Cover
Cover | 12 Months Ended |
Dec. 31, 2022 shares | |
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, 2022 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2022 |
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, Postal Zip Code | 77056 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Interactive Data Current | No |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 94,012,752 |
ICFR Auditor Attestation Flag | true |
Document Financial Statement Error Correction [Flag] | false |
Auditor Firm ID | 3211 |
Auditor Name | Grant Thornton Audit and Accounting Limited (Dubai Branch) |
Auditor Location | Dubai, United Arab Emirates |
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 | Stefan Angeli |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 78,853 | $ 205,772 |
Accounts receivable, net (Note 7) | 148,709 | 130,415 |
Unbilled revenue | 110,186 | 108,482 |
Service inventories (Note 8) | 110,521 | 93,864 |
Prepaid assets | 337 | 6,040 |
Retention withholdings | 34,268 | 41,105 |
Other receivables | 38,271 | 35,251 |
Other current assets | 16,669 | 6,439 |
Total current assets | 537,814 | 627,368 |
Non-current assets | ||
Property, plant and equipment, net (Note 9) | 461,061 | 425,506 |
Intangible assets, net (Note 10) | 102,914 | 121,616 |
Goodwill (Note 10) | 645,095 | 645,095 |
Operating lease right-of-use assets (Note 11) | 29,970 | |
Other assets | 51,473 | 11,707 |
Total assets | 1,828,327 | 1,831,292 |
Liabilities | ||
Accounts payable and accrued expenses | 353,536 | 314,569 |
Current installments of long-term debt (Note 12) | 53,352 | 8,755 |
Short-term borrowings (Note 12) | 89,885 | 78,319 |
Income taxes payable (Note 14) | 7,262 | 7,184 |
Other taxes payable | 7,604 | 5,227 |
Operating lease liabilities (Note 11) | 6,263 | |
Other current liabilities | 26,166 | 17,818 |
Total current liabilities | 544,068 | 431,872 |
Long-term debt (Note 12) | 391,863 | 508,764 |
Deferred tax liabilities (Note 14) | 8,888 | |
Employee benefit liabilities (Note 13) | 24,382 | 23,534 |
Non-current operating lease liabilities (Note 11) | 25,051 | |
Other liabilities | 40,615 | 37,200 |
Total liabilities | 1,025,979 | 1,010,258 |
Commitments and contingencies (Note 15) | ||
Equity | ||
Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at December 31, 2022 and December 31, 2021, respectively (Note 17) | ||
Common stock and additional paid in capital, no par value; unlimited shares authorized; 94,012,752 and 91,366,235 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively (Note 17) | 877,299 | 856,792 |
Retained (deficit) / earnings | (75,020) | (35,827) |
Accumulated other comprehensive income | 69 | 69 |
Total shareholders’ equity | 802,348 | 821,034 |
Non-controlling interests | ||
Total equity | 802,348 | 821,034 |
Total liabilities and equity | $ 1,828,327 | $ 1,831,292 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | 12 Months Ended |
Dec. 31, 2021 $ / shares shares | |
Statement of Financial Position [Abstract] | |
Preferred Stock, No Par Value | $ / shares | $ 0 |
Preferred Stock, Shares Authorized, Unlimited [Fixed List] | Unlimited |
Preferred Stock, Shares Outstanding | shares | 0 |
Common Stock, No Par Value | $ / shares | $ 0 |
Common Stock, Shares Authorized, Unlimited [Fixed List] | Unlimited |
Common Stock, Shares, Outstanding | shares | 91,366,235 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 909,517 | $ 876,729 | $ 834,152 |
Cost of services | (844,039) | (873,948) | (756,245) |
Gross profit / (loss) | 65,478 | 2,781 | 77,907 |
Selling, general and administrative expenses (excluding Amortization) | (47,530) | (28,071) | (26,812) |
Amortization | (18,865) | (18,042) | (15,817) |
Operating (loss) / income | (917) | (43,332) | 35,278 |
Interest expense, net | (34,126) | (15,174) | (15,879) |
Gain/(loss) on Private Warrant Liability | 557 | ||
Other income / (expense), net | 5,242 | (2,073) | 9,139 |
(Loss) / income before income tax | (29,801) | (60,579) | 29,095 |
Income tax (expense) / benefit | (6,619) | (3,989) | (12,540) |
Net (loss) / income | (36,420) | (64,568) | 16,555 |
Net (loss) / income attributable to non-controlling interests | |||
Net (loss) / income attributable to shareholders | $ (36,420) | $ (64,568) | $ 16,555 |
Weighted average shares outstanding (Note 18): | |||
Basic | 92,962,048 | 91,043,830 | 88,845,601 |
Diluted | 92,962,048 | 91,043,830 | 89,117,876 |
Net earnings per share (Note 18): | |||
Basic | $ (0.39) | $ (0.71) | $ 0.19 |
Diluted | $ (0.39) | $ (0.71) | $ 0.18 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net (loss) / income | $ (36,420) | $ (64,568) | $ 16,555 |
Other comprehensive income, net of tax | |||
Foreign currency translation adjustments | 5 | 35 | |
Total Comprehensive Income, net of tax | (36,420) | (64,563) | 16,590 |
Comprehensive income attributable to non-controlling interest | |||
Comprehensive income attributable to shareholders | $ (36,420) | $ (64,563) | $ 16,590 |
Consolidated Statements Shareho
Consolidated Statements Shareholders' Equity - USD ($) $ in Thousands | Common stock and additional paid in capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total Company Stockholders Equity [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2019 | $ 822,942 | $ 29 | $ 12,186 | $ 835,157 | $ 835,157 | |
Balance, shares at Dec. 31, 2019 | 87,187,289 | |||||
Share-based compensation expense | $ 7,832 | 7,832 | 7,832 | |||
Vesting of restricted share units | ||||||
Vesting of restricted share units, shares | 590,264 | |||||
Other | 35 | 35 | (8) | 27 | ||
Net (loss) / income | 16,555 | 16,555 | 16,555 | |||
Conversion of Private Warrants to Public Warrants | 372 | 372 | 372 | |||
Balance at Dec. 31, 2020 | $ 831,146 | 64 | 28,741 | 859,951 | (8) | 859,943 |
Balance, shares at Dec. 31, 2020 | 87,777,553 | |||||
Share-based compensation expense | $ 9,759 | 9,759 | 9,759 | |||
Vesting of restricted share units | ||||||
Vesting of restricted share units, shares | 940,032 | |||||
Other | 5 | 5 | 5 | |||
Net (loss) / income | (64,568) | (64,568) | (64,568) | |||
Shares issued to SAPESCO Selling Shareholders (Note 5) | $ 17,569 | 17,569 | 17,569 | |||
Shares issued to SAPESCO selling shareholders, shares | 2,648,650 | |||||
Acquisition of SAPESCO Noncontrolling Interest | $ (1,682) | (1,682) | 8 | (1,674) | ||
Balance at Dec. 31, 2021 | $ 856,792 | 69 | (35,827) | 821,034 | 821,034 | |
Balance, shares at Dec. 31, 2021 | 91,366,235 | |||||
Share-based compensation expense | $ 9,269 | 9,269 | 9,269 | |||
Vesting of restricted share units | ||||||
Vesting of restricted share units, shares | 996,517 | |||||
Current Expected Credit Loss Accounting Standard Adoption (Note 3) | (2,773) | (2,773) | (2,773) | |||
Acquisition of W.D. Van Gonten Engineering (Note 10) | $ 11,238 | 11,238 | 11,238 | |||
Acquisition of W.D. Van Gonten Engineering, shares (Note 10) | 1,650,000 | |||||
Other | ||||||
Net (loss) / income | (36,420) | (36,420) | $ (36,420) | |||
Shares issued to SAPESCO selling shareholders, shares | 266,611 | |||||
Balance at Dec. 31, 2022 | $ 877,299 | $ 69 | $ (75,020) | $ 802,348 | $ 802,348 | |
Balance, shares at Dec. 31, 2022 | 94,012,752 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net (loss) / income | $ (36,420) | $ (64,568) | $ 16,555 |
Adjustments to reconcile net (loss) / income to net cash provided by operating activities: | |||
Depreciation and amortization | 115,845 | 122,125 | 120,724 |
Share-based compensation expense | 9,269 | 9,759 | 7,832 |
Loss (Gain) on disposal of assets | (60) | 333 | 3,959 |
Non-cash interest (income) expense | 8,087 | 3,041 | (258) |
Deferred tax expense (benefit) | (10,261) | (12,140) | (3,241) |
Allowance for (reversal of) doubtful receivables | 8,185 | 1,114 | 261 |
Charges on obsolete service inventories | 100 | 3,610 | 1,071 |
Earn-outs on business combinations | 1,767 | (9,619) | |
Loss (Gain) on Private Warrant liability | (557) | ||
Loss (Gain) on Buyer Stock Adjustment Amount (Note 10) | (4,236) | ||
Other operating activities, net | 837 | (75) | 579 |
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable | (29,252) | (8,289) | (2,621) |
(Increase) decrease in Unbilled revenue | (1,704) | 56,088 | (76,464) |
(Increase) decrease in Retention withholdings | 6,837 | (4,000) | 6,013 |
(Increase) decrease in inventories | (16,756) | (3,236) | (11,868) |
(Increase) decrease in prepaid expenses | 6,164 | (884) | 503 |
(Increase) decrease in other current assets | (13,711) | (16,717) | (236) |
(Increase) decrease in other long-term assets and liabilities | 6,075 | 8,854 | 1,526 |
Increase (decrease) in accounts payable and accrued expenses | 33,651 | 31,221 | 79,343 |
Increase (decrease) in other current liabilities | 9,926 | (260) | 951 |
Net cash provided by operating activities | 92,576 | 127,743 | 134,453 |
Cash flows from investing activities: | |||
Capital expenditures | (122,415) | (107,076) | (82,632) |
IPM investments (note 3) | (17,367) | ||
Proceeds from disposal of assets | 626 | 2,760 | 487 |
Acquisition of business, net of cash acquired | (51,921) | (13,218) | |
Other investing activities | (7,552) | (8,299) | (1,074) |
Net cash used in investing activities | (146,708) | (164,536) | (96,437) |
Cash flows from financing activities: | |||
Proceeds from long-term debt | 3,194 | 527,488 | 15,000 |
Repayments of long-term debt | (78,755) | (360,000) | (25,972) |
Proceeds from short-term borrowings | 139,482 | 123,787 | 66,449 |
Repayments of short-term borrowings | (119,165) | (78,983) | (68,302) |
Payments on capital leases | (3,108) | (21,361) | (19,581) |
Payments on seller-provided financing for capital expenditures | (14,443) | (15,333) | (3,834) |
Other financing activities, net | (8,054) | ||
Net cash provided by (used in) financing activities | (72,795) | 167,544 | (36,240) |
Effect of exchange rate changes on cash | 8 | 9 | 35 |
Net increase (decrease) in cash | (126,919) | 130,760 | 1,811 |
Cash and cash equivalents, beginning of period | 205,772 | 75,012 | 73,201 |
Cash and cash equivalents, end of period | 78,853 | 205,772 | 75,012 |
Supplemental disclosure of cash flow information (also refer Note 3): | |||
Interest paid | 19,236 | 9,890 | 13,051 |
Income taxes paid | $ 10,989 | $ 12,777 | $ 15,641 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS National Energy Services Reunited Corp. (“NESR,” the “Company,” “we,” “our,” “us” or similar terms), a British Virgin Islands corporation headquartered in Houston, Texas, is one of the largest oilfield services providers in the Middle East North Africa (“MENA”) region. Formed in January 2017, NESR started as a special purpose acquisition company (“SPAC”) designed to invest in the oilfield services space globally. NESR filed a registration statement for its initial public offering in May 2017. In November 2017, NESR announced the acquisition of two oilfield services companies in the MENA region: NPS Holdings Limited (“NPS”) and Gulf Energy S.A.O.C. (“GES” and, together with NPS, the “Subsidiaries,” or the “NPS/GES Business Combination”). 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”). On May 5, 2021, NESR again expanded its footprint within the MENA region when its NPS subsidiary acquired specific oilfield service lines of Action Energy Company W.L.L. (“Action,” the “Action Business Combination”). On July 1, 2022, NESR acquired a minority stake in W. D. Von Gonten Engineering LLC (“WDVGE” or the “WDVGE Investment”), a premier Reservoir Characterization and Geological & Geophysical (“G&G”) laboratory and consulting business formed from the merger of W. D. Von Gonten Laboratories LLC and W. D. Von Gonten & Co. Petroleum Engineering Consulting. NESR’s revenues are primarily derived by providing production services (“Production Services”) such as hydraulic fracturing, coil tubing, stimulation and pumping, cementing, nitrogen services, filtration services, pipelines and industrial services, production assurance, artificial lift services, and completions. NESR also provides drilling and evaluation services (“Drilling and Evaluation Services”) such as rigs and integrated services, fishing and downhole tools, thru-tubing intervention, tubular running services, directional drilling, drilling fluids, pressure control, well testing services, wireline logging services, and slickline services. NESR has significant operations throughout the MENA region including Saudi Arabia, Oman, Kuwait, United Arab Emirates, Algeria, Egypt, Libya and Qatar. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. 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 allocations for the acquisitions of SAPESCO and Action, estimates made in valuing the WDVGE Investment, allowance for credit losses, evaluation for impairment of property, plant and equipment, evaluation for impairment of goodwill and intangible assets, evaluation for impairment of cost and equity method investments, estimated useful life of property, plant, and equipment and intangible assets, provision for inventories obsolescence, unrecognized tax benefits, recoverability of deferred tax assets, 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, 2022 | |
Accounting Policies [Abstract] | |
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 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 (loss) / income attributable to such parties on the Consolidated Statements of Operations. 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). Revenue recognition 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. Costs that relate directly to a contract or an anticipated contract that the Company can specifically identify, that generate or enhance resources of the Company that will be used in satisfying performance obligations in the future, and are expected to be recovered, are capitalized as contract fulfillment costs and amortized into the Statements of Operations of the Company over the period of anticipated benefit. 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 were as follows during the year ended December 31, 2022: ● Purchases of property, plant, and equipment in Accounts payable of $ 9.1 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 11.6 ● During the year-to-date period ended December 31, 2022, the Company issued NESR ordinary share consideration of 1,650,000 Non-cash transactions were as follows during the year ended December 31, 2021: ● Purchases of property, plant, and equipment in Accounts payable of $ 2.6 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 7.3 million, $ 1.1 6.0 ● Obligations of $ 4.4 6.1 ● The Company issued NESR ordinary share consideration of 2,237,000 145,039 266,611 Non-cash transactions were as follows during the year ended December 31, 2020: ● Purchases of property, plant, and equipment in Accounts payable of $ 24.7 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 2.9 3.2 9.1 ● Purchases of property, plant, and equipment using capital lease financing of $ 2.2 4.7 ● Obligations of $ 2.0 13.5 Concentration of credit risk The Company’s assets that are exposed to concentrations of credit risk consist primarily of cash, accounts receivable from customers, unbilled revenue from customers, and retention withholdings. 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. Unbilled revenue, accounts receivable and allowance for credit losses 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. On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses 2.8 million cumulative-effect adjustment in opening retained (deficit) as of January 1, 2022, related to the adoption of ASC 326. The Company monitors its customers’ payment history and current credit worthiness to determine that collectability of the related financial assets is reasonably assured. The Company also considers the overall business climate in which our customers operate. For accounts receivable, a loss allowance matrix is utilized to measure lifetime expected credit losses. The matrix contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations. Prior to the adoption of ASC 326, the Company maintained 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 and chemicals 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 charges for obsolete 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 1 15 Office equipment (furniture and fixtures) and tools 3 10 Vehicles and cranes 5 10 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 Statements 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. Production Management Assets The Company’s Integrated Production Management (“IPM”) projects are focused on developing and managing production on behalf of the Company’s customers under long-term agreements. The Company will invest its own services and products, and in some cases cash, into the field development activities and operations. Although in certain arrangements the Company is paid for a portion of the services or products it provides, generally the Company will not be paid at the time of providing its services or upon delivery of its products. Instead, the Company is compensated based upon cash flow generated. Revenues from IPM arrangements, which is recognized as the related production is achieved, represented less than 0 0 0 The Company capitalizes its cash investments in a project as well as the direct costs associated with providing services or products for which the Company will be compensated when the related production is achieved. These capitalized investments are amortized to the Consolidated Statements of Operations as the related production is achieved based on the units of production method, whereby each unit produced is assigned a pro-rata portion of the unamortized costs based on estimated total production, resulting in a matching of revenue with the applicable costs. Amortization expense relating to these capitalized investments was $ 0.0 0.0 0.0 The unamortized portion of the Company’s investments in IPM projects was $ 17.4 0.0 At December 31, 2022, the Company assessed whether the unamortized costs associated with these investments exceed the present value of future cash flows from the projects, and has determined that no impairment charge exist. The Company will continue to assess, in future reporting periods, whether the unamortized costs associated with these investments exceed the discounted present value of future cash flows, as a significant deviation in future production levels or future selling prices could result in a material charge in the Consolidated Statement of Operations for future reporting periods. Subsequent to December 31, 2022, the production of hydrocarbon products commenced on these properties, and the Company commenced the amortization of these costs. 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 on October 1st, or more frequently if circumstances require. 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 performed quantitative assessments for both of its reporting units as of October 1, 2022, October 1, 2021, and October 1, 2020, and has not recorded any impairment charge for goodwill in the accompanying Consolidated Statements 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 ten years 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. Investments in Equity Instruments Investments in equity instruments (of entities in which the Company do not have either a controlling financial interest or significant influence, most often because the Company hold a voting interest of 0 20 Equity method investments are equity holdings in entities in which the Company do not have a controlling financial interest, but over which the Company have significant influence, most often because the Company hold a voting interest of 20 50 Leasing In February 2016, the FASB issued ASU 2016-02, Leases Upon transition, the Company applied the package of practical expedients permitted under the ASC 842 transition guidance. As a result, the Company did not reassess (1) whether expired or existing contracts contain leases under the new definition of a lease, including whether an existing or expired contract contains an embedded lease, (2) lease classification for expired or existing leases and (3) any initial direct costs of existing leases. As a result of the adoption of ASC 842 on January 1, 2022, the Company recorded right-of-use assets of $ 33.7 0.4 0.1 33.2 The Company determines if an arrangement contains a lease at inception. The Company has operating leases that primarily consist of land and buildings. The Company also has finance leases for its equipment. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. The Company has elected the practical expedient to utilize the risk-free rate over a similar period as the remaining lease term as the applicable discount rate. Lease expense for fixed lease payments on operating leases is recognized over the expected term on a straight-line basis, while interest expense for fixed lease payments on finance leases is recognized using the effective interest method. The Company has elected, as an accounting policy, to not apply the recognition requirements in ASC 842 to short-term leases. The Company did not elect the hindsight practical expedient, which would have allowed the Company to revisit key assumptions, such as lease term, that were made when the lease was originally entered. The Company has also elected, as a practical expedient, by underlying class of asset, not to separate lease components from non-lease components and instead, account for them as a single lease component. Prior to the adoption of ASC 842, the Company evaluated and classified its leases as operating or capital for financial reporting purposes. Assets held under capital leases were 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 Operations. 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 applicable employee contracts. The Company records annual amounts relating to these long-term employee benefits based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in the statement of income. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The net periodic costs are recognized as employees render the services necessary to earn these benefits. 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 as incurred. 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) / benefit in the Consolidated Statements of Operations. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. 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. 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 Net (loss) / income per ordinary share Basic income per ordinary share was computed by dividing basic net (loss) / 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 (loss) / 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. Derivative financial instruments The Company evaluates all of its financial instruments 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). Fair value of financial instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, leases, contingent consideration assumed in the Action transaction (Note 5), loans and borrowings and private warrants. 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. 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 operating segments and two reportable segments (Note 21), which reflects the manner in which the CODM operates the Company. The Company’s CODM is its Chief Executive Officer. Recently issued accounting standards not yet adopted All 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. |
