital Lease [Member] | |||||
Loss Contingencies [Line Items] | |||||
Capital expenditure commitments | $ 0.6 | 0 | $ 1 | 0 | |
Capital lease term | 36 months | ||||
Capital lease imputed interest rate | 4.30% | 4.30% | |||
Egypt Equipment [Member] | |||||
Loss Contingencies [Line Items] | |||||
Capital expenditure commitments | $ 0.1 | $ 0 | $ 0.1 | $ 0 | |
Capital lease expired date | expire between 2020 and 2024 | ||||
Lease remaining principal balance outstanding | 3.3 | $ 3.3 | 0 | ||
Short term capital lease obligation | 1.7 | 1.7 | 0 | ||
Long term capital lease obligation | $ 1.6 | $ 1.6 | $ 0 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - $ / shares | 1 Months Ended | 6 Months Ended | |
Feb. 28, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Ordinary shares outstanding | 87,495,221 | 87,187,289 | |
Preferred shares issued | 0 | 0 | |
Preferred shares outstanding | 0 | 0 | |
SAPESCO [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Number of ordinary shares issuance | 2,237,000 | ||
Stock Purchase Agreement [Member] | NPS Holdings Limited [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Number of ordinary shares issuance | 1,300,214 | ||
Public Warrants [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Warrants | 22,921,700 | ||
Ordinary share price per shares | $ 5.75 | ||
Warrants expire date | Jun. 6, 2023 | ||
Private Warrants [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Warrants | 12,618,680 | ||
Ordinary share price per shares | $ 5.75 | ||
Warrants expire date | Jun. 6, 2023 |
SCHEDULE OF A RECONCILIATION OF
SCHEDULE OF A RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Weighted average ordinary shares outstanding, beginning balance | 87,495,221 | 86,896,779 | ||||
Change in shares, Shares to be issued in SAPESCO transaction | 2,237,000 | [1] | 2,237,000 | [2] | ||
Weighted average ordinary shares outstanding, Shares to be issued in SAPESCO transaction | 737,473 | [1] | 368,736 | [2] | ||
Weighted average ordinary shares outstanding, Ending balance | 88,232,694 | 86,896,779 | 88,232,694 | 86,896,779 | ||
Issuance of earnings per share | $ 2,237,000 | $ 2,237,000 | ||||
Weighted average ordinary shares outstanding, beginning balance | 87,187,289 | 85,562,769 | ||||
Change in shares, Restricted stock vesting | 307,932 | |||||
Weighted average ordinary shares outstanding, Restricted stock vesting | 175,961 | |||||
Weighted average ordinary shares outstanding, Ending balance | 87,731,986 | 86,895,285 | 87,731,986 | 86,895,285 | ||
Change in shares, Other | 33,796 | |||||
Weighted average ordinary shares outstanding, Other shares | 32,302 | |||||
Change in shares, NPS equity stock earn-out | 1,300,214 | |||||
Weighted average ordinary shares outstanding, NPS equity stock earn-out | 1,300,214 | |||||
Weighted average ordinary shares outstanding | 88,232,694 | 86,896,779 | 87,731,986 | 86,895,285 | ||
Shares for use in allocation of participating earnings | 89,396,451 | 88,496,979 | 88,895,743 | 88,495,485 | ||
Allocation Of Participating Earnings [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Weighted average ordinary shares outstanding | 88,232,694 | 87,731,986 | 86,895,285 | |||
Non-vested, participating restricted shares | 1,163,757 | 1,600,200 | 1,163,757 | 1,600,200 | ||
[1] | Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued, as such 2,237,000 | |||||
[2] | Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued, as such 2,237,000 |
SCHEDULE OF BASIC AND DILUTED E
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Net income | $ 10,536 | $ 11,356 | $ 21,903 | $ 24,530 | |
Less dividends to: Ordinary Shares | |||||
Less dividends to: Non-vested participating shares | |||||
Total Undistributed Earnings | 10,536 | 11,356 | 21,903 | 24,530 | |
Allocation of undistributed earnings to Ordinary Shares | 10,399 | 11,151 | 21,616 | 24,086 | |
Allocation of undistributed earnings to Non-vested Shares | $ 137 | $ 205 | $ 287 | $ 444 | |
Ordinary Shares, Distributed Earnings | |||||
Ordinary Shares, Undistributed Earnings | 0.12 | 0.13 | 0.25 | 0.28 | |
Diluted EPS- Ordinary shares | $ 0.12 | $ 0.13 | $ 0.25 | $ 0.28 | |
Undistributed & distributed earnings to ordinary shareholders, As reported - basic | $ 10,399 | $ 11,151 | $ 21,616 | $ 24,086 | |
Add-back : Ordinary shares, As reported - basic | 88,232,694 | 86,896,779 | 87,731,986 | 86,865,285 | |
Add-back : Undistributed & distributed earnings to ordinary shareholders, Undistributed earnings allocated to non-vested shareholders | $ 137 | $ 205 | $ 287 | $ 444 | |
Add-back : Ordinary shares, Undistributed earnings allocated to non-vested shareholders | |||||
Add-back : Undistributed & distributed earnings to ordinary shareholders, 12,618,680 Private Warrants @ $5.75 per half share (anti-dilutive) | [1] | ||||
Add-back : Ordinary shares, 12,618,680 Private Warrants @ $5.75 per half share (anti-dilutive) | [1] | ||||
Add-back : Undistributed & distributed earnings to ordinary shareholders, 22,921,700 Public Warrants @ $5.75 per half share (anti-dilutive) | [1] | ||||
Add-back : Ordinary shares, 22,921,700 Public Warrants @ $5.75 per half share (anti-dilutive) | [1] | ||||
