Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 05, 2020 | |
Document Documentand Entity Information [Abstract] | ||
Entity Registrant Name | KEY ENERGY SERVICES INC | |
Entity Central Index Key | 0000318996 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 13,781,262 | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 25,569 | $ 14,426 |
Restricted cash | 250 | 250 |
Accounts receivable, net of allowance for credit losses of $1,541 and $881, respectively | 45,152 | 51,091 |
Inventories | 13,777 | 13,565 |
Other current assets | 16,645 | 22,260 |
Total current assets | 101,393 | 101,592 |
Property and equipment | 387,904 | 432,917 |
Accumulated depreciation | (212,467) | (205,352) |
Property and equipment, net | 175,437 | 227,565 |
Intangible assets, net | 332 | 347 |
Other non-current assets | 21,499 | 18,366 |
TOTAL ASSETS | 298,661 | 347,870 |
Current liabilities: | ||
Accounts payable | 12,215 | 8,700 |
Current portion of long-term debt | 438 | 2,919 |
Other current liabilities | 62,062 | 90,715 |
Total current liabilities | 74,715 | 102,334 |
Long-term debt | 49,156 | 240,007 |
Workers’ compensation, vehicular and health insurance liabilities | 27,617 | 26,072 |
Interest payable | 16,283 | 0 |
Other non-current liabilities | 30,946 | 30,710 |
Commitments and contingencies | ||
Equity: | ||
Common stock, $0.01 par value; 150,000,000 and 2,000,000 shares authorized, 13,781,034 and 410,990 outstanding | 340 | 206 |
Additional paid-in capital | 307,657 | 265,588 |
Retained deficit | (208,053) | (317,047) |
Total equity | 99,944 | (51,253) |
TOTAL LIABILITIES AND EQUITY | $ 298,661 | $ 347,870 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,541 | $ 881 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 2,000,000 |
Common stock, shares issued | 13,781,034 | 410,990 |
Common stock, shares outstanding | 13,781,034 | 410,990 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUES | $ 75,308 | $ 109,273 |
COSTS AND EXPENSES: | ||
Direct operating expenses | 61,661 | 88,194 |
Depreciation and amortization expense | 10,226 | 14,296 |
General and administrative expenses | 15,253 | 22,095 |
Asset impairments | 41,242 | 0 |
Operating loss | (53,074) | (15,312) |
Gain on debt restructuring | 170,648 | 0 |
Interest expense, net of amounts capitalized | 8,221 | 9,233 |
Other income, net | (385) | (1,142) |
Income (loss) before income taxes | 109,738 | (23,403) |
Income tax benefit | (744) | (38) |
NET INCOME (LOSS) | $ 108,994 | $ (23,441) |
Income (loss) per share: | ||
Basic and diluted (per share) | $ 26.66 | $ (57.59) |
Weighted average shares outstanding: | ||
Basic and diluted | 4,089 | 407 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ 108,994 | $ (23,441) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 10,226 | 14,296 |
Asset impairments | 41,242 | 0 |
Bad debt expense | 784 | 506 |
Accretion of asset retirement obligations | 42 | 40 |
Gain on debt restructuring | (170,648) | 0 |
Amortization of deferred financing costs | 70 | 119 |
Loss (gain) on disposal of assets, net | (165) | 363 |
Share-based compensation | (73) | 816 |
Changes in working capital: | ||
Accounts receivable | 5,155 | 3,905 |
Other current assets | 5,404 | 507 |
Accounts payable, accrued interest and accrued expenses | (25,130) | (9,714) |
Share-based compensation liability awards | (1) | 99 |
Other assets and liabilities | 5,670 | 1,162 |
Net cash used in operating activities | (18,430) | (11,342) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (682) | (5,040) |
Proceeds from sale of assets | 1,750 | 2,389 |
Net cash provided by (used in) investing activities | 1,068 | (2,651) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term debt | 30,000 | 0 |
Repayments of long-term debt | 0 | (625) |
Repayments of finance lease obligations | (103) | 0 |
Payment of deferred financing costs | 1,385 | 0 |
Repurchases of common stock | 7 | 0 |
Net cash provided by (used in) financing activities | 28,505 | (625) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 11,143 | (14,618) |
Cash, cash equivalents, and restricted cash, beginning of period | 14,676 | 50,311 |
Cash, cash equivalents, and restricted cash, end of period | $ 25,819 | $ 35,693 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | GENERAL Key Energy Services, Inc., and its wholly owned subsidiaries (collectively, “Key,” the “Company,” “we,” “us,” “its,” and “our”) provide a full range of well services to major oil companies and independent oil and natural gas production companies. Our services include rig-based and coiled tubing-based well maintenance and workover services, well completion and recompletion services, fluid management services, fishing and rental services, and other ancillary oilfield services. Additionally, certain of our rigs are capable of specialty drilling applications. We operate in most major oil and natural gas producing regions of the continental United States. An important component of the Company’s growth strategy is to make acquisitions that will strengthen its core services or presence in selected markets, and the Company also makes strategic divestitures from time to time. The Company expects that the industry in which it operates will experience consolidation, and the Company expects to explore opportunities and engage in discussions regarding these opportunities, which could include mergers, consolidations or acquisitions or further dispositions or other transactions, although there can be no assurance that any such activities will be consummated. The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). The condensed December 31, 2019 balance sheet was prepared from audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “ 2019 Form 10-K”). Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2019 Form 10-K. The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods presented herein. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results expected for the full year or any other interim period, due to fluctuations in demand for our services, timing of maintenance and other expenditures, and other factors. We have evaluated events occurring after the balance sheet date included in this Quarterly Report on Form 10-Q and through the date on which the unaudited condensed consolidated financial statements were issued, for possible disclosure of a subsequent event. Market Conditions, COVID-19 and Going Concern As a company that provides services to oil and gas exploration and development companies, we are exposed to a number of risks and uncertainties that are inherent to our industry. In addition to such industry-specific risks, the global public health crisis associated with the novel coronavirus (“COVID-19”) has, and is anticipated to continue to have, an adverse effect on global economic activity for the immediate future and has resulted in travel restrictions, business closures and the institution of quarantining and other restrictions on movement in many communities. The slowdown in global economic activity attributable to COVID-19 has resulted in a dramatic decline in the demand for energy, which directly impacts our industry and the Company. In addition, global crude oil prices experienced a decline in late 2019 and a collapse starting in early March 2020 as a direct result of failed negotiations between the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia regarding reduced supply of oil. As the breadth of the COVID-19 health crisis expanded throughout the month of March 2020 and governmental authorities implemented more restrictive measures to limit person-to-person contact, global economic activity continued to decline commensurately. The associated impact on the energy industry has been adverse and continued to be exacerbated by the unresolved conflict regarding production. In the second week of April, OPEC, Russia and certain other petroleum producing nations (“OPEC+”), reconvened to discuss the matter of production cuts in light of unprecedented disruption and supply and demand imbalances that expanded since the failed negotiations in early March 2020. Tentative agreements were reached to cut production by up to 10 million barrels of oil per day with allocations to be made among the OPEC+ participants. If effected, these production cuts, however, may not offset near-term demand loss attributable to the COVID-19 health crisis and related economic slowdown, and the tentative agreement has not resulted in increased commodity prices. Despite a significant decline in drilling by U.S. producers starting in mid-March 2020, domestic supply is exceeding demand which has led to significant operational stress with respect to capacity limitations associated with storage, pipeline and refining infrastructure, particularly within the Gulf Coast region. The combined effect of the aforementioned factors is anticipated to have an adverse impact on the industry in general and our operations specifically. These conditions and events have adversely affected the demand for oil and natural gas, as well as for our services. The collapse in the demand for oil caused by this unprecedented global health and economic crisis, coupled with oil oversupply, has had, and is reasonably likely to continue to have, a material adverse impact on the demand for our services and the prices we can charge for our services. The decline in our customers’ demand for our services has had, and is likely to continue to have, a material adverse impact on our financial condition, results of operations and cash flows. To date, the company has enhanced the cost control measures related to operational and general and administrative expenses to optimize cost during this time period with the goal of ensuring that margins are preserved as well as increase efforts on improving working capital until customer spend increases. Due to the uncertainty of future oil and natural gas prices and the effect the COVID-19 pandemic will have on our results of operations and financial condition,there is substantial doubt as to the ability of the Company to continue as a going concern. Management has prepared these consolidated condensed financial statements in accordance with US GAAP applicable to a going concern, which contemplates that assets will be realized and liabilities will be discharged in the normal course of business as they become due. These consolidated condensed financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported revenues and expenses and balance sheet classifications that would be necessary if the Company was unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material and adverse to the financial results of the Company. Restructuring and Reverse Stock Split On March 6, 2020, we closed the previously announced restructuring of our capital structure and indebtedness (the “Restructuring”) pursuant to the Restructuring Support Agreement, dated as of January 24, 2020 (the “RSA”), with lenders under our Prior Term Loan Facility (as defined below) collectively holding over 99.5% (the “Supporting Term Lenders”) of the principal amount of the Company’s then outstanding term loans. Pursuant to the RSA and the Restructuring contemplated thereby, among other things, we effected the following transactions and changes to our capital structure and governance: • pursuant to exchange agreements entered into at the closing of the Restructuring, we exchanged approximately $241.9 million aggregate outstanding principal of our term loans (together with accrued interest thereon) held by Supporting Term Lenders under our Prior Term Loan Facility into (i) approximately 13.4 million newly issued shares of common stock representing 97% of the Company’s outstanding shares after giving effect to such issuance (and without giving effect to dilution by the New Warrants and MIP (each as defined below)) and (ii) $20 million of term loans under our new $51.2 million term loan facility (the “New Term Loan Facility”), each on a pro rata basis based on their holdings of term loans under the Prior Term Loan Facility; • completed a 1-for-50 reverse stock split of our outstanding common stock. All pre-Restructuring shares prices, including shares outstanding and earnings per share, have been adjusted to reflect the 1-for-50 reverse stock split; • distributed to our common stockholders of record as of February 18, 2020 two series of warrants (the “New Warrants”); • entered into the $51.2 million New Term Loan Facility, of which (i) $30 million was funded at closing of the Restructuring with new cash proceeds from the Supporting Term Lenders and $20 million was issued in exchange for term loans held by the Supporting Term Lenders under the Prior Term Loan Facility as described above and (ii) an approximate $1.2 million was a senior secured term loan tranche in respect of term loans held by lenders under the Prior Term Loan Facility who were not Supporting Term Lenders; • entered into the New ABL Facility (as defined below); • adopted a new management incentive plan (the “MIP”) representing up to 9% of the Company’s outstanding shares after giving effect to the issuance of shares described above; and • made certain changes to the Company’s governance, including changes to our Board of Directors (the “Board”), amendments to our governing documents and entry into the Stockholders Agreement (as defined below) with the Supporting Term Lenders. In accordance with the RSA at the closing of the Restructuring, the Company amended and restated its certificate of incorporation and entered into a stockholders agreement (the “Stockholders Agreement”) with the Supporting Term Lenders in order to, among other things, provide for a Board of seven members. Pursuant to the Stockholders Agreement, our Board consists of our chief executive officer and six other members appointed by various Supporting Term Lenders. Specifically, pursuant to the Stockholders Agreement, Supporting Term Lenders who hold more than 25% of the Company’s outstanding shares as of the closing of the Restructuring are entitled to nominate two directors and Supporting Term Lenders who hold between 10% and 25% of the Company’s outstanding shares as of the closing of the Restructuring are entitled to nominate one director. All appointees or nominees of Supporting Term Lenders, other than any director appointed or nominated by Soter Capital LLC (“Soter”), must meet the “independent director” requirements set forth in Section 303A of the NYSE Listed Company Manual. In addition, pursuant to the Stockholders Agreement, Supporting Term Lenders are entitled to appoint a non-voting board observer subject to specified ownership thresholds. In accordance with the RSA and following the closing of the Restructuring, the Company distributed to stockholders of record as of February 18, 2020 the New Warrants. The New Warrants were issued in two series each with a four-year exercise period. The first series entitles the holders to purchase in the aggregate 1,669,730 newly issued shares of common stock, representing 10% of the Company’s common shares at the closing of the Restructuring on an as-exercised basis (after giving effect to the exercise of all New Warrants, but subject to dilution by issuances under the MIP). The aggregate exercise price of the first series of New Warrants is $19.23 and was determined based on the aggregate outstanding principal amount of term loans under the Prior Term Loan Facility plus accrued interest thereon at the default rate as of the closing of the Restructuring. The second series of New Warrants entitles the holders to purchase in the aggregate 1,252,297 newly issued shares of common stock, representing 7.5% of the Company’s common shares at the closing of the Restructuring on an as-exercised basis (after giving effect to the exercise of all New Warrants, but subject to dilution by issuances under the MIP). The aggregate strike price of the second series of New Warrants is $28.85 and was determined based on the product of (i) the aggregate outstanding principal amount of term loans under the Prior Term Loan Facility plus accrued interest thereon at the default rate as of the closing of the Restructuring, multiplied by (ii) 1.50. For more information on our New Term Loan Facility and New ABL Facility entered into in connection with the Restructuring, see “Note 7. Long-Term Debt.” |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES | SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES The preparation of these unaudited condensed consolidated financial statements requires us to develop estimates and to make assumptions that affect our financial position, results of operations and cash flows. These estimates may also impact the nature and extent of our disclosure, if any, of our contingent liabilities. Among other things, we use estimates to (i) analyze assets for possible impairment, (ii) determine depreciable lives for our assets, (iii) assess future tax exposure and realization of deferred tax assets, (iv) determine amounts to accrue for contingencies, (v) value tangible and intangible assets, (vi) assess workers’ compensation, vehicular liability, self-insured risk accruals and other insurance reserves, (vii) provide allowances for our uncollectible accounts receivable, (viii) value our asset retirement obligations, and (ix) value our equity-based compensation. We review all significant estimates on a recurring basis and record the effect of any necessary adjustments prior to publication of our financial statements. Adjustments made with respect to the use of estimates relate to improved information not previously available. Because of the limitations inherent in this process, our actual results may differ materially from these estimates. We believe that the estimates used in the preparation of these interim financial statements are reasonable. There have been no material changes or developments in our evaluation of accounting estimates and underlying assumptions or methodologies that we believe to be a “Critical Accounting Policy or Estimate” as disclosed in our 2019 Form 10-K. Recent Accounting Developments ASU 2016-13. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments that will change how companies measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount. The amendments in this update was effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. We adopted the new standard effective January 1, 2020 and the adoption of this standard did not have a material impact on our consolidated financial statements. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. It is a massive tax-and-spending package intended to provide additional economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant business tax provisions that, among other things, eliminate the taxable income limit for certain net operating losses (NOL) and allow businesses to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years; accelerate refunds of previously generated corporate alternative minimum tax (AMT) credits; and generally increased the business interest limitation under section 163(j) from 30 percent to 50 percent. Key Energy has analyzed the income tax provisions under the CARES Act, and concluded that none of the provisions have a significant impact to the Company's income tax positions. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. Besides income tax provisions, the CARES Act also includes tax provisions relating to refundable payroll tax credits and deferment of employer’s social security payments. Beginning in April of 2020, we began deferment of employer’s social security payments. The Company is currently evaluating the impact of the CARES Act on our financial position, results of operations and cash flows. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2020 | |
ADOPTION OF ASC 606, REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract] | |
REVENUES ADOPTION OF ASC 606 | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The following table presents our revenues disaggregated by revenue source (in thousands). Sales taxes are excluded from revenues. Three Months Ended March 31, 2020 2019 Rig Services $ 47,909 $ 65,026 Fishing and Rental Services 9,592 14,587 Coiled Tubing Services 4,837 10,673 Fluid Management Services 12,970 18,987 Total $ 75,308 $ 109,273 Disaggregation of Revenue We have disaggregated our revenues by our reportable segments including Rig Services, Fishing & Rental Services, Coiled Tubing Services and Fluid Management Services. Rig Services Our Rig Services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of oil and gas wells. We recognize revenue within the Rig Services segment by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. The control over services is transferred as the services are rendered to the customer. Specifically, we recognize revenue as the services are provided, typically daily, as we have the right to invoice the customer for the services performed. Rig Services are billed monthly, and payment terms are usually 30 days from invoice receipt. Fishing and Rental Services We offer a full line of services and rental equipment designed for use in providing drilling and workover services. Fishing services involve recovering lost or stuck equipment in the wellbore utilizing a broad array of “fishing tools.” Our rental tool inventory consists of drill pipe, tubulars, handling tools (including our patented Hydra-Walk® pipe-handling units and services), pressure-control equipment, pumps, power swivels, reversing units, foam air units. We recognize revenue within the Fishing and Rental Services segment by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. The control over services is transferred as the services are rendered to the customer. Specifically, we recognize revenue as the services are provided, typically daily, as we have the right to invoice the customer for the services performed. Fishing and Rental Services are billed and paid monthly. Payment terms for Fishing and Rental Services are usually 30 days from invoice receipt. Coiled Tubing Services Coiled Tubing Services involve the use of a continuous metal pipe spooled onto a large reel, which is then deployed into oil and natural gas wells to perform various applications, such as wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations utilizing acid and chemical treatments. Coiled tubing is also used for a number of horizontal well applications such as milling temporary isolation plugs that separate frac zones, and various other pre- and post-hydraulic fracturing well preparation services. We recognize revenue within the Coiled Tubing Services segment by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. The control over services is transferred as the services are rendered to the customer. Specifically, we recognize revenue, typically daily, as the services are provided as we have the right to invoice the customer for the services performed. Coiled Tubing Services are billed and paid monthly. Payment terms for Coiled Tubing Services are usually 30 days from invoice receipt. Fluid Management Services We provide transportation and well-site storage services for various fluids utilized in connection with drilling, completions, workover and maintenance activities. We also provide disposal services for fluids produced subsequent to well completion. These fluids are removed from the well site and transported for disposal in saltwater disposal wells owned by us or a third party. We recognize revenue within the Fluid Management Services segment by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. The control over services is transferred as the services are rendered to the customer. Specifically, we recognize revenue as the services are provided, typically daily, as we have the right to invoice the customer for the services performed. Fluid Management Services are billed and paid monthly. Payment terms for Fluid Management Services are usually 30 days from invoice receipt. Arrangements with Multiple Performance Obligations While not typical for our business, our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenues to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or using expected cost-plus margin. For combined products and services within a contract, we account for individual products and services separately if they are distinct –- i.e. if a product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products and services within a contract based on the prices at which we separately sell our services. For items that are not sold separately, we estimate the standalone selling prices using the expected cost-plus margin approach. Contract Balances Under our revenue contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our revenue contracts do not give rise to contract assets or liabilities under ASC 606. Practical Expedients and Exemptions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within general and administrative expenses. The majority of our services are short-term in nature, with a contract term of one year or less. For those contracts, we have utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. Additionally, our payment terms are short-term in nature with settlements of one year or less. We have, therefore, utilized the practical expedient in ASC 606-10-32-18 exempting the Company from adjusting the promised amount of consideration for the effects of a significant financing component given that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Further, in many of our service contracts we have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided). For those contracts, we have utilized the practical expedient in ASC 606-10-55-18 exempting the Company from disclosure of the recognition of revenue in the amount that the Company has a right to invoice. Accordingly, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
EQUITY | EQUITY A reconciliation of the total carrying amount of our equity accounts for the three months ended March 31, 2020 is as follows (in thousands): COMMON STOCKHOLDERS Common Stock Additional Paid-in Capital Retained Deficit Total Number of Shares Amount at Par Balance at December 31, 2019 411 $ 206 $ 265,588 $ (317,047 ) $ (51,253 ) Common stock purchases (1 ) (1 ) (7 ) — (8 ) Share-based compensation 3 2 (75 ) — (73 ) Issuance of shares pursuant to the Restructuring Support Agreement 13,368 133 41,855 — 41,988 Issuance of warrants pursuant to the Restructuring Support Agreement — — 296 — 296 Net income — — — 108,994 108,994 Balance at March 31, 2020 13,781 $ 340 $ 307,657 $ (208,053 ) $ 99,944 A reconciliation of the total carrying amount of our equity accounts for the three months ended March 31, 2019 is as follows (in thousands): COMMON STOCKHOLDERS Common Stock Additional Paid-in Capital Retained Deficit Total Number of Shares Amount at Par Balance at December 31, 2018 407 $ 204 $ 264,945 $ (219,629 ) $ 45,520 Share-based compensation — — 816 — 816 Net loss — — — (23,441 ) (23,441 ) Balance at March 31, 2019 407 $ 204 $ 265,761 $ (243,070 ) $ 22,895 |
OTHER BALANCE SHEET INFORMATION
OTHER BALANCE SHEET INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Balance Sheet Disclosures [Abstract] | |
OTHER BALANCE SHEET INFORMATION | OTHER BALANCE SHEET INFORMATION The table below presents comparative detailed information about other current assets at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other current assets: Prepaid current assets $ 8,188 $ 13,118 Reinsurance receivable 6,695 6,475 Operating lease right-of-use assets 1,398 2,394 Other 364 273 Total $ 16,645 $ 22,260 The table below presents comparative detailed information about other non-current assets at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other non-current assets: Reinsurance receivable $ 7,128 $ 6,887 Deposits 10,812 8,689 Operating lease right-of-use assets 3,264 2,404 Other 295 386 Total $ 21,499 $ 18,366 The table below presents comparative detailed information about other current liabilities at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other current liabilities: Accrued payroll, taxes and employee benefits $ 10,039 $ 14,463 Accrued operating expenditures 9,407 12,919 Income, sales, use and other taxes 2,814 5,115 Self-insurance reserve 25,556 25,366 Accrued interest 962 15,476 Accrued insurance premiums 8,099 4,990 Unsettled legal claims 2,020 7,020 Accrued severance 314 2,636 Operating leases 2,722 2,502 Other 129 228 Total $ 62,062 $ 90,715 The table below presents comparative detailed information about other non-current liabilities at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other non-current liabilities: Asset retirement obligations $ 8,931 $ 9,035 Environmental liabilities 1,927 2,047 Accrued sales, use and other taxes 17,005 17,005 Deferred tax liabilities 681 — Operating leases 2,370 2,590 Other 32 33 Total $ 30,946 $ 30,710 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | INTANGIBLE ASSETS The components of our other intangible assets as of March 31, 2020 and December 31, 2019 are as follows (in thousands): March 31, 2020 December 31, 2019 Trademark: Gross carrying value $ 520 $ 520 Accumulated amortization (188 ) (173 ) Net carrying value $ 332 $ 347 The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows: Weighted average remaining amortization period (years) Expected amortization expense (in thousands) Remainder 2021 2022 2023 2024 Trademarks 5.8 $ 43 $ 58 $ 58 $ 58 $ 58 Amortization expense for our intangible assets was less than $0.1 million for the three months ended March 31, 2020 and 2019 . |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | DEBT As of March 31, 2020 and December 31, 2019 , the components of our debt were as follows (in thousands): March 31, 2020 December 31, 2019 Term Loan Facility due 2025 $ 50,000 $ — Term Loan Facility due 2021 1,209 243,125 Unamortized debt issuance costs (3,112 ) (1,799 ) Finance lease obligation 1,497 1,600 Total 49,594 242,926 Less current portion (1) (438 ) (2,919 ) Long-term debt $ 49,156 $ 240,007 (1) Of the current portion of debt, $0.4 million is related to finance leases. Prior Long-Term Debt Arrangements As previously announced, on October 29, 2019, the Company entered into a forbearance agreement (as amended on December 6, 2019, December 20, 2019, January 10, 2020 and January 31, 2020, the “ABL Forbearance Agreement”) with Bank of America, N.A., as administrative agent (the “Administrative Agent”), and all of the lenders party thereto (the “Lenders”) regarding a cross-default under the Loan and Security Agreement, dated as of December 15, 2016, by and among Key, the Administrative Agent and the Lenders. On February 28, 2020, the Company and the Lenders party thereto amended the ABL Forbearance Agreement (the “Forbearance Agreement Amendment”). Pursuant to the Forbearance Agreement Amendment, the Lenders party thereto agreed, among other things, to extend the forbearance period until the earliest of (i) March 6, 2020, (ii) the occurrence of certain specified early termination events and (iii) the date on which the previously announced Restructuring Support Agreement between the Company and certain lenders under the Company’s term loan facility is terminated in accordance with its terms. In connection with the forbearance agreement, the Company elected not to make a scheduled interest payments due October 18, 2019 and January 20, 2020 under the Term Loan Facility. The Company’s failure to make these interest payments resulted in a default under the Term Loan Facility and a cross default under the ABL Facility. Prior to the Restructuring, the Company was party to two credit facilities. The Company and Key Energy Services, LLC, were borrowers (the “ABL Borrowers”) under an ABL Facility with the financial institutions party thereto from time to time as lenders (the “ABL Lenders”), Bank of America, N.A., as administrative agent for the lenders (the “Administrative Agent”) and Bank of America, N.A., as sole collateral agent for the lenders, providing for aggregate commitments from the ABL Lenders of $80 million (the “Prior ABL Facility”). In addition, on December 15, 2016, the Company entered into the term loan facility among the Company, as borrower, certain subsidiaries of the Company named as guarantors therein, the financial institutions party thereto from time to time as Lenders (collectively, the “Term Loan Lenders”) and Cortland Capital Market Services LLC and Cortland Products Corp., as agent for the Lenders (the “Prior Term Loan Facility”). Effective March 6, 2020 upon the closing of the Restructuring, we entered into the New Term Loan Facility and the New ABL Facility, which superseded the Prior Term Loan Facility and Prior ABL Facility. A description of each of the new and prior facilities follows. New ABL Facility On March 6, 2020, the Company and Key Energy Services, LLC, as borrowers (the “ABL Borrowers”), entered into Amendment No. 3 to the Company’s existing ABL facility, dated as of December 15, 2016 (as amended, the “New ABL Facility”) with the financial institutions party thereto from time to time as lenders (the “ABL Lenders”) and Bank of America, N.A., as administrative agent and collateral agent (the “ABL Agent”) for the ABL Lenders. The New ABL Facility provides for aggregate commitments from the ABL Lenders of $70 million, which mature on the earlier of (x) April 5, 2024 and (y) 181 days prior to the scheduled maturity date of the Company’s term loan facility or the scheduled maturity date of the Company’s other material debt in an aggregate principal amount exceeding $15 million. The New ABL Facility provides the ABL Borrowers with the ability to borrow up to an aggregate principal amount equal to the lesser of (i) the aggregate revolving commitments then in effect and (ii) the sum of (a) 85% of the value of eligible accounts receivable plus (b) 80% of the value of eligible unbilled accounts receivable, subject to a limit equal to the greater of (x) $30 million and (y) 25% of the commitments. The amount that may be borrowed under the New ABL Facility is subject to increase or reduction based on certain segregated cash or reserves provided for by the New ABL Facility. In addition, the percentages of accounts receivable and unbilled accounts receivable included in the calculation described above is subject to reduction to the extent of certain bad debt write-downs and other dilutive items provided in the New ABL Facility. Borrowings under the New ABL Facility bear interest, at the ABL Borrowers’ option, at a per annum rate equal to (i) LIBOR for 30, 60, 90, 180, or, with the consent of the ABL Lenders, 360 days, plus an applicable margin that varies from 2.75% to 3.25% depending on the ABL Borrowers’ fixed charge coverage ratio at such time or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the federal funds rate, plus 0.50% or (z) 30-day LIBOR plus 1.0% plus (b) an applicable margin that varies from 1.75% to 2.25% depending on the ABL Borrowers’ fixed charge coverage ratio at such time. The New ABL Facility provides that, in the event LIBOR becomes unascertainable for the requested interest period or otherwise becomes unavailable or replaced by other benchmark interest rates, then the Company and the ABL Agent may amend the New ABL Facility for the purpose of replacing LIBOR with one or more SOFR-based rates or another alternate benchmark rate giving consideration to the general practice in similar U.S. dollar denominated syndicated credit facilities. In addition, the New ABL Facility provides for unused line fees of 0.5% to 0.375% per year, depending on utilization, letter of credit fees and certain other factors. The New ABL Facility may in the future be guaranteed by certain of the Company’s existing and future subsidiaries (the “ABL Guarantors,” and together with the ABL Borrowers, the “ABL Loan Parties”). To secure their obligations under the New ABL Facility, each of the ABL Loan Parties has granted or will grant, as applicable, to the ABL Agent a first-priority security interest for the benefit of the ABL Lenders in its present and future accounts receivable, inventory and related assets and proceeds of the foregoing (the “ABL Priority Collateral”). In addition, the obligations of the ABL Loan Parties under the ABL Facility are secured by second-priority liens on the Term Priority Collateral (as described below under “New Term Loan Facility”). The revolving loans under the New ABL Facility may be voluntarily prepaid, in whole or in part, without premium or penalty, subject to breakage or similar costs. The New ABL Facility contains certain affirmative and negative covenants, including covenants that restrict the ability of the ABL Loan Parties to take certain actions including, among other things and subject to certain significant exceptions, the incurrence of debt, the granting of liens, the making of investments, entering into transactions with affiliates, the payment of dividends and the sale of assets. The New ABL Facility also contains a requirement that the ABL Borrowers comply, during certain periods, with a fixed charge coverage ratio of at least 1.00 to 1.00. As of March 31, 2020 , we have no borrowings outstanding, $36.3 million of letters of credit and $7.2 million posted as additional collateral recorded in deposits on our balance sheet under our ABL Facility and $10.2 million of borrowing capacity available under our ABL Facility. As of March 31, 2020, we were in compliance with all covenants under our New ABL Facility. New Term Loan Facility On March 6, 2020, the Company entered into the amendment and restatement agreement with the Supporting Term Lenders and Cortland Capital Market Services LLC and Cortland Products Corp., as agent (the “Term Agent”), which amended and restated the Prior Term Loan Facility, among the Company, as borrower, certain subsidiaries of the Company named as guarantors therein, the financial institutions party thereto from time to time as lenders and the Term Agent (as amended and restated by the amendment and restatement agreement, the “New Term Loan Facility”). Prior to the closing of the Restructuring, there were approximately $243.1 million aggregate principal amount of term loans outstanding under the Prior Term Loan Facility. Following the closing of the Restructuring, the New Term Loan Facility comprises (i) $30 million new money term loans funded by the Supporting Term Lenders and $20 million new term loans excluding new money issued in exchange for existing term loans held by the Supporting Term Lenders (collectively, the “New Term Loans”) and (ii) an approximate $1.2 million senior secured term loan tranche in respect of the existing term loans held by lenders who are not Supporting Term Lenders (the “Continuing Term Loans”). As of March 31, 2020, there were approximately $51.2 million aggregate principal amount of term loans outstanding under the New Term Loan Facility. For the $20 million new term loans excluding new money which were accounted for as a troubled debt restructuring with a modification of terms in accordance with ASC 470-60, “Troubled Debt Restructurings by Debtors”, which addresses certain aspects of the accounting for debt, an estimate of undiscounted future cash flows is included with the carrying value of the modified debt and presented as interest payable. $16.3 million of estimated future undiscounted interest payments has been accrued per ASC 470-60. Interest payments made in the future associated with the modified $20 million new term loan will be a reduction to interest payable, which is recorded as a long-term liability on our consolidated balance sheet, and not to interest expense. Fluctuations in the effective interest rate used to estimate future cash flows shall be accounted for as changes in estimates for the period in which the change occurred. However, the carrying amount of the restructured payable shall remain unchanged, and future cash payments shall reduce the carrying amount until the time that any gain recognized cannot be offset by future cash payments. The New Term Loan Facility will mature on August 28, 2025, with respect to the New Term Loans, and on December 15, 2021 with respect to the Continuing Term Loans. Such maturity date may, at the Company’s request, be extended by one or more of the term loan lenders pursuant to the terms of the New Term Loan Facility. The New Term Loans will bear interest at a per annum rate equal to LIBOR for six months, plus 10.25%. The Company has the option to pay interest in kind at an annual rate of LIBOR plus 12.25% on the outstanding principal amount of the New Term Loans for the first two years following the closing of the Restructuring. The Continuing Term Loans will bear interest at a per annum rate equal to LIBOR for one, two, three, six or, with the consent of all term loan lenders, up to 12 months, and the Company has the option to pay interest in kind of up to 100 basis points of the per annum interest due on the Continuing Term Loans. The New Term Loan Facility is guaranteed by certain of the Company’s existing and future subsidiaries (the “Term Loan Guarantors,” and together with the Company, the “Term Loan Parties”). To ensure their obligations under the