RESTATEMENTS
RESTATEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTATEMENTS | RESTATEMENTS The following table shows the quantitative impact of the restatements made by the Company as of and for the year-year ended December 31, 2020, as well as for periods prior to January 1, 2020, which are adjusted through historical equity balances: SCHEDULE OF RESTATEMENT As of and for the year ended December 31, 2020 As Previously Reported Correction of Private Warrant Classification Error Correction of Errors from Overstatement/ (Understatement) of Assets and Liabilities During the Year Ended December 31, 2020 Correction of Classification Errors in Selling, General and Administrative Expenses (excluding Amortization) Correction of Errors from Overstatement/ (Understatement) of Assets and Liabilities Prior to January 1, 2020 As Restated Consolidated Balance Sheet Total current assets $ 515,217 $ - $ 161 $ - $ (4,220 ) $ 511,158 Total assets 1,687,054 - (3,710 ) - 3,197 1,686,541 Total current liabilities 359,366 - 22,923 - 53,583 435,872 Total liabilities 742,636 - 30,379 - 53,583 826,598 Total equity 944,418 - (34,089 ) - (50,386 ) 859,943 Consolidated Statement of Operations Revenues 834,146 - 6 - - 834,152 Cost of services (678,720 ) - (32,260 ) (45,265 ) - (756,245 ) Selling, general and administrative expenses (excluding Amortization) (72,077 ) - - 45,265 - (26,812 ) Gain/(loss) on Private Warrant Liability - 557 - - - 557 (Loss) / Income before income tax 60,792 557 (32,254 ) - - 29,095 Income tax (expense) / benefit (10,705 ) - (1,835 ) - - (12,540 ) Net (loss) / income 50,087 557 (34,089 ) - - 16,555 Basic earnings per share 0.56 0.01 (0.38 ) - - 0.19 Diluted earnings per share 0.56 - (0.38 ) - - 0.18 Consolidated Statement of Comprehensive Income Total Comprehensive Income, net of tax 50,122 557 (34,089 ) - - 16,590 Consolidated Statement of Shareholders’ Equity Common Stock and Additional Paid in Capital 826,614 4,532 - - - 831,146 Retained Earnings 117,748 (4,532 ) (34,089 ) - (50,386 ) 28,741 Total Shareholders’ Equity 944,418 - (34,089 ) - (50,386 ) 859,943 Consolidated Statements of Cash Flow Net cash provided by operating activities 133,471 - 982 - - 134,453 Correction of Private Warrant Classification Error On April 12, 2021, the Staff of the SEC released Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “Statement”). In response to the Statement, the Company determined that it had incorrectly accounted for its Private Warrants as equity, instead of liabilities. In accordance with ASC 480, Distinguishing Liabilities from Equity Correction of Errors from Overstatement/ (Understatement) of Assets and Liabilities On March 10, 2022, subsequent to the companywide adoption of a new Enterprise Resource Planning system and the ensuing reconciliation process, management of the Company determined that its previously issued financial statements included material errors primarily related to the completeness of accounts payable and accrued liabilities in Saudi Arabia and the United Arab Emirates. To quantify the restatement, management performed a complete reconciliation of vendor statements and subsequent invoices at these locations to the previously recorded balances. Contemporaneously, and to ensure the integrity of all other account balances and locations, management also conducted a full review of the Company’s account reconciliations in addition to physical inventory and fixed asset observations at all locations (inclusive of Saudi Arabia and the United Arab Emirates). The Company recorded additional restatements based on these procedures. Correction of Errors in Classification of Selling, General and Administrative Expenses Historically, certain costs of the Company’s field locations were incorrectly classified and reported as Selling, general and administrative expenses (excluding Amortization) (“SG&A”). The Company has restated these costs of its field locations as Cost of Services while amounts reflected in SG&A primarily relate to the Company’s global and regional headquarters locations. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Action Business Combination On May 5, 2021, NESR executed the Sale and Purchase Agreement (“Action Sale and Purchase Agreement”) to acquire specific oilfield service lines of Action Energy Company W.L.L. Description of the Action Transaction Under the terms of the Action Sale & Purchase Agreement, NESR acquired the working capital, property, plant, and equipment, contract labor force, and the economic benefit of three five-year customer contracts associated with specific oilfield service lines of Action in an all-cash transaction which comprised of $ 36.8 16.9 The Action Sale & Purchase Agreement also contained earn-out mechanisms that enabled the sellers to receive additional consideration after the closing of the Action Business Combination as follows: ● First Earn-Out Consideration (“First Earn-Out”) of 1 ● Second Earn-Out Consideration (“Second Earn-Out”) of 3 66.66 ● Third Earn-Out Consideration (“Third Earn-Out”) of up to 1.12 The First Earn-Out and Second Earn-Out were determined using a discounted cash flow approach within a scenario analysis. The Third Earn-Out was valued using a Black Sholes simulation. Collectively, the First Earn-Out, Second Earn-Out, and Third Earn-Out were fair valued at $ 6.4 million as of May 5, 2021. Subsequent to May 5, 2021, the Company recorded valuation adjustments to the First Earn-Out and Second Earn-Out totalling $ 0.7 0.5 0.7 0.0 3.0 4.3 Financing of Action Business Combination Consideration for the Action Business Combination was funded through the following sources and transactions: ● cash and cash equivalents of $ 36.8 ● deferred cash consideration of $ 16.9 The following summarizes the consideration to purchase the working capital, property, plant, and equipment, contract labor force, and the economic benefit of three five-year customer contracts associated with specific oilfield service lines of Action: SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST Consideration Cash consideration $ 36,767 Deferred cash consideration 16,935 Total consideration – cash 53,702 NESR ordinary share consideration NESR ordinary share consideration, shares Total consideration – equity Total consideration – equity, shares First Earn-Out 2,716 Second Earn-Out 3,635 Third Earn-Out - Cash Earn-Out Additional Earn-Out Shares Additional Earn-Out Shares, shares Total estimated earn-out mechanisms 6,351 Total estimated earn-out mechanisms, shares Total consideration $ 60,053 Total consideration, shares Accounting treatment The Action Business Combination was accounted for under ASC 805, Business Combinations (“ASC 805”). Pursuant to ASC 805, NESR has been determined to be the accounting acquirer. Action constitutes a business, with inputs, processes, and outputs. Accordingly, the acquisition of Action constitutes the acquisition of a business for purposes of ASC 805, and due to the change in control of Action was accounted for using the acquisition method. NESR recorded the fair value of assets acquired and liabilities assumed from Action. The following table summarizes the final purchase price allocation (in US$ thousands): SCHEDULE OF PURCHASE PRICE ALLOCATION Allocation of consideration Cash and cash equivalents $ 382 Accounts receivable 8,565 Unbilled revenue 1,352 Service inventories 2,862 Prepaid assets 310 Retention withholdings Other receivables 89 Other current assets 1,122 Property, plant and equipment 13,162 Intangible assets 29,100 Other assets 2,053 Total identifiable assets acquired 58,997 Accounts payable 5,294 Accrued expenses 2,465 Current installments of long-term debt Short-term borrowings Income taxes payable Other taxes payable Other current liabilities 200 Long-term debt Employee benefit liabilities 584 Other liabilities Non-controlling interests Net identifiable liabilities acquired 8,543 Total fair value of net assets acquired 50,454 Goodwill 9,599 Total consideration $ 60,053 All employee benefit liabilities relate to end of service benefits (Note 13). Intangible assets Intangible assets were identified that met either the separability criterion or the contractual-legal criterion described in ASC 805. The allocation to intangible assets is as follows (in US$ thousands): SCHEDULE OF ALLOCATION TO INTANGIBLE ASSETS Fair Value Total Useful Life (In US$ Customer relationships $ 29,100 10 Total intangible assets $ 29,100 Goodwill As of December 31, 2022, $ 9.6 In accordance with FASB ASC Topic 350, Goodwill and Other Intangible Assets Supplemental unaudited pro-forma information The following table summarizes the supplemental consolidated results of the Company on an unaudited pro-forma basis, as if the Action Business Combination had been consummated on January 1, 2020, for the years ended December 31, 2021 and 2020, respectively (in US$ thousands): SCHEDULE OF UNAUDITED PROFORMA INFORMATION Year ended December 31, December 31, Revenues $ 885,671 $ 855,409 Net (loss) / income (64,529 ) 15,325 These supplemental unaudited 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. The supplemental unaudited pro-forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other non-recurring charges incurred in connection with the Action Business Combination are included in the earliest period presented. Action revenue of $ 53.7 25.1 6.2 3.9 SAPESCO Business Combination In June of 2020, NESR executed the First Deed of Amendment (“First Deed of Amendment”) to the Agreement dated February 13, 2020 related to the sale and purchase of 99.7 % of SAPESCO (collectively with the First Deed of Amendment, the “SAPESCO Sale & Purchase Agreement”). The executed First Deed of Amendment gave NESR control over SAPESCO effective from June 1, 2020. Accordingly, the accounting of the acquisition was carried out effective June 1, 2020. During the fourth quarter of 2021, NESR acquired the remaining 0.3 % of SAPESCO. The transaction was accounted for as an equity transaction due to NESR’s controlling financial interest in SAPESCO both before and after the acquisition of the 0.3 % noncontrolling interest. Description of the SAPESCO Transaction Under the terms of the SAPESCO Sale & Purchase Agreement, NESR acquired 99.7 11.0 6.0 17.0 2,237,000 11.0 6.0 2,237,000 The SAPESCO Sale & Purchase Agreement also contained earn-out mechanisms that enabled the sellers to receive additional consideration after the closing of the SAPESCO Business Combination as follows: ● Cash Earn-Out (“Cash Earn-Out”) of up to $ 6.9 ● Additional Earn-Out Shares (“Additional Earn-Out Shares”) based on the collection of certain receivables and only to the extent that NESR’s average share price during the fourth quarter of 2020 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 1.9 0.5 145,039 1.4 The Customer Receivables Earn-Out Shares contingency and corresponding long-dated and doubtful receivables, were fair valued at $ 0.0 266,611 Financing of SAPESCO Business Combination Consideration for the SAPESCO 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% of the issued and outstanding equity interests of SAPESCO: SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST 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 quarter ended December 31, 2020, and finalized in the quarter ended March 31, 2021, when settled with the sellers for 145,039 During the fourth quarter of 2021, NESR acquired the remaining 0.3 % of SAPESCO. The transaction was accounted for as an equity transaction due to NESR’s controlling financial interest in SAPESCO both before and after the acquisition of the noncontrolling interest. Accounting treatment The SAPESCO Business Combination was 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): SCHEDULE OF PURCHASE PRICE ALLOCATION Allocation of consideration Cash and cash equivalents $ 3,740 Accounts receivable 14,847 Unbilled revenue 6,126 Service 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 identifiable assets acquired 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 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 13). The Company finalized its valuation of identifiable assets and liabilities during the year ended December 31, 2020. 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$ Customer relationships $ 2,900 8 Trademarks and trade names 440 2 Total intangible assets $ 3,340 Goodwill As of December 31, 2022, $ 46.2 In accordance with FASB ASC Topic 350, Goodwill and Other Intangible Assets Supplemental unaudited pro-forma information The following table summarizes the supplemental consolidated results of the Company on an unaudited pro-forma basis, as if the SAPESCO Business Combination had been consummated on January 1, 2019, for the year ended December 31, 2020 (in US$ thousands): SCHEDULE OF UNAUDITED PROFORMA INFORMATION December 31, 2020 Revenues $ 852,935 Net (loss) / income/(loss) 14,892 These supplemental unaudited 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 supplemental unaudited pro-forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other non-recurring charges incurred in connection with the SAPESCO Business Combination are included in the earliest period presented. SAPESCO revenue of $ 26.6 2.9 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of revenue There is significant homogeneity amongst the Company’s revenue-generating activities. In all service lines, the Company provides a “suite of services” to fulfill a customer purchase/service order, encompassing personnel, use of Company equipment, and supplies required to perform the services. 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 Year ended Description December 31, December 31, December 31, Revenue by Phase in Well’s Lifecycle: Production Services $ 567,249 $ 554,097 $ 557,327 Drilling and Evaluation Services 342,268 322,632 276,825 Total revenue by phase in well’s life cycle $ 909,517 $ 876,729 $ 834,152 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The following table summarizes the accounts receivable of the Company as of the period end dates set forth below (in US$ thousands): SCHEDULE OF ACCOUNTS RECEIVABLE December 31, December 31, Trade receivables $ 161,373 $ 132,467 Less: allowance for credit losses (12,664 ) (2,052 ) Total $ 148,709 $ 130,415 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, 2022 and December 31, 2021 were $ 161.4 132.5 SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS December 31, December 31, December 31, Year ended December 31, December 31, December 31, Allowance for credit losses at beginning of period $ (2,052 ) $ (1,722 ) $ (1,843 ) CECL Accounting Standard Adoption (Note 3) (2,773 ) - - (Increase) decrease to allowance for the period (8,185 ) (769 ) (261 ) (Recovery) write-off of credit losses 346 439 382 Allowance for credit losses at end of period $ (12,664 ) $ (2,052 ) $ (1,722 ) The Company’s allowance for credit losses at December 31, 2022, includes $ 9.4 |
SERVICE INVENTORIES
SERVICE INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SERVICE INVENTORIES | SERVICE INVENTORIES The following table summarizes the service inventories for the period end dates as set forth below (in US$ thousands): SCHEDULE OF SERVICE INVENTORIES December 31, December 31, 2022 2021 Spare parts $ 64,006 $ 65,883 Chemicals 46,515 27,981 Total $ 110,521 $ 93,864 |
PROPERTY, PLANT, & EQUIPMENT
PROPERTY, PLANT, & EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, & EQUIPMENT | PROPERTY, PLANT, & EQUIPMENT Property, plant and equipment, net of accumulated depreciation, of the Company consists of the following as of the period end dates set forth below (in US$ thousands): SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated Useful Lives (in years) December 31, December 31, Buildings and leasehold improvements 5 25 $ 52,442 $ 41,782 Drilling rigs, plant and equipment 1 15 677,263 565,730 Office equipment (furniture and fixtures) and tools 3 10 15,937 15,570 Vehicles and cranes 5 10 15,756 15,434 Less: Accumulated depreciation (323,325 ) (233,609 ) Land 11,664 11,664 Capital work in progress 11,324 8,935 Total $ 461,061 $ 425,506 The Company recorded depreciation expense of $ 97.0 104.1 104.8 |
GOODWILL, INTANGIBLE, AND OTHER
GOODWILL, INTANGIBLE, AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL, INTANGIBLE, AND OTHER ASSETS | GOODWILL, INTANGIBLE, AND OTHER ASSETS Goodwill Changes in the carrying amount of goodwill of the Company between December 31, 2021, and December 31, 2022, are as follows (in US$ thousands): SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL Production Drilling and Goodwill Balance as of December 31, 2021 $ 459,710 $ 185,385 $ 645,095 Purchase price adjustments from Action Business Combination - - - Balance as of December 31, 2022 $ 459,710 $ 185,385 $ 645,095 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 & relationships 10.0 Trademarks and trade names 7.9 Total intangible assets 9.7 The details of our intangible assets subject to amortization are set forth below (in US$ thousands): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31, 2022 December 31, 2021 Gross Accumulated Net Gross carrying Accumulated Net Customer contracts & relationships $ 153,500 $ (61,477 ) $ 92,023 $ 153,500 $ (46,054 ) $ 107,446 Trademarks and trade names 25,940 (15,049 ) 10,891 25,940 (11,770 ) 14,170 Total intangible assets $ 179,440 $ (76,526 ) $ 102,914 $ 179,440 $ (57,824 ) $ 121,616 The aggregate amortization expense remaining for each of the five years subsequent to December 31, 2022, is $ 18.6 18.6 18.6 16.8 15.4 Equity method investments On July 1, 2022, NESR acquired a minority stake in WDVGE, a premier Reservoir Characterization and G&G laboratory and consulting business formed from the merger of W. D. Von Gonten Laboratories LLC and W. D. Von Gonten & Co. Petroleum Engineering Consulting. The following table presents our investments at the dates indicated (in US$ thousands): SCHEDULE OF INVESTMENTS Segment Ownership December 31, 2022 W. D. Von Gonten Engineering LLC Production Services 46.2 % $ 16,086 On the date of acquisition of the WDVGE investment, the Company recorded a $ 4.2 0 The following table presents earnings (loss) from equity investments for the periods indicated (in US$ thousands): SCHEDULE OF EARNINGS (LOSS) FROM EQUITY INVESTMENTS Segment 6 months ended W. D. Von Gonten Engineering LLC Production Services $ 42.7 Summarized combined financial information for our equity method investments is as follows for the periods indicated (amounts represent 100% of investee financial information in US$ thousands): SCHEDULE OF FINANCIAL INFORMATION FOR OUR EQUITY METHOD INVESTMENTS December 31, 2022 Balance Sheet data: Current assets $ 4,484 Noncurrent assets 21,392 Total assets $ 25,876 Current liabilities $ 2,837 Other liabilities 15,171 Combined equity 7,868 Total liabilities and combined equity $ 25,876 6 months ended Statement of operations data: Revenue $ 10,035 Operating (loss) / income (350 ) Net (loss) / income 92 An equity method investment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. These circumstances can include evidence that the investor does not have the ability to recover the carrying amount of the investment and/or the inability of the investee to sustain earnings. The Company is closely monitoring the performance and outlook for WDVGE as compared to the projections made when the Company originally made its WDVGE Investment. If the Company determines that an other-than-temporary impairment (“OTTI”) has occurred, the Company will recognize a charge to earnings, for the difference between the carrying amount of the WDVGE Investment and its fair value, as of the date of the OTTI. Other investments To date, the Company has not made significant expenditures on research and development activities aside from making strategic investments and partnerships with companies to expand the ESG Impact and Drilling & Evaluation portfolios. These six investments are individually insignificant but total $ 14.2 7.6 Investments - Equity Securities |
LEASING
LEASING | 12 Months Ended |
Dec. 31, 2022 | |
Leasing | |
LEASING | LEASING Our leasing activities primarily consist of operating leases for administrative offices, manufacturing facilities, research centers, service centers, sales offices and certain equipment. The following table presents components of lease expense (in US$ thousands): SCHEDULE OF COMPONENTS OF LEASE EXPENSE Year ended December 31, 2022 Components of lease expense: Finance lease cost: Amortization of right-of-use assets $ 3,595 Interest on lease liabilities 390 Operating lease cost 7,142 Short-term lease (1) 136,818 Sublease income (54 ) Total lease expense $ 147,891 (1) Leases with a term of one year or less, including leases with a term of one month or less . For the years ended December 31, 2021, and December 31, 2020, total rental expenses were $ 134.1 144.1 1.0 1.7 Amounts recognized in the Consolidated Balance Sheet (in US$ thousands): SCHEDULE OF AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET As of Components of balance sheet: Operating leases: Operating lease right-of-use assets (non-current) $ 29,970 Current portion of operating lease liabilities 6,263 Operating lease liabilities (non-current) 25,051 Finance leases: Property, plant and equipment, net $ 7,176 Other current liabilities 2,268 Other liabilities (not current) 192 As of December 31, 2021, the total recorded liability for capital leases was $ 6.6 4.4 2.2 SCHEDULE OF OPERATING LEASE LIABILITIES Year ended December 31, 2022 Other supplemental information (in US$ thousands except percentages): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used by operating leases $ 6,662 Operating cash flows used by finance leases 390 Financing cash flows used by finance leases 3,108 Noncash investing and financing activities: Right-of-use assets obtained in exchange for lease obligations on adoption of ASC 842: Operating leases $ 33,651 Finance leases 10,771 Right-of-use assets obtained in exchange for lease obligations during the year ended December 31, 2022: Operating leases 1,945 Finance leases - Derecognition of prepaid rent upon adoption of ASC 842 93 Derecognition of prepaid rent during the year ended December 31, 2022: 683 Derecognition of tenant improvements upon adoption of ASC 842 362 Weighted-average remaining lease term: Operating leases 14.29 Finance leases 1.35 Weighted-average discount rate for leases: Operating leases 7.39 % Finance leases 5.88 % As of December 31, 2022, maturities of our lease liabilities are as follows (in US$ thousands): SCHEDULE OF MATURITIES OF OUR LEASE LIABILITIES Operating Leases Finance Leases Year: 2023 $ 6,967 $ 2,402 2024 5,383 203 2025 4,958 - 2026 2,972 - 2027 2,567 - Thereafter 34,481 - Total lease payments 57,328 2,605 Less: imputed interest (26,014 ) (145 ) Total $ 31,314 $ 2,460 As of December 31, 2021, future minimum lease commitments under non-cancellable operating leases with initial or remaining terms of one year or more, for each of the five years in the period ending December 31, 2026 were $ 5.0 2.7 2.0 1.2 1.3 2.8 Future minimum lease payments and future interest payments under non-cancellable equipment capital leases at December 31, 2021, were payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE CAPITAL LEASES As of December 31, 2021 Future Minimum Lease Payments Future Interest Payments Total Payments Within 1 year $ 4,385 $ 536 $ 4,921 1-2 years 2,247 195 2,442 2-3 years - - - 3-4 years - - - 4-5 years - - - After 5 years - - - Total $ 6,632 $ 731 $ 7,363 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt The Company’s long-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF LONG TERM DEBT OBLIGATIONS December 31, 2022 December 31, Secured Term Loan $ 430,000 $ 430,000 Secured Revolving Credit Facility 10,000 80,000 CIB Long-Term Debt - - Borrowings from Long-Term 24 Month Working Capital Facilities 11,942 17,502 Less: unamortized debt issuance costs (6,727 ) (9,983 ) Total loans and borrowings 445,215 517,519 Less: current installments (53,352 ) (8,755 ) Long-term debt, net of unamortized debt issuance costs and excluding current installments $ 391,863 $ 508,764 2021 Secured Facilities Agreement On November 4, 2021, the Company entered into a $ 860.0 8.6 10.5 The $ 860 430 November 4, 2027 80.0 November 4, 2025 350 2.6 3.0 7.64 2.96 8.60 3.44 430.0 430.0 10.0 80.0 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 0.65 The Company is permitted to make any prepayment under this RCF in multiples of $5.0 million during this 4-year period up to November 4, 2025. 70.0 0.0 The 2021 Secured Facilities Agreement also includes a working capital facility of $ 350.0 350.0 letters of credit into debt over a period of no more than two years, which carries an interest rate equal to three-month LIBOR for U.S. dollar denominated borrowings or SIBOR for Saudi Arabia Riyal borrowings, for the applicable interest period, plus a margin of 1.25% to 1.5% per annum. 252.9 223.1 97.1 126.9 The Company has also retained legacy bilateral working capital facilities from HSBC totaling $ 10.6 18.6 10.3 10.3 0.2 8.2 0.1 0.1 4.7 11.7 5.9 6.9 Utilization of the working capital facilities under both the legacy HSBC arrangement and 2021 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 HSBC arrangement and 2021 Secured Facilities Agreement that will be repaid quarterly over a period of up to two years. 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 15, Commitments and Contingencies. The 2021 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 Business Combination, the Company assumed a $ 21.0 Under the terms of its arrangement with CIB, the Company repaid $ 11.0 10.0 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, 2022 2021 Other short-term borrowings from working capital facilities $ 91,747 $ 78,807 Less: unamortized debt issuance costs (1,862 ) (488 ) Short-term debt, excluding current installments of long-term debt $ 89,885 $ 78,319 Short-term borrowings primarily consist of financing for capital equipment and inventory purchases. CIB Short-Term Debt The Commercial International Bank Short-Term Debt facilities (collectively, “CIB Short-Term Debt”) include a $ 1.5 2 10 8.8 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 the Central Bank of Egypt’s Corridor Offer Rate plus 50 basis points per annum HMDB commission. As of December 31, 2022, and December 31, 2021, the CIB Short-Term Debt resulted in an interest rate of 0 2.3 0 10.0 0 0 0 4.4 1.5 2 10 4.4 0 0 0 6.4 1.5 2.0 10 5.1 11.5 ABK Short-Term Debt The Al Ahli Bank of Kuwait working capital and overdraft facilities (collectively, “ABK Short-Term Debt”) mature nine months from the date of borrowing. The ABK Short-Term Debt facilities included a $ 3.0 0.2 1.65 11 0 0.1 3.0 0.1 Other debt information Scheduled principal payments of long-term debt for periods subsequent to December 31, 2022 are as follows (in US$ thousands): SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT 2023 $ 53,345 2024 66,097 2025 74,500 2026 64,500 2027 193,500 Thereafter - Total $ 451,942 |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
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, 2022, and 2021 (in thousands): SCHEDULE OF FUNDED STATUS OF END-OF-SERVICE INDEMNITIES EMPLOYEES RECEIVE UNDER ONE OF FIVE BENEFIT STRUCTURES December 31, December 31, Change in benefit obligations Benefit obligations at the beginning of the year $ 27,410 $ 24,941 Actuarial (gain) / loss (1,128 ) (69 ) Service cost 4,876 4,545 Interest cost 675 482 Benefits paid (3,519 ) (3,021 ) Benefit obligation acquired in business combination - 532 Benefit obligations at the end of the year 28,314 27,410 Current benefit obligation 3,932 3,876 Non-current benefit obligation 24,382 23,534 Benefit obligation at the end of the year 28,314 27,410 Change in plan assets Fair value of plan assets at the beginning of the year - - Employer contributions 3,519 3,021 Benefits paid (3,519 ) (3,021 ) Plan assets at the end of the year - - Unfunded status $ 28,314 $ 27,410 Net cost for the years ended December 31, 2022, 2021, and 2020, comprises the following components (in thousands): SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST Year ended December 31, December 31, December 31, Service cost $ 4,876 $ 4,545 $ 3,487 Interest cost 675 482 583 Actuarial (gain)/loss (1,128 ) (69 ) 2,243 Other - - - Net cost $ 4,423 $ 4,958 $ 6,313 The weighted-average assumptions used to determine benefit obligations as of December 31, 2022 and 2021 are set out below: SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST December 31, 2022 December 31, Discount rate 5.00 % 2.25 % Rate of increase in compensation levels: 4.5 5 % 3 5 % The discount rate has been set with regard to the market yields on high quality corporate bonds as of December 31, 2022 for the measurements as of December 31, 2022 (and as of December 31, 2021 for the measurements as of December 31, 2021) of duration broadly consistent with the duration of the benefit obligations. The primary yield curve for the purpose of this comparison has been the ‘FTSE Above Median Double-A Curve’. The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2022 and 2021 are set out below: December 31, 2022 December 31, Discount rate 2.25 % 1.75 % Rate of increase in compensation levels: 4.5 5 % 3 5 % 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 100 basis point decrease in discount rate +$ 1,720 100 basis point increase in discount rate -$ (1,529 ) 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, 2022, the Company has no plan assets to invest. Accumulated benefit obligation was $ 15.8 15.6 The following reflect expected future benefit payments (in thousands): SCHEDULE OF EXPECTED FUTURE BENEFIT PAYMENTS Year ending December 31, 2023 $ 5,232 2024 $ 4,952 2025 $ 4,704 2026 $ 4,776 2027 $ 4,671 2028 through 2032 $ 21,525 The expected benefits are based materially on the same assumptions used to measure the Company’s benefit obligations as of December 31, 2021. 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 Statements of Operations as incurred. Total contributions for the years ended December 31, 2022, 2021, and 2020, were $ 3.8 3.7 3.3 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES NESR is a holding company incorporated in the British Virgin Islands, which imposes a zero percent statutory corporate income tax rate on income generated outside of the British Virgin Islands. The subsidiaries operate in multiple tax jurisdictions throughout the MENA region where statutory tax rates generally vary from 10 % to 40%. In the British Virgin Islands, the statutory rate is effectively 0% as tax is not applied on extra territorial activity. SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN Year ended December 31, 2022 December 31, December 31, Domestic $ (8,726 ) $ (183 ) $ (4,151 ) Foreign (21,075 ) (60,396 ) 33,246 (Loss) / Income before income tax $ (29,801 ) $ (60,579 ) $ 29,095 Income tax (expense) / benefit The components of the income tax (expense) / benefit (benefit), all of which is foreign, are as follows (in US$ thousands): SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Year ended December 31, 2022 December 31, December 31, Current tax expense $ 16,880 $ 16,129 $ 15,781 Deferred tax expense (benefit) (10,261 ) (12,140 ) (3,241 ) Income tax expense / (benefit) $ 6,619 $ 3,989 $ 12,540 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 US$ thousands): SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) As of December 31, December 31, Deferred Tax Assets Property, plant and equipment $ 4,644 $ 4,252 Net operating loss carryforward 26,514 18,056 Temporary differences due to restatement (Note 4) - 5,166 Total deferred tax assets 31,158 27,474 Less: valuation allowance (10,042 ) (8,582 ) Deferred tax assets, net of valuation allowance $ 21,116 $ 18,892 Deferred Tax Liabilities Property, plant and equipment $ (4,335 ) $ (4,086 ) Intangible assets (15,408 ) (18,528 ) Temporary differences due to restatement (Note 4) - (5,166 ) Total deferred tax liabilities (19,743 ) (27,780 ) Net deferred tax asset / (liability) $ 1,373 $ (8,888 ) The Company has $ 257 188 69 Deferred tax assets are reduced by valuation allowances. As of December 31, 2022, and 2021, valuation allowances of $ 10.0 8.6 1.5 0.4 1.8 0.3 1.5 1.1 24.0 18.3 Deferred tax liabilities on Property, plant and equipment of $ 4.3 4.1 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) / benefit and the amount that would result from applying the British Virgin Islands statutory rate is shown in the table below (in thousands). In the British Virgin Islands, the statutory rate is effectively 0 0 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Year ended December 31, 2022 December 31, December 31, Income tax at statutory rate (BVI and UAE 0 $ - $ - $ - Foreign tax rate differential (1,498 ) (6,981 ) 5,510 Tax effect of adjustments to prior years current tax expense - (997 ) (1,206 ) Tax effect of adjustments to prior years deferred taxes - - - Reversal of tax liability on expiration of limitation period - - - Effect of changes in valuation allowances (1,460 ) 1,391 3,300 Unrecognized tax benefits 9,577 10,576 4,936 Other - - - Income tax expense / (benefit) $ 6,619 $ 3,989 $ 12,540 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 %. Income tax (benefit)/ expense for the years ended December 31, 2022 and 2021, include $ 0.8 0.4 Unrecognized Tax Benefits The Company records estimated accrued interest and penalties related to an underpayment of income taxes in income tax (expense) / benefit. As of December 31, 2022, and 2021, the Company had $ 61.1 51.0 2.9 2.0 64.0 A summary of activity related to the net unrecognized tax benefits is as follows: SCHEDULE OF UNRECOGNIZED TAX BENEFITS December 31, December 31, December 31, Year ended December 31, December 31, December 31, Balance at beginning of period $ 51,002 $ 33,336 $ 24,974 Additions from tax positions adjusted in purchase accounting - - - Additions from tax positions related to the current period 16,953 26,916 10,825 Additions from tax positions related to prior periods - 311 27 Reductions from tax positions related to earlier periods (5,485 ) (8,512 ) (762 ) Reductions on account of statute expiry - - Settlement of tax positions (1,355 ) (1,049 ) (1,728 ) Balance at end of period $ 61,115 $ 51,002 $ 33,336 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 2017 and subsequent years for all major jurisdictions 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Capital expenditure commitments The Company was committed to incur capital expenditures of $ 38.4 36.7 Other commitments The Company purchases certain property, plant, and equipment using seller-provided installment financing with payment terms extending to 24 months. As of December 31, 2022, and December 31, 2021, the Company recorded $ 11.6 8.5 The Company had outstanding letters of credit amounting to $ 26.4 40.1 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 $ 132.4 105.6 3.6 4.4 As of December 31, 2022, and December 31, 2021, the Company had liabilities of $ 2.0 2.0 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 it is not required to recognize a provision because they are not probable or reasonably estimable and any impacts are not expected to have a material impact on the Company’s business, financial condition, results of operations, or liquidity. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
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 ended December 31, 2022 December 31, 2021 December 31, 2020 Number Weighted Number of Restricted Shares Weighted per Share Number of Weighted Average Value per Share Unvested at Beginning of Period 2,248,699 $ 9.58 2,038,662 $ 7.38 1,502,690 $ 10.25 Granted 1,011,040 $ 8.76 1,413,335 $ 11.67 1,194,905 $ 5.30 Vested (1,064,774 ) $ 9.38 (940,032 ) $ 8.04 (590,264 ) $ 10.18 Forfeited (118,648 ) $ 9.25 (263,266 ) $ 9.20 (68,669 ) $ 9.55 Unvested at End of Period 2,076,317 $ 10.10 2,248,699 $ 9.58 2,038,662 $ 7.38 At December 31, 2022, there were 14,828 53,429 At December 31, 2022 and 2021, the Company had unrecognized compensation expense of $ 12.4 14.0 1.72 1.99 SCHEDULE OF STOCK-BASED COMPENSATION Year ended December 31, December 31, December 31, Cost of Services $ 4,466 $ 4,632 $ 3,521 Selling, general and administrative expenses (excluding Amortization) 4,803 5,127 4,311 Net cost $ 9,269 $ 9,759 $ 7,832 |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Successors [Member] | |
EQUITY | EQUITY Common Stock 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, 2022 and December 31, 2021, there were 94,012,752 91,366,235 Preferred Shares 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, 2022, and December 31, 2021, there were no Public and Private Warrants As of both December 31, 2022, and December 31, 2021, there were 35,540,380 5.75 June 6, 2023 five years The Company reserves the right to call the Public Warrants at any time prior to its exercise with a notice of call in writing to the holders of record of the Warrant, giving at least 30 days’ notice of such call, at any time while the Public Warrants are exercisable, if the last sale price of the Company’s ordinary shares has been at least $ 21.00 .01 .01 From their initial sale in May of 2017 until May of 2020, the Company also had Private Warrants outstanding. The Company’s Private Warrants were distinguished from the Company’s Public Warrants exclusively for their unique cashless exercise and limited redemption features. The Private Warrants retained these features for as long as they were held by our Sponsor, NESR Holdings, Ltd. Periodically between December of 2018 and May of 2020, NESR Holdings, Ltd. sold its Private Warrants, at which time the Company’s Private Warrants were converted into Public Warrants. As of both December 31, 2022, and December 31, 2021, there were no Private Warrants outstanding. The Company has accounted for its Public and Private Warrants in accordance with ASC 480, Distinguishing Liabilities from Equity |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Under ASC 260, Earnings per Share ● The treasury stock method, reverse treasury stock method, if-converted method or contingently issuable share method, as applicable, provided a participating security or second class of common stock is a potential common share ● The two-class method, assuming a participating security or second class of common stock is not exercised or converted Prior to December 31, 2022, the Company had participating shares as RSUs granted until the end of 2019 had the right to participate in dividends. The last of these RSUs vested during 2022. For the year-ended December 31, 2020, the Company utilized the more punitive of the treasury stock method or two-class method to determine dilutive earnings per share. For the years-ended December 31, 2022, and 2021, the Company utilized only the treasury stock method. For the December 31, 2022, computation, there were no participating securities outstanding. For the December 31, 2021, computation, participating securities do not participate in losses and thus the two-class method was not applicable. Years ended December 31, 2022, December 31, 2021, and December 31, 2020 The following tables provides a reconciliation of the data used in the calculation of basic and diluted ordinary shares outstanding for the years ended December 31, 2022, December 31, 2021, and December 31, 2020 (in US$ thousands except shares and per share amounts): SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING Date Transaction Detail Change in Year ended Weighted December 31, 2021 Beginning Balance 91,366,235 February 23, 2022 Restricted Stock Vesting 32,868 28,005 March 16, 2022 Restricted Stock Vesting 279,493 222,063 March 17, 2022 Restricted Stock Vesting 74,000 58,592 March 18, 2022 Restricted Stock Vesting 242,727 191,522 March 19, 2022 Restricted Stock Vesting 316,775 249,081 July 1, 2022 WDVGE - NESR ordinary share consideration 1,650,000 827,260 August 14, 2022 Restricted Stock Vesting 50,654 19,290 December 31, 2022 Ending Balance 92,962,048 Date Transaction Detail Change in Year ended Weighted December 31, 2020 Beginning Balance 87,777,553 June 1, 2020 SAPESCO - NESR ordinary share consideration (issued January 14, 2021) (1) 2,237,000 2,237,000 December 31, 2020 SAPESCO - Additional Earn-Out Shares (issued January 14, 2021) (2) 145,039 145,039 February 23, 2021 Restricted Stock Vesting 87,905 74,900 March 16, 2021 Restricted Stock Vesting 316,781 251,689 March 18, 2021 Restricted Stock Vesting 288,329 227,503 December 31, 2020 SAPESCO - Contingently Issuable Shares (contingency resolved at December 31, 2020) (3) 150,434 150,434 March 31, 2021 SAPESCO - Contingently Issuable Shares (contingency resolved at March 31, 2021; issued on June 8, 2021) (3) 113,215 85,299 June 8, 2021 SAPESCO - Customer Receivables Earn-Out Shares (contingency resolved and issued both on June 8, 2021) (3) 2,962 1,672 August 14, 2021 Restricted Stock Vesting 242,017 92,166 November 19, 2021 Restricted Stock Vesting 5,000 575 December 31, 2021 Ending Balance 91,043,830 (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 145,039 (3) Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued; as such 266,611 Date Transaction Detail Change in Year ended Weighted 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 5) (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 5) (2) 295,473 808 December 31, 2020 Ending Balance 88,845,601 (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 295,473 SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE December 31, 2022 December 31, 2021 December 31, 2020 (As restated, Note 4) Net (loss) / income to Ordinary Shareholders Weighted-average ordinary shares outstanding EPS Net (loss) / income to Ordinary Shareholders Weighted-average ordinary shares outstanding EPS Net (loss) / income to Ordinary Shareholders Weighted-average ordinary shares outstanding EPS Basic EPS - ordinary shares $ (36,420 ) 92,962,048 $ (0.39 ) $ (64,568 ) 91,043,830 $ (0.71 ) $ 16,555 88,845,601 $ 0.19 Restricted stock units - - 272,275 Antidilution sequencing - subtotal (36,420 ) 92,962,048 (0.39 ) (64,568 ) 91,043,830 (0.71 ) 16,555 89,117,876 0.19 Decrease/(increase) in the fair value of the warrants $ (557 ) 35,540,380 5.75 - - Diluted EPS - ordinary shares $ (36,420 ) 92,962,048 $ (0.39 ) $ (64,568 ) 91,043,830 $ (0.71 ) $ 15,998 89,117,876 $ 0.18 For the years ended December 31, 2022 and 2021, both potentially dilutive restricted stock units and public warrants had no impact on the determination of dilutive earnings per share as these potential ordinary shares were antidilutive as the Company reported net losses for both annual periods. For the year ended December 31, 2020, warrants that could be converted into as many as 35,540,380 1,724,832 |
FAIR VALUE ACCOUNTING
FAIR VALUE ACCOUNTING | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE ACCOUNTING | FAIR VALUE ACCOUNTING The Company measures and records liabilities for its Private Warrants (note 17) and the Buyer Stock Adjustment Amount derivative liability (note 10) at fair value in the accompanying financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value, includes: ● Level 1 – Observable inputs for identical assets or liabilities such as quoted prices in active markets; ● Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; and ● Level 3 – Unobservable inputs in which little or no market data exists, which are therefore developed by the Company using estimates and assumptions that reflect those that a market participant would use. The following tables present the Company’s fair value hierarchy for its financial liabilities measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE OF HIERARCHY AT FAIR VALUE ON RECURRING BASIS As of December 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Liability for Buyer Stock Adjustment Amount derivative (Note 10) $ - $ - $ - $ - Liability for Private Warrants (Note 17) - - - - As of December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities: Liability for Private Warrants (Note 17) $ - $ - $ - $ - The Company’s Private Warrants and Buyer Stock Adjustment Amount derivative are included as Level 3 measurements in the tables above. The fair value of the Company’s Private Warrant liability was calculated using the Black-Scholes model. The fair value of the Company’s Buyer Stock Adjustment Amount derivative liability was calculated using the Monte Carlo simulation analysis. The change in fair value of the Company’s Level 3 measurements is as follows: SCHEDULE OF FAIR VALUE OF LEVEL 3 MEASUREMENTS December 31, December 31, December 31, Year-to-date period ended December 31, December 31, December 31, Beginning Balance $ - $ - $ (557 ) Initial accounting for Buyer Stock Adjustment Amount derivative liability (Note 10) (4,236 ) - - Change in Buyer Stock Adjustment Amount derivative liability (Note 10) 4,236 - - Change in Private Warrant liability - - 557 Ending Balance $ - $ - $ - The Company’s other financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, accounts payable, leases, contingent consideration assumed in the Action transaction (Note 5), and loans and borrowings. The fair value of the Company’s other financial instruments approximates the carrying amounts represented in the accompanying Consolidated Balance Sheets, primarily due to their short-term nature. The fair value of the Company’s long-term borrowings also approximates the carrying amounts as these loans are carrying interest at the market rate. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Mubbadrah Investment LLC (“Mubbadrah”) GES leases office space in a building it owns in Muscat, Oman to Mubbadrah along with other Mubbadrah group entities (collectively, the “Mubbadrah group entities”). GES charges rental income to the Mubbadrah group entities for the occupation of the office space, based on usage. Rental income charged by GES to the Mubbadrah group entities amounted to $ 0.3 0.2 0.2 0.4 0.4 Heavy Equipment Manufacturing & Trading LLC (“HEMT”) HEMT is a majority owned by Mubbadrah Group. HEMT is engaged by various subsidiaries of GES for services such as fabrication, manufacturing and maintenance of tools and equipment. HEMT has charged GES $ 0.1 0.1 0.1 0.6 0.5 Prime Business Solutions LLC (“PBS”) PBS is majority owned by Mubbadrah Group and is involved in the development and maintenance of Enterprise Resource Planning (“ERP”) systems. PBS developed and implemented the GEARS (ERP) system used by one of the Company’s subsidiaries under December 31, 2021, and is currently engaged to maintain it. Charges totaling $ 0.3 0.5 1.0 1.1 0.8 Nine Energy Service, Inc. (“Nine”) The Company purchased $ 0.8 1.2 0.8 0.2 0.5 Basin Holdings US LLC (“Basin”) The Company purchased $ 0.6 0.7 2.1 0.2 0.1 |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS Operating segments are components of an enterprise where separate financial information is available and that are evaluated regularly by the Company’s CODM in deciding how to allocate resources and in assessing performance. The Company reports segment information based on the “management” approach and its CODM is its Chief Executive Officer. The Company’s services are similar to one another in that they consist of oilfield services and related offerings, whose customers are oil and gas companies. The results of operations of the service offerings are regularly reviewed by the CODM for the Company for the purposes of determining resource and asset allocation and assessing performance. The Company has determined that it has two 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: hydraulic fracturing, coil tubing, stimulation and pumping, cementing, nitrogen services, filtration services, pipelines and industrial services, production assurance, artificial lift services, and completions. Drilling and Evaluation Services generates its revenue from the following service offerings: rigs and integrated services, fishing and downhole tools, thru-tubing intervention, tubular running services, directional drilling, drilling fluids, pressure control, well testing services, wireline logging services, and slickline services. In January 2021, the Company announced an Environmental, Social, and Corporate Governance IMPACT (“ESG IMPACT”) initiative to develop a portfolio of product lines and services aimed to mitigate climate change, enhance water management and conservation, and minimize environmental waste in the industry. These innovative energy solutions so far include methane detection and control, flare capture and re-use, and water treatment and re-use. The results of ESG IMPACT were not material to our Consolidated Statements of Operations for the year ended December 31, 2022. The Company’s operations and activities are located within certain geographies, primarily the MENA region, as well as in Malaysia, Indonesia and India. Revenue from operations SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS Year ended December 31, 2022 December 31, December 31, Reportable Segment: Production Services $ 567,249 $ 554,097 $ 557,327 Drilling and Evaluation Services 342,268 322,632 276,825 Total revenue from external customers $ 909,517 $ 876,729 $ 834,152 Long-lived assets As of December 31, 2022 December 31, Reportable Segment: Production Services $ 239,958 $ 253,215 Drilling and Evaluation Services 173,520 133,691 Total Reportable Segments 413,478 386,906 Unallocated assets 47,583 38,600 Total long-lived assets $ 461,061 $ 425,506 Unallocated assets mainly comprise of buildings and leasehold improvements in the countries which supports both the segments in the normal course of business. Total segment operating (loss) / income Year ended December 31, 2022 December 31, 2021 December 31, 2020 Reportable Segment: Production Services $ 28,717 $ (1,858 ) $ 56,180 Drilling and Evaluation Services 33,473 (1,238 ) 24,295 Total Reportable Segments 62,190 (3,096 ) 80,475 Unallocated expenses (63,107 ) (40,236 ) (45,197 ) Total Operating income / (loss) (917 ) (43,332 ) 35,278 Interest expense, net (34,126 ) (15,174 ) (15,879 ) Gain/(loss) on Private Warrant Liability - - 557 Other income / (expense), net 5,242 (2,073 ) 9,139 (Loss) / income before income tax (29,801 ) (60,579 ) 29,095 Unallocated expenses for the years ended December 31, 2022, December 31, 2021, and December 31, 2020, mainly include payroll and compensation costs for headquarters’ employees, professional and legal expenses relating to audit firms, consulting firms and legal counsel, and depreciation charges on headquarters’ offices and leasehold improvements. Revenue by geographic area SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS Year ended December 31, 2022 December 31, December 31, Geographic Area: Domestic (British Virgin Islands) $ - $ - $ - MENA 893,635 865,917 822,606 Rest of World 15,882 10,812 11,546 Total revenue $ 909,517 $ 876,729 $ 834,152 Long-lived assets by geographic area As of December 31, 2022 December 31, 2021 Geographic area: Domestic (British Virgin Islands) $ - $ - MENA 443,967 408,089 Rest of World 17,094 17,417 Total long-lived assets $ 461,061 $ 425,506 Significant customers Revenues from four customers individually accounted for 40%, 9 %, 7 % and 7% of the Company’s consolidated revenues in the year ended December 31, 2022, 51%, 10 %, 7 % and 4 % of the Company’s consolidated revenues in the year ended December 31, 2021, and 58%, 12 %, 4 % and 3 % of the Company’s consolidated revenues in the year ended December 31, 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
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 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 (loss) / income attributable to such parties on the Consolidated Statements of Operations. |
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). |
Revenue recognition | Revenue recognition 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. Costs that relate directly to a contract or an anticipated contract that the Company can specifically identify, that generate or enhance resources of the Company that will be used in satisfying performance obligations in the future, and are expected to be recovered, are capitalized as contract fulfillment costs and amortized into the Statements of Operations of the Company over the period of anticipated benefit. |
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 were as follows during the year ended December 31, 2022: ● Purchases of property, plant, and equipment in Accounts payable of $ 9.1 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 11.6 ● During the year-to-date period ended December 31, 2022, the Company issued NESR ordinary share consideration of 1,650,000 Non-cash transactions were as follows during the year ended December 31, 2021: ● Purchases of property, plant, and equipment in Accounts payable of $ 2.6 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 7.3 million, $ 1.1 6.0 ● Obligations of $ 4.4 6.1 ● The Company issued NESR ordinary share consideration of 2,237,000 145,039 266,611 Non-cash transactions were as follows during the year ended December 31, 2020: ● Purchases of property, plant, and equipment in Accounts payable of $ 24.7 ● Purchases of property, plant, and equipment using seller-provided installment financing of $ 2.9 3.2 9.1 ● Purchases of property, plant, and equipment using capital lease financing of $ 2.2 4.7 ● Obligations of $ 2.0 13.5 |
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, unbilled revenue from customers, and retention withholdings. 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. |
Unbilled revenue, accounts receivable and allowance for credit losses | Unbilled revenue, accounts receivable and allowance for credit losses 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. On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses 2.8 million cumulative-effect adjustment in opening retained (deficit) as of January 1, 2022, related to the adoption of ASC 326. The Company monitors its customers’ payment history and current credit worthiness to determine that collectability of the related financial assets is reasonably assured. The Company also considers the overall business climate in which our customers operate. For accounts receivable, a loss allowance matrix is utilized to measure lifetime expected credit losses. The matrix contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations. Prior to the adoption of ASC 326, the Company maintained 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 and chemicals 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 charges for obsolete 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 1 15 Office equipment (furniture and fixtures) and tools 3 10 Vehicles and cranes 5 10 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 Statements 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. |
Production Management Assets | Production Management Assets The Company’s Integrated Production Management (“IPM”) projects are focused on developing and managing production on behalf of the Company’s customers under long-term agreements. The Company will invest its own services and products, and in some cases cash, into the field development activities and operations. Although in certain arrangements the Company is paid for a portion of the services or products it provides, generally the Company will not be paid at the time of providing its services or upon delivery of its products. Instead, the Company is compensated based upon cash flow generated. Revenues from IPM arrangements, which is recognized as the related production is achieved, represented less than 0 0 0 The Company capitalizes its cash investments in a project as well as the direct costs associated with providing services or products for which the Company will be compensated when the related production is achieved. These capitalized investments are amortized to the Consolidated Statements of Operations as the related production is achieved based on the units of production method, whereby each unit produced is assigned a pro-rata portion of the unamortized costs based on estimated total production, resulting in a matching of revenue with the applicable costs. Amortization expense relating to these capitalized investments was $ 0.0 0.0 0.0 The unamortized portion of the Company’s investments in IPM projects was $ 17.4 0.0 At December 31, 2022, the Company assessed whether the unamortized costs associated with these investments exceed the present value of future cash flows from the projects, and has determined that no impairment charge exist. The Company will continue to assess, in future reporting periods, whether the unamortized costs associated with these investments exceed the discounted present value of future cash flows, as a significant deviation in future production levels or future selling prices could result in a material charge in the Consolidated Statement of Operations for future reporting periods. Subsequent to December 31, 2022, the production of hydrocarbon products commenced on these properties, and the Company commenced the amortization of these costs. |
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 on October 1st, or more frequently if circumstances require. 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 performed quantitative assessments for both of its reporting units as of October 1, 2022, October 1, 2021, and October 1, 2020, and has not recorded any impairment charge for goodwill in the accompanying Consolidated Statements 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 ten years 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. |
Investments in Equity Instruments | Investments in Equity Instruments Investments in equity instruments (of entities in which the Company do not have either a controlling financial interest or significant influence, most often because the Company hold a voting interest of 0 20 Equity method investments are equity holdings in entities in which the Company do not have a controlling financial interest, but over which the Company have significant influence, most often because the Company hold a voting interest of 20 50 |
Leasing | Leasing In February 2016, the FASB issued ASU 2016-02, Leases Upon transition, the Company applied the package of practical expedients permitted under the ASC 842 transition guidance. As a result, the Company did not reassess (1) whether expired or existing contracts contain leases under the new definition of a lease, including whether an existing or expired contract contains an embedded lease, (2) lease classification for expired or existing leases and (3) any initial direct costs of existing leases. As a result of the adoption of ASC 842 on January 1, 2022, the Company recorded right-of-use assets of $ 33.7 0.4 0.1 33.2 The Company determines if an arrangement contains a lease at inception. The Company has operating leases that primarily consist of land and buildings. The Company also has finance leases for its equipment. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. The Company has elected the practical expedient to utilize the risk-free rate over a similar period as the remaining lease term as the applicable discount rate. Lease expense for fixed lease payments on operating leases is recognized over the expected term on a straight-line basis, while interest expense for fixed lease payments on finance leases is recognized using the effective interest method. The Company has elected, as an accounting policy, to not apply the recognition requirements in ASC 842 to short-term leases. The Company did not elect the hindsight practical expedient, which would have allowed the Company to revisit key assumptions, such as lease term, that were made when the lease was originally entered. The Company has also elected, as a practical expedient, by underlying class of asset, not to separate lease components from non-lease components and instead, account for them as a single lease component. Prior to the adoption of ASC 842, the Company evaluated and classified its leases as operating or capital for financial reporting purposes. Assets held under capital leases were 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 Operations. |
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 applicable employee contracts. The Company records annual amounts relating to these long-term employee benefits based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in the statement of income. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The net periodic costs are recognized as employees render the services necessary to earn these benefits. 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 as incurred. |
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) / benefit in the Consolidated Statements of Operations. Considerable judgment is involved in determining which tax positions are more likely than not to be sustained. |
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. |
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 |
Net (loss) / income per ordinary share | Net (loss) / income per ordinary share Basic income per ordinary share was computed by dividing basic net (loss) / 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 (loss) / 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. |
Derivative financial instruments | Derivative financial instruments The Company evaluates all of its financial instruments 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). |
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, leases, contingent consideration assumed in the Action transaction (Note 5), loans and borrowings and private warrants. 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. |
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 operating segments and two reportable segments (Note 21), which reflects the manner in which the CODM operates the Company. The Company’s CODM is its Chief Executive Officer. |
Recently issued accounting standards not yet adopted | Recently issued accounting standards not yet adopted All 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, 2022 | |
Accounting Policies [Abstract] | |
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 1 15 Office equipment (furniture and fixtures) and tools 3 10 Vehicles and cranes 5 10 |
RESTATEMENTS (Tables)
RESTATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
SCHEDULE OF RESTATEMENT | SCHEDULE OF RESTATEMENT As of and for the year ended December 31, 2020 As Previously Reported Correction of Private Warrant Classification Error Correction of Errors from Overstatement/ (Understatement) of Assets and Liabilities During the Year Ended December 31, 2020 Correction of Classification Errors in Selling, General and Administrative Expenses (excluding Amortization) Correction of Errors from Overstatement/ (Understatement) of Assets and Liabilities Prior to January 1, 2020 As Restated Consolidated Balance Sheet Total current assets $ 515,217 $ - $ 161 $ - $ (4,220 ) $ 511,158 Total assets 1,687,054 - (3,710 ) - 3,197 1,686,541 Total current liabilities 359,366 - 22,923 - 53,583 435,872 Total liabilities 742,636 - 30,379 - 53,583 826,598 Total equity 944,418 - (34,089 ) - (50,386 ) 859,943 Consolidated Statement of Operations Revenues 834,146 - 6 - - 834,152 Cost of services (678,720 ) - (32,260 ) (45,265 ) - (756,245 ) Selling, general and administrative expenses (excluding Amortization) (72,077 ) - - 45,265 - (26,812 ) Gain/(loss) on Private Warrant Liability - 557 - - - 557 (Loss) / Income before income tax 60,792 557 (32,254 ) - - 29,095 Income tax (expense) / benefit (10,705 ) - (1,835 ) - - (12,540 ) Net (loss) / income 50,087 557 (34,089 ) - - 16,555 Basic earnings per share 0.56 0.01 (0.38 ) - - 0.19 Diluted earnings per share 0.56 - (0.38 ) - - 0.18 Consolidated Statement of Comprehensive Income Total Comprehensive Income, net of tax 50,122 557 (34,089 ) - - 16,590 Consolidated Statement of Shareholders’ Equity Common Stock and Additional Paid in Capital 826,614 4,532 - - - 831,146 Retained Earnings 117,748 (4,532 ) (34,089 ) - (50,386 ) 28,741 Total Shareholders’ Equity 944,418 - (34,089 ) - (50,386 ) 859,943 Consolidated Statements of Cash Flow Net cash provided by operating activities 133,471 - 982 - - 134,453 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST | SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST Consideration Cash consideration $ 36,767 Deferred cash consideration 16,935 Total consideration – cash 53,702 NESR ordinary share consideration NESR ordinary share consideration, shares Total consideration – equity Total consideration – equity, shares First Earn-Out 2,716 Second Earn-Out 3,635 Third Earn-Out - Cash Earn-Out Additional Earn-Out Shares Additional Earn-Out Shares, shares Total estimated earn-out mechanisms 6,351 Total estimated earn-out mechanisms, shares Total consideration $ 60,053 Total consideration, shares |
SCHEDULE OF PURCHASE PRICE ALLOCATION | The following table summarizes the final purchase price allocation (in US$ thousands): SCHEDULE OF PURCHASE PRICE ALLOCATION Allocation of consideration Cash and cash equivalents $ 382 Accounts receivable 8,565 Unbilled revenue 1,352 Service inventories 2,862 Prepaid assets 310 Retention withholdings Other receivables 89 Other current assets 1,122 Property, plant and equipment 13,162 Intangible assets 29,100 Other assets 2,053 Total identifiable assets acquired 58,997 Accounts payable 5,294 Accrued expenses 2,465 Current installments of long-term debt Short-term borrowings Income taxes payable Other taxes payable Other current liabilities 200 Long-term debt Employee benefit liabilities 584 Other liabilities Non-controlling interests Net identifiable liabilities acquired 8,543 Total fair value of net assets acquired 50,454 Goodwill 9,599 Total consideration $ 60,053 |
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS | The allocation to intangible assets is as follows (in US$ thousands): SCHEDULE OF ALLOCATION TO INTANGIBLE ASSETS Fair Value Total Useful Life (In US$ Customer relationships $ 29,100 10 Total intangible assets $ 29,100 |
SCHEDULE OF UNAUDITED PROFORMA INFORMATION | The following table summarizes the supplemental consolidated results of the Company on an unaudited pro-forma basis, as if the Action Business Combination had been consummated on January 1, 2020, for the years ended December 31, 2021 and 2020, respectively (in US$ thousands): SCHEDULE OF UNAUDITED PROFORMA INFORMATION Year ended December 31, December 31, Revenues $ 885,671 $ 855,409 Net (loss) / income (64,529 ) 15,325 |
Sahara Petroleum Services Company [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST | The following summarizes the consideration to purchase 99.7% of the issued and outstanding equity interests of SAPESCO: SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST SAPESCO 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 quarter ended December 31, 2020, and finalized in the quarter ended March 31, 2021, when settled with the sellers for 145,039 |
SCHEDULE OF PURCHASE PRICE ALLOCATION | The following table summarizes the final allocation of the purchase price allocation (in US$ thousands): SCHEDULE OF PURCHASE PRICE ALLOCATION Allocation of consideration Cash and cash equivalents $ 3,740 Accounts receivable 14,847 Unbilled revenue 6,126 Service 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 identifiable assets acquired 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 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$ Customer relationships $ 2,900 8 Trademarks and trade names 440 2 Total intangible assets $ 3,340 |
SCHEDULE OF UNAUDITED PROFORMA INFORMATION | The following table summarizes the supplemental consolidated results of the Company on an unaudited pro-forma basis, as if the SAPESCO Business Combination had been consummated on January 1, 2019, for the year ended December 31, 2020 (in US$ thousands): SCHEDULE OF UNAUDITED PROFORMA INFORMATION December 31, 2020 Revenues $ 852,935 Net (loss) / income/(loss) 14,892 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
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 Year ended Description December 31, December 31, December 31, Revenue by Phase in Well’s Lifecycle: Production Services $ 567,249 $ 554,097 $ 557,327 Drilling and Evaluation Services 342,268 322,632 276,825 Total revenue by phase in well’s life cycle $ 909,517 $ 876,729 $ 834,152 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | The following table summarizes the accounts receivable of the Company as of the period end dates set forth below (in US$ thousands): SCHEDULE OF ACCOUNTS RECEIVABLE December 31, December 31, Trade receivables $ 161,373 $ 132,467 Less: allowance for credit losses (12,664 ) (2,052 ) Total $ 148,709 $ 130,415 |
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS | SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS December 31, December 31, December 31, Year ended December 31, December 31, December 31, Allowance for credit losses at beginning of period $ (2,052 ) $ (1,722 ) $ (1,843 ) CECL Accounting Standard Adoption (Note 3) (2,773 ) - - (Increase) decrease to allowance for the period (8,185 ) (769 ) (261 ) (Recovery) write-off of credit losses 346 439 382 Allowance for credit losses at end of period $ (12,664 ) $ (2,052 ) $ (1,722 ) |
SERVICE INVENTORIES (Tables)
SERVICE INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF SERVICE INVENTORIES | The following table summarizes the service inventories for the period end dates as set forth below (in US$ thousands): SCHEDULE OF SERVICE INVENTORIES December 31, December 31, 2022 2021 Spare parts $ 64,006 $ 65,883 Chemicals 46,515 27,981 Total $ 110,521 $ 93,864 |
PROPERTY, PLANT, & EQUIPMENT (T
PROPERTY, PLANT, & EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment, net of accumulated depreciation, of the Company consists of the following as of the period end dates set forth below (in US$ thousands): SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated Useful Lives (in years) December 31, December 31, Buildings and leasehold improvements 5 25 $ 52,442 $ 41,782 Drilling rigs, plant and equipment 1 15 677,263 565,730 Office equipment (furniture and fixtures) and tools 3 10 15,937 15,570 Vehicles and cranes 5 10 15,756 15,434 Less: Accumulated depreciation (323,325 ) (233,609 ) Land 11,664 11,664 Capital work in progress 11,324 8,935 Total $ 461,061 $ 425,506 |
GOODWILL, INTANGIBLE, AND OTH_2
GOODWILL, INTANGIBLE, AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL | Changes in the carrying amount of goodwill of the Company between December 31, 2021, and December 31, 2022, are as follows (in US$ thousands): SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL Production Drilling and Goodwill Balance as of December 31, 2021 $ 459,710 $ 185,385 $ 645,095 Purchase price adjustments from Action Business Combination - - - Balance as of December 31, 2022 $ 459,710 $ 185,385 $ 645,095 |
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 & relationships 10.0 Trademarks and trade names 7.9 Total intangible assets 9.7 |
SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION | The details of our intangible assets subject to amortization are set forth below (in US$ thousands): SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31, 2022 December 31, 2021 Gross Accumulated Net Gross carrying Accumulated Net Customer contracts & relationships $ 153,500 $ (61,477 ) $ 92,023 $ 153,500 $ (46,054 ) $ 107,446 Trademarks and trade names 25,940 (15,049 ) 10,891 25,940 (11,770 ) 14,170 Total intangible assets $ 179,440 $ (76,526 ) $ 102,914 $ 179,440 $ (57,824 ) $ 121,616 |
SCHEDULE OF INVESTMENTS | The following table presents our investments at the dates indicated (in US$ thousands): SCHEDULE OF INVESTMENTS Segment Ownership December 31, 2022 W. D. Von Gonten Engineering LLC Production Services 46.2 % $ 16,086 |
SCHEDULE OF EARNINGS (LOSS) FROM EQUITY INVESTMENTS | The following table presents earnings (loss) from equity investments for the periods indicated (in US$ thousands): SCHEDULE OF EARNINGS (LOSS) FROM EQUITY INVESTMENTS Segment 6 months ended W. D. Von Gonten Engineering LLC Production Services $ 42.7 |
SCHEDULE OF FINANCIAL INFORMATION FOR OUR EQUITY METHOD INVESTMENTS | Summarized combined financial information for our equity method investments is as follows for the periods indicated (amounts represent 100% of investee financial information in US$ thousands): SCHEDULE OF FINANCIAL INFORMATION FOR OUR EQUITY METHOD INVESTMENTS December 31, 2022 Balance Sheet data: Current assets $ 4,484 Noncurrent assets 21,392 Total assets $ 25,876 Current liabilities $ 2,837 Other liabilities 15,171 Combined equity 7,868 Total liabilities and combined equity $ 25,876 6 months ended Statement of operations data: Revenue $ 10,035 Operating (loss) / income (350 ) Net (loss) / income 92 |
LEASING (Tables)
LEASING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leasing | |
SCHEDULE OF COMPONENTS OF LEASE EXPENSE | The following table presents components of lease expense (in US$ thousands): SCHEDULE OF COMPONENTS OF LEASE EXPENSE Year ended December 31, 2022 Components of lease expense: Finance lease cost: Amortization of right-of-use assets $ 3,595 Interest on lease liabilities 390 Operating lease cost 7,142 Short-term lease (1) 136,818 Sublease income (54 ) Total lease expense $ 147,891 (1) Leases with a term of one year or less, including leases with a term of one month or less . |
SCHEDULE OF AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET | Amounts recognized in the Consolidated Balance Sheet (in US$ thousands): SCHEDULE OF AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET As of Components of balance sheet: Operating leases: Operating lease right-of-use assets (non-current) $ 29,970 Current portion of operating lease liabilities 6,263 Operating lease liabilities (non-current) 25,051 Finance leases: Property, plant and equipment, net $ 7,176 Other current liabilities 2,268 Other liabilities (not current) 192 |
SCHEDULE OF OPERATING LEASE LIABILITIES | SCHEDULE OF OPERATING LEASE LIABILITIES Year ended December 31, 2022 Other supplemental information (in US$ thousands except percentages): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used by operating leases $ 6,662 Operating cash flows used by finance leases 390 Financing cash flows used by finance leases 3,108 Noncash investing and financing activities: Right-of-use assets obtained in exchange for lease obligations on adoption of ASC 842: Operating leases $ 33,651 Finance leases 10,771 Right-of-use assets obtained in exchange for lease obligations during the year ended December 31, 2022: Operating leases 1,945 Finance leases - Derecognition of prepaid rent upon adoption of ASC 842 93 Derecognition of prepaid rent during the year ended December 31, 2022: 683 Derecognition of tenant improvements upon adoption of ASC 842 362 Weighted-average remaining lease term: Operating leases 14.29 Finance leases 1.35 Weighted-average discount rate for leases: Operating leases 7.39 % Finance leases 5.88 % |
SCHEDULE OF MATURITIES OF OUR LEASE LIABILITIES | As of December 31, 2022, maturities of our lease liabilities are as follows (in US$ thousands): SCHEDULE OF MATURITIES OF OUR LEASE LIABILITIES Operating Leases Finance Leases Year: 2023 $ 6,967 $ 2,402 2024 5,383 203 2025 4,958 - 2026 2,972 - 2027 2,567 - Thereafter 34,481 - Total lease payments 57,328 2,605 Less: imputed interest (26,014 ) (145 ) Total $ 31,314 $ 2,460 |
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, 2021, were payable as follows (in US$ thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE CAPITAL LEASES As of December 31, 2021 Future Minimum Lease Payments Future Interest Payments Total Payments Within 1 year $ 4,385 $ 536 $ 4,921 1-2 years 2,247 195 2,442 2-3 years - - - 3-4 years - - - 4-5 years - - - After 5 years - - - Total $ 6,632 $ 731 $ 7,363 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LONG TERM DEBT OBLIGATIONS | The Company’s long-term debt obligations consist of the following (in US$ thousands): SCHEDULE OF LONG TERM DEBT OBLIGATIONS December 31, 2022 December 31, Secured Term Loan $ 430,000 $ 430,000 Secured Revolving Credit Facility 10,000 80,000 CIB Long-Term Debt - - Borrowings from Long-Term 24 Month Working Capital Facilities 11,942 17,502 Less: unamortized debt issuance costs (6,727 ) (9,983 ) Total loans and borrowings 445,215 517,519 Less: current installments (53,352 ) (8,755 ) Long-term debt, net of unamortized debt issuance costs and excluding current installments $ 391,863 $ 508,764 |
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, 2022 2021 Other short-term borrowings from working capital facilities $ 91,747 $ 78,807 Less: unamortized debt issuance costs (1,862 ) (488 ) Short-term debt, excluding current installments of long-term debt $ 89,885 $ 78,319 |
SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT | Scheduled principal payments of long-term debt for periods subsequent to December 31, 2022 are as follows (in US$ thousands): SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT 2023 $ 53,345 2024 66,097 2025 74,500 2026 64,500 2027 193,500 Thereafter - Total $ 451,942 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
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, 2022, and 2021 (in thousands): SCHEDULE OF FUNDED STATUS OF END-OF-SERVICE INDEMNITIES EMPLOYEES RECEIVE UNDER ONE OF FIVE BENEFIT STRUCTURES December 31, December 31, Change in benefit obligations Benefit obligations at the beginning of the year $ 27,410 $ 24,941 Actuarial (gain) / loss (1,128 ) (69 ) Service cost 4,876 4,545 Interest cost 675 482 Benefits paid (3,519 ) (3,021 ) Benefit obligation acquired in business combination - 532 Benefit obligations at the end of the year 28,314 27,410 Current benefit obligation 3,932 3,876 Non-current benefit obligation 24,382 23,534 Benefit obligation at the end of the year 28,314 27,410 Change in plan assets Fair value of plan assets at the beginning of the year - - Employer contributions 3,519 3,021 Benefits paid (3,519 ) (3,021 ) Plan assets at the end of the year - - Unfunded status $ 28,314 $ 27,410 |
SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST | Net cost for the years ended December 31, 2022, 2021, and 2020, comprises the following components (in thousands): SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST Year ended December 31, December 31, December 31, Service cost $ 4,876 $ 4,545 $ 3,487 Interest cost 675 482 583 Actuarial (gain)/loss (1,128 ) (69 ) 2,243 Other - - - Net cost $ 4,423 $ 4,958 $ 6,313 |
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, 2022 and 2021 are set out below: SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST December 31, 2022 December 31, Discount rate 5.00 % 2.25 % Rate of increase in compensation levels: 4.5 5 % 3 5 % The discount rate has been set with regard to the market yields on high quality corporate bonds as of December 31, 2022 for the measurements as of December 31, 2022 (and as of December 31, 2021 for the measurements as of December 31, 2021) of duration broadly consistent with the duration of the benefit obligations. The primary yield curve for the purpose of this comparison has been the ‘FTSE Above Median Double-A Curve’. The weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2022 and 2021 are set out below: December 31, 2022 December 31, Discount rate 2.25 % 1.75 % Rate of increase in compensation levels: 4.5 5 % 3 5 % |
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 100 basis point decrease in discount rate +$ 1,720 100 basis point increase in discount rate -$ (1,529 ) |
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, 2023 $ 5,232 2024 $ 4,952 2025 $ 4,704 2026 $ 4,776 2027 $ 4,671 2028 through 2032 $ 21,525 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN | SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN Year ended December 31, 2022 December 31, December 31, Domestic $ (8,726 ) $ (183 ) $ (4,151 ) Foreign (21,075 ) (60,396 ) 33,246 (Loss) / Income before income tax $ (29,801 ) $ (60,579 ) $ 29,095 |
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | The components of the income tax (expense) / benefit (benefit), all of which is foreign, are as follows (in US$ thousands): SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) Year ended December 31, 2022 December 31, December 31, Current tax expense $ 16,880 $ 16,129 $ 15,781 Deferred tax expense (benefit) (10,261 ) (12,140 ) (3,241 ) Income tax expense / (benefit) $ 6,619 $ 3,989 $ 12,540 |
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 US$ thousands): SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) As of December 31, December 31, Deferred Tax Assets Property, plant and equipment $ 4,644 $ 4,252 Net operating loss carryforward 26,514 18,056 Temporary differences due to restatement (Note 4) - 5,166 Total deferred tax assets 31,158 27,474 Less: valuation allowance (10,042 ) (8,582 ) Deferred tax assets, net of valuation allowance $ 21,116 $ 18,892 Deferred Tax Liabilities Property, plant and equipment $ (4,335 ) $ (4,086 ) Intangible assets (15,408 ) (18,528 ) Temporary differences due to restatement (Note 4) - (5,166 ) Total deferred tax liabilities (19,743 ) (27,780 ) Net deferred tax asset / (liability) $ 1,373 $ (8,888 ) |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION Year ended December 31, 2022 December 31, December 31, Income tax at statutory rate (BVI and UAE 0 $ - $ - $ - Foreign tax rate differential (1,498 ) (6,981 ) 5,510 Tax effect of adjustments to prior years current tax expense - (997 ) (1,206 ) Tax effect of adjustments to prior years deferred taxes - - - Reversal of tax liability on expiration of limitation period - - - Effect of changes in valuation allowances (1,460 ) 1,391 3,300 Unrecognized tax benefits 9,577 10,576 4,936 Other - - - Income tax expense / (benefit) $ 6,619 $ 3,989 $ 12,540 |
SCHEDULE OF UNRECOGNIZED TAX BENEFITS | A summary of activity related to the net unrecognized tax benefits is as follows: SCHEDULE OF UNRECOGNIZED TAX BENEFITS December 31, December 31, December 31, Year ended December 31, December 31, December 31, Balance at beginning of period $ 51,002 $ 33,336 $ 24,974 Additions from tax positions adjusted in purchase accounting - - - Additions from tax positions related to the current period 16,953 26,916 10,825 Additions from tax positions related to prior periods - 311 27 Reductions from tax positions related to earlier periods (5,485 ) (8,512 ) (762 ) Reductions on account of statute expiry - - Settlement of tax positions (1,355 ) (1,049 ) (1,728 ) Balance at end of period $ 61,115 $ 51,002 $ 33,336 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SCHEDULE OF UNVESTED RESTRICTED STOCK | The following tables set forth the LTIP activity for the periods indicated (in US$ thousands, except share and per share amounts): SCHEDULE OF UNVESTED RESTRICTED STOCK Year ended December 31, 2022 December 31, 2021 December 31, 2020 Number Weighted Number of Restricted Shares Weighted per Share Number of Weighted Average Value per Share Unvested at Beginning of Period 2,248,699 $ 9.58 2,038,662 $ 7.38 1,502,690 $ 10.25 Granted 1,011,040 $ 8.76 1,413,335 $ 11.67 1,194,905 $ 5.30 Vested (1,064,774 ) $ 9.38 (940,032 ) $ 8.04 (590,264 ) $ 10.18 Forfeited (118,648 ) $ 9.25 (263,266 ) $ 9.20 (68,669 ) $ 9.55 Unvested at End of Period 2,076,317 $ 10.10 2,248,699 $ 9.58 2,038,662 $ 7.38 |
SCHEDULE OF STOCK-BASED COMPENSATION | SCHEDULE OF STOCK-BASED COMPENSATION Year ended December 31, December 31, December 31, Cost of Services $ 4,466 $ 4,632 $ 3,521 Selling, general and administrative expenses (excluding Amortization) 4,803 5,127 4,311 Net cost $ 9,269 $ 9,759 $ 7,832 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING | The following tables provides a reconciliation of the data used in the calculation of basic and diluted ordinary shares outstanding for the years ended December 31, 2022, December 31, 2021, and December 31, 2020 (in US$ thousands except shares and per share amounts): SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING Date Transaction Detail Change in Year ended Weighted December 31, 2021 Beginning Balance 91,366,235 February 23, 2022 Restricted Stock Vesting 32,868 28,005 March 16, 2022 Restricted Stock Vesting 279,493 222,063 March 17, 2022 Restricted Stock Vesting 74,000 58,592 March 18, 2022 Restricted Stock Vesting 242,727 191,522 March 19, 2022 Restricted Stock Vesting 316,775 249,081 July 1, 2022 WDVGE - NESR ordinary share consideration 1,650,000 827,260 August 14, 2022 Restricted Stock Vesting 50,654 19,290 December 31, 2022 Ending Balance 92,962,048 Date Transaction Detail Change in Year ended Weighted December 31, 2020 Beginning Balance 87,777,553 June 1, 2020 SAPESCO - NESR ordinary share consideration (issued January 14, 2021) (1) 2,237,000 2,237,000 December 31, 2020 SAPESCO - Additional Earn-Out Shares (issued January 14, 2021) (2) 145,039 145,039 February 23, 2021 Restricted Stock Vesting 87,905 74,900 March 16, 2021 Restricted Stock Vesting 316,781 251,689 March 18, 2021 Restricted Stock Vesting 288,329 227,503 December 31, 2020 SAPESCO - Contingently Issuable Shares (contingency resolved at December 31, 2020) (3) 150,434 150,434 March 31, 2021 SAPESCO - Contingently Issuable Shares (contingency resolved at March 31, 2021; issued on June 8, 2021) (3) 113,215 85,299 June 8, 2021 SAPESCO - Customer Receivables Earn-Out Shares (contingency resolved and issued both on June 8, 2021) (3) 2,962 1,672 August 14, 2021 Restricted Stock Vesting 242,017 92,166 November 19, 2021 Restricted Stock Vesting 5,000 575 December 31, 2021 Ending Balance 91,043,830 (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 145,039 (3) Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued; as such 266,611 Date Transaction Detail Change in Year ended Weighted 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 5) (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 5) (2) 295,473 808 December 31, 2020 Ending Balance 88,845,601 (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 295,473 |
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE | SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE December 31, 2022 December 31, 2021 December 31, 2020 (As restated, Note 4) Net (loss) / income to Ordinary Shareholders Weighted-average ordinary shares outstanding EPS Net (loss) / income to Ordinary Shareholders Weighted-average ordinary shares outstanding EPS Net (loss) / income to Ordinary Shareholders Weighted-average ordinary shares outstanding EPS Basic EPS - ordinary shares $ (36,420 ) 92,962,048 $ (0.39 ) $ (64,568 ) 91,043,830 $ (0.71 ) $ 16,555 88,845,601 $ 0.19 Restricted stock units - - 272,275 Antidilution sequencing - subtotal (36,420 ) 92,962,048 (0.39 ) (64,568 ) 91,043,830 (0.71 ) 16,555 89,117,876 0.19 Decrease/(increase) in the fair value of the warrants $ (557 ) 35,540,380 5.75 - - Diluted EPS - ordinary shares $ (36,420 ) 92,962,048 $ (0.39 ) $ (64,568 ) 91,043,830 $ (0.71 ) $ 15,998 89,117,876 $ 0.18 |
FAIR VALUE ACCOUNTING (Tables)
FAIR VALUE ACCOUNTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FAIR VALUE OF HIERARCHY AT FAIR VALUE ON RECURRING BASIS | The following tables present the Company’s fair value hierarchy for its financial liabilities measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE OF HIERARCHY AT FAIR VALUE ON RECURRING BASIS As of December 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Liability for Buyer Stock Adjustment Amount derivative (Note 10) $ - $ - $ - $ - Liability for Private Warrants (Note 17) - - - - As of December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities: Liability for Private Warrants (Note 17) $ - $ - $ - $ - |
SCHEDULE OF FAIR VALUE OF LEVEL 3 MEASUREMENTS | The change in fair value of the Company’s Level 3 measurements is as follows: SCHEDULE OF FAIR VALUE OF LEVEL 3 MEASUREMENTS December 31, December 31, December 31, Year-to-date period ended December 31, December 31, December 31, Beginning Balance $ - $ - $ (557 ) Initial accounting for Buyer Stock Adjustment Amount derivative liability (Note 10) (4,236 ) - - Change in Buyer Stock Adjustment Amount derivative liability (Note 10) 4,236 - - Change in Private Warrant liability - - 557 Ending Balance $ - $ - $ - |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) - Successors [Member] | 12 Months Ended |
Dec. 31, 2022 | |
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 Year ended December 31, 2022 December 31, December 31, Reportable Segment: Production Services $ 567,249 $ 554,097 $ 557,327 Drilling and Evaluation Services 342,268 322,632 276,825 Total revenue from external customers $ 909,517 $ 876,729 $ 834,152 Long-lived assets As of December 31, 2022 December 31, Reportable Segment: Production Services $ 239,958 $ 253,215 Drilling and Evaluation Services 173,520 133,691 Total Reportable Segments 413,478 386,906 Unallocated assets 47,583 38,600 Total long-lived assets $ 461,061 $ 425,506 Unallocated assets mainly comprise of buildings and leasehold improvements in the countries which supports both the segments in the normal course of business. Total segment operating (loss) / income Year ended December 31, 2022 December 31, 2021 December 31, 2020 Reportable Segment: Production Services $ 28,717 $ (1,858 ) $ 56,180 Drilling and Evaluation Services 33,473 (1,238 ) 24,295 Total Reportable Segments 62,190 (3,096 ) 80,475 Unallocated expenses (63,107 ) (40,236 ) (45,197 ) Total Operating income / (loss) (917 ) (43,332 ) 35,278 Interest expense, net (34,126 ) (15,174 ) (15,879 ) Gain/(loss) on Private Warrant Liability - - 557 Other income / (expense), net 5,242 (2,073 ) 9,139 (Loss) / income before income tax (29,801 ) (60,579 ) 29,095 Unallocated expenses for the years ended December 31, 2022, December 31, 2021, and December 31, 2020, mainly include payroll and compensation costs for headquarters’ employees, professional and legal expenses relating to audit firms, consulting firms and legal counsel, and depreciation charges on headquarters’ offices and leasehold improvements. |
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 Year ended December 31, 2022 December 31, December 31, Geographic Area: Domestic (British Virgin Islands) $ - $ - $ - MENA 893,635 865,917 822,606 Rest of World 15,882 10,812 11,546 Total revenue $ 909,517 $ 876,729 $ 834,152 Long-lived assets by geographic area As of December 31, 2022 December 31, 2021 Geographic area: Domestic (British Virgin Islands) $ - $ - MENA 443,967 408,089 Rest of World 17,094 17,417 Total long-lived assets $ 461,061 $ 425,506 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIFE PROPERTY, PLANT AND EQUIPMENT (Details) | Dec. 31, 2022 |
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 | 1 year |
Drilling Rigs, Plant and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 15 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 | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jan. 01, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Change in shares, sapesco - nesr ordinary share consideration | 1,650,000 | 2,237,000 | |||
Other current liabilities | $ 26,166 | $ 17,818 | |||
Short term borrowings | $ 89,885 | 78,319 | |||
Capital lease obligations, current | 4,400 | ||||
Capital Lease Obligations, Current | $ 2,200 | ||||
Change in shares, sapesco - additional earn-out shares | 145,039 | ||||
Change in shares, SAPESCO - additional earn-out shares | 266,611 | ||||
Capital lease obligations, current | $ 2,200 | ||||
Capital lease obligations, non current | 4,700 | ||||
Retained Earnings (Accumulated Deficit) | $ 2,800 | $ (75,020) | $ (35,827) | $ 28,741 | |
Revenue percent | 0% | 0% | 0% | ||
Capitalized investments | $ 0 | $ 0 | $ 0 | ||
Unamortized expense | 17,400 | 0 | |||
Right of use asset | 29,970 | ||||
Lease liabilities | $ 31,314 | ||||
2018 Long Term Incentive Plan [Member] | Board of Directors [Member] | |||||
Time-based and vest ratably period | 1 year | ||||
2018 Long Term Incentive Plan [Member] | Employees [Member] | |||||
Time-based and vest ratably period | 3 years | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Right of use asset | 33,700 | ||||
Leasehold liabilities | 400 | ||||
Prepaid rent assets | 100 | ||||
Lease liabilities | $ 33,200 | ||||
Minimum [Member] | |||||
Finite lived intangible asset, useful lives | 8 years | ||||
Minimum [Member] | Integrated Production Management [Member] | |||||
Ownership percent | 0% | ||||
Minimum [Member] | National Energy Services [Member] | |||||
Ownership percent | 20% | ||||
Maximum [Member] | |||||
Finite lived intangible asset, useful lives | 10 years | ||||
Maximum [Member] | Integrated Production Management [Member] | |||||
Ownership percent | 20% | ||||
Maximum [Member] | National Energy Services [Member] | |||||
Ownership percent | 50% | ||||
Common Stock One [Member] | |||||
Change in shares, SAPESCO - additional earn-out shares | 266,611 | ||||
Sahara Petroleum Services Company [Member] | |||||
Capital lease obligations, current | $ 4,400 | 2,000 | |||
Capital Lease Obligations, Current | 6,100 | 13,500 | |||
Seller Provided Installment Financing | |||||
Accounts payable | 1,100 | 9,100 | |||
Other current liabilities | 6,000 | ||||
Short term borrowings | 6,000 | ||||
Accounts Payable [Member] | |||||
Payments to acquire property, plant, and equipment | $ 9,100 | 2,600 | 24,700 | ||
Accounts Payable [Member] | Seller Provided Installment Financing | |||||
Payments to acquire property, plant, and equipment | $ 11,600 | $ 7,300 | 2,900 | ||
Short Term Borrowings [Member] | Seller Provided Installment Financing | |||||
Payments to acquire property, plant, and equipment | $ 3,200 |
SCHEDULE OF RESTATEMENT (Detail
SCHEDULE OF RESTATEMENT (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Jan. 01, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total current assets | $ 537,814 | $ 627,368 | $ 511,158 | |||
Total assets | 1,828,327 | 1,831,292 | 1,686,541 | |||
Total current liabilities | 544,068 | 431,872 | 435,872 | |||
Total liabilities | 1,025,979 | 1,010,258 | 826,598 | |||
Total shareholders' equity | 802,348 | 821,034 | 859,943 | $ 835,157 | ||
Revenues | 909,517 | 876,729 | 834,152 | |||
Cost of services | (844,039) | (873,948) | (756,245) | |||
Selling, general and administrative expenses (excluding Amortization) | (47,530) | (28,071) | (26,812) | |||
Selling, general and administrative expenses (excluding Amortization) | 47,530 | 28,071 | 26,812 | |||
Gain/(loss) on Private Warrant Liability | 557 | |||||
(Loss) / Income before income tax | (29,801) | (60,579) | 29,095 | |||
Income tax (expense) / benefit | 6,619 | 3,989 | 12,540 | |||
Income tax (expense) / benefit | (6,619) | (3,989) | (12,540) | |||
Net (loss) / income | $ (36,420) | $ (64,568) | $ 16,555 | |||
Basic earnings per share | $ (0.39) | $ (0.71) | $ 0.19 | |||
Diluted earnings per share | $ (0.39) | $ (0.71) | $ 0.18 | |||
Total comprehensive income, net of tax | $ (36,420) | $ (64,563) | $ 16,590 | |||
Retained earnings | (75,020) | (35,827) | 28,741 | $ 2,800 | ||
Net cash provided by operating activities | 92,576 | 127,743 | 134,453 | |||
Common stock and additional paid in capital [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total shareholders' equity | $ 877,299 | $ 856,792 | 831,146 | $ 822,942 | ||
Previously Reported [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total current assets | 515,217 | |||||
Total assets | 1,687,054 | |||||
Total current liabilities | 359,366 | |||||
Total liabilities | 742,636 | |||||
Total shareholders' equity | 944,418 | |||||
Revenues | 834,146 | |||||
Cost of services | (678,720) | |||||
Selling, general and administrative expenses (excluding Amortization) | (72,077) | |||||
Selling, general and administrative expenses (excluding Amortization) | 72,077 | |||||
Gain/(loss) on Private Warrant Liability | ||||||
(Loss) / Income before income tax | 60,792 | |||||
Income tax (expense) / benefit | (10,705) | |||||
Income tax (expense) / benefit | 10,705 | |||||
Net (loss) / income | $ 50,087 | |||||
Basic earnings per share | $ 0.56 | |||||
Diluted earnings per share | $ 0.56 | |||||
Total comprehensive income, net of tax | $ 50,122 | |||||
Retained earnings | 117,748 | |||||
Net cash provided by operating activities | 133,471 | |||||
Previously Reported [Member] | Common stock and additional paid in capital [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total shareholders' equity | 826,614 | |||||
Revision of Prior Period, Error Correction, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total assets | $ 3,197 | |||||
Total current liabilities | 53,583 | 22,923 | ||||
Total liabilities | 53,583 | 30,379 | ||||
Total shareholders' equity | (50,386) | (34,089) | ||||
Revenues | 6 | |||||
Cost of services | (32,260) | |||||
Selling, general and administrative expenses (excluding Amortization) | ||||||
Selling, general and administrative expenses (excluding Amortization) | ||||||
Gain/(loss) on Private Warrant Liability | ||||||
(Loss) / Income before income tax | (32,254) | |||||
Income tax (expense) / benefit | (1,835) | |||||
Income tax (expense) / benefit | 1,835 | |||||
Net (loss) / income | $ (34,089) | |||||
Basic earnings per share | $ (0.38) | |||||
Diluted earnings per share | $ (0.38) | |||||
Total comprehensive income, net of tax | $ (34,089) | |||||
Retained earnings | (50,386) | (34,089) | ||||
Net cash provided by operating activities | 982 | |||||
Revision of Prior Period, Error Correction, Adjustment [Member] | Common stock and additional paid in capital [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total shareholders' equity | ||||||
Revision of Prior Period, Error Correction, Adjustment [Member] | Private Warrant [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total current assets | ||||||
Total current liabilities | ||||||
Total liabilities | ||||||
Total shareholders' equity | ||||||
Revenues | ||||||
Cost of services | ||||||
Selling, general and administrative expenses (excluding Amortization) | ||||||
Selling, general and administrative expenses (excluding Amortization) | ||||||
Gain/(loss) on Private Warrant Liability | 557 | |||||
(Loss) / Income before income tax | 557 | |||||
Income tax (expense) / benefit | ||||||
Income tax (expense) / benefit | ||||||
Net (loss) / income | $ 557 | |||||
Basic earnings per share | $ 0.01 | |||||
Diluted earnings per share | ||||||
Total comprehensive income, net of tax | $ 557 | |||||
Retained earnings | (4,532) | |||||
Net cash provided by operating activities | ||||||
Revision of Prior Period, Error Correction, Adjustment [Member] | Private Warrant [Member] | Common stock and additional paid in capital [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total shareholders' equity | 4,532 | |||||
Revision of Prior Period, Reclassification, Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total current assets | $ (4,220) | 161 | ||||
Total assets | (3,710) | |||||
Total shareholders' equity | (34,089) | |||||
Correction of Classification Errors in Selling General and Administrative Expenses (Excluding Amortization) [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total current assets | ||||||
Total assets | ||||||
Total current liabilities | ||||||
Total liabilities | ||||||
Total shareholders' equity | ||||||
Revenues | ||||||
Cost of services | (45,265) | |||||
Selling, general and administrative expenses (excluding Amortization) | (45,265) | |||||
Selling, general and administrative expenses (excluding Amortization) | 45,265 | |||||
Gain/(loss) on Private Warrant Liability | ||||||
(Loss) / Income before income tax | ||||||
Income tax (expense) / benefit | ||||||
Income tax (expense) / benefit | ||||||
Net (loss) / income | ||||||
Basic earnings per share | ||||||
Diluted earnings per share | ||||||
Total comprehensive income, net of tax | ||||||
Retained earnings | ||||||
Net cash provided by operating activities | ||||||
Correction of Classification Errors in Selling General and Administrative Expenses (Excluding Amortization) [Member] | Common stock and additional paid in capital [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total shareholders' equity | ||||||
Revision of Prior Period, Adjustment [Member] | Private Warrant [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Total assets |
SCHEDULE OF CONSIDERATION TO PU
SCHEDULE OF CONSIDERATION TO PURCHASE ISSUED AND OUTSTANDING EQUITY INTEREST (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | May 05, 2021 | |
Sahara Petroleum Services Company [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 16,958 | ||
Total consideration - cash | 16,958 | ||
NESR ordinary share consideration | $ 12,013 | ||
NESR ordinary share consideration, shares | 2,237,000 | ||
Total consideration - equity | [1] | $ 12,013 | |
Total consideration - equity, shares | [1] | 2,237,000 | |
Cash Earn-Out | $ 5,301 | ||
Additional Earn-Out Shares | $ 6,377 | ||
Additional Earn-Out Shares, shares | |||
Total estimated earn-out mechanisms | $ 11,678 | ||
Total estimated earn-out mechanisms, shares | |||
Total consideration | $ 40,649 | ||
Total consideration shares | 2,237,000 | ||
Action Sale and Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 36,767 | ||
Deferred cash consideration | 16,935 | ||
Total consideration - cash | 53,702 | ||
First Earn-Out | 2,716 | ||
Second Earn-Out | 3,635 | ||
Third Earn-Out | |||
Total estimated earn-out mechanisms | 6,351 | ||
Total consideration | $ 60,053 | ||
[1]The fair value of NESR ordinary shares was determined based upon the $ 5.37 |
SCHEDULE OF PURCHASE PRICE ALLO
SCHEDULE OF PURCHASE PRICE ALLOCATION (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Sahara Petroleum Services Company [Member] | |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $ 3,740 |
Accounts receivable | 14,847 |
Unbilled revenue | 6,126 |
Service 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 identifiable assets acquired | 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 interests | (8) |
Net identifiable liabilities acquired | 55,297 |
Total fair value of net assets acquired | (5,508) |
Goodwill | 46,157 |
Total consideration | 40,649 |
Action Sale and Purchase Agreement [Member] | |
Business Acquisition [Line Items] | |
Cash and cash equivalents | 382 |
Accounts receivable | 8,565 |
Unbilled revenue | 1,352 |
Service inventories | 2,862 |
Prepaid assets | 310 |
Other receivables | 89 |
Other current assets | 1,122 |
Property, plant and equipment | 13,162 |
Intangible assets | 29,100 |
Other assets | 2,053 |
Total identifiable assets acquired | 58,997 |
Accounts payable | 5,294 |
Accrued expenses | 2,465 |
Other current liabilities | 200 |
Employee benefit liabilities | 584 |
Net identifiable liabilities acquired | 8,543 |
Total fair value of net assets acquired | 50,454 |
Goodwill | 9,599 |
Total consideration | $ 60,053 |
SCHEDULE OF ALLOCATION TO INTAN
SCHEDULE OF ALLOCATION TO INTANGIBLE ASSETS (Details) - Action Sale and Purchase Agreement [Member] $ in Thousands | Dec. 31, 2022 USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | $ 29,100 |
Customer Contracts [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | $ 29,100 |
Total intangible assets, term | 10 years |
SCHEDULE OF UNAUDITED PROFORMA
SCHEDULE OF UNAUDITED PROFORMA INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Revenues | $ 885,671 | $ 855,409 |
Net (loss) / income | $ (64,529) | 15,325 |
Sahara Petroleum Services Company [Member] | ||
Business Acquisition [Line Items] | ||
Revenues | 852,935 | |
Net (loss) / income | $ 14,892 |
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 | $ 5.37 | |
Number of shares settled with sellers | 145,039 |
SCHEDULE OF PRELIMINARY ALLOCAT
SCHEDULE OF PRELIMINARY ALLOCATION TO INTANGIBLE ASSETS (Details) - Sahara Petroleum Services Company [Member] $ in Thousands | Dec. 31, 2022 USD ($) |
Business Acquisition [Line Items] | |
Total intangible assets | $ 3,340 |
Customer Contracts [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 2,900 |
Total intangible assets, term | 8 years |
Trademarks and Trade Names [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 440 |
Total intangible assets, term | 2 years |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
May 05, 2021 | Feb. 13, 2020 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 02, 2020 | |
Goodwill | $ 645,095 | $ 645,095 | $ 645,095 | |||||
Business acquisition proforma net income loss | 6,200 | 3,900 | ||||||
Stock issued during period, value, acquisitions | $ 11,238 | |||||||
Change in shares, SAPESCO - additional earn-out shares | 266,611 | |||||||
Noncontrolling Interest [Member] | ||||||||
Stock issued during period, value, acquisitions | ||||||||
Sahara Petroleum Services Company [Member] | ||||||||
Business combination cash settled | 3,740 | |||||||
Goodwill | 46,200 | |||||||
Business acquisitions proforma revenues | $ 26,600 | |||||||
Business acquisition proforma net income loss | 2,900 | |||||||
SAPESCO Business Combination [Member] | ||||||||
Business combination cash and cash equivalents. | 11,000 | |||||||
Deferred consideration | $ 6,000 | |||||||
Business acquisition, equity interest issued or issuable, number of shares | 2,237,000 | |||||||
Action Revenue [Member] | ||||||||
Business acquisitions proforma revenues | $ 53,700 | 25,100 | ||||||
Action Sale and Purchase Agreement [Member] | ||||||||
All-cash transaction | $ 36,800 | |||||||
Business combination, deferred consideration | $ 16,900 | |||||||
Business combination cash settled | 382 | |||||||
Business combination cash and cash equivalents. | 36,800 | |||||||
Deferred consideration | 16,900 | |||||||
Goodwill | 9,600 | |||||||
Action Sale and Purchase Agreement [Member] | First Earn-Out Consideration [Member] | ||||||||
Revenue percentage | 1% | |||||||
Business combination issued in equity earn-outs | $ 6,400 | |||||||
Valuation adjustment value | 500 | 700 | 500 | |||||
Business combination cash settled | 0 | 700 | 0 | |||||
Business combination collective value | 4,300 | 3,000 | 4,300 | |||||
Action Sale and Purchase Agreement [Member] | Second Earn-Out Consideration [Member] | ||||||||
Revenue percentage | 3% | |||||||
Earnout payable percentage | 66.66% | |||||||
Valuation adjustment value | 700 | |||||||
Business combination collective value | 4,300 | 3,000 | 4,300 | |||||
Action Sale and Purchase Agreement [Member] | Third Earn-Out Consideration [Member] | ||||||||
Revenue percentage | 1.12% | |||||||
Business combination collective value | $ 4,300 | 3,000 | $ 4,300 | |||||
Sale and Purchase Agreement [Member] | ||||||||
Business combination issued in equity earn-outs | $ 1,900 | $ 11,700 | ||||||
Sale of stock, percentage of ownership after transaction | 99.70% | |||||||
Payments to acquire businesses, gross | $ 500 | |||||||
Stock issued during period, shares, acquisitions | 145,039 | |||||||
Stock issued during period, value, acquisitions | $ 1,400 | |||||||
Receivables Earnout Shares Contingency Fair Value | $ 0 | |||||||
Change in shares, SAPESCO - additional earn-out shares | 2,237,000 | 266,611 | ||||||
Sale and Purchase Agreement [Member] | Additional Earn Out Shares [Member] | ||||||||
Business combination acquired receivable fair value | $ 6,900 | |||||||
Sale and Purchase Agreement [Member] | Sahara Petroleum Services Company [Member] | ||||||||
Business combination, deferred consideration | 6,000 | 6,000 | ||||||
Sale of stock, percentage of ownership after transaction | 99.70% | 0.30% | ||||||
Business combination consideration transferred | 11,000 | $ 11,000 | ||||||
Payments to acquire businesses, gross | $ 17,000 | |||||||
Business acquisition, equity interest issued or issuable, number of shares | 2,237,000 | 2,237,000 | ||||||
Sale and Purchase Agreement [Member] | Sahara Petroleum Services Company [Member] | Noncontrolling Interest [Member] | ||||||||
Sale of stock, percentage of ownership after transaction | 0.30% | |||||||
Sale and Purchase Agreement [Member] | Additional Earn Out Shares [Member] | Maximum [Member] | ||||||||
Business acquisition, share price | $ 9 | |||||||
Sale and Purchase Agreement [Member] | NESR Additional Share [Member] | Maximum [Member] | ||||||||
Business acquisition, share price | $ 11.70 | |||||||
Sale and Purchase Agreement [Member] | NESR Additional Share [Member] | Minimum [Member] | ||||||||
Business acquisition, share price | $ 10 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE BY SERVICE TYPE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue by phase in well's life cycle | $ 909,517 | $ 876,729 | $ 834,152 |
Production Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue by phase in well's life cycle | 567,249 | 554,097 | 557,327 |
Drilling and Evaluation Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue by phase in well's life cycle | $ 342,268 | $ 322,632 | $ 276,825 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||||
Trade receivables | $ 161,373 | $ 132,467 | ||
Less: allowance for credit losses | (12,664) | (2,052) | $ (1,722) | $ (1,843) |
Total | $ 148,709 | $ 130,415 |
SCHEDULE OF ALLOWANCE FOR DOUBT
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | |||
Allowance for credit losses at beginning of period | $ (2,052) | $ (1,722) | $ (1,843) |
CECL Accounting Standard Adoption (Note 3) | (2,773) | ||
(Increase) decrease to allowance for the period | (8,185) | (769) | (261) |
(Recovery) write-off of credit losses | 346 | 439 | 382 |
Allowance for credit losses at end of period | $ (12,664) | $ (2,052) | $ (1,722) |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Allowance for doubtful accounts receivable | $ 161,373 | $ 132,467 |
Allowance for credit losses | $ 9,400 |
SCHEDULE OF SERVICE INVENTORIES
SCHEDULE OF SERVICE INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-Term Purchase Commitment [Line Items] | ||
Total | $ 110,521 | $ 93,864 |
Spare Parts [Member] | ||
Long-Term Purchase Commitment [Line Items] | ||
Total | 64,006 | 65,883 |
Chemicals [Member] | ||
Long-Term Purchase Commitment [Line Items] | ||
Total | $ 46,515 | $ 27,981 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation | $ (323,325) | $ (233,609) |
Land | 11,664 | 11,664 |
Capital work in progress | 11,324 | 8,935 |
Total | 461,061 | 425,506 |
Buildings And Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Vehicles and cranes | $ 52,442 | 41,782 |
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] | ||
Vehicles and cranes | $ 677,263 | 565,730 |
Drilling Rigs, Plant and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 1 year | |
Drilling Rigs, Plant and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Office Equipment and Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Vehicles and cranes | $ 15,937 | 15,570 |
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] | ||
Vehicles and cranes | $ 15,756 | $ 15,434 |
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 | 10 years |
PROPERTY, PLANT, & EQUIPMENT (D
PROPERTY, PLANT, & EQUIPMENT (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 97 | $ 104.1 | $ 104.8 |
SCHEDULE OF CHANGES IN CARRYING
SCHEDULE OF CHANGES IN CARRYING AMOUNT OF GOODWILL (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Indefinite-Lived Intangible Assets [Line Items] | |
Balance | $ 645,095 |
Purchase price adjustments from Action Business Combination | |
Balance | 645,095 |
Production Services [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Balance | 459,710 |
Purchase price adjustments from Action Business Combination | |
Balance | 459,710 |
Drilling and Evaluation Services [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Balance | 185,385 |
Purchase price adjustments from Action Business Combination | |
Balance | $ 185,385 |
SCHEDULE OF WEIGHTED AVERAGE AM
SCHEDULE OF WEIGHTED AVERAGE AMORTIZATION PERIOD FOR INTANGIBLE ASSETS (Details) | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 9 years 8 months 12 days |
Customer Contracts [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 10 years |
Trademarks and Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 7 years 10 months 24 days |
SCHEDULE OF INTANGIBLE ASSETS S
SCHEDULE OF INTANGIBLE ASSETS SUBJECT TO AMORTIZATION (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, Gross carrying amount | $ 179,440 | $ 179,440 |
Total intangible assets, Accumulated amortization | (76,526) | (57,824) |
Total intangible assets, Net carrying amount | 102,914 | 121,616 |
Customer Contracts and Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, Gross carrying amount | 153,500 | 153,500 |
Total intangible assets, Accumulated amortization | (61,477) | (46,054) |
Total intangible assets, Net carrying amount | 92,023 | 107,446 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, Gross carrying amount | 25,940 | 25,940 |
Total intangible assets, Accumulated amortization | (15,049) | (11,770) |
Total intangible assets, Net carrying amount | $ 10,891 | $ 14,170 |
SCHEDULE OF INVESTMENTS (Detail
SCHEDULE OF INVESTMENTS (Details) - W. D. Von Gonten Engineering LLC [Member] $ in Thousands | Dec. 31, 2022 USD ($) |
Ownership percentage | 46.20% |
Equity method investments | $ 16,086 |
SCHEDULE OF EARNINGS (LOSS) FRO
SCHEDULE OF EARNINGS (LOSS) FROM EQUITY INVESTMENTS (Details) | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
W. D. Von Gonten Engineering LLC [Member] | |
Earnings (loss) from equity investments | $ 42,700 |
SCHEDULE OF FINANCIAL INFORMATI
SCHEDULE OF FINANCIAL INFORMATION FOR OUR EQUITY METHOD INVESTMENTS (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | $ 537,814 | $ 537,814 | $ 627,368 | $ 511,158 |
Total assets | 1,828,327 | 1,828,327 | 1,831,292 | 1,686,541 |
Current liabilities | 544,068 | 544,068 | 431,872 | 435,872 |
Other liabilities | 2,000 | 2,000 | 2,000 | |
Combined equity | 802,348 | 802,348 | 821,034 | |
Total liabilities and combined equity | 1,828,327 | 1,828,327 | 1,831,292 | |
Operating (loss) / income | (917) | (43,332) | 35,278 | |
Net (loss) / income | (36,420) | $ (64,568) | $ 16,555 | |
W. D. Von Gonten Engineering LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 4,484 | 4,484 | ||
Noncurrent assets | 21,392 | 21,392 | ||
Total assets | 25,876 | 25,876 | ||
Current liabilities | 2,837 | 2,837 | ||
Other liabilities | 15,171 | 15,171 | ||
Combined equity | 7,868 | 7,868 | ||
Total liabilities and combined equity | 25,876 | $ 25,876 | ||
Revenue | 10,035 | |||
Operating (loss) / income | (350) | |||
Net (loss) / income | $ 92 |
GOODWILL, INTANGIBLE, AND OTH_3
GOODWILL, INTANGIBLE, AND OTHER ASSETS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Aggregate amortization expense remaining, 2023 | $ 18,600 | |
Aggregate amortization expense remaining, 2024 | 18,600 | |
Aggregate amortization expense remaining, 2025 | 18,600 | |
Aggregate amortization expense remaining, 2026 | 16,800 | |
Aggregate amortization expense remaining, 2027 | 15,400 | |
Other current liabilities | 26,166 | $ 17,818 |
Buyer stock adjustment amount | 0 | |
Payments for investments | 14,200 | $ 7,600 |
W. D. Von Gonten Engineering LLC [Member] | ||
Other current liabilities | $ 4,200 |
SCHEDULE OF COMPONENTS OF LEASE
SCHEDULE OF COMPONENTS OF LEASE EXPENSE (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) | ||
Finance lease cost: | ||
Amortization of right-of-use assets | $ 3,595 | |
Interest on lease liabilities | 390 | |
Operating lease cost | 7,142 | |
Short-term lease | 136,818 | [1] |
Sublease income | (54) | |
Total lease expense | $ 147,891 | |
[1]Leases with a term of one year or less, including leases with a term of one month or less . |
SCHEDULE OF AMOUNTS RECOGNIZED
SCHEDULE OF AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases: | ||
Operating lease right-of-use assets (non-current) | $ 29,970 | |
Current portion of operating lease liabilities | 6,263 | |
Operating lease liabilities (non-current) | 25,051 | |
Finance leases: | ||
Property, plant and equipment, net (non-current) | $ 7,176 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net (Note 9) | |
Other current liabilities | $ 2,268 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | |
Other liabilities (not current) | $ 192 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities |
SCHEDULE OF OPERATING LEASE LIA
SCHEDULE OF OPERATING LEASE LIABILITIES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Operating cash flows used by operating leases | $ 6,662 |
Operating cash flows used by finance leases | 390 |
Financing cash flows used by finance leases | 3,108 |
Operating leases | 1,945 |
Finance leases | |
Derecognition of prepaid rent during the year ended December 31, 2022: | $ 683 |
Operating Lease, Weighted Average Remaining Lease Term | 14 years 3 months 14 days |
Finance Lease, Weighted Average Remaining Lease Term | 1 year 4 months 6 days |
Weighted average discount rate for operating leases | 7.39% |
Weighted average discount rate for finance leases | 5.88% |
Accounting Standards Update 2016-02 [Member] | |
Operating leases | $ 33,651 |
Finance leases | 10,771 |
Derecognition of prepaid rent during the year ended December 31, 2022: | 93 |
Derecognition of tenant improvements upon adoption of ASC 842 | $ 362 |
SCHEDULE OF MATURITIES OF OUR L
SCHEDULE OF MATURITIES OF OUR LEASE LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leasing | ||
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Finance Leases, Total | |
Operating Leases, 2023 | $ 6,967 | |
Finance Leases, 2023 | 2,402 | $ 4,385 |
Operating Leases, 2024 | 5,383 | |
Finance Leases, 2024 | 203 | 2,247 |
Operating Leases, 2025 | 4,958 | |
Finance Leases, 2025 | ||
Operating Leases, 2026 | 2,972 | |
Finance Leases, 2026 | ||
Operating Leases, 2027 | 2,567 | |
Finance Leases, 2027 | ||
Operating Leases, Thereafter | 34,481 | |
Finance Leases, Thereafter | ||
Operating Leases, Total lease payments | 57,328 | |
Finance Leases, Total lease payments | 2,605 | $ 6,632 |
Operating Leases, Less: imputed interest | (26,014) | |
Finance Leases, Less: imputed interest | (145) | |
Operating Leases, Total | 31,314 | |
Finance Leases, Total | $ 2,460 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER NON-CANCELABLE CAPITAL LEASES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leasing | ||
Future Minimum Lease Payments Within 1 year | $ 2,402 | $ 4,385 |
Future Interest Payments Within 1 year | 536 | |
Total Payments Within 1 year | 4,921 | |
Future Minimum Lease Payments 1-2 years | 203 | 2,247 |
Future Interest Payments 1-2 years | 195 | |
Total Payments 1-2 years | 2,442 | |
Future Minimum Lease Payments 2-3 years | ||
Future Interest Payments 2-3 years | ||
Total Payments 2-3 years | ||
Future Minimum Lease Payments 3-4 years | ||
Total Payments 3-4 years | ||
Future Minimum Lease Payments 4-5 years | ||
Total Payments 4-5 years | ||
Future Minimum Lease Payments After 5 years | ||
Total Payments After 5 years | ||
Future Minimum Lease Payments Total | $ 2,605 | 6,632 |
Total | 731 | |
Total | $ 7,363 |
LEASING (Details Narrative)
LEASING (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Rental expense | $ 134,100 | $ 144,100 | |
Interest expense incurred on capital leases | $ 34,126 | 15,174 | 15,879 |
Capital lease obligations | 6,600 | ||
Short term obligations | 4,400 | ||
Long term obligations | 2,200 | ||
Future minimum lease commitments, 2022 | 5,000 | ||
Future minimum lease commitments, 2023 | 2,700 | ||
Future minimum lease commitments, 2024 | 2,000 | ||
Future minimum lease commitments, 2025 | 1,200 | ||
Future minimum lease commitments, 2026 | 1,300 | ||
Future minimum lease commitments, Thereafter | 2,800 | ||
Capital Lease [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Interest expense incurred on capital leases | $ 1,000 | $ 1,700 |
SCHEDULE OF LONG TERM DEBT OBLI
SCHEDULE OF LONG TERM DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Line of Credit Facility [Line Items] | ||
Less: unamortized debt issuance costs | $ (6,727) | $ (9,983) |
Total loans and borrowings | 445,215 | 517,519 |
Less: current installments | (53,352) | (8,755) |
Long-term debt, net of unamortized debt issuance costs and excluding current installments | 391,863 | 508,764 |
CIB Long-Term Debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | ||
Working Capital Facilities [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | 11,942 | 17,502 |
Secured Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | 430,000 | 430,000 |
Secured Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Long-term Debt, Gross | $ 10,000 | $ 80,000 |
SCHEDULE OF SHORT TERM DEBT OBL
SCHEDULE OF SHORT TERM DEBT OBLIGATIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Other short-term borrowings from working capital facilities | $ 91,747 | $ 78,807 |
Less: unamortized debt issuance costs | (1,862) | (488) |
Short-term debt, excluding current installments of long-term debt | $ 89,885 | $ 78,319 |
SCHEDULE PRINCIPAL PAYMENTS OF
SCHEDULE PRINCIPAL PAYMENTS OF LONG TERM DEBT (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 53,345 |
2022 | 66,097 |
2023 | 74,500 |
2024 | 64,500 |
2025 | 193,500 |
Thereafter | |
Total | $ 451,942 |
DEBT (Details Narrative)
DEBT (Details Narrative) $ in Thousands, £ in Millions | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 GBP (£) | Nov. 04, 2021 USD ($) | |
Short-Term Debt [Line Items] | ||||
Deferred debt issuance costs | $ 8,600 | $ 10,500 | ||
Working capital facility | $ 350,000 | $ 350,000 | ||
Line of Credit Facility, Interest Rate During Period | 7.64% | 2.96% | ||
Short-term borrowings (Note 12) | $ 89,885 | $ 78,319 | ||
CIB Long-Term Debt [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt 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 2020 with the remaining $10.0 million settled during 2021 as part of the 2021 Secured Facilities Agreement refinancing. | |||
Repayments of Debt | 11,000 | |||
Remaining debt obligation amount | $ 10,000 | |||
CIB Short-Term Debt [Member] | ||||
Short-Term Debt [Line Items] | ||||
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 the Central Bank of Egypt’s Corridor Offer Rate plus 50 basis points per annum HMDB commission. | |||
ABK Short-Term Debt [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt interest rate | 11% | 11% | ||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | $ 1,500 | |||
Debt interest rate | 0% | 2.30% | 0% | |
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | Letters of Guarantee [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | $ 8,800 | |||
Time Loan Facility [Member] | CIB Short-Term Debt [Member] | Egyptian [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | £ | £ 2 | |||
Debt interest rate | 0% | 10% | 0% | |
Time Loan Overdraft Facility [Member] | CIB Short-Term Debt [Member] | Egyptian [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | £ | £ 10 | |||
SAUDI ARABIA | ||||
Short-Term Debt [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 8.60% | 3.44% | ||
London Interbank Offered Rates LIBOR [Member] | Minimum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 2.60% | |||
London Interbank Offered Rates LIBOR [Member] | Maximum [Member] | ||||
Short-Term Debt [Line Items] | ||||
Line of Credit Facility, Interest Rate During Period | 3% | |||
Term Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Withdrawn term loan | $ 430,000 | $ 430,000 | ||
Revolving Credit Facility [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt Instrument, maturity date | Nov. 04, 2025 | |||
Long-Term Line of Credit | $ 80,000 | |||
Withdrawn term loan | $ 10,000 | 80,000 | ||
Line of Credit Facility, Commitment Fee Percentage | 0.65% | |||
Future Interest Payments 2023 | The Company is permitted to make any prepayment under this RCF in multiples of $5.0 million during this 4-year period up to November 4, 2025. | |||
Short term debt balance amount | $ 70,000 | 0 | ||
Revolving Credit Facility [Member] | Lenders [Member] | ||||
Short-Term Debt [Line Items] | ||||
Working capital facility | 350,000 | |||
CIB Short-Term Debt [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt balance amount | 11,500 | |||
CIB Short-Term Debt [Member] | Time Loan Facility [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt balance amount | 1,500 | 1,500 | ||
Short-term borrowings (Note 12) | 0 | 0 | ||
CIB Short-Term Debt [Member] | Egyptian Pound Time Loan Facility [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt balance amount | 2,000 | 2,000 | ||
Short-term borrowings (Note 12) | 0 | 0 | ||
CIB Short-Term Debt [Member] | Egyptian Pound Time Loan Overdraft Facility [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt balance amount | 10,000 | 10,000 | ||
Short-term borrowings (Note 12) | 0 | 0 | ||
CIB Short-Term Debt [Member] | Letters of Guarantee [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt balance amount | 4,400 | 5,100 | ||
Short-term borrowings (Note 12) | 4,400 | 6,400 | ||
ABK Short-Term Debt [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt balance amount | 3,000 | |||
Short-term borrowings (Note 12) | 0 | |||
ABK Short-Term Debt [Member] | Time Loan Facility [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | 3,000 | |||
ABK Short-Term Debt [Member] | Letters of Guarantee [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | 200 | |||
Short term debt balance amount | 100 | |||
Short-term borrowings (Note 12) | $ 100 | |||
ABK Short-Term Debt [Member] | Central Bank of Egypts Corridor Offer Rate [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt interest rate | 1.65% | 1.65% | ||
Secured Facilities Agreement [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | $ 430,000 | $ 860,000 | ||
Debt Instrument, Covenant Description | 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] | ||||
Short-Term Debt [Line Items] | ||||
Working capital facility | $ 10,600 | 18,600 | ||
Short term debt balance amount | 5,900 | 6,900 | ||
Utilized working capital facility | 4,700 | 11,700 | ||
Secured Facilities Agreement [Member] | QATAR | HSBC Bank Middle East Limited [Member] | ||||
Short-Term Debt [Line Items] | ||||
Working capital facility | 10,300 | 10,300 | ||
Secured Facilities Agreement [Member] | UNITED ARAB EMIRATES | HSBC Bank Middle East Limited [Member] | ||||
Short-Term Debt [Line Items] | ||||
Working capital facility | 200 | 8,200 | ||
Secured Facilities Agreement [Member] | KUWAIT | HSBC Bank Middle East Limited [Member] | ||||
Short-Term Debt [Line Items] | ||||
Working capital facility | 100 | 100 | ||
Secured Facilities Agreement [Member] | Lenders [Member] | ||||
Short-Term Debt [Line Items] | ||||
Working capital facility | $ 97,100 | 126,900 | ||
Line of Credit Facility, Description | letters of credit into debt over a period of no more than two years, which carries an interest rate equal to three-month LIBOR for U.S. dollar denominated borrowings or SIBOR for Saudi Arabia Riyal borrowings, for the applicable interest period, plus a margin of 1.25% to 1.5% per annum. | |||
Utilized working capital facility | $ 252,900 | $ 223,100 | ||