Less : Undistributed & distributed earnings to ordinary shareholders, Undistributed earnings reallocated to non-vested shareholders | $ (137) | $ (205) | $ (287) | $ (444) | |
Add-back : Ordinary shares, Undistributed earnings reallocated to non-vested shareholders | |||||
Diluted EPS - Ordinary shares | $ 10,399 | $ 11,151 | $ 21,616 | $ 24,086 | |
Diluted EPS - Ordinary shares | 88,232,694 | 86,896,779 | 87,731,986 | 86,895,285 | |
Diluted EPS- Ordinary shares | $ 0.12 | $ 0.13 | $ 0.25 | $ 0.28 | |
Restricted Stock [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share amount | 1,080,905 | ||||
Private Warrants [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of warrants | 12,618,680 | 12,618,680 | 12,618,680 | 12,618,680 | |
Warrants, price per share | $ 5.75 | $ 5.75 | $ 5.75 | $ 5.75 | |
Public Warrants [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of warrants | 22,921,700 | 22,921,700 | 22,921,700 | 22,921,700 | |
Warrants, price per share | $ 5.75 | $ 5.75 | $ 5.75 | $ 5.75 | |
Warrant [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share amount | 17,770,190 | 17,770,190 | |||
[1] | Non-participating warrants that could be converted into as many as 17,770,190 1,080,905 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Effective statutory rate, description | In the British Virgin Islands, the statutory rate is effectively 0% as tax is not applied on extra territorial activity. | |||
Effective tax rate | 21.00% | 28.00% | 20.00% | 23.00% |
Minimum [Member] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income tax statutory rate | 12.00% | |||
Maximum [Member] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income tax statutory rate | 35.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Rental income to be paid on leases | $ 34,600 | $ 30,900 | $ 68,900 | $ 56,400 | |
Liabilities | 752,659 | 752,659 | $ 635,892 | ||
Prime Business Solutions LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Maintenance fees payable | 400 | 400 | 400 | ||
Nine Energy Service, Inc. [Member] | Coiled Tubing Equipment [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchased of propety plant and equipment | 300 | 0 | 1,400 | ||
Nine Energy Service, Inc. [Member] | Products and Rentals [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchased of propety plant and equipment | 0 | ||||
Nine Energy Service, Inc. [Member] | Coiled Tubing Equipment, Products and Services [Member] | |||||
Related Party Transaction [Line Items] | |||||
Liabilities | 5,300 | 5,300 | 6,800 | ||
Basin Holdings US LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Purchased of propety plant and equipment | 20 | 0 | 450 | 0 | |
Liabilities | 100 | 100 | 0 | ||
Mubbadrah Group Entities [Member] | |||||
Related Party Transaction [Line Items] | |||||
Rental income to be paid on leases | 40 | 100 | 100 | 100 | |
Due from related party | $ 600 | $ 600 | $ 600 | ||
Percentage of ownership | 17.00% | 17.00% | |||
Heavy Equipment Manufacturing Trading LLC [Member] | GES [Member] | |||||
Related Party Transaction [Line Items] | |||||
Services charges | $ 20 | 40 | $ 40 | 50 | |
Business Solutions LLC [Member] | Prime Business Solutions LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership | 100.00% | 100.00% | |||
Administrative service fee | $ 200 | $ 0 | $ 800 | $ 0 |
SCHEDULE OF SEGMENT REPORTING,
SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue from External Customer [Line Items] | |||||
Total revenue | $ 203,249 | $ 159,899 | $ 402,548 | $ 311,603 | |
Total long-lived assets | 458,161 | 458,161 | $ 419,307 | ||
Total operating income | 17,858 | 21,995 | 36,373 | 42,103 | |
Production Services [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Total revenue | 139,034 | 95,358 | 272,224 | 187,471 | |
Total long-lived assets | 308,746 | 308,746 | 290,765 | ||
Total operating income | 20,217 | 23,192 | 41,545 | 44,514 | |
Drilling and Evaluation Services [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Total revenue | 64,215 | 64,541 | 130,324 | 124,132 | |
Total long-lived assets | 137,193 | 137,193 | 115,241 | ||
Total operating income | 8,334 | 9,413 | 16,202 | 14,892 | |
Total Reportable Segments [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Total long-lived assets | 445,939 | 445,939 | 406,006 | ||
Total operating income | 28,551 | 32,605 | 57,747 | 59,406 | |
Unallocated Assets [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Total long-lived assets | 12,222 | 12,222 | $ 13,301 | ||
Unallocated Expenses [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Total operating income | $ (10,693) | $ (10,610) | $ (21,374) | $ (17,303) |
SCHEDULE OF REVENUE FROM EXTERN
SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | $ 203,249 | $ 159,899 | $ 402,548 | $ 311,603 | |
Total long-lived assets | 458,161 | 458,161 | $ 419,307 | ||
MENA [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | 200,737 | 158,082 | 396,798 | 307,627 | |
Total long-lived assets | 449,029 | 449,029 | 409,139 | ||
Rest of World [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | 2,512 | $ 1,817 | 5,750 | $ 3,976 | |
Total long-lived assets | $ 9,132 | $ 9,132 | $ 10,168 |
REPORTABLE SEGMENTS (Details Na
REPORTABLE SEGMENTS (Details Narrative) | 6 Months Ended |
Jun. 30, 2020Segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |