Cover
Cover | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2020 |
Document Fiscal Period Focus | FY |
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 Incorporation, State or Country Code | D8 |
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, Country | US |
Entity Address, Postal Zip Code | 77056 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 87,777,553 |
ICFR Auditor Attestation Flag | false |
Ordinary shares, no par value per share | |
Entity Addresses [Line Items] | |
Title of 12(b) Security | Ordinary shares, no par value per share |
Trading Symbol | NESR |
Security Exchange Name | NASDAQ |
Warrants to purchase one-half of one ordinary share | |
Entity Addresses [Line Items] | |
Title of 12(b) Security | Warrants to purchase one-half of one ordinary share |
Trading Symbol | NESRW |
Security Exchange Name | NASDAQ |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
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 |
City Area Code | (832) |
Local Phone Number | 925-3777 |
Contact Personnel Name | Christopher L. Boone |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 75,012 | $ 73,201 |
Accounts receivable, net | 116,835 | 98,799 |
Unbilled revenue | 158,457 | 76,347 |
Service inventories, net | 94,263 | 78,841 |
Prepaid assets | 11,480 | 9,590 |
Retention withholdings | 36,773 | 40,970 |
Other receivables | 18,454 | 14,019 |
Other current assets | 3,943 | 11,442 |
Total current assets | 515,217 | 403,209 |
Non-current assets | ||
Property, plant and equipment, net | 437,743 | 419,307 |
Intangible assets, net | 110,376 | 122,714 |
Goodwill | 620,921 | 574,764 |
Other assets | 2,797 | 2,370 |
Total assets | 1,687,054 | 1,522,364 |
Liabilities | ||
Accounts payable | 144,614 | 65,704 |
Accrued expenses | 73,783 | 69,137 |
Current installments of long-term debt | 47,500 | 15,000 |
Short-term borrowings | 42,360 | 37,963 |
Income taxes payable | 9,420 | 7,542 |
Other taxes payable | 11,289 | 7,189 |
Other current liabilities | 30,400 | 25,601 |
Total current liabilities | 359,366 | 228,136 |
Long-term debt | 308,614 | 330,564 |
Deferred tax liabilities | 21,070 | 26,217 |
Employee benefit liabilities | 21,515 | 16,745 |
Other liabilities | 32,071 | 34,230 |
Total liabilities | 742,636 | 635,892 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at December 31, 2020 and December 31, 2019, respectively | ||
Common stock and additional paid in capital, no par value; unlimited shares authorized; 87,777,553 and 87,187,289 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 826,614 | 818,782 |
Retained earnings | 117,748 | 67,661 |
Accumulated other comprehensive income | 64 | 29 |
Total shareholders’ equity | 944,426 | 886,472 |
Non-controlling interests | (8) | |
Total equity | 944,418 | 886,472 |
Total liabilities and equity | $ 1,687,054 | $ 1,522,364 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 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 outstanding | 87,777,553 | 87,187,289 |
Common stock, shares issued | 87,777,553 | 87,187,289 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||||
Net income | $ 6,736 | $ 34,980 | $ 50,087 | $ 39,364 |
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Revenues | 348,590 | 834,146 | 658,385 | |
Cost of services | (249,159) | (678,720) | (506,799) | |
Gross profit | 99,431 | 155,426 | 151,586 | |
Selling, general and administrative expenses | (36,705) | (72,077) | (63,840) | |
Amortization | (9,373) | (15,817) | (15,932) | |
Operating income | 53,353 | 67,532 | 71,814 | |
Interest expense, net | (14,383) | (15,879) | (18,971) | |
Other income / (expense), net | 5,441 | 9,139 | (408) | |
Income before income tax | 44,411 | 60,792 | 52,435 | |
Income tax expense | (9,431) | (10,705) | (13,071) | |
Net income | 34,980 | 50,087 | 39,364 | |
Net income / (loss) attributable to non-controlling interests | (163) | |||
Net income attributable to shareholders | $ 35,143 | $ 50,087 | $ 39,364 | |
Weighted average shares outstanding: | ||||
Basic | 85,569,020 | 88,845,618 | 86,997,554 | |
Diluted | 86,862,983 | 88,990,657 | 86,997,554 | |
Net earnings per share (Note 16): | ||||
Basic | $ 0.41 | $ 0.56 | $ 0.45 | |
Diluted | $ 0.40 | $ 0.56 | $ 0.45 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Revenues | 137,027 | |||
Cost of services | (104,242) | |||
Gross profit | 32,785 | |||
Selling, general and administrative expenses | (19,969) | |||
Amortization | (10) | |||
Operating income | 12,806 | |||
Interest expense, net | (4,090) | |||
Other income / (expense), net | 362 | |||
Income before income tax | 9,078 | |||
Income tax expense | (2,342) | |||
Net income | 6,736 | |||
Net income / (loss) attributable to non-controlling interests | (881) | |||
Net income attributable to shareholders | $ 7,617 | |||
Weighted average shares outstanding: | ||||
Basic | 348,524,566 | |||
Diluted | 370,000,000 | |||
Net earnings per share (Note 16): | ||||
Basic | $ 0.02 | |||
Diluted | $ 0.02 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||||
Net income | $ 6,736 | $ 34,980 | $ 50,087 | $ 39,364 |
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Net income | 34,980 | 50,087 | 39,364 | |
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustments | 35 | (19) | ||
Total Comprehensive Income, net of tax | 34,980 | 50,122 | 39,345 | |
Comprehensive income attributable to non-controlling interest | (163) | |||
Comprehensive income attributable to shareholders | $ 35,143 | $ 50,122 | $ 39,345 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Net income | 6,736 | |||
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustments | (16) | |||
Total Comprehensive Income, net of tax | 6,720 | |||
Comprehensive income attributable to non-controlling interest | (881) | |||
Comprehensive income attributable to shareholders | $ 7,601 |
Consolidated Statements Shareho
Consolidated Statements Shareholders' Equity - USD ($) $ in Thousands | Common Stock And Additional Paid In Capital [Member]Successors [Member] | AOCI Attributable to Parent [Member]Successors [Member] | AOCI Attributable to Parent [Member]Predecessors [Member]NPS Holdings Limited [Member] | Retained Earnings [Member]Successors [Member] | Retained Earnings [Member]Predecessors [Member]NPS Holdings Limited [Member] | Total Company Stockholders Equity [Member]Successors [Member] | Noncontrolling Interest [Member]Successors [Member] | Noncontrolling Interest [Member]Predecessors [Member]NPS Holdings Limited [Member] | Successors [Member] | Total | Predecessors [Member]NPS Holdings Limited [Member] | Common Stock [Member]Predecessors [Member]NPS Holdings Limited [Member] | Redeemable Convertible Shares [Member]Predecessors [Member]NPS Holdings Limited [Member] | Additional Paid-in Capital [Member]Predecessors [Member]NPS Holdings Limited [Member] | Total Shareholders Equity [Member]Predecessors [Member]NPS Holdings Limited [Member] |
Beginning balance, value at Dec. 31, 2017 | $ (436) | $ 18,480 | $ (1,960) | $ 389,429 | $ 389,429 | $ 342,250 | $ 27,750 | $ 3,345 | $ 391,389 | ||||||
Balance at beginning, shares at Dec. 31, 2017 | 342,250,000 | 27,750,000 | |||||||||||||
Foreign currency translation adjustment | (16) | (16) | (16) | (16) | |||||||||||
Conversion of redeemable shares | $ 6,275 | $ (6,275) | |||||||||||||
Conversion of redeemable shares, shares | 6,274,566 | (6,274,566) | |||||||||||||
Dividends paid | (48,210) | (48,210) | (48,210) | (48,210) | |||||||||||
Amount of Provision for Zakat | (766) | (766) | (766) | (766) | |||||||||||
Net income (loss) | 7,617 | (881) | 6,736 | 6,736 | 7,617 | ||||||||||
Ending balance, value at Jun. 06, 2018 | $ 56,601 | $ (452) | $ (4,611) | $ (22,879) | $ 51,990 | $ (2,841) | $ 51,990 | 0 | $ 347,173 | $ 348,525 | $ 21,475 | $ 3,345 | $ 350,014 | ||
Balance at end, shares at Jun. 06, 2018 | 11,730,425 | 348,524,566 | 21,475,434 | ||||||||||||
Share-based compensation expense | $ 1,034 | 1,034 | 1,034 | 1,034 | |||||||||||
Other | 48 | 48 | (1) | 47 | 47 | ||||||||||
Other, shares | |||||||||||||||
Acquisition of non-controlling interest during the period | 808 | 808 | (808) | ||||||||||||
Reclassification of shares previously subject to redemption | $ 165,188 | 165,188 | 165,188 | 165,188 | |||||||||||
Reclassification of shares previously subject to redemption, shares | 16,921,700 | ||||||||||||||
Redeemed shares | $ (19,379) | (19,379) | (19,379) | (19,379) | |||||||||||
Redeemed shares, shares | (1,916,511) | ||||||||||||||
Shares issued to acquire NPS | $ 255,537 | 255,537 | 255,537 | 255,537 | |||||||||||
Shares issued to acquire NPS, shares | 25,077,277 | ||||||||||||||
Shares issued to acquire GES | $ 288,848 | 288,848 | 288,848 | 288,848 | |||||||||||
Shares issued to acquire GES, shares | 28,346,229 | ||||||||||||||
Shares issued to related party for loan fee and transaction costs | $ 2,719 | 2,719 | 2,719 | 2,719 | |||||||||||
Shares issued to related party for loan fee and transaction costs, shares | 266,809 | ||||||||||||||
Shares issued in secondary offering | $ 48,294 | 48,294 | 48,294 | 48,294 | |||||||||||
Shares issued in secondary offering, shares | 4,829,375 | ||||||||||||||
Shares issued for IPO underwriting fees | $ 3,737 | 3,737 | 3,737 | 3,737 | |||||||||||
Shares issued for IPO underwriting fees, shares | 307,465 | ||||||||||||||
Business combination non-controlling interest | (2,004) | (2,004) | (2,004) | ||||||||||||
Non-controlling interest derecognized due to sale of subsidiary | (3,043) | (3,043) | 3,043 | ||||||||||||
Net income (loss) | 35,143 | 35,143 | (163) | 34,980 | 34,980 | ||||||||||
Ending balance, value at Dec. 31, 2018 | $ 802,579 | 48 | 28,297 | 830,924 | 67 | 830,991 | 830,991 | ||||||||
Balance at end, shares at Dec. 31, 2018 | 85,562,769 | ||||||||||||||
Share-based compensation expense | $ 5,654 | 5,654 | 5,654 | 5,654 | |||||||||||
Vesting of restricted share units | |||||||||||||||
Vesting of restricted share units, shares | 290,510 | ||||||||||||||
Other | $ 2 | (19) | (17) | (17) | (17) | ||||||||||
Other, shares | 33,796 | ||||||||||||||
Acquisition of non-controlling interest during the period | $ 67 | 67 | (67) | ||||||||||||
NPS equity earn-out | $ 10,480 | 10,480 | 10,480 | 10,480 | |||||||||||
NPS equity earn-out, shares | 1,300,214 | ||||||||||||||
Net income (loss) | 39,364 | 39,364 | 39,364 | 39,364 | |||||||||||
Ending balance, value at Dec. 31, 2019 | $ 818,782 | 29 | 67,661 | 886,472 | 886,472 | 886,472 | |||||||||
Balance at end, shares at Dec. 31, 2019 | 87,187,289 | ||||||||||||||
Share-based compensation expense | $ 7,832 | 7,832 | 7,832 | 7,832 | |||||||||||
Vesting of restricted share units | |||||||||||||||
Vesting of restricted share units, shares | 590,264 | ||||||||||||||
Other | 35 | 35 | (8) | 27 | 27 | ||||||||||
Other, shares | |||||||||||||||
NPS equity earn-out, shares | |||||||||||||||
Reclassification of shares previously subject to redemption, shares | |||||||||||||||
Redeemed shares, shares | |||||||||||||||
Shares issued to acquire NPS, shares | |||||||||||||||
Shares issued to acquire GES, shares | |||||||||||||||
Shares issued to related party for loan fee and transaction costs, shares | |||||||||||||||
Shares issued in secondary offering, shares | |||||||||||||||
Shares issued for IPO underwriting fees, shares | |||||||||||||||
Conversion of redeemable shares, shares | |||||||||||||||
Net income (loss) | 50,087 | 50,087 | 50,087 | 50,087 | |||||||||||
Ending balance, value at Dec. 31, 2020 | $ 826,614 | $ 64 | $ 117,748 | $ 944,426 | $ (8) | $ 944,418 | $ 944,418 | ||||||||
Balance at end, shares at Dec. 31, 2020 | 87,777,553 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||||
Net income | $ 6,736 | $ 34,980 | $ 50,087 | $ 39,364 |
Successors [Member] | ||||
Cash flows from operating activities: | ||||
Net income | 34,980 | 50,087 | 39,364 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 42,416 | 120,778 | 88,111 | |
Shares issued for loan fees and transaction costs | 2,719 | |||
Share-based compensation expense | 1,034 | 7,832 | 5,654 | |
Loss (Gain) on disposal of assets | (986) | 96 | (1,659) | |
Non-cash interest (income) expense | 2,055 | (271) | 1,884 | |
Deferred tax expense (benefit) | (2,025) | (4,617) | (3,935) | |
Allowance for doubtful receivables | 693 | 188 | 1,771 | |
Provision for obsolete service inventories | 1,155 | 1,071 | 622 | |
Earn-outs on business combinations | (5,723) | (9,619) | ||
Other operating activities, net | 796 | 579 | 90 | |
Changes in operating assets and liabilities: | ||||
(Increase) decrease in accounts receivable | 10,329 | (3,390) | (39,176) | |
(Increase) decrease in Unbilled revenue | (8,424) | (75,971) | 19,171 | |
(Increase) decrease in Retention withholdings | (25,135) | 6,367 | (18,960) | |
(Increase) decrease in inventories | 5,440 | (12,535) | (21,312) | |
(Increase) decrease in prepaid expenses | 596 | (1,211) | (2,573) | |
(Increase) decrease in other current assets | (2,814) | 1,800 | 374 | |
(Increase) decrease in other long-term assets and liabilities | (5,030) | 8,623 | ||
Increase (decrease) in accounts payable and accrued expenses | (34,943) | 55,323 | 19,438 | |
Increase (decrease) in other current liabilities | 18,677 | 1,994 | (8,396) | |
Net cash provided by operating activities | 40,840 | 133,471 | 89,091 | |
Cash flows from investing activities: | ||||
Capital expenditures | (23,211) | (90,323) | (107,938) | |
Proceeds from disposal of assets | 5,309 | 487 | 1,625 | |
Proceeds from the Company’s Trust account | 231,782 | |||
Acquisition of business, net of cash acquired | (282,190) | (13,218) | ||
Other investing activities | 1,722 | (574) | (1,025) | |
Net cash used in investing activities | (66,588) | (103,628) | (107,338) | |
Cash flows from financing activities: | ||||
Proceeds from long-term debt | 92,490 | 15,000 | 365,000 | |
Repayments of long-term debt | (61,606) | (25,972) | (285,048) | |
Proceeds from short-term borrowings | 33,753 | 49,305 | ||
Repayments of short-term borrowings | (27,433) | (56,965) | ||
Payments on capital leases | (19,581) | |||
Payments on seller-provided financing for capital expenditures | (3,834) | |||
Proceeds from issuance of shares | 48,294 | |||
Redemption of ordinary shares | (19,380) | |||
Payment of deferred underwriting fees | (9,070) | |||
Dividend paid | ||||
Other financing activities, net | (134) | (5,717) | ||
Net cash provided by (used in) financing activities | 50,594 | (28,067) | 66,575 | |
Effect of exchange rate changes on cash | 35 | (19) | ||
Net increase in cash | 24,846 | 1,811 | 48,309 | |
Cash and cash equivalents, beginning of period | 46 | 73,201 | 24,892 | |
Cash and cash equivalents, end of period | 46 | 24,892 | 75,012 | 73,201 |
Supplemental disclosure of cash flow information (also refer Note 3): | ||||
Interest paid | 8,812 | 12,667 | 17,290 | |
Income taxes paid | 6,008 | $ 15,641 | $ 19,192 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Cash flows from operating activities: | ||||
Net income | 6,736 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 17,284 | |||
Shares issued for loan fees and transaction costs | ||||
Share-based compensation expense | ||||
Loss (Gain) on disposal of assets | ||||
Non-cash interest (income) expense | 3,350 | |||
Deferred tax expense (benefit) | ||||
Allowance for doubtful receivables | 2,402 | |||
Provision for obsolete service inventories | ||||
Earn-outs on business combinations | ||||
Other operating activities, net | 1,442 | |||
Changes in operating assets and liabilities: | ||||
(Increase) decrease in accounts receivable | (15) | |||
(Increase) decrease in Unbilled revenue | ||||
(Increase) decrease in Retention withholdings | ||||
(Increase) decrease in inventories | (2,080) | |||
(Increase) decrease in prepaid expenses | (759) | |||
(Increase) decrease in other current assets | (16,257) | |||
(Increase) decrease in other long-term assets and liabilities | (544) | |||
Increase (decrease) in accounts payable and accrued expenses | 7,335 | |||
Increase (decrease) in other current liabilities | 1,932 | |||
Net cash provided by operating activities | 20,826 | |||
Cash flows from investing activities: | ||||
Capital expenditures | (9,861) | |||
Proceeds from disposal of assets | ||||
Proceeds from the Company’s Trust account | ||||
Acquisition of business, net of cash acquired | (1,098) | |||
Other investing activities | 3,043 | |||
Net cash used in investing activities | (7,916) | |||
Cash flows from financing activities: | ||||
Proceeds from long-term debt | 47,063 | |||
Repayments of long-term debt | ||||
Proceeds from short-term borrowings | ||||
Repayments of short-term borrowings | ||||
Payments on capital leases | ||||
Payments on seller-provided financing for capital expenditures | ||||
Proceeds from issuance of shares | ||||
Redemption of ordinary shares | ||||
Payment of deferred underwriting fees | (164) | |||
Dividend paid | (48,210) | |||
Other financing activities, net | (4,429) | |||
Net cash provided by (used in) financing activities | (5,740) | |||
Effect of exchange rate changes on cash | (16) | |||
Net increase in cash | 7,154 | |||
Cash and cash equivalents, beginning of period | 24,502 | $ 31,656 | ||
Cash and cash equivalents, end of period | 31,656 | |||
Supplemental disclosure of cash flow information (also refer Note 3): | ||||
Interest paid | 3,636 | |||
Income taxes paid | $ 345 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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 NESR shareholders. On June 1, 2020, NESR further expanded its footprint within the MENA region when its NPS subsidiary acquired Sahara Petroleum Services Company S.A.E. (“SAPESCO,” the “SAPESCO Business Combination”). 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, Egypt, Libya and Kuwait. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All amounts are shown in U.S. dollars, except as noted. On June 6, 2018, NESR acquired all of the issued and outstanding equity interests of the Subsidiaries (collectively, the “NPS/GES Business Combination”). The NPS/GES Business Combination was accounted for under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations ● The transfer of cash by NESR; ● NESR’s executive management comprise the C-Suite of the combined company; ● NESR’s right to designate members of the board; and ● NESR initiated the NPS/GES Business Combination. As a result of the NPS/GES Business Combination, NPS and GES were acquirees and NPS was determined to be the accounting “Predecessor”. NPS was determined to be the accounting “Predecessor” as the Company expects to use the NPS platform to grow the business as it operates throughout the Middle East and Africa whereas GES is concentrated in Oman. Further, the market size of countries where NPS is operating is much larger than that of GES and the valuation and price paid for NPS was higher than that of GES. The Company’s financial statement presentation distinguishes a Predecessor for periods prior to the Closing Date. NESR is the “Successor” for periods after the Closing Date, which includes the consolidated financial results of both NPS and GES. The transactions were accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting for both NPS and GES that is based on the fair value of assets acquired and liabilities assumed. See Note 4, Business Combinations, for further discussion on the NPS/GES Business Combination. As a result of the application of the acquisition method of accounting as of the Closing Date, the financial statements for the predecessor periods and for the successor period are presented on a different basis of accounting and are, therefore, not comparable. The historical information of NESR prior to the NPS/GES Business Combination has not been reflected in the Company’s financial statements prior to June 7, 2018, as it was not deemed the Predecessor. Statement of operations activity of NESR, being nominal in nature, prior to the closing of the NPS/GES Business Combination were recorded in the opening retained earnings as of June 7, 2018 and not presented separately. In the accompanying consolidated financial statements, the successor period is from June 7, 2018 to December 31, 2018 (“2018 Successor Period”), January 1, 2019 to December 31, 2019 (“2019 Successor Period”), and January 1, 2020 to December 31, 2020 (“2020 Successor Period”), and the predecessor period is from January 1, 2018 to June 6, 2018 (“2018 Predecessor Period”). 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 consolidated 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 consolidated 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 consolidated 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, unrecognized tax benefits, recoverability of deferred tax assets 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 consolidated 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 | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation The Company consolidates entities in which the Company has a majority voting interest and entities that meet the criteria for variable interest entities for which the Company is deemed to be the primary beneficiary for accounting purposes. The Company eliminates intercompany transactions and accounts in consolidation. The Company applies the equity method of accounting for an investment in an entity if it has the ability to exercise significant influence over the entity that (a) does not meet the variable interest entity criteria or (b) meets the variable interest entity criteria, but for which the Company is not deemed to be the primary beneficiary. The Company applies the cost method of accounting for an investment in an entity if it does not have the ability to exercise significant influence over the unconsolidated entity. The Company separately presents within equity on the consolidated balance sheets the ownership interests attributable to parties with non-controlling interests in the Company’s consolidated subsidiaries, and separately presents net income attributable to such parties on the consolidated statements of operations. Cash and cash equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. Supplemental cash flow information Non-cash transactions for the 2020 Successor period: ● Purchases of property, plant, and equipment in Accounts payable, Accrued expenses and Short-term borrowings at December 31, 2020 of $ 16.6 0 20.4 ● Capital lease obligations of $ 22.5 5.5 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 11.4 0.6 3.2 ● Obligations of $ 2.0 13.5 Non-cash transactions for the 2019 Successor period: ● Purchases of property, plant, and equipment in accounts payable, accrued expenses and short-term borrowings at December 31, 2019 of $ 21.7 3.0 29.3 ● Non-cash additions to capital lease obligations of $ 33.7 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 3.0 3.0 Non-cash transactions for the 2018 Successor period: ● In connection the NPS/GES Business Combination in 2018, the Company issued ordinary shares valued at $ 544.4 ● In connection with the Hana Loan, which is described in Note 10, Debt, the Company paid a $ 0.6 2.1 ● Purchases of property, plant, and equipment in accounts payable and short-term debt at December 31, 2018 of $ 20.8 14.7 Income taxes The Company applies an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are computed for differences between the financial statement carrying amount and the tax basis of assets and liabilities that will result in future deductible or taxable amounts and for carryforwards, based on enacted tax laws and rates applicable to the periods in which the deductible or taxable temporary differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company applies a recognition threshold and measurement attribute for evaluating tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position, based solely on the technical merits, must be more-likely-than-not to be sustained upon examination by taxing authorities. Recognized tax positions are measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. The Subsidiaries operate in multiple tax jurisdictions in the Middle East, North Africa and Asia. The Company has provided for income taxes based on enacted tax laws and tax rates in effect in the countries where the Company operates and earns income. The income taxes in these jurisdictions vary substantially. The Company engages in transactions in which the income tax consequences may be subject to uncertainty and examination by the varying taxing authorities. Significant judgment is required by the Company’s management in assessing and estimating the income tax consequences of these transactions. While the Company prepares tax returns based on interpretations of tax laws and regulations, in the normal course of business, the income tax returns may be subject to examination by the various taxing authorities. Such examinations may result in future assessments of additional income tax, interest and penalties. NESR classifies interest and penalties relating to an underpayment of income taxes within income tax expense in the Consolidated Statement of Operations. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. Net income per ordinary share Basic income per ordinary share was computed by dividing basic net income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding. Diluted income per ordinary share was computed by dividing diluted net income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding plus dilutive potential ordinary shares, if any. Dilutive potential ordinary shares include outstanding warrants, restricted stock awards, and/or other contracts to issue ordinary stock and are determined by applying the treasury stock method or if-converted method, as applicable, if dilutive. Concentration of credit risk The Company’s assets that are exposed to concentrations of credit risk consist primarily of cash, accounts receivable from customers, and unbilled revenue from customers. The Company places its cash with financial institutions and limits the amount of credit exposure with any one of them. The Company regularly evaluates the creditworthiness of the issuers in which it invests. The Company minimizes this credit risk by entering into transactions with high-quality counterparties, limiting the exposure to each counterparty and monitoring the financial condition of its counterparties. Fair value of financial instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, and loans and borrowings. The fair value of the Company’s financial instruments under ASC Topic 820, “ Fair Value Measurements and Disclosures Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Unbilled revenue, accounts receivable and allowance for doubtful accounts Trade accounts receivable are recorded at the invoiced amount. Accounts receivable are reclassified from unbilled revenue when presented to the customer or accepted in the customer’s electronic invoice processing portal, if applicable. No interest is charged on past-due balances. The Company grants credit to customers based upon an evaluation of each customer’s financial condition. The Company periodically monitors the payment history and ongoing creditworthiness of customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowances management considers historical losses adjusted to take into account current market conditions and the customer’s financial conditions, the amount of receivable in dispute, current receivables ageing and current payment patterns. Significant accounts receivable balances and balances that have been outstanding greater than 90 days are reviewed for collectability. Account balances, when determined to be uncollectable, are charged against the allowance. Service inventories The Company’s service inventory consists of spare parts, chemicals and raw materials to support ongoing operations which are held for the purpose of service contracts and are measured at the lower of cost or net realizable value. The cost is based on the weighted average cost principle and includes expenditures incurred in acquiring the service inventories. Net realizable value is the estimated selling price less estimated costs of completion and selling expenses incurred in the ordinary course of business. The Company determines reserves for service inventory based on historical usage of inventory on-hand, assumptions about future demand and market conditions and estimates about potential alternative uses, which are limited. Property, plant and equipment Property, plant and equipment, inclusive of equipment under capital lease, is stated at cost less accumulated depreciation. The cost of ordinary maintenance and repair is charged to operating expense, while replacement of critical components and major improvements that extend the life of the related asset are capitalized. Capital work in progress mainly represents costs incurred on drilling rigs and equipment that are in transit at the reporting date. No depreciation is charged to capital work in progress. Depreciation of property, plant and equipment is calculated using the straight-line method over the asset’s estimated useful life as follows: SCHEDULE OF ESTIMATED USEFUL LIFE PROPERTY, PLANT AND EQUIPMENT Buildings and leasehold improvements 5 25 Drilling rigs, plant and equipment 3 15 Furniture and fixtures 5 Office equipment and tools 3 10 Vehicles and cranes 5 8 Equipment held under capital leases are generally amortized on a straight-line basis over the shorter of the estimated useful life of the underlying asset and the term of the lease. Property, plant and equipment is reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable. Events or circumstances that may indicate include, but are not limited to, matters such as a significant decline in market value or a significant change in business climate (“triggering events”). An impairment loss is recognized when the carrying value of an asset exceeds the estimated undiscounted future cash flows from the use of the asset and its eventual disposition. The amount of impairment loss recognized is the excess of the asset’s carrying value over its fair value. In determining the fair market value of the assets, the Company considers market trends and recent transactions involving sales of similar assets, or when not available, discounted cash flow analysis. The Company has not recorded any impairment charges of property, plant and equipment in the accompanying consolidated statement of operations for any of the periods presented. Assets to be disposed of are reported at the lower of the carrying value or the fair value less cost to sell. Upon sale or other disposition of an asset, the Company recognizes a gain or loss on disposal measured as the difference between the net carrying value of the asset and the net proceeds received. Leases The Company leases certain facilities and equipment used in its operations. The Company evaluates and classifies its leases as operating or capital leases for financial reporting purposes. Assets held under capital leases are included in property, plant and equipment, net, on the consolidated balance sheets. Operating lease expense is recorded on a straight-line basis over the lease term in the consolidated statements of operation. Goodwill Goodwill is the excess cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is evaluated for impairment on an annual basis, or more frequently if circumstances require. The Company’s next annual test will occur on October 1, 2021. The Company performs a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount. If the Company determines, as a result of its qualitative assessment, that it is not more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, no further testing is required. If the Company determines, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, a goodwill impairment assessment is performed using a two-step, fair-value based test. Under the first step, goodwill is reviewed for impairment by comparing the carrying value of the reporting unit’s net assets (including allocated goodwill) to the fair value of the reporting unit. The fair value of the reporting units is determined using a discounted cash flow approach. Determining the fair value of a reporting unit requires judgment and the use of significant estimates and assumptions. Such estimates and assumptions include revenue growth rates, discount rates, operating margins, weighted average costs of capital, market share and future market conditions, among others. If the reporting unit’s carrying value is greater than its fair value, a second step is performed whereby the implied fair value of goodwill is estimated by allocating the fair value of the reporting unit in a hypothetical purchase price allocation analysis. If the amount of goodwill resulting from this hypothetical purchase price allocation is less than the carrying value of the reporting unit’s goodwill, the recorded carrying value of goodwill is written down to the implied fair value. The Company has not recorded any impairment charge for goodwill in the accompanying consolidated statement of operations for any of the periods presented. Intangible assets Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. The Company’s intangible assets with finite lives consist of customer contracts, trademarks and trade names. The cost of intangible assets with finite lives is amortized over the estimated period of economic benefit on a straight-line basis, ranging from eight to ten years. Asset lives are adjusted whenever there is a change in the estimated period of economic benefit. No residual value has been assigned to these intangible assets. Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. These conditions may include a change in the extent or manner in which the asset is being used or a change in future operations. The Company assesses the recoverability of the carrying amount by preparing estimates of future revenue, margins and cash flows. If the sum of expected future cash flows (undiscounted) is less than the carrying amount, an impairment loss is recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. Fair value of these assets may be determined by a variety of methodologies, including discounted cash flow models. Employee benefits The Company provides defined benefit plan of severance pay to the 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. Commitments and contingencies The Company accrues for costs relating to litigation claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. In circumstances where the most likely outcome of a contingency can be reasonably estimated, the Company accrues a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than others, the low end of the range is accrued. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous judgments with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. Revenue recognition Effective December 31, 2019, the Company adopted ASU 2014-09, Revenue from Contracts with Customers The Company recognizes revenue from contracts with customers upon transfer of control of promised services to customers at an amount that reflects the consideration it expects to receive in exchange of services. The Company typically receives “callouts” from its customers for specific services at specific customer locations, typically initiated by the receipt of a purchase/service order or similar document from the customer. Customer callouts request that the Company provide a “suite of services” to fulfill the service order, encompassing personnel, use of Company equipment, and supplies required to perform the work. Rates for these services are defined in the Company’s contracts with customers. The term between invoicing and when the payment is due is typically 30-60 days. Revenue is recognized for each performance obligation when the customer obtains control of the service the Company is providing. For most services, control is obtained over time as (1) the customer simultaneously receives and consumes the benefits provided by the Company’s performance as Company employees perform and (2) the Company’s performance creates or enhances an asset that the customer controls. Revenue is recorded based on daily drilling logs, recognized at the standalone selling price of the services provided as reduced proportionately for management’s estimate of volume or early pay discount where applicable. Upon initial recording, revenue is presented as unbilled revenue on the Company’s Consolidated Balance Sheet and subsequently reclassified to Accounts receivable when the final invoice is presented to the customer or accepted in the customer’s electronic invoice processing portal, as applicable. Amounts collected on behalf of third parties in conjunction with revenue, such as taxes, are generally presented gross as the Company is typically the principal in each taxing jurisdiction. Costs of obtaining a customer contract that are incremental and expected to be recovered are recognized as an asset. Costs are subsequently amortized over the term of the contract or less if circumstances indicate that a shorter deferral period better matches these costs with the revenue they generate. Segment information An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses and about which separate financial information is regularly evaluated by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources. Similar operating segments can be aggregated into a single operating segment if the businesses are similar. Management has determined that the Company has two two Stock-based compensation arrangements The Company provides stock-based compensation in the form of restricted stock awards to members of its Board of Directors and employees. Awards are issued pursuant to the terms of the Company’s 2018 Long Term Incentive Plan (“LTIP”) and valued at their grant date fair value. Such awards qualify as participating securities as they have the right to participate in dividends issued on the Company’s ordinary shares, if any. Grants to members of the Company’s Board of Directors are time-based and vest ratably over a 1 3 Functional and presentation currency These consolidated financial statements are presented in U.S. Dollars (“USD”), which is the functional and reporting currency of the Company. The majority of the Company’s sales are denominated in USD. Each subsidiary of NESR determines its own functional currency and items included in the financial statements of each subsidiary are measured using that functional currency. All financial information presented in USD is rounded to the nearest thousand, unless otherwise indicated. Transactions in foreign currencies are translated to the respective functional currency of the Company’s subsidiaries at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate as of the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognized in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated. The assets and liabilities of entities whose functional currency is not the USD are translated into the USD at the exchange rate as of the reporting date. The income and expenses of such entities are translated into the USD using average exchange rates for the reporting period. Exchange differences on foreign currency translations are recorded in other comprehensive income (loss). Derivative financial instruments The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as an embedded derivative. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as other income (expense). Recent accounting pronouncements As an emerging growth company, the Company has elected the option to defer the effective date for adoption of new or revised accounting guidance. This option allows the Company to adopt new guidance on the effective date for entities that are not public business entities. Recently issued accounting standards not yet adopted The U.S. Securities and Exchange Commission (“SEC”) permits qualifying Emerging Growth Companies (“EGC”) to defer the adoption of accounting standards updates until the time when a private company would adopt. The Company continues to qualify as an EGC as of December 31, 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 consolidated 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. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS SAPESCO 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 11.0 6.0 2,237,000 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 (the “Business Combination”) which comprised of $ 11.0 million to be paid at closing, an additional $ 6.0 million to be paid in three equal installments, for total cash consideration of $ 17.0 million, and the issuance of 2,237,000 NESR shares. ● 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 was 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 In the fourth quarter of 2020, the Company reduced the liabilities recorded for the Cash Earn-Out and Additional Earn-Out Shares to $ 2.1 1.4 Financing of Business Combination Consideration for the Business Combination was funded through the following sources and transactions: ● cash and cash equivalents of $ 11.0 ● deferred cash consideration of $ 6.0 ● the issuance of 2,237,000 The following summarizes the consideration to purchase 99.7 SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST December 31, 2020 SAPESCO Value (In US$ 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 Cash Earn-Out 5,301 Additional Earn-Out Shares 6,377 (2) Total estimated earn-out mechanisms 11,678 (2) Total 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 was negotiated in the fourth quarter of 2020 and finalized in the first quarter of 2021 when settled with the sellers for 145,039 shares. These shares were valued for accounting purposes at $ 9.93 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 following table summarizes the final allocation of the purchase price allocation (in US$ thousands): Allocation of consideration SCHEDULE OF PURCHASE PRICE ALLOCATION December 31, 2020 Cash and cash equivalents $ 3,740 Accounts receivable 14,847 Unbilled revenue 6,126 Service inventories 5,641 Current assets Prepaid assets 679 Retention withholdings 279 Other current assets 552 Property, plant and equipment 14,385 Intangible assets 3,340 Deferred tax assets Other assets 200 Total identifiable assets acquired 49,789 Accounts payable 11,984 Accrued expenses 6,613 Current portion of loans and borrowings Current installments of long-term debt 5,400 Short-term borrowings 5,692 Current liabilities Loans and borrowings Deferred tax liabilities Income taxes payable 313 Other taxes payable 3,802 Other current liabilities 2,237 Long-term debt 15,572 Employee benefit liabilities 1,455 Other liabilities 2,237 Non-controlling interests (8 ) Net identifiable liabilities acquired 55,297 Total fair value of net assets acquired (5,508 ) Goodwill 46,157 Total consideration $ 40,649 All employee benefit liabilities relate to end of service benefits (note 12). During the quarter ended December 31, 2020, the Company finalized its valuation of identifiable assets and liabilities. These measurement period changes resulted in an increase of $ 25.2 19.8 0.9 2.2 1.3 34.2 19.6 Intangible assets Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. The final 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 $ 2,900 8 Trademarks and trade names 440 2 Total intangible assets $ 3,340 Goodwill As of December 31, 2020, $ 46.2 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 and/or deductible 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 $ 1.1 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 year-to-date periods ended December 31, 2020 and December 31, 2019, respectively (in US$ thousands): SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS Successor (NESR) Period from Period from January 1 January 1 to December 31, to December 31, 2020 2019 Revenues $ 852,823 $ 720,860 Net income/(loss) 45,320 43,081 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 consolidated company during the periods presented and are not necessarily indicative of 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 consolidated 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 $ 26.5 million and net income of $ 0.8 million are included in the consolidated statement of operations during the 2020 Successor Period from the date of acquisition. NPS/GES Business Combination On June 6, 2018, NESR consummated the NPS/GES Business Combination and related financing transactions, acquiring all of the issued and outstanding equity interests of NPS and GES. Accounting treatment The NPS/GES Business Combination is accounted for under ASC 805. Pursuant to ASC 805, NESR has been determined to be the accounting acquirer. Refer to Note 2, Basis of Presentation, for more information. NPS and GES both constitute businesses, with inputs, processes, and outputs. Accordingly, the acquisition of NPS and GES both constitute the acquisition of a business for purposes of ASC 805 and due to the change in control of each of NPS and GES was accounted for using the acquisition method. NESR recorded the fair value of assets acquired and liabilities assumed from NPS and GES. The following table summarizes the final allocation of the purchase price (in thousands): Allocation of consideration SCHEDULE OF PURCHASE PRICE ALLOCATION December 31, 2020 December 31, 2020 NPS GES (In thousands) Cash and cash equivalents $ 31,656 $ 5,206 Accounts receivable 55,392 18,013 Unbilled revenue 41,378 45,343 Inventories 33,652 31,092 Current assets 19,463 8,719 Property, plant and equipment 216,094 91,444 Intangible assets 94,000 53,000 Deferred tax assets - 554 Other assets 7,457 1,254 Total identifiable assets acquired 499,092 254,625 Accounts payable 26,457 31,113 Accrued expenses 28,685 25,388 Current portion of loans and borrowings - 16,368 Short-term borrowings 55,836 9,000 Current liabilities 3,665 15,449 Loans and borrowings 149,399 25,098 Deferred tax liabilities 24,098 8,053 Other liabilities 22,363 9,910 Non-controlling interest (2,841 ) 837 Net identifiable liabilities acquired 307,662 141,216 Total fair value of net assets acquired 191,430 113,409 Goodwill 399,325 175,439 Total gross consideration $ 590,755 $ 288,848 Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. The final allocation to intangible assets is as follows (in thousands): Intangible assets SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS Fair Value NPS GES Total Useful Life (In thousands) Customer contracts $ 77,000 $ 44,500 $ 121,500 10 Trademarks and trade names 17,000 8,500 25,500 8 Total intangible assets $ 94,000 $ 53,000 $ 147,000 Unaudited pro-forma information The following table summarizes the supplemental consolidated results of the Company on an unaudited pro-forma basis, as if the NPS/GES Business Combination had been consummated on January 1, 2017 (in thousands): SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS Period from Period from to December 31, to December 31, 2018 2017 Revenues $ 552,520 $ 457,888 Net income $ 52,667 $ 36,418 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 results of operations in future periods. The pro-forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other non-recurring charges incurred in connection with the NPS/GES Business Combination are included in the earliest period presented. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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 fulfil a customer purchase/service order, encompassing personnel, use of Company equipment, and supplies required to perform the services. 98% 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 SERVICE TYPE Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 1-Jan to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Revenue by Phase in Well’s Lifecycle: Production Services $ 556,121 $ 405,654 $ 215,791 $ 112,295 Drilling and Evaluation Services 278,025 252,731 132,799 24,732 Total revenue by phase in well’s life cycle $ 834,146 $ 658,385 $ 348,590 $ 137,027 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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 December 31, December 31, 2020 2019 Trade receivables $ 118,557 $ 100,642 Less: allowance for doubtful accounts (1,722 ) (1,843 ) Total $ 116,835 $ 98,799 Trade receivables relate to the sale of services, for which credit is extended based on the Company’s evaluation of the customer’s creditworthiness. The gross contractual amounts of trade receivables at December 31, 2020 and December 31, 2019 were $ 118.6 100.6 SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to to to to June 6, 2020 2019 2018 2018 Allowance for doubtful accounts at beginning of period (1,843 ) (693 ) - (4,106 ) Add: additional allowance for the year $ (261 ) $ (1,771 ) $ (693 ) $ - Less: bad debt expense 382 621 - - Allowance for doubtful accounts at end of period $ (1,722 ) $ (1,843 ) $ (693 ) $ (4,106 ) |
SERVICE INVENTORIES
SERVICE INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
SERVICE INVENTORIES | SERVICE INVENTORIES The following table summarizes the service inventories for the periods as set forth below (in thousands): SCHEDULE OF SERVICE INVENTORIES December 31, December 31, 2020 2019 Spare parts $ 55,845 $ 39,428 Chemicals 24,527 22,852 Consumables 16,503 18,338 Total 96,875 80,618 Less: allowance for obsolete and slow-moving inventories (2,612 ) (1,777 ) Total $ 94,263 $ 78,841 |
PROPERTY, PLANT, & EQUIPMENT
PROPERTY, PLANT, & EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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) December 31, December 31, Buildings and leasehold improvements 5 25 $ 31,827 $ 36,853 Drilling rigs, plant and equipment 3 15 534,964 411,984 Furniture and fixtures 5 2,282 3,720 Office equipment and tools 3 10 39,174 35,991 Vehicles and cranes 5 8 7,429 12,292 Less: Accumulated depreciation (193,261 ) (104,689 ) Land 5,104 5,104 Capital work in progress 10,224 18,052 Total $ 437,743 $ 419,307 The Company recorded depreciation expense of $ 105.0 72.2 33.0 17.3 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
GOODWILL AND INTANGIBLE ASSETS | 9. GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill of the Company between December 31, 2019 and December 31, 2020 are as follows (in 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 23,811 22,346 46,157 Balance as of December 31, 2020 $ 443,457 177,464 620,921 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 WEIGHTED AVERAGE AMORTIZATION PERIOD FOR INTANGIBLE ASSETS Amortization Customer contracts 10.0 Trademarks and trade names 7.9 Total intangible assets 9.6 The details of the Company’s intangible assets subject to amortization are set forth below (in thousands): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31, 2020 December 31, 2019 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer contracts $ 124,400 $ (31,685 ) $ 92,715 $ 121,500 $ (19,239 ) $ 102,261 Trademarks and trade names 25,940 (8,279 ) 17,661 25,500 (5,047 ) 20,453 Total intangible assets $ 150,340 $ (39,964 ) $ 110,376 $ 147,000 $ (24,286 ) $ 122,714 The aggregate amortization expense for each of the five years subsequent to December 31, 2020 is within the range of $ 15.7 15.9 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
DEBT | DEBT Long-term debt The Company’s long-term debt obligations consist of the following (in thousands): SCHEDULE OF LONG TERM DEBT OBLIGATIONS December 31, December 31, Secured Term Loan $ 285,000 $ 300,000 Secured Revolving Credit Facility 65,000 50,000 CIB Long-Term Debt 10,000 - Less: unamortized debt issuance costs (3,886 ) (4,436 ) Total loans and borrowings 356,114 345,564 Less: current portion of long-term debt (47,500 ) (15,000 ) Long-term debt, net of unamortized debt issuance costs and excluding current installments $ 308,614 $ 330,564 Secured Facilities Agreement On May 5, 2019, the Company entered into a $ 450.0 35.0 40.0 485.0 525.0 501.3 The $501.3 million Secured Facilities Agreement consists of a $ 285.0 May 6, 2025 65.0 May 6, 2023 151.3 2.4% 2.7% 2.6% 4.3% 285.0 300.0 65.0 50.0 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% The Company is permitted to make any prepayment under this RCF in multiples of $ 5.0 0.0 15.0 The Secured Facilities Agreement also includes a working capital facility of $ 151.3 160.0 letters of guarantee and letters of credit and refinancing letters of credit into short-term debt 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. 129.4 134.2 21.9 25.8 The Company has also retained legacy bilateral working capital facilities from HSBC totaling $ 24.7 30.4 10.3 16.4 14.3 13.9 0.1 18.5 24.1 6.2 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 available under both the legacy arrangement and Secured Facilities Agreement 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. CIB Long-Term Debt As part of the SAPESCO transaction, the Company assumed a $ 21.0 Under the terms of its arrangement with CIB, the Company repaid $ 11.0 10.0 August 15, 2021 2% 2.3% Short-term debt The Company’s short-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF SHORT TERM DEBT OBLIGATIONS December 31, December 31, CIB Short-Term Debt $ 2,125 $ - ABK Short-Term Debt 2,252 - Other short-term borrowings from working capital facilities 37,983 37,963 Short-term debt, excluding current installments of long-term debt $ 42,360 $ 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 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 December 31, 2020, the CIB Short-Term Debt resulted in an interest rate of 2.3% 10.0% 1.3 2.0 9.8 8.3 0.2 0.0 0.2 5.5 ABK Short-Term Debt As part of the SAPESCO transaction, the Company assumed a $ 3.1 3.0 0.2 The ABK Short-Term Debt accrues interest at 1.65% per annum over Corridor Offer Rate 11% 2.3 0.2 0.8 0.0 Other debt information Scheduled principal payments of long-term debt for periods subsequent to December 31, 2020 are as follows (in thousands): SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT - 2021 $ 47,500 2022 45,000 2023 110,000 2024 45,000 2025 112,500 Thereafter - Total $ 360,000 |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
FAIR VALUE ACCOUNTING | FAIR VALUE ACCOUNTING The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, contingent consideration assumed in the SAPESCO transaction (Note 4), loans and borrowings and capital lease obligations. The fair value of the Company’s financial instruments approximates the carrying amounts represented in the accompanying 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. The purchase price allocation for the SAPESCO acquisition in 2020 included $ 46.2 Level 3 measurements for the Cash Earn-Out and Additional Earn-Out Shares were fair valued at $ 11.7 The Cash Earn-Out was determined using a discounted cash flow approach within a scenario analysis and had an undiscounted range of outcomes between $0 and $5.4 million. The Additional Earn-Out Shares were valued using a Monte Carlo simulation and had an undiscounted range of outcomes between $0 and $6.4 million. 2.1 145,039 9.93 0.7 |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
EMPLOYEE BENEFITS | EMPLOYEE BENEFITS Defined benefit plans The following tables set out the funded status of the end-of-service indemnities employees receive under one of the five benefit structures the Company and its subsidiaries offer to its employees and the amounts recognized in the Company’s financial statements as of December 31, 2020 and 2019 (in thousands): SCHEDULE OF FUNDED STATUS OF END-OF-SERVICE INDEMNITIES EMPLOYEES RECEIVE UNDER ONE OF FIVE BENEFIT STRUCTURES December 31, 2020 December 31, 2019 Change in benefit obligations Benefit obligations at the beginning of the year $ 19,320 $ 16,122 Actuarial (gain) / loss 2,243 2,031 Service cost 3,487 2,680 Interest cost 583 655 Benefits paid (2,007 ) (2,168 ) Benefit obligation acquired in business combination 1,315 - Benefit obligations at the end of the year 24,941 19,320 Current benefit obligation 3,426 2,575 Non-current benefit obligation 21,515 16,745 Benefit obligation at the end of the year 24,941 19,320 Change in plan assets Fair value of plan assets at the beginning of the year - - Employer contributions 2,007 2,168 Benefits paid (2,007 ) (2,168 ) Plan assets at the end of the year - - Unfunded status $ 24,941 $ 19,320 Net cost for the 2020 Successor Period, 2019 Successor Period, 2018 Successor Period, and 2018 Predecessor Period comprises the following components (in thousands): SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Service cost $ 3,487 $ 2,680 $ 1,412 $ 866 Interest cost 583 655 282 168 Actuarial (gain)/loss 2,243 2,031 896 375 Other - - (416 ) - Net cost $ 6,313 $ 5,366 $ 2,174 $ 1,409 The weighted-average assumptions used to determine benefit obligations as of December 31, 2020 and 2019 are set out below: SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST December 31, 2020 December 31, 2019 Discount rate 1.75 % 2.75 % Rate of increase in compensation levels: 3.00 % 3.00 % The discount rate has been selected by the Company in consultation with its third-party actuarial valuation specialist. The primary reference point in identifying the rate was the yield on high-quality U.S. corporate bonds per the FTSE Above Median Double-A Curve (as of November 30, 2020) of duration broadly consistent with the benefit obligations. The rate has been rounded to the nearest 0.25% The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2020 and 2019 are set out below: December 31, 2020 December 31, 2019 Discount rate 2.75 % 3.75 % Rate of increase in compensation levels: 3.00 % 3.00 % The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The following illustrates the sensitivity to changes in discount rate, holding all other assumptions constant, for in the Company’s benefit obligations (in thousands): SCHEDULE OF BENEFIT OBLIGATIONS CHANGE IN ASSUMPTION Change in assumption: Benefit obligation at the end of the year 25 basis point decrease in discount rate +$429 25 basis point increase in discount rate -$377 The Company has no regulatory requirement to fund these benefits in advance and intends to pay benefits directly as they fall due. As of December 31, 2020, the Company has no plan assets to invest. Accumulated benefit obligation was $ 13.9 16.1 The following reflect expected future benefit payments (in thousands): SCHEDULE OF EXPECTED FUTURE BENEFIT PAYMENTS Year ending December 31, 2020 2021 $ 3,902 2022 $ 3,871 2023 $ 3,688 2024 $ 3,793 2025 $ 3,519 2026 through 2030 $ 16,704 The expected benefits are based on the same assumptions used to measure the Company’s benefit obligations as of December 31, 2020. Defined contribution plans 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 consolidated statement of operations as incurred. Total contributions for the 2020 Successor Period and 2019 Successor Period were $ 3.3 3.1 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION 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 Year-to-date period from January 1 January 1 June 7 Number of Restricted Shares Weighted Average Value per Share Number of Restricted Shares Weighted Average Value per Share Number of Restricted Shares Weighted Average Value per Share Unvested at Beginning of Period 1,502,690 $ 10.25 725,200 $ 10.94 - $ - Granted 1,194,905 $ 5.30 1,184,000 $ 9.86 725,200 $ 10.94 Vested and issued (590,264 ) $ 10.18 (290,510 ) $ 10.27 - $ - Forfeited (68,669 ) $ 9.55 (116,000 ) $ 10.59 - $ - Unvested at End of Period 2,038,662 $ 7.38 1,502,690 $ 10.25 725,200 $ 10.94 At December 31, 2020 and 2019, we had unrecognized compensation expense of $ 9.7 11.7 1.6 2.0 SCHEDULE OF STOCK-BASED COMPENSATION Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, 2020 2019 2018 Cost of Services $ 3,521 $ 2,392 $ 517 Selling, general and administrative expenses 4,311 3,262 517 Net cost $ 7,832 $ 5,654 $ 1,034 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Capital expenditure commitments The Company was committed to incur capital expenditures of $ 16.1 22.1 Capital lease commitments The Company leases certain hydraulic fracturing equipment under capital leases that expire between 2021 and 2023 . The leases have terms ranging from 24 - 36 months and imputed interest rates between 4.3% - 6.5% per annum. As of December 31, 2020, and December 31, 2019, the total recorded liability for these capital leases was $ 25.5 million and $ 33.7 million, respectively, with $ 22.3 million and $ 20.5 million, respectively, classified as a short-term obligation within Other current liabilities account and $ 3.2 million and $ 13.1 million, respectively, classified as long-term obligations within Other liabilities account in the Consolidated Balance Sheets. Total interest expense incurred on these capital leases was $ 1.5 million, $ 0.6 million, $ 0.0 (zero) million, and $ 0.0 (zero) million during the 2020 Successor Period, 2019 Successor Period, 2018 Successor Period, and 2018 Predecessor Period, respectively, in the Consolidated Statement of Operations. Depreciation of assets held under these capital leases is included within depreciation expense. The Company also leases certain equipment in Egypt under capital leases that expire between 2020 and 2024 3.0 0.0 0.7 0.0 2.3 0.0 0.2 0.0 0.0 0.0 Future minimum lease payments and future interest payments under non-cancellable equipment capital leases at December 31, 2020 are payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE CAPITAL LEASES As of December 31, 2020 Future Minimum Lease Payments Future Interest Payments Total Payments 2021 $ 22,500 $ 1,524 $ 24,024 2022 3,236 453 3,689 2023 1,810 174 1,984 2024 438 21 459 2025 - - - Thereafter - - - Total $ 27,984 $ 2,172 $ 30,156 Operating lease commitments Future minimum lease commitments under non-cancellable operating leases with initial or remaining terms of one year or more at December 31, 2020 are payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES December 31, 2021 $ 21,665 2022 2,814 2023 1,998 2024 2,003 2025 1,355 Thereafter 3,413 Total $ 33,248 The Company recorded rental expense $ 144.1 114.9 57.8 19.5 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 December 31, 2020, and December 31, 2019, were $ 15.2 6.0 11.4 0.6 3.2 0.0 3.0 3.0 The Company had outstanding letters of credit amounting to $ 16.9 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 $ 101.5 99.1 3.4 5.8 As of December 31, 2020, and December 31, 2019, the Company had liabilities of $ 4.0 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 | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
EQUITY | 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 December 31, 2020, there were 87,777,553 ordinary shares and 35,540,380 outstanding. Each warrant entitles the registered holder to purchase one-half of one ordinary share at a price of $ 5.75 per half share at any time commencing on July 6, 2018 (30 days after the completion of the NPS/GES Business Combination). The warrants must be exercised for whole ordinary shares. The warrants expire on June 6, 2023 ( five years after the completion of the NPS/GES Business Combination). For the 12,618,680 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 December 31, 2020, and 2019, there were no Predecessor convertible shares As part of NPS’s acquisition of NPS Bahrain in 2014, NPS issued a total of 37,000,000 1 Under the terms of the convertible shares, in the event any indemnity claims were settled by the selling shareholders by providing cash to NPS, an equivalent amount of convertible shares would be converted into NPS common shares. However, in the event the indemnity claims were not settled by the selling shareholders, an equivalent amount of convertible shares would be cancelled by NPS. These convertible shares are equity classified because the conversion to equity shares or the cancellation of the same is at the option of NPS. At the end of the June 2019, unless all indemnity claims were settled to the satisfaction of NPS, half of the convertible shares were to convert into NPS common shares and the balance on extinguishment of contingencies. The convertible shares were cancelled at closing of the NPS/GES Business Combination. Prior to the NPS/GES Business Combination, the Predecessor (NPS) paid dividends per share of $ 0.13 0.05 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
EARNINGS PER SHARE | EARNINGS PER SHARE 2020, 2019 and 2018 Successor Periods 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 RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING Date Transaction Detail Change in Shares Period from January 1 to December 31, 2020 Weighted Average Ordinary Shares Outstanding December 31, 2019 Beginning Balance 87,187,289 March 18, 2020 Restricted stock vesting 307,932 242,307 June 1, 2020 NESR ordinary share consideration to be issued in SAPESCO transaction (Note 4) (1) 2,237,000 1,307,973 August 14, 2020 Restricted stock vesting 282,332 107,224 December 31, 2020 Contingently issuable shares to be issued in SAPESCO transaction (Note 4) (2) 301,830 825 December 31, 2020 Ending Balance 88,845,618 (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 301,830 Date Transaction Detail Change in Shares Period from January 1 to December 31, 2019 Weighted Average Ordinary Shares Outstanding December 31, 2018 Beginning Balance 85,562,769 January 9, 2019 Other 33,796 33,055 February 19, 2019 NPS equity stock earn-out (1) 1,300,214 1,300,214 August 14, 2019 Restricted stock vesting 250,310 96,009 November 12, 2019 Restricted stock vesting 40,200 5,507 December 31, 2019 Ending Balance 86,997,554 (1) The NPS equity stock earn-out has been included in the computation of basic earnings per share (“EPS”) as the conditions for issuance were satisfied as of December 31, 2018. Date Transaction Detail Change in Shares Period from June 7 to December 31, 2018 Weighted Average Ordinary Shares Outstanding June 7, 2018 Beginning Balance 0 11,730,425 June 7, 2018 Backstop shares 4,829,375 4,829,375 June 7, 2018 Underwriter shares 307,465 307,465 June 7, 2018 Shares issued to NPS/GES 53,690,315 53,690,315 June 7, 2018 Shares transferred to perm equity 15,005,189 15,005,189 December 31, 2018 NPS equity stock earn-out (1) 1,300,214 6,251 December 31, 2018 Ending Balance 85,569,020 (1) The NPS equity stock earn-out has been included in the computation of basic earnings per share (“EPS”) as the conditions for issuance were satisfied as of December 31, 2018. Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, Shares for Use in Allocation of Participating Earnings: 2020 2019 2018 Weighted average ordinary shares outstanding $ 88,845,618 $ 86,997,554 $ 85,569,020 Non-vested, participating restricted shares 1,094,156 1,419,361 725,200 Shares for use in allocation of participating earnings $ 89,939,774 $ 88,416,915 $ 86,294,220 Basic earnings per share (EPS): SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, 2020 2019 2018 Net income $ 50,087 $ 39,364 $ 35,143 Less dividends to: Ordinary Shares - - - Non-vested participating shares - - - Total Undistributed Earnings $ 50,087 $ 39,364 $ 35,143 Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, 2020 2019 2018 Allocation of undistributed earnings to Ordinary Shares $ 49,478 $ 38,732 $ 34,834 Allocation of undistributed earnings to Non-vested Shares 609 632 309 Total Undistributed Earnings $ 50,087 $ 39,364 $ 35,143 Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, Ordinary Shares: 2020 2019 2018 Distributed Earnings $ - $ - $ - Undistributed Earnings 0.56 0.45 0.41 Total $ 0.56 $ 0.45 $ 0.41 Diluted earnings per share (EPS): Period from Period from Period from January 1 to December 31, 2020 January 1 to December 31, 2019 June 7 to December 31, 2018 Ordinary shares Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS As reported — basic $ 49,478 88,845,618 $ 0.56 $ 38,732 86,997,554 $ 0.45 $ 34,834 85,569,020 $ 0.41 Add-back: Undistributed earnings allocated to non-vested shareholders 609 - 632 - 309 - Equity stock earn-outs - 145,039 - - - - 1,293,963 (0.01 ) 35,540,380 5.75 (1) - - - - - - Less: Undistributed earnings reallocated to non-vested shareholders (609 ) - (632 ) - (305 ) - Diluted EPS — Ordinary shares $ 49,478 88,990,657 $ 0.56 $ 38,732 86,997,554 $ 0.45 $ 34,838 86,862,983 $ 0.40 (1) Non-participating warrants that could be converted into as many as 17,770,190 December 31, 1,119,905 0 0 2018 Predecessor Periods The following table sets forth the calculation of basic and diluted earnings per common share for the period presented: Period from January 1 to June 6, 2018 Weighted average basic common shares outstanding 348,524,566 Dilutive potential common shares 21,475,434 Weighted average dilutive common shares outstanding 370,000,000 Basic: Net Income $ 7,617 Less: Earnings allocated to participating securities (192 ) Net income available to basic common shares $ 7,425 Basic earnings per common share $ 0.02 Diluted: Net Income $ 7,617 Less: Earnings allocated to participating securities (181 ) Net income available to diluted common shares $ 7,436 Diluted earnings per common share $ 0.02 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
INCOME TAXES | INCOME TAXES The Company operates in over 15 countries where statutory rates generally vary from 10 35 SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Domestic $ (3,163 ) $ (1,675 ) $ (20,722 ) $ - Foreign 63,955 54,050 65,133 9,078 Income Before Income Tax $ 60,792 $ 52,375 $ 44,411 $ 9,078 Income Tax Expense The components of the income tax expense (benefit), all of which is foreign, are as follows (in thousands): SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Current tax expense $ 15,322 $ 17,006 $ 11,456 $ 2,342 Deferred tax expense (benefit) (4,617 ) (3,935 ) (2,025 ) - Income tax expense $ 10,705 $ 13,071 $ 9,431 $ 2,342 Deferred taxes have been recognized for temporary differences and carryforwards that will have effects on income taxes payable or receivables in future years. The components of net deferred tax liabilities and assets are as follows (in thousands): SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) December 31, 2020 December 31, 2019 Deferred Tax Assets Property, plant and equipment $ 3,819 $ 1,678 Net operating loss carryforward 7,263 6,932 Total deferred tax assets 11,082 8,610 Less: valuation allowance (6,904 ) (4,886 ) Deferred tax assets, net of valuation allowance $ 4,178 $ 3,724 Deferred Tax Liabilities Property, plant and equipment $ (3,600 ) $ (4,911 ) Intangible assets (21,648 ) (25,030 ) Total deferred tax liabilities (25,248 ) (29,941 ) Net deferred tax liability $ (21,070 ) $ (26,217 ) The Company has $ 39.9 million of operating loss carryforwards that expire between 2021 and 2025. Deferred tax assets are reduced by valuation allowances. As of December 31, 2020, and 2019, valuation allowances of $ 6.9 million and $ 4.9 million relate to deferred tax assets for net operating loss carryforwards. Changes in the Company’s estimates and assumptions used to determine the valuation allowance, including any changes in applicable tax laws or tax rates, may impact the Company’s ability to recognize the underlying deferred tax assets and could require future adjustments to the valuation allowances. The $ 2.0 million and $ 4.8 3.7 1.7 2.4 million and $ 1.7 million, respectively. Deferred tax liabilities on Property, plant and equipment of $ 3.6 4.9 3.6 3.6 The Company generally does not recognize deferred tax liabilities related to undistributed earnings of foreign subsidiaries because such earnings either would not be taxable when remitted or they are indefinitely reinvested. This position may change if the Company decides to distribute the earnings from its subsidiaries, which are subject to withholding taxes, or if there are any unfavorable changes in the tax laws in this regard. Accordingly, a determination of the amount of unrecognized deferred tax liability on such undistributed earnings is not practicable. Current tax expense will be incurred if/when the Company distributes earnings from its subsidiaries which are subject to withholding taxes. Income Tax Rate Reconciliation The difference between the reported amount of income tax expense and the amount that would result from applying in both the British Virgin Islands (Successor) as well as the United Arab Emirates (Predecessor) statutory rates are shown in the table below (in thousands). In the British Virgin Islands, the statutory rate is effectively 0% as income tax is not applied on extra territorial activity. For the United Arab Emirates, the statutory rate on our operations is also 0%. SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Income tax at statutory rate (BVI and UAE 0% $ - $ - $ - $ - Foreign tax rate differential 10,782 12,848 8,328 2,147 Tax effect of adjustments to prior years current tax expense 1,348 (2,054 ) - 195 Tax effect of adjustments to prior years deferred taxes (2,234 ) - - - Reversal of tax liability on expiration of limitation period’ (1,206 ) - - - Effect of changes in valuation allowances 2,018 - - - Unrecognized tax benefits (3 ) 2,476 1,574 - Other - (199 ) (471 ) - Income tax expense $ 10,705 $ 13,071 $ 9,431 $ 2,342 The foreign tax rate differential relates to differences between the income tax rates in effect in the foreign countries in which the Company operates, which can vary significantly, and the Company’s statutory tax rate of 0 0.1 0.9 Unrecognized Tax Benefits The Company records estimated accrued interest and penalties related to an underpayment of income taxes in income tax expense. As of December 31, 2020, and 2019, the Company had $ 15.6 million and $ 13.7 million, respectively, of unrecognized tax benefits, excluding estimated accrued interest and penalties of $ 1.7 million and $ 1.8 million, respectively, which are included in Other Long-Term Liabilities in the Consolidated Balance Sheet. There are no timing differences or other items that have indirect effects included in the unrecognized tax benefits and as such all $ 15.6 million of the net unrecognized tax benefits as of December 31, 2020 would affect the effective tax rate if recognized. A summary of activity related to the net unrecognized tax benefits is as follows: SCHEDULE OF UNRECOGNIZED TAX BENEFITS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Balance at beginning of period $ 13,739 $ 8,341 $ - $ 4,837 Additions from tax positions adjusted in purchase accounting - 1,072 6,767 - Additions from tax positions related to the current period 4,599 1,376 1,324 - Additions from tax positions related to prior periods 1,503 4,700 250 - Reductions from tax positions related to earlier periods (1,880 ) (873 ) - - Reductions on account of statute expiry (1,206 ) Settlement of tax positions (1,156 ) (877 ) - - Balance at end of period $ 15,599 $ 13,739 $ 8,341 $ 4,837 The Company does not anticipate the amount of the unrecognized tax benefits will change significantly over the next twelve months. Unrecognized tax benefits may change from quarter-to-quarter based on various factors, including, but not limited to, favorable or unfavorable resolution of tax audits or disputes, expiration of relevant statutes of limitations, changes in tax laws or changes to the interpretation of existing tax laws due to new legislative guidance or court rulings, or new tax positions taken on recently filed tax returns. Although the Company has recorded unrecognized tax benefits for all tax positions which, in management’s judgment, are not more likely than not to be sustained if challenged by the relevant tax authorities in the future, the Company cannot provide assurance as to the final tax liability related to its tax positions as it is not possible to predict with certainty the ultimate outcome of any related tax disputes. Thus, it is reasonably possible that the ultimate tax liabilities related to such tax positions could substantially exceed recorded unrecognized tax benefits related to such tax positions, resulting in a material adverse effect on the Company’s earnings and cash flows from operations. The Company’s tax returns for year 2015 and subsequent years for all major jurisdictions, i.e. Saudi Arabia, Oman, Qatar, Iraq, and Algeria, remain subject to examination by tax authorities. The Company is currently subject to or expects to be subject to income tax examinations in various jurisdictions where the Company operates or has previously operated. If any tax authority successfully challenges the Company’s tax positions, including, but not limited to, tax positions related to the tax consequences of various intercompany transactions, the taxable presence of the Company’s subsidiaries in a given jurisdiction, the basis of taxation in a given jurisdiction (such as deemed profits versus net-filing basis), or the applicability of relevant double tax treaty benefits to certain transactions; or should the Company otherwise lose a material tax dispute in any jurisdiction, the Company’s income tax liability could increase substantially and the Company’s earnings and cash flows from operations could be materially adversely affected. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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 $ 0.2 million, $ 0.2 million, and $ 0.1 million in the 2020 Successor Period, 2019 Successor Period and 2018 Successor Period, respectively, in the Consolidated Statement of Operations. The outstanding balance of rental income receivables from Mubbadrah was $ 0.2 million and $ 0.6 million at December 31, 2020 and 2019, respectively. The outstanding balances from the Mubbadrah group entities were a payable $ 0.3 0.5 14.68 % of the Company. 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 amounts of $ 0.1 million, $ 0.1 million, and $ 0.5 million for the 2020 Successor Period, 2019 Successor Period, and 2018 Successor Period, respectively. As of December 31, 2020, and 2019, $ 0.6 0.4 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 $ 1.0 0.8 0 0.3 0.4 Nine Energy Service, Inc. (“Nine”) The Company purchased $ 1.1 6.8 3.7 6.8 Basin Holdings US LLC (“Basin”) The Company purchased $ 2.1 2.0 0 0.1 |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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 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. Revenue from operations SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Reportable Segment: Production Services $ 556,121 $ 405,654 $ 215,791 $ 112,295 Drilling and Evaluation Services 278,025 252,731 132,799 24,732 Total revenue $ 834,146 $ 658,385 $ 348,590 $ 137,027 Long-lived assets December 31, 2020 December 31, 2019 Reportable Segment: Production Services $ 303,625 $ 290,765 Drilling and Evaluation Services 124,062 115,241 Total Reportable Segments 427,687 406,006 Unallocated assets 10,056 13,301 Total long-lived assets $ 437,743 $ 419,307 Operating income Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Reportable Segment: Production Services $ 74,472 $ 79,571 $ 59,007 $ 25,459 Drilling and Evaluation Services 32,391 29,031 24,931 893 Total Reportable Segments 106,863 108,602 83,938 26,352 Unallocated expenses (39,331 ) ( 36,788 ) (30,585 ) (13,546 ) Total operating income $ 67,532 $ 71,814 $ 53,353 $ 12,806 The Production Services segment record depreciation and amortization expense of $ 79.2 53.5 29.7 23.2 Revenue by geographic area SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Geographic area: MENA $ 823,247 $ 647,434 $ 345,047 $ 134,479 Rest of World 10,899 10,951 3,543 2,548 Total revenue $ 834,146 $ 658,385 $ 348,590 $ 137,027 Long-lived assets by geographic area December 31, 2020 December 31, 2019 Geographic area: MENA $ 429,283 $ 409,139 Rest of World 8,460 10,168 Total long-lived assets $ 437,743 $ 419,307 Significant clients Revenues from four customers of the Successor (NESR) individually accounted for 57 12 4 3 45 16 8 6 42 17 10 5 49 0 16 9 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
Consolidation | Consolidation The Company consolidates entities in which the Company has a majority voting interest and entities that meet the criteria for variable interest entities for which the Company is deemed to be the primary beneficiary for accounting purposes. The Company eliminates intercompany transactions and accounts in consolidation. The Company applies the equity method of accounting for an investment in an entity if it has the ability to exercise significant influence over the entity that (a) does not meet the variable interest entity criteria or (b) meets the variable interest entity criteria, but for which the Company is not deemed to be the primary beneficiary. The Company applies the cost method of accounting for an investment in an entity if it does not have the ability to exercise significant influence over the unconsolidated entity. The Company separately presents within equity on the consolidated balance sheets the ownership interests attributable to parties with non-controlling interests in the Company’s consolidated subsidiaries, and separately presents net income attributable to such parties on the consolidated statements of operations. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. |
Supplemental cash flow information | Supplemental cash flow information Non-cash transactions for the 2020 Successor period: â—Ź Purchases of property, plant, and equipment in Accounts payable, Accrued expenses and Short-term borrowings at December 31, 2020 of $ 16.6 0 20.4 â—Ź Capital lease obligations of $ 22.5 5.5 â—Ź Purchases of property, plant, and equipment using seller-provided installment financing of $ 11.4 0.6 3.2 â—Ź Obligations of $ 2.0 13.5 Non-cash transactions for the 2019 Successor period: â—Ź Purchases of property, plant, and equipment in accounts payable, accrued expenses and short-term borrowings at December 31, 2019 of $ 21.7 3.0 29.3 â—Ź Non-cash additions to capital lease obligations of $ 33.7 â—Ź Purchases of property, plant, and equipment using seller-provided installment financing of $ 3.0 3.0 Non-cash transactions for the 2018 Successor period: â—Ź In connection the NPS/GES Business Combination in 2018, the Company issued ordinary shares valued at $ 544.4 â—Ź In connection with the Hana Loan, which is described in Note 10, Debt, the Company paid a $ 0.6 2.1 â—Ź Purchases of property, plant, and equipment in accounts payable and short-term debt at December 31, 2018 of $ 20.8 14.7 |
Income taxes | Income taxes The Company applies an asset and liability approach to financial accounting and reporting for income taxes. Deferred tax assets and liabilities are computed for differences between the financial statement carrying amount and the tax basis of assets and liabilities that will result in future deductible or taxable amounts and for carryforwards, based on enacted tax laws and rates applicable to the periods in which the deductible or taxable temporary differences are expected to affect taxable income. Valuation allowances are established to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company applies a recognition threshold and measurement attribute for evaluating tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position, based solely on the technical merits, must be more-likely-than-not to be sustained upon examination by taxing authorities. Recognized tax positions are measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. The Subsidiaries operate in multiple tax jurisdictions in the Middle East, North Africa and Asia. The Company has provided for income taxes based on enacted tax laws and tax rates in effect in the countries where the Company operates and earns income. The income taxes in these jurisdictions vary substantially. The Company engages in transactions in which the income tax consequences may be subject to uncertainty and examination by the varying taxing authorities. Significant judgment is required by the Company’s management in assessing and estimating the income tax consequences of these transactions. While the Company prepares tax returns based on interpretations of tax laws and regulations, in the normal course of business, the income tax returns may be subject to examination by the various taxing authorities. Such examinations may result in future assessments of additional income tax, interest and penalties. NESR classifies interest and penalties relating to an underpayment of income taxes within income tax expense in the Consolidated Statement of Operations. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. |
Net income per ordinary share | Net income per ordinary share Basic income per ordinary share was computed by dividing basic net income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding. Diluted income per ordinary share was computed by dividing diluted net income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding plus dilutive potential ordinary shares, if any. Dilutive potential ordinary shares include outstanding warrants, restricted stock awards, and/or other contracts to issue ordinary stock and are determined by applying the treasury stock method or if-converted method, as applicable, if dilutive. |
Concentration of credit risk | Concentration of credit risk The Company’s assets that are exposed to concentrations of credit risk consist primarily of cash, accounts receivable from customers, and unbilled revenue from customers. The Company places its cash with financial institutions and limits the amount of credit exposure with any one of them. The Company regularly evaluates the creditworthiness of the issuers in which it invests. The Company minimizes this credit risk by entering into transactions with high-quality counterparties, limiting the exposure to each counterparty and monitoring the financial condition of its counterparties. |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, and loans and borrowings. The fair value of the Company’s financial instruments under ASC Topic 820, “ Fair Value Measurements and Disclosures Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Unbilled revenue, accounts receivable and allowance for doubtful accounts | Unbilled revenue, accounts receivable and allowance for doubtful accounts Trade accounts receivable are recorded at the invoiced amount. Accounts receivable are reclassified from unbilled revenue when presented to the customer or accepted in the customer’s electronic invoice processing portal, if applicable. No interest is charged on past-due balances. The Company grants credit to customers based upon an evaluation of each customer’s financial condition. The Company periodically monitors the payment history and ongoing creditworthiness of customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowances management considers historical losses adjusted to take into account current market conditions and the customer’s financial conditions, the amount of receivable in dispute, current receivables ageing and current payment patterns. Significant accounts receivable balances and balances that have been outstanding greater than 90 days are reviewed for collectability. Account balances, when determined to be uncollectable, are charged against the allowance. |
Service inventories | Service inventories The Company’s service inventory consists of spare parts, chemicals and raw materials to support ongoing operations which are held for the purpose of service contracts and are measured at the lower of cost or net realizable value. The cost is based on the weighted average cost principle and includes expenditures incurred in acquiring the service inventories. Net realizable value is the estimated selling price less estimated costs of completion and selling expenses incurred in the ordinary course of business. The Company determines reserves for service inventory based on historical usage of inventory on-hand, assumptions about future demand and market conditions and estimates about potential alternative uses, which are limited. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment, inclusive of equipment under capital lease, is stated at cost less accumulated depreciation. The cost of ordinary maintenance and repair is charged to operating expense, while replacement of critical components and major improvements that extend the life of the related asset are capitalized. Capital work in progress mainly represents costs incurred on drilling rigs and equipment that are in transit at the reporting date. No depreciation is charged to capital work in progress. Depreciation of property, plant and equipment is calculated using the straight-line method over the asset’s estimated useful life as follows: SCHEDULE OF ESTIMATED USEFUL LIFE PROPERTY, PLANT AND EQUIPMENT Buildings and leasehold improvements 5 25 Drilling rigs, plant and equipment 3 15 Furniture and fixtures 5 Office equipment and tools 3 10 Vehicles and cranes 5 8 Equipment held under capital leases are generally amortized on a straight-line basis over the shorter of the estimated useful life of the underlying asset and the term of the lease. Property, plant and equipment is reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable. Events or circumstances that may indicate include, but are not limited to, matters such as a significant decline in market value or a significant change in business climate (“triggering events”). An impairment loss is recognized when the carrying value of an asset exceeds the estimated undiscounted future cash flows from the use of the asset and its eventual disposition. The amount of impairment loss recognized is the excess of the asset’s carrying value over its fair value. In determining the fair market value of the assets, the Company considers market trends and recent transactions involving sales of similar assets, or when not available, discounted cash flow analysis. The Company has not recorded any impairment charges of property, plant and equipment in the accompanying consolidated statement of operations for any of the periods presented. Assets to be disposed of are reported at the lower of the carrying value or the fair value less cost to sell. Upon sale or other disposition of an asset, the Company recognizes a gain or loss on disposal measured as the difference between the net carrying value of the asset and the net proceeds received. |
Leases | Leases The Company leases certain facilities and equipment used in its operations. The Company evaluates and classifies its leases as operating or capital leases for financial reporting purposes. Assets held under capital leases are included in property, plant and equipment, net, on the consolidated balance sheets. Operating lease expense is recorded on a straight-line basis over the lease term in the consolidated statements of operation. |
Goodwill | Goodwill Goodwill is the excess cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is evaluated for impairment on an annual basis, or more frequently if circumstances require. The Company’s next annual test will occur on October 1, 2021. The Company performs a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount. If the Company determines, as a result of its qualitative assessment, that it is not more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, no further testing is required. If the Company determines, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of the applicable reporting unit is less than its carrying amount, a goodwill impairment assessment is performed using a two-step, fair-value based test. Under the first step, goodwill is reviewed for impairment by comparing the carrying value of the reporting unit’s net assets (including allocated goodwill) to the fair value of the reporting unit. The fair value of the reporting units is determined using a discounted cash flow approach. Determining the fair value of a reporting unit requires judgment and the use of significant estimates and assumptions. Such estimates and assumptions include revenue growth rates, discount rates, operating margins, weighted average costs of capital, market share and future market conditions, among others. If the reporting unit’s carrying value is greater than its fair value, a second step is performed whereby the implied fair value of goodwill is estimated by allocating the fair value of the reporting unit in a hypothetical purchase price allocation analysis. If the amount of goodwill resulting from this hypothetical purchase price allocation is less than the carrying value of the reporting unit’s goodwill, the recorded carrying value of goodwill is written down to the implied fair value. The Company has not recorded any impairment charge for goodwill in the accompanying consolidated statement of operations for any of the periods presented. |
Intangible assets | Intangible assets Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. The Company’s intangible assets with finite lives consist of customer contracts, trademarks and trade names. The cost of intangible assets with finite lives is amortized over the estimated period of economic benefit on a straight-line basis, ranging from eight to ten years. Asset lives are adjusted whenever there is a change in the estimated period of economic benefit. No residual value has been assigned to these intangible assets. Intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. These conditions may include a change in the extent or manner in which the asset is being used or a change in future operations. The Company assesses the recoverability of the carrying amount by preparing estimates of future revenue, margins and cash flows. If the sum of expected future cash flows (undiscounted) is less than the carrying amount, an impairment loss is recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. Fair value of these assets may be determined by a variety of methodologies, including discounted cash flow models. |
Employee benefits | Employee benefits The Company provides defined benefit plan of severance pay to the 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. |
Commitments and contingencies | Commitments and contingencies The Company accrues for costs relating to litigation claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. In circumstances where the most likely outcome of a contingency can be reasonably estimated, the Company accrues a liability for that amount. Where the most likely outcome cannot be estimated, a range of potential losses is established and if no one amount in that range is more likely than others, the low end of the range is accrued. Such estimates may be based on advice from third parties or on management’s judgment, as appropriate. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous judgments with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. |
Revenue recognition | Revenue recognition Effective December 31, 2019, the Company adopted ASU 2014-09, Revenue from Contracts with Customers The Company recognizes revenue from contracts with customers upon transfer of control of promised services to customers at an amount that reflects the consideration it expects to receive in exchange of services. The Company typically receives “callouts” from its customers for specific services at specific customer locations, typically initiated by the receipt of a purchase/service order or similar document from the customer. Customer callouts request that the Company provide a “suite of services” to fulfill the service order, encompassing personnel, use of Company equipment, and supplies required to perform the work. Rates for these services are defined in the Company’s contracts with customers. The term between invoicing and when the payment is due is typically 30-60 days. Revenue is recognized for each performance obligation when the customer obtains control of the service the Company is providing. For most services, control is obtained over time as (1) the customer simultaneously receives and consumes the benefits provided by the Company’s performance as Company employees perform and (2) the Company’s performance creates or enhances an asset that the customer controls. Revenue is recorded based on daily drilling logs, recognized at the standalone selling price of the services provided as reduced proportionately for management’s estimate of volume or early pay discount where applicable. Upon initial recording, revenue is presented as unbilled revenue on the Company’s Consolidated Balance Sheet and subsequently reclassified to Accounts receivable when the final invoice is presented to the customer or accepted in the customer’s electronic invoice processing portal, as applicable. Amounts collected on behalf of third parties in conjunction with revenue, such as taxes, are generally presented gross as the Company is typically the principal in each taxing jurisdiction. Costs of obtaining a customer contract that are incremental and expected to be recovered are recognized as an asset. Costs are subsequently amortized over the term of the contract or less if circumstances indicate that a shorter deferral period better matches these costs with the revenue they generate. |
Segment information | Segment information An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses and about which separate financial information is regularly evaluated by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources. Similar operating segments can be aggregated into a single operating segment if the businesses are similar. Management has determined that the Company has two two |
Stock-based compensation arrangements | Stock-based compensation arrangements The Company provides stock-based compensation in the form of restricted stock awards to members of its Board of Directors and employees. Awards are issued pursuant to the terms of the Company’s 2018 Long Term Incentive Plan (“LTIP”) and valued at their grant date fair value. Such awards qualify as participating securities as they have the right to participate in dividends issued on the Company’s ordinary shares, if any. Grants to members of the Company’s Board of Directors are time-based and vest ratably over a 1 3 |
Functional and presentation currency | Functional and presentation currency These consolidated financial statements are presented in U.S. Dollars (“USD”), which is the functional and reporting currency of the Company. The majority of the Company’s sales are denominated in USD. Each subsidiary of NESR determines its own functional currency and items included in the financial statements of each subsidiary are measured using that functional currency. All financial information presented in USD is rounded to the nearest thousand, unless otherwise indicated. Transactions in foreign currencies are translated to the respective functional currency of the Company’s subsidiaries at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate as of the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognized in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated. The assets and liabilities of entities whose functional currency is not the USD are translated into the USD at the exchange rate as of the reporting date. The income and expenses of such entities are translated into the USD using average exchange rates for the reporting period. Exchange differences on foreign currency translations are recorded in other comprehensive income (loss). |
Derivative financial instruments | Derivative financial instruments The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as an embedded derivative. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as other income (expense). |
Recent accounting pronouncements | Recent accounting pronouncements As an emerging growth company, the Company has elected the option to defer the effective date for adoption of new or revised accounting guidance. This option allows the Company to adopt new guidance on the effective date for entities that are not public business entities. |
Recently issued accounting standards not yet adopted | Recently issued accounting standards not yet adopted The U.S. Securities and Exchange Commission (“SEC”) permits qualifying Emerging Growth Companies (“EGC”) to defer the adoption of accounting standards updates until the time when a private company would adopt. The Company continues to qualify as an EGC as of December 31, 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 consolidated 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF ESTIMATED USEFUL LIFE PROPERTY, PLANT AND EQUIPMENT | SCHEDULE OF ESTIMATED USEFUL LIFE PROPERTY, PLANT AND EQUIPMENT Buildings and leasehold improvements 5 25 Drilling rigs, plant and equipment 3 15 Furniture and fixtures 5 Office equipment and tools 3 10 Vehicles and cranes 5 8 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST | SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST December 31, 2020 SAPESCO Value (In US$ 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 Cash Earn-Out 5,301 Additional Earn-Out Shares 6,377 (2) Total estimated earn-out mechanisms 11,678 (2) Total 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 was negotiated in the fourth quarter of 2020 and finalized in the first quarter of 2021 when settled with the sellers for 145,039 shares. These shares were valued for accounting purposes at $ 9.93 6.4 |
SCHEDULE OF PURCHASE PRICE ALLOCATION | The following table summarizes the final allocation of the purchase price allocation (in US$ thousands): Allocation of consideration SCHEDULE OF PURCHASE PRICE ALLOCATION December 31, 2020 Cash and cash equivalents $ 3,740 Accounts receivable 14,847 Unbilled revenue 6,126 Service inventories 5,641 Current assets Prepaid assets 679 Retention withholdings 279 Other current assets 552 Property, plant and equipment 14,385 Intangible assets 3,340 Deferred tax assets Other assets 200 Total identifiable assets acquired 49,789 Accounts payable 11,984 Accrued expenses 6,613 Current portion of loans and borrowings Current installments of long-term debt 5,400 Short-term borrowings 5,692 Current liabilities Loans and borrowings Deferred tax liabilities Income taxes payable 313 Other taxes payable 3,802 Other current liabilities 2,237 Long-term debt 15,572 Employee benefit liabilities 1,455 Other liabilities 2,237 Non-controlling interests (8 ) Net identifiable liabilities acquired 55,297 Total fair value of net assets acquired (5,508 ) Goodwill 46,157 Total consideration $ 40,649 |
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS | The final 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 $ 2,900 8 Trademarks and trade names 440 2 Total intangible assets $ 3,340 |
SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS | SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS Successor (NESR) Period from Period from January 1 January 1 to December 31, to December 31, 2020 2019 Revenues $ 852,823 $ 720,860 Net income/(loss) 45,320 43,081 |
NPS Holdings Limited and Gulf Energy SAOC [Member] | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF PURCHASE PRICE ALLOCATION | The following table summarizes the final allocation of the purchase price (in thousands): Allocation of consideration SCHEDULE OF PURCHASE PRICE ALLOCATION December 31, 2020 December 31, 2020 NPS GES (In thousands) Cash and cash equivalents $ 31,656 $ 5,206 Accounts receivable 55,392 18,013 Unbilled revenue 41,378 45,343 Inventories 33,652 31,092 Current assets 19,463 8,719 Property, plant and equipment 216,094 91,444 Intangible assets 94,000 53,000 Deferred tax assets - 554 Other assets 7,457 1,254 Total identifiable assets acquired 499,092 254,625 Accounts payable 26,457 31,113 Accrued expenses 28,685 25,388 Current portion of loans and borrowings - 16,368 Short-term borrowings 55,836 9,000 Current liabilities 3,665 15,449 Loans and borrowings 149,399 25,098 Deferred tax liabilities 24,098 8,053 Other liabilities 22,363 9,910 Non-controlling interest (2,841 ) 837 Net identifiable liabilities acquired 307,662 141,216 Total fair value of net assets acquired 191,430 113,409 Goodwill 399,325 175,439 Total gross consideration $ 590,755 $ 288,848 |
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS | SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS Fair Value NPS GES Total Useful Life (In thousands) Customer contracts $ 77,000 $ 44,500 $ 121,500 10 Trademarks and trade names 17,000 8,500 25,500 8 Total intangible assets $ 94,000 $ 53,000 $ 147,000 |
SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS | SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS Period from Period from to December 31, to December 31, 2018 2017 Revenues $ 552,520 $ 457,888 Net income $ 52,667 $ 36,418 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF DISAGGREGATION OF REVENUE BY SERVICE TYPE | 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 SERVICE TYPE Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 1-Jan to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Revenue by Phase in Well’s Lifecycle: Production Services $ 556,121 $ 405,654 $ 215,791 $ 112,295 Drilling and Evaluation Services 278,025 252,731 132,799 24,732 Total revenue by phase in well’s life cycle $ 834,146 $ 658,385 $ 348,590 $ 137,027 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
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 December 31, December 31, 2020 2019 Trade receivables $ 118,557 $ 100,642 Less: allowance for doubtful accounts (1,722 ) (1,843 ) Total $ 116,835 $ 98,799 |
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS | SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to to to to June 6, 2020 2019 2018 2018 Allowance for doubtful accounts at beginning of period (1,843 ) (693 ) - (4,106 ) Add: additional allowance for the year $ (261 ) $ (1,771 ) $ (693 ) $ - Less: bad debt expense 382 621 - - Allowance for doubtful accounts at end of period $ (1,722 ) $ (1,843 ) $ (693 ) $ (4,106 ) |
SERVICE INVENTORIES (Tables)
SERVICE INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF SERVICE INVENTORIES | The following table summarizes the service inventories for the periods as set forth below (in thousands): SCHEDULE OF SERVICE INVENTORIES December 31, December 31, 2020 2019 Spare parts $ 55,845 $ 39,428 Chemicals 24,527 22,852 Consumables 16,503 18,338 Total 96,875 80,618 Less: allowance for obsolete and slow-moving inventories (2,612 ) (1,777 ) Total $ 94,263 $ 78,841 |
PROPERTY, PLANT, & EQUIPMENT (T
PROPERTY, PLANT, & EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Successors [Member] | |
Multiemployer Plan [Line Items] | |
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) December 31, December 31, Buildings and leasehold improvements 5 25 $ 31,827 $ 36,853 Drilling rigs, plant and equipment 3 15 534,964 411,984 Furniture and fixtures 5 2,282 3,720 Office equipment and tools 3 10 39,174 35,991 Vehicles and cranes 5 8 7,429 12,292 Less: Accumulated depreciation (193,261 ) (104,689 ) Land 5,104 5,104 Capital work in progress 10,224 18,052 Total $ 437,743 $ 419,307 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL | Changes in the carrying amount of goodwill of the Company between December 31, 2019 and December 31, 2020 are as follows (in 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 23,811 22,346 46,157 Balance as of December 31, 2020 $ 443,457 177,464 620,921 |
SCHEDULE OF WEIGHTED AVERAGE AMORTIZATION PERIOD FOR INTANGIBLE ASSETS | The following is the weighted average amortization period for intangible assets of the Company subject to amortization (in years): SCHEDULE OF WEIGHTED AVERAGE AMORTIZATION PERIOD FOR INTANGIBLE ASSETS Amortization Customer contracts 10.0 Trademarks and trade names 7.9 Total intangible assets 9.6 |
SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION | The details of the Company’s intangible assets subject to amortization are set forth below (in thousands): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31, 2020 December 31, 2019 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer contracts $ 124,400 $ (31,685 ) $ 92,715 $ 121,500 $ (19,239 ) $ 102,261 Trademarks and trade names 25,940 (8,279 ) 17,661 25,500 (5,047 ) 20,453 Total intangible assets $ 150,340 $ (39,964 ) $ 110,376 $ 147,000 $ (24,286 ) $ 122,714 |
DEBT (Tables)
DEBT (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF LONG TERM DEBT OBLIGATIONS | The Company’s long-term debt obligations consist of the following (in thousands): SCHEDULE OF LONG TERM DEBT OBLIGATIONS December 31, December 31, Secured Term Loan $ 285,000 $ 300,000 Secured Revolving Credit Facility 65,000 50,000 CIB Long-Term Debt 10,000 - Less: unamortized debt issuance costs (3,886 ) (4,436 ) Total loans and borrowings 356,114 345,564 Less: current portion of long-term debt (47,500 ) (15,000 ) Long-term debt, net of unamortized debt issuance costs and excluding current installments $ 308,614 $ 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 December 31, December 31, CIB Short-Term Debt $ 2,125 $ - ABK Short-Term Debt 2,252 - Other short-term borrowings from working capital facilities 37,983 37,963 Short-term debt, excluding current installments of long-term debt $ 42,360 $ 37,963 |
SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT | Scheduled principal payments of long-term debt for periods subsequent to December 31, 2020 are as follows (in thousands): SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT - 2021 $ 47,500 2022 45,000 2023 110,000 2024 45,000 2025 112,500 Thereafter - Total $ 360,000 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF FUNDED STATUS OF END-OF-SERVICE INDEMNITIES EMPLOYEES RECEIVE UNDER ONE OF FIVE BENEFIT STRUCTURES | The following tables set out the funded status of the end-of-service indemnities employees receive under one of the five benefit structures the Company and its subsidiaries offer to its employees and the amounts recognized in the Company’s financial statements as of December 31, 2020 and 2019 (in thousands): SCHEDULE OF FUNDED STATUS OF END-OF-SERVICE INDEMNITIES EMPLOYEES RECEIVE UNDER ONE OF FIVE BENEFIT STRUCTURES December 31, 2020 December 31, 2019 Change in benefit obligations Benefit obligations at the beginning of the year $ 19,320 $ 16,122 Actuarial (gain) / loss 2,243 2,031 Service cost 3,487 2,680 Interest cost 583 655 Benefits paid (2,007 ) (2,168 ) Benefit obligation acquired in business combination 1,315 - Benefit obligations at the end of the year 24,941 19,320 Current benefit obligation 3,426 2,575 Non-current benefit obligation 21,515 16,745 Benefit obligation at the end of the year 24,941 19,320 Change in plan assets Fair value of plan assets at the beginning of the year - - Employer contributions 2,007 2,168 Benefits paid (2,007 ) (2,168 ) Plan assets at the end of the year - - Unfunded status $ 24,941 $ 19,320 |
SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST | Net cost for the 2020 Successor Period, 2019 Successor Period, 2018 Successor Period, and 2018 Predecessor Period comprises the following components (in thousands): SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Service cost $ 3,487 $ 2,680 $ 1,412 $ 866 Interest cost 583 655 282 168 Actuarial (gain)/loss 2,243 2,031 896 375 Other - - (416 ) - Net cost $ 6,313 $ 5,366 $ 2,174 $ 1,409 |
SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST | The weighted-average assumptions used to determine benefit obligations as of December 31, 2020 and 2019 are set out below: SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST December 31, 2020 December 31, 2019 Discount rate 1.75 % 2.75 % Rate of increase in compensation levels: 3.00 % 3.00 % The discount rate has been selected by the Company in consultation with its third-party actuarial valuation specialist. The primary reference point in identifying the rate was the yield on high-quality U.S. corporate bonds per the FTSE Above Median Double-A Curve (as of November 30, 2020) of duration broadly consistent with the benefit obligations. The rate has been rounded to the nearest 0.25% The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2020 and 2019 are set out below: December 31, 2020 December 31, 2019 Discount rate 2.75 % 3.75 % Rate of increase in compensation levels: 3.00 % 3.00 % |
SCHEDULE OF BENEFIT OBLIGATIONS CHANGE IN ASSUMPTION | The following illustrates the sensitivity to changes in discount rate, holding all other assumptions constant, for in the Company’s benefit obligations (in thousands): SCHEDULE OF BENEFIT OBLIGATIONS CHANGE IN ASSUMPTION Change in assumption: Benefit obligation at the end of the year 25 basis point decrease in discount rate +$429 25 basis point increase in discount rate -$377 |
SCHEDULE OF EXPECTED FUTURE BENEFIT PAYMENTS | The following reflect expected future benefit payments (in thousands): SCHEDULE OF EXPECTED FUTURE BENEFIT PAYMENTS Year ending December 31, 2020 2021 $ 3,902 2022 $ 3,871 2023 $ 3,688 2024 $ 3,793 2025 $ 3,519 2026 through 2030 $ 16,704 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
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 Year-to-date period from January 1 January 1 June 7 Number of Restricted Shares Weighted Average Value per Share Number of Restricted Shares Weighted Average Value per Share Number of Restricted Shares Weighted Average Value per Share Unvested at Beginning of Period 1,502,690 $ 10.25 725,200 $ 10.94 - $ - Granted 1,194,905 $ 5.30 1,184,000 $ 9.86 725,200 $ 10.94 Vested and issued (590,264 ) $ 10.18 (290,510 ) $ 10.27 - $ - Forfeited (68,669 ) $ 9.55 (116,000 ) $ 10.59 - $ - Unvested at End of Period 2,038,662 $ 7.38 1,502,690 $ 10.25 725,200 $ 10.94 |
SCHEDULE OF STOCK-BASED COMPENSATION | SCHEDULE OF STOCK-BASED COMPENSATION Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, 2020 2019 2018 Cost of Services $ 3,521 $ 2,392 $ 517 Selling, general and administrative expenses 4,311 3,262 517 Net cost $ 7,832 $ 5,654 $ 1,034 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE CAPITAL LEASES | Future minimum lease payments and future interest payments under non-cancellable equipment capital leases at December 31, 2020 are payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE CAPITAL LEASES As of December 31, 2020 Future Minimum Lease Payments Future Interest Payments Total Payments 2021 $ 22,500 $ 1,524 $ 24,024 2022 3,236 453 3,689 2023 1,810 174 1,984 2024 438 21 459 2025 - - - Thereafter - - - Total $ 27,984 $ 2,172 $ 30,156 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES | Future minimum lease commitments under non-cancellable operating leases with initial or remaining terms of one year or more at December 31, 2020 are payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES December 31, 2021 $ 21,665 2022 2,814 2023 1,998 2024 2,003 2025 1,355 Thereafter 3,413 Total $ 33,248 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF 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 RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING Date Transaction Detail Change in Shares Period from January 1 to December 31, 2020 Weighted Average Ordinary Shares Outstanding December 31, 2019 Beginning Balance 87,187,289 March 18, 2020 Restricted stock vesting 307,932 242,307 June 1, 2020 NESR ordinary share consideration to be issued in SAPESCO transaction (Note 4) (1) 2,237,000 1,307,973 August 14, 2020 Restricted stock vesting 282,332 107,224 December 31, 2020 Contingently issuable shares to be issued in SAPESCO transaction (Note 4) (2) 301,830 825 December 31, 2020 Ending Balance 88,845,618 (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 301,830 Date Transaction Detail Change in Shares Period from January 1 to December 31, 2019 Weighted Average Ordinary Shares Outstanding December 31, 2018 Beginning Balance 85,562,769 January 9, 2019 Other 33,796 33,055 February 19, 2019 NPS equity stock earn-out (1) 1,300,214 1,300,214 August 14, 2019 Restricted stock vesting 250,310 96,009 November 12, 2019 Restricted stock vesting 40,200 5,507 December 31, 2019 Ending Balance 86,997,554 (1) The NPS equity stock earn-out has been included in the computation of basic earnings per share (“EPS”) as the conditions for issuance were satisfied as of December 31, 2018. Date Transaction Detail Change in Shares Period from June 7 to December 31, 2018 Weighted Average Ordinary Shares Outstanding June 7, 2018 Beginning Balance 0 11,730,425 June 7, 2018 Backstop shares 4,829,375 4,829,375 June 7, 2018 Underwriter shares 307,465 307,465 June 7, 2018 Shares issued to NPS/GES 53,690,315 53,690,315 June 7, 2018 Shares transferred to perm equity 15,005,189 15,005,189 December 31, 2018 NPS equity stock earn-out (1) 1,300,214 6,251 December 31, 2018 Ending Balance 85,569,020 (1) The NPS equity stock earn-out has been included in the computation of basic earnings per share (“EPS”) as the conditions for issuance were satisfied as of December 31, 2018. Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, Shares for Use in Allocation of Participating Earnings: 2020 2019 2018 Weighted average ordinary shares outstanding $ 88,845,618 $ 86,997,554 $ 85,569,020 Non-vested, participating restricted shares 1,094,156 1,419,361 725,200 Shares for use in allocation of participating earnings $ 89,939,774 $ 88,416,915 $ 86,294,220 |
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE | Basic earnings per share (EPS): SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, 2020 2019 2018 Net income $ 50,087 $ 39,364 $ 35,143 Less dividends to: Ordinary Shares - - - Non-vested participating shares - - - Total Undistributed Earnings $ 50,087 $ 39,364 $ 35,143 Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, 2020 2019 2018 Allocation of undistributed earnings to Ordinary Shares $ 49,478 $ 38,732 $ 34,834 Allocation of undistributed earnings to Non-vested Shares 609 632 309 Total Undistributed Earnings $ 50,087 $ 39,364 $ 35,143 Period from January 1 January 1 June 7 to December 31, to December 31, to December 31, Ordinary Shares: 2020 2019 2018 Distributed Earnings $ - $ - $ - Undistributed Earnings 0.56 0.45 0.41 Total $ 0.56 $ 0.45 $ 0.41 Diluted earnings per share (EPS): Period from Period from Period from January 1 to December 31, 2020 January 1 to December 31, 2019 June 7 to December 31, 2018 Ordinary shares Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS Undistributed & distributed earnings to ordinary shareholders Ordinary shares EPS As reported — basic $ 49,478 88,845,618 $ 0.56 $ 38,732 86,997,554 $ 0.45 $ 34,834 85,569,020 $ 0.41 Add-back: Undistributed earnings allocated to non-vested shareholders 609 - 632 - 309 - Equity stock earn-outs - 145,039 - - - - 1,293,963 (0.01 ) 35,540,380 5.75 (1) - - - - - - Less: Undistributed earnings reallocated to non-vested shareholders (609 ) - (632 ) - (305 ) - Diluted EPS — Ordinary shares $ 49,478 88,990,657 $ 0.56 $ 38,732 86,997,554 $ 0.45 $ 34,838 86,862,983 $ 0.40 (1) Non-participating warrants that could be converted into as many as 17,770,190 December 31, 1,119,905 0 0 2018 Predecessor Periods The following table sets forth the calculation of basic and diluted earnings per common share for the period presented: Period from January 1 to June 6, 2018 Weighted average basic common shares outstanding 348,524,566 Dilutive potential common shares 21,475,434 Weighted average dilutive common shares outstanding 370,000,000 Basic: Net Income $ 7,617 Less: Earnings allocated to participating securities (192 ) Net income available to basic common shares $ 7,425 Basic earnings per common share $ 0.02 Diluted: Net Income $ 7,617 Less: Earnings allocated to participating securities (181 ) Net income available to diluted common shares $ 7,436 Diluted earnings per common share $ 0.02 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN | SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Domestic $ (3,163 ) $ (1,675 ) $ (20,722 ) $ - Foreign 63,955 54,050 65,133 9,078 Income Before Income Tax $ 60,792 $ 52,375 $ 44,411 $ 9,078 |
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | The components of the income tax expense (benefit), all of which is foreign, are as follows (in thousands): SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Current tax expense $ 15,322 $ 17,006 $ 11,456 $ 2,342 Deferred tax expense (benefit) (4,617 ) (3,935 ) (2,025 ) - Income tax expense $ 10,705 $ 13,071 $ 9,431 $ 2,342 |
SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) | Deferred taxes have been recognized for temporary differences and carryforwards that will have effects on income taxes payable or receivables in future years. The components of net deferred tax liabilities and assets are as follows (in thousands): SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) December 31, 2020 December 31, 2019 Deferred Tax Assets Property, plant and equipment $ 3,819 $ 1,678 Net operating loss carryforward 7,263 6,932 Total deferred tax assets 11,082 8,610 Less: valuation allowance (6,904 ) (4,886 ) Deferred tax assets, net of valuation allowance $ 4,178 $ 3,724 Deferred Tax Liabilities Property, plant and equipment $ (3,600 ) $ (4,911 ) Intangible assets (21,648 ) (25,030 ) Total deferred tax liabilities (25,248 ) (29,941 ) Net deferred tax liability $ (21,070 ) $ (26,217 ) |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Income tax at statutory rate (BVI and UAE 0% $ - $ - $ - $ - Foreign tax rate differential 10,782 12,848 8,328 2,147 Tax effect of adjustments to prior years current tax expense 1,348 (2,054 ) - 195 Tax effect of adjustments to prior years deferred taxes (2,234 ) - - - Reversal of tax liability on expiration of limitation period’ (1,206 ) - - - Effect of changes in valuation allowances 2,018 - - - Unrecognized tax benefits (3 ) 2,476 1,574 - Other - (199 ) (471 ) - Income tax expense $ 10,705 $ 13,071 $ 9,431 $ 2,342 |
SCHEDULE OF UNRECOGNIZED TAX BENEFITS | A summary of activity related to the net unrecognized tax benefits is as follows: SCHEDULE OF UNRECOGNIZED TAX BENEFITS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Balance at beginning of period $ 13,739 $ 8,341 $ - $ 4,837 Additions from tax positions adjusted in purchase accounting - 1,072 6,767 - Additions from tax positions related to the current period 4,599 1,376 1,324 - Additions from tax positions related to prior periods 1,503 4,700 250 - Reductions from tax positions related to earlier periods (1,880 ) (873 ) - - Reductions on account of statute expiry (1,206 ) Settlement of tax positions (1,156 ) (877 ) - - Balance at end of period $ 15,599 $ 13,739 $ 8,341 $ 4,837 |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Multiemployer Plan [Line Items] | |
SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS | Revenue from operations SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Reportable Segment: Production Services $ 556,121 $ 405,654 $ 215,791 $ 112,295 Drilling and Evaluation Services 278,025 252,731 132,799 24,732 Total revenue $ 834,146 $ 658,385 $ 348,590 $ 137,027 Long-lived assets December 31, 2020 December 31, 2019 Reportable Segment: Production Services $ 303,625 $ 290,765 Drilling and Evaluation Services 124,062 115,241 Total Reportable Segments 427,687 406,006 Unallocated assets 10,056 13,301 Total long-lived assets $ 437,743 $ 419,307 Operating income Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Reportable Segment: Production Services $ 74,472 $ 79,571 $ 59,007 $ 25,459 Drilling and Evaluation Services 32,391 29,031 24,931 893 Total Reportable Segments 106,863 108,602 83,938 26,352 Unallocated expenses (39,331 ) ( 36,788 ) (30,585 ) (13,546 ) Total operating income $ 67,532 $ 71,814 $ 53,353 $ 12,806 |
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 Successor (NESR) Predecessor (NPS) Period from Period from Period from Period from January 1 January 1 June 7 January 1 to December 31, to December 31, to December 31, to June 6, 2020 2019 2018 2018 Geographic area: MENA $ 823,247 $ 647,434 $ 345,047 $ 134,479 Rest of World 10,899 10,951 3,543 2,548 Total revenue $ 834,146 $ 658,385 $ 348,590 $ 137,027 Long-lived assets by geographic area December 31, 2020 December 31, 2019 Geographic area: MENA $ 429,283 $ 409,139 Rest of World 8,460 10,168 Total long-lived assets $ 437,743 $ 419,307 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIFE PROPERTY, PLANT AND EQUIPMENT (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings And Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 5 years |
Buildings And Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 25 years |
Drilling Rigs, Plant and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 3 years |
Drilling Rigs, Plant and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 15 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 5 years |
Office Equipment and Tools [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 3 years |
Office Equipment and Tools [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 10 years |
Vehicles and Cranes [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 5 years |
Vehicles and Cranes [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 8 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) shares in Thousands, $ in Thousands | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2018USD ($)shares | Dec. 31, 2020USD ($)Segments | Dec. 31, 2019USD ($) | |
Multiemployer Plan [Line Items] | |||
Reportable segments | Segments | 2 | ||
Successors [Member] | |||
Multiemployer Plan [Line Items] | |||
Non-cash additions to capital lease obligations | $ 33,700 | ||
Business combination, ordinary shares issued | shares | 544,400 | ||
Minimum service period duration for employee severance pay benefit, description | The Company provides defined benefit plan of severance pay to the 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. | ||
Operating segments | Segments | 2 | ||
Reportable segments | Segments | 2 | ||
Successors [Member] | Board of Directors [Member] | |||
Multiemployer Plan [Line Items] | |||
Stock-based compensation arrangements, vesting period | 1 year | ||
Successors [Member] | Employees [Member] | |||
Multiemployer Plan [Line Items] | |||
Stock-based compensation arrangements, vesting period | 3 years | ||
Successors [Member] | Hana Loan [Member] | |||
Multiemployer Plan [Line Items] | |||
Origination fee | $ 600 | ||
Reimbursement of transaction fees and expenses through issuance of ordinary shares | 2,100 | ||
Successors [Member] | Sahara Petroleum Services Company [Member] | |||
Multiemployer Plan [Line Items] | |||
Capital lease obligations, current | $ 2,000 | ||
Capital lease obligations, non current | 13,500 | ||
Successors [Member] | Other Current Liabilities [Member] | |||
Multiemployer Plan [Line Items] | |||
Capital lease obligations, current | 22,500 | 3,000 | |
Successors [Member] | Other Liabilities [Member] | |||
Multiemployer Plan [Line Items] | |||
Capital lease obligations, current | 5,500 | 3,000 | |
Successors [Member] | Seller Provided Installment Financing Two [Member] | Other Current Liabilities [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 3,200 | ||
Successors [Member] | Accounts Payable [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 20,800 | 21,700 | |
Successors [Member] | Accounts Payable [Member] | Seller Provided Installment Financing One [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 16,600 | ||
Successors [Member] | Accounts Payable [Member] | Seller Provided Installment Financing Two [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 11,400 | ||
Successors [Member] | Accrued Liabilities [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 3,000 | ||
Successors [Member] | Accrued Liabilities [Member] | Seller Provided Installment Financing One [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 0 | ||
Successors [Member] | Short-term Debt [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | $ 14,700 | $ 29,300 | |
Successors [Member] | Short-term Debt [Member] | Seller Provided Installment Financing One [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | 20,400 | ||
Successors [Member] | Short-term Debt [Member] | Seller Provided Installment Financing Two [Member] | |||
Multiemployer Plan [Line Items] | |||
Purchases of property, plant, and equipment | $ 600 |
SCHEDULE OF CONSIDERATION TO PU
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST (Details) $ in Thousands | Dec. 31, 2020USD ($)shares | |
Business Acquisition [Line Items] | ||
Cash consideration | $ 3,740 | |
Total consideration | 49,789 | |
Sahara Petroleum Services Company [Member] | ||
Business Acquisition [Line Items] | ||
Cash consideration | 16,958 | |
Total consideration – cash | 16,958 | |
NESR ordinary share consideration | $ 12,013 | |
[custom:BusinessAcquisitionOrdinaryShareConsiderationShares-0] | shares | 2,237,000 | |
Total consideration – equity | $ 12,013 | [1] |
[custom:BusinessAcquisitionOrdinaryShareConsiderationEquity-0] | shares | 2,237,000 | |
Cash Earn-Out | $ 5,301 | |
Additional Earn-Out Shares | 6,377 | [2] |
Total estimated earn-out mechanisms | 11,678 | [2] |
Total consideration | $ 40,649 | |
[custom:BusinessAcquisitionConsiderationShares-0] | shares | 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 was negotiated in the fourth quarter of 2020 and finalized in the first quarter of 2021 when settled with the sellers for 145,039 shares. These shares were valued for accounting purposes at $ 9.93 6.4 |
SCHEDULE OF CONSIDERATION TO _2
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST (Details) (Parenthetical) - Sahara Petroleum Services Company [Member] - $ / shares | Dec. 31, 2020 | Jun. 02, 2020 |
Business Acquisition [Line Items] | ||
Closing price per share | $ 9.93 | $ 5.37 |
[custom:NumberOfSharesSettledWithSellers] | 145,039 |
BUSINESS COMBINATION - SCHEDULE
BUSINESS COMBINATION - SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST (Details) (Parenthetical) $ in Millions | Dec. 31, 2020USD ($) |
Sahara Petroleum Services Company [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Contingent Consideration, Liability | $ 6.4 |
SCHEDULE OF PURCHASE PRICE ALLO
SCHEDULE OF PURCHASE PRICE ALLOCATION (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Entity Listings [Line Items] | |
Cash and cash equivalents | $ 3,740 |
Accounts receivable | 14,847 |
Unbilled revenue | 6,126 |
Inventories | 5,641 |
Prepaid assets | 679 |
Retention withholdings | 279 |
Other current assets | 552 |
Property, plant and equipment | 14,385 |
Intangible assets | 3,340 |
Other assets | 200 |
Total consideration | 49,789 |
Accounts payable | 11,984 |
Accrued expenses | 6,613 |
Current installments of long-term debt | 5,400 |
Short-term borrowings | 5,692 |
Income taxes payable | 313 |
Other taxes payable | 3,802 |
Other current liabilities | 2,237 |
Long-term debt | 15,572 |
Employee benefit liabilities | 1,455 |
Other liabilities | 2,237 |
Non-controlling interest | (8) |
Net identifiable liabilities acquired | 55,297 |
Total fair value of net assets acquired | (5,508) |
Goodwill | 46,157 |
Total gross consideration | 40,649 |
NPS Holdings Limited [Member] | |
Entity Listings [Line Items] | |
Cash and cash equivalents | 31,656 |
Accounts receivable | 55,392 |
Unbilled revenue | 41,378 |
Inventories | 33,652 |
Current assets | 19,463 |
Property, plant and equipment | 216,094 |
Intangible assets | 94,000 |
Deferred tax assets | |
Other assets | 7,457 |
Total consideration | 499,092 |
Accounts payable | 26,457 |
Accrued expenses | 28,685 |
Current portion of loans and borrowings | |
Short-term borrowings | 55,836 |
Current liabilities | 3,665 |
Loans and borrowings | 149,399 |
Deferred tax liabilities | 24,098 |
Other liabilities | 22,363 |
Non-controlling interest | (2,841) |
Net identifiable liabilities acquired | 307,662 |
Total fair value of net assets acquired | 191,430 |
Goodwill | 399,325 |
Total gross consideration | 590,755 |
Gulf Energy S A O C [Member] | |
Entity Listings [Line Items] | |
Cash and cash equivalents | 5,206 |
Accounts receivable | 18,013 |
Unbilled revenue | 45,343 |
Inventories | 31,092 |
Current assets | 8,719 |
Property, plant and equipment | 91,444 |
Intangible assets | 53,000 |
Deferred tax assets | 554 |
Other assets | 1,254 |
Total consideration | 254,625 |
Accounts payable | 31,113 |
Accrued expenses | 25,388 |
Current portion of loans and borrowings | 16,368 |
Short-term borrowings | 9,000 |
Current liabilities | 15,449 |
Loans and borrowings | 25,098 |
Deferred tax liabilities | 8,053 |
Other liabilities | 9,910 |
Non-controlling interest | 837 |
Net identifiable liabilities acquired | 141,216 |
Total fair value of net assets acquired | 113,409 |
Goodwill | 175,439 |
Total gross consideration | $ 288,848 |
SCHEDULE OF PRELIMINARY ALLOCAT
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 3,340 | |
Total intangible assets | $ 150,340 | $ 147,000 |
Total intangible assets, term | 9 years 7 months 6 days | |
NPS Holdings Limited [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 94,000 | |
Total intangible assets | 94,000 | |
Gulf Energy [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 53,000 | |
NPS Holdings Limited and Gulf Energy SAOC [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 147,000 | |
Customer Contracts [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 2,900 | |
Total intangible assets, term | 8 years | |
Total intangible assets | $ 124,400 | 121,500 |
Total intangible assets, term | 10 years | |
Customer Contracts [Member] | NPS Holdings Limited and Gulf Energy SAOC [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 121,500 | |
Customer Contracts [Member] | NPS Holdings Limited [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 77,000 | |
Customer Contracts [Member] | Gulf Energy [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 44,500 | |
Customer Contracts [Member] | NPS Holdings Limited and Gulf Energy SAOC [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, term | 10 years | |
Trademarks and Trade Names [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 440 | |
Total intangible assets, term | 2 years | |
Total intangible assets | $ 25,940 | $ 25,500 |
Total intangible assets, term | 7 years 10 months 24 days | |
Trademarks and Trade Names [Member] | NPS Holdings Limited [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 17,000 | |
Trademarks and Trade Names [Member] | Gulf Energy [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 8,500 | |
Trademarks and Trade Names [Member] | NPS Holdings Limited and Gulf Energy SAOC [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 25,500 | |
Total intangible assets, term | 8 years |
SCHEDULE OF PROFORMA INFORMATIO
SCHEDULE OF PROFORMA INFORMATION OF OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Entity Listings [Line Items] | ||||
Revenues | $ 852,823 | $ 720,860 | ||
Net income | $ 45,320 | $ 43,081 | ||
NPS Holdings Limited and Gulf Energy SAOC [Member] | ||||
Entity Listings [Line Items] | ||||
Revenues | $ 552,520 | $ 457,888 | ||
Net income | $ 52,667 | $ 36,418 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jun. 13, 2020 | Feb. 13, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 02, 2020 |
Business Acquisition [Line Items] | |||||||
Business Combination, Consideration Transferred | $ 11,000 | ||||||
Business Combination, Deferred Consideration | $ 6,000 | ||||||
Number of shares issued during the period | 2,237,000 | ||||||
Business Combination,cash and cash equivalents | $ 11,000 | $ 11,000 | |||||
Deferred consideration | 6,000 | 6,000 | |||||
Goodwill, Period Increase (Decrease) | 25,200 | ||||||
[custom:ReductionInPropertyPlantAndEquipment] | 19,800 | ||||||
Increase (Decrease) in Intangible Assets, Current | 900 | ||||||
Increase (Decrease) in Accrued Liabilities | 2,200 | ||||||
[custom:IncreaseDecreaseInOtherTaxesPayable] | 1,300 | ||||||
Change in fair value of property, plant and equipment | $ 19,600 | $ 34,200 | |||||
Amount allocated to goodwill | 46,200 | 46,200 | |||||
Business Acquisition, Transaction Costs | 1,100 | 1,100 | |||||
Business Acquisition, Pro Forma Revenue | 852,823 | $ 720,860 | |||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 45,320 | $ 43,081 | |||||
Sahara Petroleum Services Company [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Sale of Stock, Percentage of Ownership after Transaction | 99.70% | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 2,237,000 | ||||||
Sahara Petroleum Services Company [Member] | Successors [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Acquisition, Pro Forma Revenue | $ 26,500 | ||||||
Business Acquisition, Pro Forma Net Income (Loss) | 800 | ||||||
Sale and Purchase Agreement [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination issued in equity earn-outs | 2,100 | 2,100 | $ 11,700 | ||||
Receivables earn-out shares contingency fair value | $ 0 | $ 0 | |||||
Sale and Purchase Agreement [Member] | Minimum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Average per share price | $ 10 | $ 10 | |||||
Sale and Purchase Agreement [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Average per share price | $ 11.70 | $ 11.70 | |||||
Sale and Purchase Agreement [Member] | Cash Earn-Out [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Receivables | $ 6,900 | $ 6,900 | |||||
Sale and Purchase Agreement [Member] | Additional Earn-Out Shares [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Average per share price | $ 9 | $ 9 | |||||
Sale and Purchase Agreement [Member] | NESR Additional Shares [Member] | Minimum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Average per share price | 10 | 10 | |||||
Sale and Purchase Agreement [Member] | NESR Additional Shares [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Average per share price | $ 11.70 | $ 11.70 | |||||
Sale and Purchase Agreement [Member] | Sahara Petroleum Services Company [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Sale of Stock, Percentage of Ownership after Transaction | 99.70% | ||||||
Business Combination, Consideration Transferred | $ 11,000 | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 99.70% | 99.70% | |||||
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] | Sahara Petroleum Services Company [Member] | Three Equal Installments [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Consideration Transferred | $ 6,000 | ||||||
Sales And Purchase Agreement [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Issuance of receivables earn-eut shares. value | $ 1,400 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY SERVICE TYPE (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Successors [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 348,590 | $ 834,146 | $ 658,385 | |
Successors [Member] | Production Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 215,791 | 556,121 | 405,654 | |
Successors [Member] | Drilling and Evaluation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 132,799 | $ 278,025 | $ 252,731 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 137,027 | |||
Predecessors [Member] | Production Services [Member] | NPS Holdings Limited [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 112,295 | |||
Predecessors [Member] | Drilling and Evaluation Services [Member] | NPS Holdings Limited [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 24,732 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Less: allowance for doubtful accounts | $ (1,722) | $ (1,843) |
Total | 116,835 | 98,799 |
Trade Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivables, gross | $ 118,557 | $ 100,642 |
SCHEDULE OF ALLOWANCE FOR DOUBT
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||||
Allowance for doubtful accounts at beginning of period | $ (1,843) | |||
Allowance for doubtful accounts at end of period | (1,722) | $ (1,843) | ||
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Allowance for doubtful accounts at beginning of period | (1,843) | (693) | ||
Add: additional allowance for the year | (693) | (261) | (1,771) | |
Less: bad debt expense | 382 | 621 | ||
Allowance for doubtful accounts at end of period | (693) | $ (1,722) | $ (1,843) | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Allowance for doubtful accounts at beginning of period | (4,106) | $ (4,106) | ||
Add: additional allowance for the year | ||||
Less: bad debt expense | ||||
Allowance for doubtful accounts at end of period | $ (4,106) |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Allowance for doubtful accounts receivable | $ 118.6 | $ 100.6 |
SCHEDULE OF SERVICE INVENTORIES
SCHEDULE OF SERVICE INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | $ 96,875 | $ 80,618 |
Less: allowance for obsolete and slow-moving inventories | (2,612) | (1,777) |
Service inventories, net | 94,263 | 78,841 |
Spare Parts [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | 55,845 | 39,428 |
Chemicals [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | 24,527 | 22,852 |
Consumables [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Service inventories, gross | $ 16,503 | $ 18,338 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation | $ (193,261) | $ (104,689) |
Land | 5,104 | 5,104 |
Capital work in progress | 10,224 | 18,052 |
Property, plant and equipment net | 437,743 | 419,307 |
Buildings And Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 31,827 | 36,853 |
Buildings And Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Buildings And Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 25 years | |
Drilling Rigs, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 534,964 | 411,984 |
Drilling Rigs, Plant and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Drilling Rigs, Plant and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Property, plant and equipment gross | $ 2,282 | 3,720 |
Office Equipment and Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 39,174 | 35,991 |
Office Equipment and Tools [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Office Equipment and Tools [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Vehicles and Cranes [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment gross | $ 7,429 | $ 12,292 |
Vehicles and Cranes [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Vehicles and Cranes [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 8 years |
PROPERTY, PLANT, & EQUIPMENT (D
PROPERTY, PLANT, & EQUIPMENT (Details Narrative) - USD ($) $ in Millions | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Depreciation expense | $ 33 | $ 105 | $ 72.2 | |
Predecessors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Depreciation expense | $ 17.3 |
SCHEDULE OF CHANGES IN CARRYING
SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance as of December 31, 2019 | $ 574,764 |
SAPESCO Business Combination | 46,157 |
Balance as of September 30, 2020 | 620,921 |
Production Services [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance as of December 31, 2019 | 419,646 |
SAPESCO Business Combination | 23,811 |
Balance as of September 30, 2020 | 443,457 |
Drilling and Evaluation Services [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Balance as of December 31, 2019 | 155,118 |
SAPESCO Business Combination | 22,346 |
Balance as of September 30, 2020 | $ 177,464 |
SCHEDULE OF WEIGHTED AVERAGE AM
SCHEDULE OF WEIGHTED AVERAGE AMORTIZATION PERIOD FOR INTANGIBLE ASSETS (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets, amortization | 9 years 7 months 6 days |
Customer Contracts [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets, amortization | 10 years |
Trademarks and Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets, amortization | 7 years 10 months 24 days |
SCHEDULE OF INTANGIBLE ASSETS S
SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 150,340 | $ 147,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | (39,964) | (24,286) |
Finite-Lived Intangible Assets, Net | 110,376 | 122,714 |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 124,400 | 121,500 |
Finite-Lived Intangible Assets, Accumulated Amortization | (31,685) | (19,239) |
Finite-Lived Intangible Assets, Net | 92,715 | 102,261 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 25,940 | 25,500 |
Finite-Lived Intangible Assets, Accumulated Amortization | (8,279) | (5,047) |
Finite-Lived Intangible Assets, Net | $ 17,661 | $ 20,453 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - Subsequent Event [Member] $ in Millions | Mar. 15, 2021USD ($) |
Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization expense, 2020 | $ 15.7 |
Amortization expense, year two | 15.7 |
Amortization expense, year three | 15.7 |
Amortization expense, year four | 15.7 |
Amortization expense, year five | 15.7 |
Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization expense, 2020 | 15.9 |
Amortization expense, year two | 15.9 |
Amortization expense, year three | 15.9 |
Amortization expense, year four | 15.9 |
Amortization expense, year five | $ 15.9 |
SCHEDULE OF LONG TERM DEBT OBLI
SCHEDULE OF LONG TERM DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||
Less: unamortized debt issuance costs | $ (3,886) | $ (4,436) |
Total loans and borrowings | 356,114 | 345,564 |
Less: current portion of long-term debt | (47,500) | (15,000) |
Long-term Debt, Excluding Current Maturities | 308,614 | 330,564 |
CIB Long-Term Debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | 10,000 | |
Secured Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | 285,000 | 300,000 |
Secured Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | $ 65,000 | $ 50,000 |
SCHEDULE OF SHORT TERM DEBT OBL
SCHEDULE OF SHORT TERM DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Short-term Debt [Line Items] | ||
Other Short-term Borrowings | $ 37,983 | $ 37,963 |
Short-term debt, excluding current installments of long-term debt | 42,360 | 37,963 |
Commercial International Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short-term Bank Loans and Notes Payable | 2,125 | |
Al Ahli Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short-term Bank Loans and Notes Payable | $ 2,252 |
SCHEDULE PRINCIPAL PAYMENTS OF
SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 47,500 |
2022 | 45,000 |
2023 | 110,000 |
2024 | 45,000 |
2025 | 112,500 |
Thereafter | |
Total | $ 360,000 |
DEBT (Details Narrative)
DEBT (Details Narrative) $ in Thousands, ÂŁ in Millions | Jun. 20, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020GBP (ÂŁ) | May 23, 2019USD ($) | May 05, 2019USD ($) |
Debt Instrument [Line Items] | ||||||
Working capital facility | $ 151,300 | $ 160,000 | ||||
Line of credit facility, interest rate during period | 2.60% | 4.30% | ||||
Short-term Debt | $ 42,360 | $ 37,963 | ||||
CIB Long-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Aug. 15, 2021 | |||||
Debt instrument, face amount | $ 21,000 | |||||
Short-term Debt, Description | Under the terms of its arrangement with CIB, the Company repaid $11.0 million of this balance during the third quarter of 2020 with the remaining $10.0 million due on August 15, 2021. Borrowings under the CIB Long-Term Debt incur interest at 2% per annum over 6 months LIBOR (to be settled on monthly basis) plus 50 basis points per annum. As of December 31, 2020, this resulted in an interest rate of 2.3%. The Company’s CIB Long-Term Debt is secured by a letter of guarantee from Mashreqbank PSC. | |||||
Repayments of Debt | $ 11,000 | |||||
Remaining debt obligation amount | $ 10,000 | |||||
Debt instrument, interest rate, stated percentage | 2.30% | 2.30% | ||||
CIB Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 2,600 | |||||
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 | |||||
ABK Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 3,100 | |||||
Short-term Debt, Description | The ABK Short-Term Debt accrues interest at 1.65% per annum over Corridor Offer Rate | |||||
Debt instrument, interest rate, stated percentage | 11.00% | 11.00% | ||||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 1,500 | |||||
Debt instrument, interest rate, stated percentage | 2.30% | 2.30% | ||||
Utilized debt amount | $ 1,300 | |||||
Short-term Debt | $ 200 | |||||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | Egyptian [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | ÂŁ | ÂŁ 2 | |||||
Debt instrument, interest rate, stated percentage | 10.00% | 10.00% | ||||
Utilized debt amount | ÂŁ | ÂŁ 2 | |||||
Short-term Debt | ÂŁ | 0 | |||||
Time Loan Overdraft Faciity [Member] | CIB Short-Term Debt [Member] | Egyptian [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | ÂŁ | 10 | |||||
Utilized debt amount | ÂŁ | 9.8 | |||||
Short-term Debt | ÂŁ | ÂŁ 0.2 | |||||
London Interbank Offered Rate (LIBOR) [Member] | CIB Long-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate, stated percentage | 2.00% | 2.00% | ||||
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] | ||||||
Debt Instrument, Maturity Date | May 6, 2025 | |||||
Withdrawn term loan | $ 285,000 | 300,000 | ||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | May 6, 2023 | |||||
Long-term line of credit | $ 65,000 | |||||
Withdrawn term loan | 65,000 | 50,000 | ||||
Line of credit facility, commitment fee percentage | 0.60% | |||||
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. Any unutilized balances from the RCF can be drawn down again during the 4-year tenure at the same terms. | |||||
Prepayment of borrowings | $ 5,000 | |||||
Line of credit facility, remaining borrowing capacity | 0 | 15,000 | ||||
Letters of Guarantee [Member] | ABK Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 200 | |||||
Utilized debt amount | 200 | |||||
Short-term Debt | 0 | |||||
Letters of Guarantee [Member] | Time Loan Facility [Member] | CIB Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 13,800 | |||||
Utilized debt amount | 8,300 | |||||
Short-term Debt | 5,500 | |||||
Time Loan Facility [Member] | ABK Short-Term Debt [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | 3,000 | |||||
Utilized debt amount | 2,300 | |||||
Short-term Debt | 800 | |||||
Secured Facilities Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | 525,000 | $ 485,000 | $ 450,000 | |||
Term loan amount | 285,000 | |||||
Working capital facility | $ 24,700 | 30,400 | ||||
Debt instrument, covenant 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. | |||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | $ 6,200 | 6,300 | ||||
Utilized working capital facility | 18,500 | 24,100 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | QATAR | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 10,300 | 16,400 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | UNITED ARAB EMIRATES | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 14,300 | 13,900 | ||||
Secured Facilities Agreement [Member] | HSBC Bank Middle East Limited [Member] | KUWAIT | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | 100 | 100 | ||||
Secured Facilities Agreement [Member] | Lenders [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | $ 21,900 | 25,800 | ||||
Line of credit, description | letters of guarantee and letters of credit and refinancing letters of credit into short-term debt 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 | $ 129,400 | $ 134,200 | ||||
Secured Facilities Agreement [Member] | Successors [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Reduced term loan amount | 501,300 | |||||
Incremental Facilities Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000 | $ 35,000 | ||||
Secured Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Working capital facility | $ 151,300 |
FAIR VALUE ACCOUNTING (Details
FAIR VALUE ACCOUNTING (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 01, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Goodwill | $ 620,921 | $ 620,921 | $ 574,764 | |||
Undiscounted range description | The Cash Earn-Out was determined using a discounted cash flow approach within a scenario analysis and had an undiscounted range of outcomes between $0 and $5.4 million. The Additional Earn-Out Shares were valued using a Monte Carlo simulation and had an undiscounted range of outcomes between $0 and $6.4 million. | |||||
Stock Issued During Period, Value, Other | $ 47 | $ 27 | $ (17) | |||
Fair Value, Inputs, Level 3 [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of cash and additional earn-out shares | $ 11,700 | |||||
Value of cash and additional earn-out shares reduced | $ 2,100 | |||||
Shares Issued, Price Per Share | $ 9.93 | $ 9.93 | ||||
Fair Value, Inputs, Level 3 [Member] | Subsequent Event [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of additional earn out shares issued | 145,039 | |||||
Stock Issued During Period, Value, Other | $ 700 | |||||
Sahara Petroleum Services Company SAE [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Goodwill | $ 46,200 | $ 46,200 |
SCHEDULE OF FUNDED STATUS OF EN
SCHEDULE OF FUNDED STATUS OF END-OF-SERVICE INDEMNITIES EMPLOYEES RECEIVE UNDER ONE OF FIVE BENEFIT STRUCTURES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Benefit obligations at the beginning of the year | $ 19,320 | $ 16,122 |
Actuarial (gain) / loss | 2,243 | 2,031 |
Service cost | 3,487 | 2,680 |
Interest cost | 583 | 655 |
Benefits paid | (2,007) | (2,168) |
Other | 1,315 | |
Defined Benefit Plan, Benefit Obligation, Ending Balance | 24,941 | 19,320 |
Current benefit obligation | 3,426 | 2,575 |
Non-current benefit obligation | 21,515 | 16,745 |
Fair value of plan assets at the beginning of the year | ||
Employer contributions | 2,007 | 2,168 |
Benefits paid | (2,007) | (2,168) |
Plan assets at the end of the year | ||
Unfunded status | $ 24,941 | $ 19,320 |
SCHEDULE OF COMPONENTS OF NET P
SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||||
Service cost | $ 3,487 | $ 2,680 | ||
Interest cost | 583 | 655 | ||
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Service cost | $ 1,412 | 3,487 | 2,680 | |
Interest cost | 282 | 583 | 655 | |
Actuarial (gain)/loss | 896 | 2,243 | 2,031 | |
Other | (416) | |||
Net cost | $ 2,174 | $ 6,313 | $ 5,366 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Service cost | $ 866 | |||
Interest cost | 168 | |||
Actuarial (gain)/loss | 375 | |||
Other | ||||
Net cost | $ 1,409 |
SCHEDULE OF ASSUMPTIONS USED TO
SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Benefit obligations, Discount rate | 1.75% | 2.75% |
Benefit obligations, Rate of increase in compensation levels: | 3.00% | 3.00% |
Net periodic benefit cost, Discount rate | 2.75% | 3.75% |
Net periodic benefit cost, Rate of increase in compensation levels: | 3.00% | 3.00% |
SCHEDULE OF BENEFIT OBLIGATIONS
SCHEDULE OF BENEFIT OBLIGATIONS CHANGE IN ASSUMPTION (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Retirement Benefits [Abstract] | |
25 basis point decrease in discount rate | $ 429 |
25 basis point increase in discount rate | $ (377) |
SCHEDULE OF EXPECTED FUTURE BEN
SCHEDULE OF EXPECTED FUTURE BENEFIT PAYMENTS (Details) $ in Millions | Dec. 31, 2020USD ($) |
Retirement Benefits [Abstract] | |
2021 | $ 3,902 |
2022 | 3,871 |
2023 | 3,688 |
2024 | 3,793 |
2025 | 3,519 |
2026 through 2030 | $ 16,704 |
EMPLOYEE BENEFITS (Details Narr
EMPLOYEE BENEFITS (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||
Discount rate, percentage | 0.25% | |
Accumulated benefit obligation | $ 13.9 | $ 16.1 |
Successors [Member] | ||
Multiemployer Plan [Line Items] | ||
Total contributions | $ 3.3 | $ 3.1 |
SCHEDULE OF UNVESTED RESTRICTED
SCHEDULE OF UNVESTED RESTRICTED STOCK (Details) - Restricted Stock Units (RSUs) [Member] - Successors [Member] - $ / shares | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Restricted Shares, Unvested, Beginning Balance | 1,502,690 | 725,200 | |
Weighted Average Grant Date Fair Value per Share, Unvested, Beginning Balance | $ 10.25 | $ 10.94 | |
Number of Restricted Shares, Granted | 725,200 | 1,194,905 | 1,184,000 |
Weighted Average Grant Date Fair Value per Share, Granted | $ 10.94 | $ 5.30 | $ 9.86 |
Number of Restricted Shares, Vested and issued | (590,264) | (290,510) | |
Weighted Average Grant Date Fair Value per Share, Vested and issued | $ 10.18 | $ 10.27 | |
Number of Restricted Shares, Forfeited | (68,669) | (116,000) | |
Weighted Average Grant Date Fair Value per Share, Forfeited | $ 9.55 | $ 10.59 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance | 725,200 | 2,038,662 | 1,502,690 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ 10.94 | $ 7.38 | $ 10.25 |
SCHEDULE OF STOCK-BASED COMPENS
SCHEDULE OF STOCK-BASED COMPENSATION (Details) - Successors [Member] - USD ($) $ in Thousands | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 1,034 | $ 7,832 | $ 5,654 |
Cost of Services [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 517 | 3,521 | 2,392 |
Selling, General and Administrative Expenses [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 517 | $ 4,311 | $ 3,262 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - 2018 Long Term Incentive Plan [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 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 | $ 9.7 | $ 11.7 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 1 year 7 months 6 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 CAPITAL LEASES (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments 2021 | $ 22,500 |
Future Interest Payments 2021 | 1,524 |
Total Payments 2021 | 24,024 |
Future Minimum Lease Payments 2022 | 3,236 |
Future Interest Payments 2022 | 453 |
Total Payments 2022 | 3,689 |
Future Minimum Lease Payments 2023 | 1,810 |
Future Interest Payments 2023 | 174 |
Total Payments 2023 | 1,984 |
Future Minimum Lease Payments 2024 | 438 |
Future Interest Payments 2024 | 21 |
Total Payments 2024 | 459 |
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 | 27,984 |
Future Interest Payments Total | 2,172 |
Total | $ 30,156 |
SCHEDULE OF FUTURE MINIMUM LE_2
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE OPERATING LEASES (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 21,665 |
2022 | 2,814 |
2023 | 1,998 |
2024 | 2,003 |
2025 | 1,355 |
Thereafter | 3,413 |
Total | $ 33,248 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | ||||
Capital expenditure commitments | $ 16,100 | $ 22,100 | ||
Capital lease expired date | expire between 2021 and 2023 | |||
Capital Lease Obligations | $ 25,500 | 33,700 | ||
Short term capital lease obligation | 22,300 | 20,500 | ||
Long term capital lease obligation | 3,200 | 13,100 | ||
Due to Related Parties | 15,200 | 6,000 | ||
Letters of credit outstanding amount | 16,900 | 21,200 | ||
Surety bonds and other bank issued guarantees | 101,500 | 99,100 | ||
Cash margin guarantees | 3,400 | 5,800 | ||
Other Liabilities | 4,000 | 6,700 | ||
Accounts Payable [Member] | ||||
Loss Contingencies [Line Items] | ||||
Due to Related Parties | 11,400 | 0 | ||
Other Current Liabilities [Member] | ||||
Loss Contingencies [Line Items] | ||||
Due to Related Parties | 600 | 3,000 | ||
Other Liabilities [Member] | ||||
Loss Contingencies [Line Items] | ||||
Due to Related Parties | $ 3,200 | 3,000 | ||
Egypt Equipment [Member] | ||||
Loss Contingencies [Line Items] | ||||
Capital lease expired date | expire between 2020 and 2024 | |||
Capital Lease Obligations | $ 3,000 | 0 | ||
Short term capital lease obligation | 700 | 0 | ||
Long term capital lease obligation | 2,300 | 0 | ||
Successors [Member] | ||||
Loss Contingencies [Line Items] | ||||
Interest Expense | $ 14,383 | 15,879 | 18,971 | |
Rental expense | 57,800 | 144,100 | 114,900 | |
Successors [Member] | Second Capital Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
Interest Expense | 0 | 1,500 | 600 | |
Successors [Member] | Egypt Equipment [Member] | ||||
Loss Contingencies [Line Items] | ||||
Interest Expense | $ 0 | $ 200 | $ 0 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Loss Contingencies [Line Items] | ||||
Interest Expense | $ 4,090 | |||
Rental expense | 19,500 | |||
Predecessors [Member] | Second Capital Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
Interest Expense | 0 | |||
Predecessors [Member] | Egypt Equipment [Member] | ||||
Loss Contingencies [Line Items] | ||||
Interest Expense | $ 0 | |||
Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Capital lease term | 24 months | |||
Capital lease imputed interest rate | 4.30% | |||
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Capital lease term | 36 months | |||
Capital lease imputed interest rate | 6.50% |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - $ / shares | 5 Months Ended | 12 Months Ended | |||
Jun. 06, 2018 | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common Stock, Shares, Outstanding | 87,777,553 | 87,187,289 | |||
Preferred shares issued | 0 | 0 | |||
Preferred shares outstanding | 0 | 0 | |||
Successors [Member] | NPS Holdings Limited [Member] | Mr Abdulaziz Mubarak Al Dolaimiand Mr Fahad Abdulla Bindekhayel [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Ordinary share price per shares | $ 1 | ||||
Number of convertible shares issued | 37,000,000 | ||||
Predecessors [Member] | NPS Holdings Limited [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Dividends paid per share | $ 0.13 | $ 0.05 | |||
Public Warrants [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Class of Warrant or Right, Outstanding | 35,540,380 | ||||
Previously unregistered warrants | 12,618,680 | ||||
Public Warrants [Member] | Successors [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Class of Warrant or Right, Outstanding | 35,540,380 | 35,540,380 | 35,540,380 | ||
Private Warrants [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Ordinary share price per shares | $ 5.75 | ||||
Warrants and Rights Outstanding, Maturity Date | Jun. 6, 2023 | ||||
Warrants and Rights Outstanding, Term | 5 years |
SCHEDULE OF RECONCILIATION OF B
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING (Details) - Successors [Member] - shares | 7 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Multiemployer Plan [Line Items] | ||||||
Weighted average ordinary shares outstanding, beginning balance | 87,187,289 | |||||
Change in shares, Restricted stock vesting | 307,932 | 250,310 | ||||
Weighted average ordinary shares outstanding, Restricted stock vesting | 242,307 | 96,009 | ||||
Change in shares, NESR ordinary share consideration to be issued in SAPESCO transaction (Note 4) | [1] | 2,237,000 | ||||
Weighted average ordinary shares outstanding, NESR ordinary share consideration to be issued in SAPESCO transaction (Note 4) | [1] | 1,307,973 | ||||
Change in shares, Restricted stock vesting | 282,332 | 40,200 | ||||
Weighted average ordinary shares outstanding, Restricted stock vesting | 107,224 | 5,507 | ||||
Contingently issuable shares to be issued in SAPESCO transaction | [2] | 301,830 | ||||
Weighted average ordinary shares outstanding, Contingently issuable shares to be issued in SAPESCO transaction | [2] | 825 | ||||
Weighted average ordinary shares outstanding, ending balance | 88,845,618 | 87,187,289 | ||||
Weighted average ordinary shares outstanding, beginning balance | 86,997,554 | 85,562,769 | ||||
Change in shares, Other | 33,796 | |||||
Weighted average ordinary shares outstanding, Other shares | 33,055 | |||||
Change in shares, NPS equity stock earn-out | 1,300,214 | [3] | 1,300,214 | [4] | ||
Weighted average ordinary shares outstanding, NPS equity stock earn-out | 6,251 | [3] | 1,300,214 | [4] | ||
Weighted average ordinary shares outstanding, ending balance | 85,562,769 | 86,997,554 | ||||
Weighted average ordinary shares outstanding, beginning balance | 11,730,425 | 85,569,020 | ||||
Change in shares, backstop shares | 4,829,375 | |||||
Weighted average ordinary shares outstanding, backstop shares | 4,829,375 | |||||
Change in shares, underwriter shares | 307,465 | |||||
Weighted average ordinary shares outstanding, underwriter shares | 307,465 | |||||
Change in shares issued to NPS/GES | 53,690,315 | |||||
Weighted average ordinary shares outstanding, shares issued to NPS/GES | 53,690,315 | |||||
Change in shares transferred to perm equity | 15,005,189 | |||||
Weighted average ordinary shares outstanding, Shares transferred to perm equity | 15,005,189 | |||||
[custom:ShareIssued-2] | 85,569,020 | |||||
Weighted average ordinary shares outstanding | 85,569,020 | 88,845,618 | 86,997,554 | |||
Allocation of Participating Earnings [Member] | ||||||
Multiemployer Plan [Line Items] | ||||||
Weighted average ordinary shares outstanding | 85,569,020 | 88,845,618 | 86,997,554 | |||
Non-vested, participating restricted shares | 725,200 | 1,094,156 | 1,419,361 | |||
Shares for use in allocation of participating earnings | 86,294,220 | 89,939,774 | 88,416,915 | |||
[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 301,830 | |||||
[3] | The NPS equity stock earn-out has been included in the computation of basic earnings per share (“EPS”) as the conditions for issuance were satisfied as of December 31, 2018. | |||||
[4] | The NPS equity stock earn-out has been included in the computation of basic earnings per share (“EPS”) as the conditions for issuance were satisfied as of December 31, 2018. |
SCHEDULE OF RECONCILIATION OF_2
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING (Details) (Parenthetical) - Sale and Purchase Agreement [Member] - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Shares expected to be issued | 301,830 | |
Forecast [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Shares expected to be issued | 2,237,000 |
SCHEDULE OF BASIC AND DILUTED E
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) - USD ($) | 5 Months Ended | 7 Months Ended | 12 Months Ended | ||
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | ||
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 | 17,770,190 | ||
Public Warrants [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of warrants | 35,540,380 | ||||
Successors [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Net income | $ 35,143,000 | $ 50,087,000 | $ 39,364,000 | ||
Ordinary Shares | |||||
Non-vested participating shares | |||||
Total Undistributed Earnings | 35,143,000 | 50,087,000 | 39,364,000 | ||
Allocation of earnings to Ordinary Shares | 34,834,000 | 49,478,000 | 38,732,000 | ||
Allocation of earnings to Nonvested Shares | $ 309,000 | $ 609,000 | $ 632,000 | ||
Ordinary Shares, Distributed Earnings | |||||
Ordinary Shares, Undistributed Earnings | 0.41 | 0.56 | 0.45 | ||
Basic : Basic earnings per common share | $ 0.41 | $ 0.56 | $ 0.45 | ||
Undistributed & distributed earnings to ordinary shareholders, As reported - basic | $ 34,834,000 | $ 49,478,000 | $ 38,732,000 | ||
Weighted average ordinary shares outstanding | 85,569,020 | 88,845,618 | 86,997,554 | ||
Diluted EPS- Ordinary shares | $ 0.41 | $ 0.56 | $ 0.45 | ||
Add-back : Undistributed & distributed earnings to ordinary shareholders, Undistributed earnings allocated to nonvested shareholders | $ 309,000 | $ 609,000 | $ 632,000 | ||
Add-back : Ordinary shares, Undistributed earnings allocated to nonvested shareholders | |||||
Add-back : Undistributed & distributed earnings to ordinary shareholders, NPS equity stock earn-out | |||||
Add-back : Ordinary shares, NPS equity stock earn-out | 1,293,963 | 145,039 | |||
Equity stock earn-outs, Earning per share | $ (0.01) | ||||
Add-back : Undistributed & distributed earnings to ordinary shareholders | [1] | ||||
Add-back : Ordinary shares, 22,921,700 Public Warrants | [1] | ||||
Less : Undistributed & distributed earnings to ordinary shareholders, Undistributed earnings reallocated to nonvested shareholders | $ (305,000) | $ (609,000) | $ (632,000) | ||
Less : Undistributed & distributed earnings to ordinary shareholders, Undistributed earnings reallocated to non-vested shareholders | |||||
Diluted EPS - Ordinary shares | $ 34,838 | $ 49,478 | $ 38,732 | ||
Weighted average dilutive common shares outstanding | 86,862,983 | 88,990,657 | 86,997,554 | ||
Diluted : Diluted earnings per common share | $ 0.40 | $ 0.56 | $ 0.45 | ||
Net income | $ 35,143,000 | $ 50,087,000 | $ 39,364,000 | ||
Successors [Member] | Public Warrants [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of warrants | 35,540,380 | 35,540,380 | 35,540,380 | ||
Warrants, price per share | $ 5.75 | $ 5.75 | $ 5.75 | ||
Predecessors [Member] | NPS Holdings Limited [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Basic : Basic earnings per common share | $ 0.02 | ||||
Weighted average ordinary shares outstanding | 348,524,566 | ||||
Weighted average dilutive common shares outstanding | 370,000,000 | ||||
Diluted : Diluted earnings per common share | $ 0.02 | ||||
Dilutive potential common shares | 21,475,434 | ||||
Net income | $ 7,617,000 | ||||
Basic : Less: Earnings allocated to participating securities | (192,000) | ||||
Basic : Net income available to basic common shares | 7,425,000 | ||||
Diluted : Less: Earnings allocated to participating securities | (181,000) | ||||
Diluted : Net income available to diluted common shares | $ 7,436,000 | ||||
[1] | Non-participating warrants that could be converted into as many as 17,770,190 December 31, 1,119,905 0 0 |
SCHEDULE OF BASIC AND DILUTED_2
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) (Parenthetical) - $ / shares | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount | 1,119,905 | 0 | 0 | |
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 | 17,770,190 | |
Public Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of warrants | 35,540,380 | |||
Successors [Member] | Public Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of warrants | 35,540,380 | 35,540,380 | 35,540,380 | 35,540,380 |
Warrants, price per share | $ 5.75 | $ 5.75 | $ 5.75 | $ 5.75 |
SCHEDULE OF INCOME BEFORE INCOM
SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Domestic | $ (20,722) | $ (3,163) | $ (1,675) | |
Foreign | 65,133 | 63,955 | 54,050 | |
Income Before Income Tax | $ 44,411 | $ 60,792 | $ 52,375 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Domestic | ||||
Foreign | 9,078 | |||
Income Before Income Tax | $ 9,078 |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Successors [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Deferred tax expense (benefit) | $ (2,025) | $ (4,617) | $ (3,935) | |
Income tax expense | 9,431 | 10,705 | 13,071 | |
Successors [Member] | Foreign Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Current tax expense | 11,456 | 15,322 | 17,006 | |
Deferred tax expense (benefit) | (2,025) | (4,617) | (3,935) | |
Income tax expense | $ 9,431 | $ 10,705 | $ 13,071 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Deferred tax expense (benefit) | ||||
Income tax expense | 2,342 | |||
Predecessors [Member] | Foreign Tax Authority [Member] | NPS Holdings Limited [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Current tax expense | 2,342 | |||
Deferred tax expense (benefit) | ||||
Income tax expense | $ 2,342 |
SCHEDULE OF DEFERRED INCOME TAX
SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets, Property, plant and equipment | $ 3,819 | $ 1,678 |
Deferred Tax Assets, Net operating loss carryforward | 7,263 | 6,932 |
Total deferred tax assets | 11,082 | 8,610 |
Less: valuation allowance | (6,904) | (4,886) |
Deferred tax assets, net of valuation allowance | 4,178 | 3,724 |
Deferred Tax Liabilities, Property, plant and equipment | (3,600) | (4,911) |
Deferred Tax Liabilities, Intangible assets | (21,648) | (25,030) |
Total deferred tax liabilities | (25,248) | (29,941) |
Net deferred tax liability | $ (21,070) | $ (26,217) |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) (Parenthetical) | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | |||
Successors [Member] | VIRGIN ISLANDS, BRITISH | ||||
Multiemployer Plan [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | 0.00% | 0.00% | |
Predecessors [Member] | VIRGIN ISLANDS, BRITISH | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | |||
Predecessors [Member] | UNITED ARAB EMIRATES | ||||
Multiemployer Plan [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | 0.00% | 0.00% | |
Predecessors [Member] | UNITED ARAB EMIRATES | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% |
SCHEDULE OF EFFECTIVE INCOME _2
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Income tax at statutory rate (BVI and UAE 0%) | ||||
Foreign tax rate differential | 8,328 | 10,782 | 12,848 | |
Tax effect of adjustments to prior years current tax expense | 1,348 | (2,054) | ||
Tax effect of adjustments to prior years deferred taxes | (2,234) | |||
Reversal of tax liability on expiration of limitation period | (1,206) | |||
Effect of changes in valuation allowances | 2,018 | |||
Unrecognized tax benefits | 1,574 | (3) | 2,476 | |
Other | (471) | (199) | ||
Income tax expense | $ 9,431 | $ 10,705 | $ 13,071 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Income tax at statutory rate (BVI and UAE 0%) | ||||
Foreign tax rate differential | 2,147 | |||
Tax effect of adjustments to prior years current tax expense | 195 | |||
Tax effect of adjustments to prior years deferred taxes | ||||
Reversal of tax liability on expiration of limitation period | ||||
Effect of changes in valuation allowances | ||||
Unrecognized tax benefits | ||||
Other | ||||
Income tax expense | $ 2,342 |
SCHEDULE OF UNRECOGNIZED TAX BE
SCHEDULE OF UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Multiemployer Plan [Line Items] | ||||
Balance at beginning of period | $ 13,700 | |||
Ending unrecognized tax benefits | 15,600 | $ 13,700 | ||
Successors [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Balance at beginning of period | 13,739 | 8,341 | ||
Additions from tax positions adjusted in purchase accounting | 6,767 | 1,072 | ||
Additions from tax positions related to the current period | 1,324 | 4,599 | 1,376 | |
Addtions from tax positions related to prior periods | 250 | 1,503 | 4,700 | |
Reductions from tax positions related to earlier periods | (1,880) | (873) | ||
Reductions on account of statute expiry | (1,206) | |||
Other | (1,156) | (877) | ||
Ending unrecognized tax benefits | 8,341 | $ 15,599 | $ 13,739 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Multiemployer Plan [Line Items] | ||||
Balance at beginning of period | 4,837 | $ 4,837 | ||
Additions from tax positions adjusted in purchase accounting | ||||
Additions from tax positions related to the current period | ||||
Addtions from tax positions related to prior periods | ||||
Reductions from tax positions related to earlier periods | ||||
Other | ||||
Ending unrecognized tax benefits | $ 4,837 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Income tax statutory rate | 0.00% | |
Operating Loss Carryforwards | $ 39,900 | |
Operating loss carryforward, expiry description | expire between 2021 and 2025. | |
Operating Loss Carryforwards, Valuation Allowance | $ 6,900 | $ 4,900 |
[custom:IncreaseInNetOperatingLossCarryforwardValuationAllowance-0] | 2,000 | 4,800 |
Valuation allowance, deferred tax asset, increase | 3,700 | |
Utilization of valuation allowance | 1,700 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 2,400 | 1,700 |
Deferred tax liabilities on property, plant and equipment | 3,600 | 4,911 |
Unrecognized tax benefit deferred tax liabilities on property, plant and equipment | $ 3,600 | 3,600 |
Effective statutory rate, description | In the British Virgin Islands, the statutory rate is effectively 0% as income tax is not applied on extra territorial activity. For the United Arab Emirates, the statutory rate on our operations is also 0%. | |
Income tax examination penalties and interest accrued | $ 100 | 900 |
Unrecognized Tax Benefits | 15,600 | 13,700 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 1,700 | $ 1,800 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 15,600 | |
Minimum [Member] | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||
Income tax statutory rate | 10.00% | |
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 | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Liabilities | $ 742,636 | $ 635,892 | |
Prime Business Solutions LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Maintenance fees payable | 300 | 400 | |
Nine Energy Service, Inc. [Member] | Coiled Tubing Equipment, Products and Services [Member] | |||
Related Party Transaction [Line Items] | |||
Liabilities | 3,700 | 6,800 | |
Basin Holdings US LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Liabilities | 0 | 100 | |
Successors [Member] | Nine Energy Service, Inc. [Member] | Coiled Tubing Equipment [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to acquire property, plant, and equipment | 1,100 | 6,800 | |
Successors [Member] | Basin Holdings US LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to acquire property, plant, and equipment | 2,100 | 2,000 | |
Mubbadrah Group Entities [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | $ 200 | 600 | |
Equity method investment, ownership percentage | 14.68% | ||
Mubbadrah Group Entities [Member] | Successors [Member] | |||
Related Party Transaction [Line Items] | |||
Operating Leases, Rent Expense, Net | $ 100 | $ 200 | 200 |
Receivable from related party | 300 | 300 | |
Payable to releted party | 500 | 500 | |
Heavy Equipment Manufacturing Trading LLC [Member] | Successors [Member] | |||
Related Party Transaction [Line Items] | |||
Receivable from related party | 600 | 400 | |
Heavy Equipment Manufacturing Trading LLC [Member] | Successors [Member] | GES [Member] | |||
Related Party Transaction [Line Items] | |||
Services charges | 500 | $ 100 | 100 |
Business Solutions LLC [Member] | Prime Business Solutions LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Equity method investment, ownership percentage | 100.00% | ||
Business Solutions LLC [Member] | Successors [Member] | Prime Business Solutions LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Administrative service fee | $ 0 | $ 1,000 | $ 800 |
SCHEDULE OF SEGMENT REPORTING,
SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from External Customer [Line Items] | ||||
Total long-lived assets | $ 437,743 | $ 419,307 | ||
Production Services [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total long-lived assets | 303,625 | 290,765 | ||
Drilling and Evaluation Services [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total long-lived assets | 124,062 | 115,241 | ||
Total Reportable Segments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total long-lived assets | 427,687 | 406,006 | ||
Unallocated Assets [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total long-lived assets | 10,056 | 13,301 | ||
Successors [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | $ 348,590 | 834,146 | 658,385 | |
Total operating income | 53,353 | 67,532 | 71,814 | |
Successors [Member] | Production Services [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 215,791 | 556,121 | 405,654 | |
Total operating income | 59,007 | 74,472 | 79,571 | |
Successors [Member] | Drilling and Evaluation Services [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 132,799 | 278,025 | 252,731 | |
Total operating income | 24,931 | 32,391 | 29,031 | |
Successors [Member] | Total Reportable Segments [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total operating income | 83,938 | 106,863 | 108,602 | |
Successors [Member] | Unallocated Expenses [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total operating income | $ (30,585) | $ (39,331) | $ 36,788 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | $ 137,027 | |||
Total operating income | 12,806 | |||
Predecessors [Member] | Production Services [Member] | NPS Holdings Limited [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 112,295 | |||
Total operating income | 25,459 | |||
Predecessors [Member] | Drilling and Evaluation Services [Member] | NPS Holdings Limited [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenue | 24,732 | |||
Total operating income | 893 | |||
Predecessors [Member] | Total Reportable Segments [Member] | NPS Holdings Limited [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total operating income | 26,352 | |||
Predecessors [Member] | Unallocated Expenses [Member] | NPS Holdings Limited [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total operating income | $ (13,546) |
SCHEDULE OF REVENUE FROM EXTERN
SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS (Details) - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total long-lived assets | $ 437,743 | $ 419,307 | ||
MENA [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total long-lived assets | 429,283 | 409,139 | ||
Rest of World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total long-lived assets | 8,460 | 10,168 | ||
Successors [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 348,590 | 834,146 | 658,385 | |
Successors [Member] | MENA [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 345,047 | 823,247 | 647,434 | |
Successors [Member] | Rest of World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 3,543 | $ 10,899 | $ 10,951 | |
Predecessors [Member] | NPS Holdings Limited [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 137,027 | |||
Predecessors [Member] | MENA [Member] | NPS Holdings Limited [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | 134,479 | |||
Predecessors [Member] | Rest of World [Member] | NPS Holdings Limited [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenue | $ 2,548 |
REPORTABLE SEGMENTS (Details Na
REPORTABLE SEGMENTS (Details Narrative) $ in Millions | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Jun. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2020USD ($)Segments | Dec. 31, 2019USD ($) | |
Revenue, Major Customer [Line Items] | ||||
Number of Reportable Segments | Segments | 2 | |||
Successors [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Number of Reportable Segments | Segments | 2 | |||
Successors [Member] | Revenue Benchmark [Member] | Customer One [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 42.00% | 57.00% | 45.00% | |
Successors [Member] | Revenue Benchmark [Member] | Customer Two [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 17.00% | 12.00% | 16.00% | |
Successors [Member] | Revenue Benchmark [Member] | Customer Three [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 10.00% | 4.00% | 8.00% | |
Successors [Member] | Revenue Benchmark [Member] | Customer Four [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 5.00% | 3.00% | 6.00% | |
Successors [Member] | Production Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Depreciation and amortization expense | $ | $ 79.2 | $ 53.5 | ||
Successors [Member] | Drilling and Evaluation Services [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Depreciation and amortization expense | $ | $ 29.7 | $ 23.2 | ||
Predecessors [Member] | Revenue Benchmark [Member] | Customer One [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 49.00% | |||
Predecessors [Member] | Revenue Benchmark [Member] | Customer Two [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 0.00% | |||
Predecessors [Member] | Revenue Benchmark [Member] | Customer Three [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 16.00% | |||
Predecessors [Member] | Revenue Benchmark [Member] | Customer Four [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 9.00% |