Secured Facilities Agreement [Member] | Term Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Short term debt amount | $ 860,000 | |||
Debt Instrument, maturity date | Nov. 04, 2027 |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Benefit obligations at the beginning of the year | $ 27,410 | $ 24,941 | |
Actuarial (gain) / loss | (1,128) | (69) | |
Service cost | 4,876 | 4,545 | $ 3,487 |
Interest cost | 675 | 482 | 583 |
Benefits paid | (3,519) | (3,021) | |
Other | 532 | ||
Benefit obligations at the end of the year | 28,314 | 27,410 | 24,941 |
Current benefit obligation | 3,932 | 3,876 | |
Non-current benefit obligation | 24,382 | 23,534 | |
Fair value of plan assets at the beginning of the year | |||
Employer contributions | 3,519 | 3,021 | |
Benefits paid | (3,519) | (3,021) | |
Plan assets at the end of the year | |||
Unfunded status | $ 28,314 | $ 27,410 |
SCHEDULE OF COMPONENTS OF NET P
SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 4,876 | $ 4,545 | $ 3,487 |
Interest cost | 675 | 482 | 583 |
Actuarial (gain)/loss | (1,128) | (69) | 2,243 |
Other | |||
Net cost | $ 4,423 | $ 4,958 | $ 6,313 |
SCHEDULE OF ASSUMPTIONS USED TO
SCHEDULE OF ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS AND NET PERIODIC BENEFIT COST (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Benefit obligations, Discount rate | 5% | 2.25% |
Net periodic benefit cost, Discount rate | 2.25% | 1.75% |
Minimum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Benefit obligations, Rate of increase in compensation levels: | 4.50% | 3% |
Net periodic benefit cost, Rate of increase in compensation levels: | 4.50% | 3% |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Benefit obligations, Rate of increase in compensation levels: | 5% | 5% |
Net periodic benefit cost, Rate of increase in compensation levels: | 5% | 5% |
SCHEDULE OF BENEFIT OBLIGATIONS
SCHEDULE OF BENEFIT OBLIGATIONS CHANGE IN ASSUMPTION (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Retirement Benefits [Abstract] | |
Defined Benefit Plan, Effect of One-Percentage-Point Decrease on Service and Interest Cost Components | $ 1,720 |
Defined Benefit Plan, Effect of One-Percentage-Point Increase on Service and Interest Cost Components | $ (1,529) |
SCHEDULE OF EXPECTED FUTURE BEN
SCHEDULE OF EXPECTED FUTURE BENEFIT PAYMENTS (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Retirement Benefits [Abstract] | |
2023 | $ 5,232 |
2024 | 4,952 |
2025 | 4,704 |
2026 | 4,776 |
2027 | 4,671 |
2028 through 2032 | $ 21,525 |
EMPLOYEE BENEFITS (Details Narr
EMPLOYEE BENEFITS (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Accumulated benefit obligation | $ 15.8 | $ 15.6 | |
Total contributions | $ 3.8 | $ 3.7 | $ 3.3 |
SCHEDULE OF INCOME BEFORE INCOM
SCHEDULE OF INCOME BEFORE INCOME TAX DOMESTIC AND FOREIGN (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (8,726) | $ (183) | $ 4,151 |
Domestic | 8,726 | 183 | (4,151) |
Foreign | (21,075) | (60,396) | 33,246 |
(Loss) / Income before income tax | $ (29,801) | $ (60,579) | $ 29,095 |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Current tax expense | $ (997) | $ (1,206) | |
Deferred tax expense (benefit) | (10,261) | (12,140) | (3,241) |
Income tax (expense) / benefit | 6,619 | 3,989 | 12,540 |
Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Current tax expense | 16,880 | 16,129 | 15,781 |
Deferred tax expense (benefit) | (10,261) | (12,140) | (3,241) |
Income tax (expense) / benefit | $ 6,619 | $ 3,989 | $ 12,540 |
SCHEDULE OF DEFERRED INCOME TAX
SCHEDULE OF DEFERRED INCOME TAX ASSETS (LIABILITIES) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | |||
Deferred Tax Assets, Property, plant and equipment | $ 4,644 | $ 4,252 | |
Deferred Tax Assets, Net operating loss carryforward | 26,514 | 18,056 | |
Temporary differences due to restatement | 5,166 | ||
Total deferred tax assets | 31,158 | 27,474 | |
Valuation allowance | (10,042) | (8,582) | |
Deferred tax assets, net of valuation allowance | 21,116 | 18,892 | |
Deferred Tax Liabilities, Property, plant and equipment | (4,335) | $ (4,100) | $ (4,086) |
Deferred Tax Liabilities, Intangible assets | (15,408) | (18,528) | |
Temporary differences due to restatement | 5,166 | ||
Temporary differences due to restatement | (5,166) | ||
Total deferred tax liabilities | (19,743) | (27,780) | |
Net deferred tax liability | 1,373 | 8,888 | |
Net deferred tax liability | $ (1,373) | $ (8,888) |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0% |
UNITED ARAB EMIRATES | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0% |
SCHEDULE OF EFFECTIVE INCOME _2
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax at statutory rate (BVI and UAE 0%) | |||
Foreign tax rate differential | (1,498) | (6,981) | 5,510 |
Tax effect of adjustments to current year tax provisions | (997) | (1,206) | |
Tax effect of adjustments to prior year tax provisions | |||
Reversal of tax liability on expiration of limitation period | |||
Effect of changes in valuation allowances | (1,460) | 1,391 | 3,300 |
Unrecognized tax benefits | 9,577 | 10,576 | 4,936 |
Other | |||
Income tax (expense) / benefit | $ 6,619 | $ 3,989 | $ 12,540 |
SCHEDULE OF UNRECOGNIZED TAX BE
SCHEDULE OF UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of period | $ 51,002 | $ 33,336 | $ 24,974 |
Additions from tax positions adjusted in purchase accounting | |||
Additions from tax positions related to the current period | 16,953 | 26,916 | 10,825 |
Additions from tax positions related to prior periods | 311 | 27 | |
Reductions from tax positions related to earlier periods | (5,485) | (8,512) | (762) |
Reductions on account of statute expiry | |||
Settlement of tax positions | (1,355) | (1,049) | (1,728) |
Balance at end of period | $ 61,115 | $ 51,002 | $ 33,336 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0% | ||
Operating loss carryforward | $ 257,000 | ||
Deferred tax assets, valuation allowance | 10,042 | $ 8,582 | |
Deferred tax assets, valuation allowance increased | 1,500 | 400 | |
Valuation allowance, deferred tax asset, increase | 1,800 | 1,500 | |
Utilization of valuation allowance | 300 | 1,100 | |
Unrecognized tax benefits disallowances | 24,000 | 18,300 | |
Deferred tax liabilities on Property, plant and equipment | 4,335 | 4,100 | $ 4,086 |
Unrecognized tax benefits | 3,600 | 3,600 | |
Unrecognized tax penalties and interests | 800 | 400 | |
Unrecognized tax benefits, Accrued interest and penalties | 61,100 | 51,000 | |
unrecognized tax benefits, excluding accrued interest and penalties | 2,900 | $ 2,000 | |
Net unrecognized tax benefits | 64,000 | ||
SAUDI ARABIA | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Operating loss carryforward | 188,000 | ||
Other Countries [Member] | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Operating loss carryforward | $ 69,000 | ||
VIRGIN ISLANDS, BRITISH | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0% | ||
UNITED ARAB EMIRATES | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0% | ||
Minimum [Member] | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 10% | ||
Maximum [Member] | |||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 40% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | ||
Capital Expenditures Incurred but Not yet Paid | $ 38.4 | $ 36.7 |
Other liability | 2 | 2 |
Letters of credit outstanding amount | 26.4 | 40.1 |
Surety bonds and other bank issued guarantees | 132.4 | 105.6 |
Cash margin guarantees | 3.6 | 4.4 |
Accounts Payable [Member] | Related Party [Member] | ||
Loss Contingencies [Line Items] | ||
Other liability | $ 11.6 | $ 8.5 |
SCHEDULE OF UNVESTED RESTRICTED
SCHEDULE OF UNVESTED RESTRICTED STOCK (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Restricted Shares, Unvested, Beginning Balance | 2,248,699 | 2,038,662 | 1,502,690 |
Weighted Average Grant Date Fair Value per Share, Unvested, Beginning Balance | $ 9.58 | $ 7.38 | $ 10.25 |
Number of Restricted Shares, Granted | 1,011,040 | 1,413,335 | 1,194,905 |
Weighted Average Grant Date Fair Value per Share, Granted | $ 8.76 | $ 11.67 | $ 5.30 |
Number of Restricted Shares, Vested | (1,064,774) | (940,032) | (590,264) |
Weighted Average Grant Date Fair Value per Share, Vested | $ 9.38 | $ 8.04 | $ 10.18 |
Number of Restricted Shares, Forfeited | (118,648) | (263,266) | (68,669) |
Weighted Average Grant Date Fair Value per Share, Forfeited | $ 9.25 | $ 9.20 | $ 9.55 |
Number of Restricted Shares, Unvested, Ending Balance | 2,076,317 | 2,248,699 | 2,038,662 |
Weighted Average Grant Date Fair Value per Share, Unvested, Ending Balance | $ 10.10 | $ 9.58 | $ 7.38 |
SCHEDULE OF STOCK-BASED COMPENS
SCHEDULE OF STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 9,269 | $ 9,759 | $ 7,832 |
Cost of Services [Member] | |||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 4,466 | 4,632 | 3,521 |
Selling, General and Administrative Expenses [Member] | |||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 4,803 | $ 5,127 | $ 4,311 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Restricted Stock Units (RSUs) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares vested | 14,828 | ||
Director [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares vested | 53,429 | ||
2018 Long Term Incentive Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Deferred compensation arrangement with individual, common stock reserved for future issuance | 5,000,000 | ||
Unrecognized compensation expense | $ 12.4 | $ 14 | |
Share-based compensation arrangement by share-based payment award, equity instruments other than options, outstanding, weighted average remaining contractual terms | 1 year 8 months 19 days | 1 year 11 months 26 days | |
2018 Long Term Incentive Plan [Member] | Board of Directors [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Time-based and vest ratably period | 1 year | ||
2018 Long Term Incentive Plan [Member] | Employees [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Time-based and vest ratably period | 3 years |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Common stock shares outstanding | 94,012,752 | 91,366,235 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Public Warrants [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Class of warrant or right, outstanding | 35,540,380 | 35,540,380 | 35,540,380 |
Ordinary share price | $ 5.75 | $ 5.75 | $ 5.75 |
Warrants and rights outstanding, maturity date | Jun. 06, 2023 | ||
Warrants term | 5 years | ||
Sale price | $ 21 | ||
Share price | $ 0.01 |
SCHEDULE OF RECONCILIATION OF B
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING (Details) - shares | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Earnings Per Share [Abstract] | ||||||
Weighted average ordinary shares outstanding, beginning balance | 91,366,235 | |||||
Change in shares, restricted stock vesting | 32,868 | 87,905 | 307,932 | |||
Weighted average ordinary shares outstanding, restricted stock vesting | 28,005 | 74,900 | 242,307 | |||
Change in shares, restricted stock vesting one | 279,493 | 316,781 | 282,332 | |||
Weighted average ordinary shares outstanding, restricted stock vesting one | 222,063 | 251,689 | 107,224 | |||
Change in shares restricted stock vesting two | 74,000 | 288,329 | ||||
Weighted average ordinary shares outstanding restricted stock vesting two | 58,592 | 227,503 | ||||
Change in shares restricted stock vesting three. | 242,727 | 242,017 | ||||
Weighted average ordinary shares outstanding restricted stock vesting three | 191,522 | 92,166 | ||||
Change in shares restricted stock vesting four | 316,775 | 5,000 | ||||
Weighted average ordinary shares outstanding restricted stock vesting four | 249,081 | 575 | ||||
Change in shares, ordinary share consideration one | 1,650,000 | |||||
Weighted average ordinary shares outstanding, ordinary share consideration one | 827,260 | |||||
Change in shares restricted stock vesting five | 50,654 | |||||
Weighted average ordinary shares outstanding restricted stock vesting five | 19,290 | |||||
Weighted average ordinary shares outstanding, ending balance | 92,962,048 | 91,366,235 | ||||
Weighted average ordinary shares outstanding, beginning balance | 87,777,553 | |||||
Change in shares, ordinary share consideration | [1] | 2,237,000 | ||||
Weighted average ordinary shares outstanding, ordinary share consideration | [1] | 2,237,000 | ||||
Change in shares additional earn out shares | [2] | 145,039 | ||||
Weighted average ordinary shares outstanding additional earnout shares | [2] | 145,039 | ||||
Change in shares, NESR ordinary share consideration, shares | 150,434 | [3] | 2,237,000 | [4] | ||
Weighted average ordinary shares outstanding contingently issuable shares | [3] | 150,434 | ||||
Change in shares, contingently issuable shares | 113,215 | [3] | 295,473 | [5] | ||
Weighted average ordinary shares outstanding contingently issuable shares one | [3] | 85,299 | ||||
Change in shares contingently issuable share contingency resolved | [3] | 2,962 | ||||
Weighted average ordinary shares outstanding contingently issuable share | [3] | 1,672 | ||||
Weighted average ordinary shares outstanding, ending balance | 91,043,830 | |||||
Weighted average ordinary shares outstanding, beginning balance | 88,845,601 | 87,187,289 | ||||
Weighted average ordinary shares outstanding, NESR ordinary share consideration, shares | [4] | 1,307,973 | ||||
Weighted average ordinary shares outstanding, contingently issuable shares | [5] | 808 | ||||
Weighted average ordinary shares outstanding, ending balance | 88,845,601 | |||||
[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 2,237,000 145,039 266,611 2,237,000 295,473 |
SCHEDULE OF RECONCILIATION OF_2
SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED COMMON SHARES OUTSTANDING (Details) (Parenthetical) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares | 266,611 | |||
Sale and Purchase Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares | 2,237,000 | 266,611 | ||
Shares expected to be issued | 2,237,000 | 295,473 | ||
Sale and Purchase Agreement [Member] | Additional Earn Out Shares [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares | 145,039 |
SCHEDULE OF BASIC AND DILUTED E
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net (loss) / income to Ordinary Shareholders, Basic | $ (36,420) | $ (64,568) | $ 16,555 |
Weighted-average ordinary shares outstanding, Basic | 92,962,048 | 91,043,830 | 88,845,601 |
Weighted-average ordinary shares outstanding, Basic | $ (0.39) | $ (0.71) | $ 0.19 |
Weighted average number of shares outstanding, restricted stock units | 272,275,000 | ||
Net (loss) / income to Ordinary Shareholders, antidilution sequencing - subtotal | $ (36,420) | $ (64,568) | $ 16,555 |
Weighted-average ordinary shares outstanding, antidilution sequencing - subtotal | 92,962,048 | 91,043,830 | 89,117,876 |
Weighted-average ordinary shares outstanding, antidilution sequencing - subtotal | $ (0.39) | $ (0.71) | $ 0.19 |
Net (loss) / income to Ordinary Shareholders, antidilution sequencing - subtotal | $ (557) | ||
Weighted-average ordinary shares outstanding, public warrants | |||
Net (loss) / income to Ordinary Shareholders, Diluted | $ (36,420) | $ (64,568) | $ 15,998 |
Weighted-average ordinary shares outstanding, Diluted | 92,962,048 | 91,043,830 | 89,117,876 |
Weighted-average ordinary shares outstanding, Diluted | $ (0.39) | $ (0.71) | $ 0.18 |
SCHEDULE OF BASIC AND DILUTED_2
SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) (Parenthetical) - Public Warrants [Member] - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Public warrants shares | 35,540,380 | 35,540,380 | 35,540,380 |
Public warrants per half share | $ 5.75 | $ 5.75 | $ 5.75 |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2020 shares | |
Number of ordinary shares converted | 35,540,380 |
Number of restricted shares excluded from common shares | 1,724,832 |
SCHEDULE OF FAIR VALUE OF HIERA
SCHEDULE OF FAIR VALUE OF HIERARCHY AT FAIR VALUE ON RECURRING BASIS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Liability For Buyer Stock Adjustment Amount Derivative [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability For Buyer Stock Adjustment Amount Derivative [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability For Buyer Stock Adjustment Amount Derivative [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability For Buyer Stock Adjustment Amount Derivative [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability for Private Warrants [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability for Private Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability for Private Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure | ||
Liability for Private Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial Liabilities Fair Value Disclosure |
SCHEDULE OF FAIR VALUE OF LEVEL
SCHEDULE OF FAIR VALUE OF LEVEL 3 MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||
Beginning Balance | $ (557) | ||
Initial accounting for Buyer Stock Adjustment Amount derivative liability (Note 10) | (4,236) | ||
Change in Buyer Stock Adjustment Amount derivative liability (Note 10) | 4,236 | ||
Change in Private Warrant liability | 557 | ||
Ending Balance |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Accounts receivable related parties | $ 148,709 | $ 130,415 | |
Liabilities | 1,025,979 | 1,010,258 | $ 826,598 |
Nine Energy Service, Inc. [Member] | Coiled Tubing Equipment [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to acquire property, plant, and equipment | 800 | 1,200 | 800 |
Nine Energy Service, Inc. [Member] | Coiled Tubing Equipment, Products and Services [Member] | |||
Related Party Transaction [Line Items] | |||
Liabilities | 200 | 500 | |
Basin Holdings US LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to acquire property, plant, and equipment | 600 | 700 | 2,100 |
Liabilities | 200 | 100 | |
Mubbadrah Group Entities [Member] | |||
Related Party Transaction [Line Items] | |||
Rental income to be paid on leases | 300 | 200 | 200 |
Due from related parties | 400 | 400 | |
Heavy Equipment Manufacturing Trading LLC [Member] | GES [Member] | |||
Related Party Transaction [Line Items] | |||
Services charges | 100 | 100 | 100 |
Accounts receivable related parties | 600 | 500 | |
Business Solutions LLC [Member] | Prime Business Solutions LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Administrative service fee | 300 | 500 | $ 1,000 |
Maintenance fees payable | $ 1,100 | $ 800 |
SCHEDULE OF SEGMENT REPORTING,
SCHEDULE OF SEGMENT REPORTING, INFORMATION ON REVENUES AND LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | |||
Total revenue from external customers | $ 909,517 | $ 876,729 | $ 834,152 |
Total long-lived assets | 461,061 | 425,506 | |
Total operating income | (917) | (43,332) | 35,278 |
Interest expense, net | (34,126) | (15,174) | (15,879) |
Gain/(loss) on Private Warrant Liability | 557 | ||
Other income / (expense), net | 5,242 | (2,073) | 9,139 |
(Loss) / income before income tax | (29,801) | (60,579) | 29,095 |
Production Services [Member] | |||
Revenue from External Customer [Line Items] | |||
Total long-lived assets | 239,958 | 253,215 | |
Drilling and Evaluation Services [Member] | |||
Revenue from External Customer [Line Items] | |||
Total long-lived assets | 173,520 | 133,691 | |
Total reportable segments [Member] | |||
Revenue from External Customer [Line Items] | |||
Total long-lived assets | 413,478 | 386,906 | |
Production Services [Member] | |||
Revenue from External Customer [Line Items] | |||
Total revenue from external customers | 567,249 | 554,097 | 557,327 |
Total operating income | 28,717 | (1,858) | 56,180 |
Drilling and Evaluation Services [Member] | |||
Revenue from External Customer [Line Items] | |||
Total revenue from external customers | 342,268 | 322,632 | 276,825 |
Total operating income | 33,473 | (1,238) | 24,295 |
Unallocated assets [Member] | |||
Revenue from External Customer [Line Items] | |||
Total long-lived assets | 47,583 | 38,600 | |
Total reportable segments [Member] | |||
Revenue from External Customer [Line Items] | |||
Total operating income | 62,190 | (3,096) | 80,475 |
Unallocated expenses [Member] | |||
Revenue from External Customer [Line Items] | |||
Total operating income | $ (63,107) | $ (40,236) | $ (45,197) |
SCHEDULE OF REVENUE FROM EXTERN
SCHEDULE OF REVENUE FROM EXTERNAL CUSTOMERS AND LONG-LIVED ASSETS, BY GEOGRAPHICAL AREAS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 909,517 | $ 876,729 | $ 834,152 |
Total long-lived assets | 461,061 | 425,506 | |
Domestic [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | |||
Total long-lived assets | |||
MENA [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 893,635 | 865,917 | 822,606 |
Total long-lived assets | 443,967 | 408,089 | |
Rest of world [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 15,882 | 10,812 | $ 11,546 |
Total long-lived assets | $ 17,094 | $ 17,417 |
REPORTABLE SEGMENTS (Details Na
REPORTABLE SEGMENTS (Details Narrative) - Segments | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue, Major Customer [Line Items] | |||
Number of Reportable Segments | 2 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer one [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 40% | 51% | 58% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 9% | 10% | 12% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 7% | 7% | 4% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration Risk, Percentage | 7% | 4% | 3% |