New Term Loan Facility, each of the Term Loan Parties has granted or will grant, as applicable, to the Term Agent a first-priority security interest for the benefit of the Term Loan Lenders in substantially all of each Term Loan Party’s assets other than certain excluded assets and the ABL Priority Collateral (the “Term Priority Collateral”). In addition, the obligations of the Term Loan Parties under the New Term Loan Facility are secured by second-priority liens on the ABL Priority Collateral (as described above under “ABL Facility”). The New Term Loans may be prepaid at the Company’s option, subject to the payment of a prepayment premium (which may be waived by lenders holding New Term Loans under the New Term Loan Facility representing at least two-thirds of the aggregate outstanding principal amount of the New Term Loans) in certain circumstances as provided in the New Term Loan Facility. If a prepayment is made prior to the first anniversary of the closing of the Restructuring, such prepayment premium is equal to 3% of the principal amount of the New Term Loans prepaid; if a prepayment is made from the first anniversary to the second anniversary of the closing of the Restructuring, the prepayment premium is equal to 2% of the principal amount of the New Term Loans prepaid; if a prepayment is made from the second anniversary to the third anniversary of the closing of the Restructuring, the prepayment premium is equal to 1% of the principal amount of the New Term Loans prepaid; and there is no prepayment premium thereafter. The Company is required to make principal payments in respect of the Continuing Term Loans in the amount of $3,125 per quarter commencing with the quarter ended March 31, 2020 and is required to pay $1,190,625 on the maturity date of the Continuing Term Loans. In addition, pursuant to the New Term Loan Facility, the Company must prepay or offer to prepay, as applicable, term loans with the net cash proceeds of certain debt incurrences and asset sales, excess cash flow, receipt of extraordinary cash proceeds (e.g., tax and insurance) and upon certain change of control transactions, subject in each case to certain exceptions. The New Term Loan Facility contains certain affirmative and negative covenants, including covenants that restrict the ability of the Term Loan Parties to take certain actions including, among other things and subject to certain significant exceptions, the incurrence of debt, the granting of liens, the making of investments, entering into transactions with affiliates, the payment of dividends and the sale of assets. The New Term Loan Facility also contains a financial covenant requiring that the Company maintain Liquidity (as defined in the New Term Loan Facility) of not less than $10 million as of the last day of any fiscal quarter, subject to certain exceptions and cure rights. As of March 31, 2020, we were in compliance with all covenants under our Term Loan Facility. Prior ABL Facility As described above, the Company and Key Energy Services, LLC were borrowers under the Prior ABL Facility that provided for aggregate commitments from the ABL Lenders of $80 million. On April 5, 2019, the ABL Borrowers, as borrowers, the financial institutions party thereto as lenders and Bank of America, N.A. (the “ABL Agent”), as administrative agent for the lenders, entered into Amendment No. 1 (“Amendment No. 1”) to the Prior ABL Facility, among the ABL Borrowers, the financial institutions party thereto from time to time as lenders, the ABL Agent and the co-collateral agents for the lenders, Bank of America, N.A. and Wells Fargo Bank, National Association. The amendment, among other things, lowered the applicable margin for borrowings to (i) from between 2.50% and 4.50% to between 2.00% and 2.50% for LIBOR borrowings and (ii) from 1.50% and 3.50% to between 1.00% and 1.50% for base rate borrowings. On December 20, 2019, the Company and the Lenders amended the ABL Forbearance Agreement and the Loan Agreement to, among other things, (i) reduce the minimum availability Key is required to maintain under the ABL Forbearance Agreement from $12.5 million to $10 million and (ii) reduce the aggregate revolving commitments under the Loan Agreement from $100 million to $80 million. The Prior ABL Facility provided the ABL Borrowers with the ability to borrow up to an aggregate principal amount equal to the lesser of (i) the aggregate revolving commitments then in effect and (ii) the sum of (a) 85% of the value of eligible accounts receivable plus (b) 80% of the value of eligible unbilled accounts receivable, subject to a limit equal to the greater of (x) $35 million and (y) 25% of the Commitments. The contractual interest rates under the Prior ABL Facility were, at the ABL Borrowers’ option, at a per annum rate equal to (i) LIBOR for 30, 60, 90, 180, or, with the consent of the ABL Lenders, 360 days, plus an applicable margin that varies from 2.50% to 4.50% depending on the ABL Borrowers’ fixed charge coverage ratio at such time or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the federal funds rate, plus 0.50% or (z) 30-day LIBOR, plus 1.0% plus (b) an applicable margin that varied from 1.50% to 3.50% depending on the ABL Borrowers’ fixed charge coverage ratio at such time. In addition, the Prior ABL Facility provided for unused line fees of 1.0% to 1.25% per year, depending on utilization, letter of credit fees and certain other factors. Prior Term Loan Facility As described above, the Company and certain subsidiaries were parties to the Prior Term Loan Facility, which had an initial outstanding principal amount of $250 million. Borrowings under the Prior Term Loan Facility bore interest, at the Company’s option, at a per annum rate equal to (i) LIBOR for one, two, three, six, or, with the consent of the Term Loan Lenders, 12 months, plus 10.25% or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the Federal Funds rate, plus 0.50% and (z) 30-day LIBOR, plus 1.0% plus (b) 9.25%. The weighted average interest rate on the outstanding borrowings under the Prior Term Loan Facility for the three month period ended March 31, 2020 were as follows: Three Months Ended March 31, 2020 Term Loan Facility 15.45 % |
OTHER INCOME, NET
OTHER INCOME, NET | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER INOME, NET | OTHER INCOME The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “ other income, net ” for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 Interest income $ (57 ) $ (323 ) Other (328 ) (819 ) Total $ (385 ) $ (1,142 ) |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We are subject to U.S. federal income tax as well as income taxes in multiple state and foreign jurisdictions. Our effective tax rates for the three months ended March 31, 2020 and 2019 were 0.7% and (0.2)% for the three months ended March 31, 2020 and 2019 , respectively. The variance between our effective rate and the U.S. statutory rate is due to the impact of permanent differences, and other tax adjustments, such as valuation allowances against deferred tax assets. We continued recording income taxes using a year-to-date effective tax rate method for the three months ended March 31, 2020 and 2019 . The use of this method was based on our expectations that a small change in our estimated ordinary income could result in a large change in the estimated annual effective tax rate. We will re-evaluate our use of this method each quarter until such time as a return to the annualized effective tax rate method is deemed appropriate. The Company assesses the realizability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. Due to the history of losses in recent years and the continued challenges affecting the oil and gas industry, management continues to believe it is more likely than not that we will not be able to realize our net deferred tax assets. No release of our deferred tax asset valuation allowance was made during the three months ended March 31, 2020 . The company did not recognize any unrecognized tax benefits during three months ended March 31, 2020 . As of March 31, 2020, we had no unrecognized tax benefits. Cancellation of Indebtedness Income (“CODI”) Under the Restructuring Support Agreement, a substantial portion of the Company’s term loans were exchanged for newly issued shares and new term loans of the Company. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The Internal Revenue Code of 1986, as amended (“IRC”), provides that an insolvent debtor may exclude CODI from taxable income up to the amount of insolvency but must reduce certain of its tax attributes by the amount of any CODI excluded pursuant to the insolvency exception. The amount of CODI realized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. Based on the market value of the Company’s equity, and the adjusted issue price of the term loans issued in the exchange the estimated amount of U.S. CODI is approximately $206.0 million , $197.8 million of which is excluded pursuant to the insolvency exception and $8.2 million of which will be included in taxable income. Due to the application of the insolvency exception, the Company will reduce the value of its U.S. net operating losses that had a value of $476.8 million as of March 31, 2020. The actual reduction in tax attributes does not occur until the first day of the Company’s tax year subsequent to the date of the restructuring, or January 1, 2021. The remaining net operating losses, tax credits, and certain built-in-losses or deductions existing as of the date of the ownership change will be limited under IRC Section 382 due to the change in control resulting from the restructuring. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. It is a massive tax-and-spending package intended to provide additional economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant business tax provisions that, among other things, eliminate the taxable income limit for certain net operating losses (NOL) and allow businesses to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years; accelerate refunds of previously generated corporate alternative minimum tax (AMT) credits; and generally increased the business interest limitation under section 163(j) from 30 percent to 50 percent. Key Energy has analyzed the income tax provisions under the CARES Act, and concluded that none of the provisions have a significant impact to the Company's income tax positions. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. Besides income tax provisions, the CARES Act also includes tax provisions relating to refundable payroll tax credits and deferment of employer’s social security payments. Beginning in April of 2020, we began deferment of employer’s social security payments. The Company is currently evaluating the impact of the CARES Act on our financial position, results of operations and cash flows. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation Various suits and claims arising in the ordinary course of business are pending against us. We conduct business throughout the continental United States and may be subject to jury verdicts or arbitrations that result in outcomes in favor of the plaintiffs. We continually assess our contingent liabilities, including potential litigation liabilities, as well as the adequacy of our accruals and our need for the disclosure of these items, if any. We establish a provision for a contingent liability when it is probable that a liability has been incurred and the amount is reasonably estimable. We have $2.0 million of other liabilities related to litigation that is deemed probable and reasonably estimable as of March 31, 2020 . We do not believe that the disposition of any of these matters will result in an additional loss materially in excess of amounts that have been recorded. Self-Insurance Reserves We maintain reserves for workers’ compensation and vehicle liability on our balance sheet based on our judgment and estimates using an actuarial method based on claims incurred. We estimate general liability claims on a case-by-case basis. We maintain insurance policies for workers’ compensation, vehicle liability and general liability claims. These insurance policies carry self-insured retention limits or deductibles on a per occurrence basis. The retention limits or deductibles are accounted for in our accrual process for all workers’ compensation, vehicular liability and general liability claims. The deductibles have a $5 million maximum per vehicular liability claim, and a $2 million maximum per general liability claim and a $1 million maximum per workers’ compensation claim. As of March 31, 2020 and December 31, 2019 , we have recorded $53.2 million and $51.4 million , respectively, of self-insurance reserves related to workers’ compensation, vehicular liabilities and general liability claims. Partially offsetting these liabilities, we had $13.8 million and $ 13.4 million of insurance receivables as of March 31, 2020 and December 31, 2019 , respectively. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued for existing claims. Environmental Remediation Liabilities For environmental reserve matters, including remediation efforts for current locations and those relating to previously disposed properties, we record liabilities when our remediation efforts are probable and the costs to conduct such remediation efforts can be reasonably estimated. As of each of March 31, 2020 and December 31, 2019 , we have recorded $1.9 million and $2.0 million , respectively, for our environmental remediation liabilities. We believe that the liabilities we have recorded are appropriate based on the known facts and circumstances and do not expect further losses materially in excess of the amounts already accrued. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic loss per share is determined by dividing net loss attributable to Key by the weighted average number of common shares actually outstanding during the period. Diluted loss per common share is based on the increased number of shares that would be outstanding assuming conversion of potentially dilutive outstanding securities using the treasury stock and “as if converted” methods. The components of our earnings (loss) per share are as follows (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019 Basic EPS Calculation: Numerator Net income (loss) $ 108,994 $ (23,441 ) Denominator Weighted average shares outstanding 4,089 407 Basic and diluted earnings (loss) per share $ 26.66 $ (57.59 ) Restricted stock units (“RSUs”), stock options, and warrants are included in the computation of diluted earnings per share using the treasury stock method. Restricted stock awards are legally considered issued and outstanding when granted and are included in basic weighted average shares outstanding. The company has issued potentially dilutive instruments such as RSUs, stock options and warrants . However, the company did not include stock options or warrants in its calculation of diluted earnings per share for the three months ended March 31, 2020 , because to include them would be anti-dilutive due to the exercise price of those instruments exceeding the current market price of our common stock. In addition, time-based RSUs were excluded from diluted EPS as the amount of unrecognized cost, which is the assumed proceeds of the awards, exceeds their market value, so to include them would be anti-dilutive. Performance-based RSUs were excluded from diluted EPS as the Company does not believe the performance goals for the awards will be met. The Company did not include RSUs, stock options or warrants in its calculation of diluted loss per share for the three months ended March 31, 2019 , because to include them would be anti-dilutive due the Company's net loss. The following table shows potentially dilutive instruments: Three Months Ended March 31, 2020 2019 RSUs 13,133 37,280 Stock options 1,084 1,477 Warrants 836,602 36,759 Total 850,819 75,516 No events occurred after March 31, 2020 that would materially affect the number of weighted average shares outstanding. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Common Stock Awards We recognized employee share-based compensation expense (benefit) of $(1.0) million and $0.7 million during the three months ended March 31, 2020 and 2019 , respectively. Our employee share-based awards, including common stock awards, stock option awards and phantom shares, vest in equal installments over a three-year period or which vest in a 40%-60% split respectively over a two-year period. We recognized share-based compensation expense related to our outside directors of less than $(1.0) million and $0.1 million during the three months ended March 31, 2020 and 2019 , respectively. The unrecognized compensation cost related to our unvested share-based awards as of March 31, 2020 is estimated to be $1.3 million and is expected to be recognized over a weighted-average period of 1.0 years. Stock Option Awards As of March 31, 2020 , all outstanding stock options are vested and there are no unrecognized costs related to our stock options. Phantom Share Plan We recognized compensation expense (benefit) related to our phantom shares of less than $(0.1) million and $0.1 million during the three months ended March 31, 2020 and 2019 , respectively. The unrecognized compensation cost related to our unvested phantom shares as of March 31, 2020 is estimated to be less than $0.1 million and is expected to be recognized over a weighted-average period of 0.8 years. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | TRANSACTIONS WITH RELATED PARTIES The Company has a corporate advisory services agreement between with Platinum Equity Advisors, LLC (“Platinum”), an affiliate of Soter, pursuant to which Platinum provides certain business advisory services to the Company. The dollar amounts related to these related party activities are not material to the Company’s condensed consolidated financial statements. In March 2020, the Company and Platinum Equity Advisors, LLC (“Platinum”), entered into a letter agreement (the “CASA Letter Agreement”) regarding outstanding payments owed to Platinum by the Company under the Corporate Advisory Services Agreement, dated as of December 15, 2016 (the “Advisory Agreement”). Pursuant to the CASA Letter Agreement and the Exchange Agreement, Platinum agreed to release the Company from its outstanding payment obligations under the Advisory Agreement in exchange for the right to a potential payment of $4.0 million upon the occurrence of certain reorganization events involving the Company. |
ESTIMATED FAIR VALUE OF FINANCI
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS | ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date. Term Loan Facility . Because the variable interest rates of these loans approximate current market rates, the fair values of the loans borrowed under this facility approximate their carrying values. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | We have operating leases for certain corporate offices and operating locations and finance leases for certain vehicles. We determine if a contract is a lease or contains an embedded lease at the inception of the contract. Operating lease right-of-use (“ROU”) assets are included in other current and other non-current assets, operating lease liabilities are included in other current and other non-current liabilities in our consolidated balance sheets. Finance lease ROU assets are included in property and equipment, net, and finance lease liabilities are included in our current portion of long-term debt, and long-term debt on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our risk adjusted incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease. Our leases have remaining lease terms of less than one year to five years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Lease expense for lease payments is recognized on a straight-line basis over the non-cancelable term of the lease. We recognized $0.7 million of costs related to our operating leases during the three months ended March 31, 2020 and March 31, 2019 . As of March 31, 2020 , our operating leases have a weighted average remaining lease term of 2.5 years and a weighted average discount rate of 5.68% . We recognized $0.1 million and zero of costs related to our finance leases during the three months ended March 31, 2020 and March 31, 2019 respectively. As of March 31, 2020 , our finance leases have a weighted average remaining lease term of 3.4 years and a weighted average discount rate of 4.77% . Supplemental balance sheet information related to leases as of March 31, 2020 and December 31, 2019 are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-Use Assets under Operating Leases Operating lease right-of-use assets, current portion $ 1,398 $ 2,394 Operating lease right-of-use assets, non-current portion 3,264 2,404 Total operating lease assets $ 4,662 $ 4,798 Operating lease liabilities, current portion $ 2,722 $ 2,502 Operating lease liabilities, non-current portion 2,370 2,590 Total operating lease liabilities $ 5,092 $ 5,092 Right-of-Use Assets under Finance Leases Property and equipment, at cost $ 1,760 $ 1,760 Less accumulated depreciation 293 183 Property and equipment, net $ 1,467 $ 1,577 Current portion of long-term debt $ 424 $ 419 Long-term debt 1,073 1,181 Total finance lease liabilities $ 1,497 $ 1,600 The maturities of our operating and finance lease liabilities as of March 31, 2020 are as follows (in thousands): March 31, 2020 Operating Leases Finance Leases Remainder of 2020 $ 2,276 $ 363 2021 1,738 485 2022 705 485 2023 528 283 2024 188 — Total lease payments 5,435 1,616 Less imputed interest (343 ) (119 ) Total $ 5,092 $ 1,497 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our reportable business segments are Rig Services, Fishing and Rental Services, Coiled Tubing Services and Fluid Management Services. We also have a “Functional Support” segment associated with overhead and other costs in support of our reportable segments. We evaluate the performance of our segments based on gross margin measures. All inter-segment sales pricing is based on current market conditions. Rig Services Our Rig Services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of wells. Many of our rigs are outfitted with our proprietary KeyView® technology, which captures and reports well site operating data and provides safety control systems. We believe that this technology allows our customers and our crews to better monitor well site operations, improves efficiency and safety, and adds value to the services that we offer. The completion and recompletion services provided by our rigs prepare wells for production, whether newly drilled, or recently extended through a workover operation. The completion process may involve selectively perforating the well casing to access production zones, stimulating and testing these zones, and installing tubular and downhole equipment. We typically provide a well service rig and may also provide other equipment to assist in the completion process. Completion services vary by well and our work may take a few days to several weeks to perform, depending on the nature of the completion. The workover services that we provide are designed to enhance the production of existing wells and generally are more complex and time consuming than normal maintenance services. Workover services can include deepening or extending wellbores into new formations by drilling horizontal or lateral wellbores, sealing off depleted production zones and accessing previously bypassed production zones, converting former production wells into injection wells for enhanced recovery operations and conducting major subsurface repairs due to equipment failures. Workover services may last from a few days to several weeks, depending on the complexity of the workover. Maintenance services provided with our rig fleet are generally required throughout the life cycle of an oil or natural gas well. Examples of these maintenance services include routine mechanical repairs to the pumps, tubing and other equipment, removing debris and formation material from wellbores, and pulling rods and other downhole equipment from wellbores to identify and resolve production problems. Maintenance services are generally less complicated than completion and workover related services and require less time to perform. Our rig fleet is also used in the process of permanently shutting-in oil or natural gas wells that are at the end of their productive lives. These plugging and abandonment services generally require auxiliary equipment in addition to a well servicing rig. The demand for plugging and abandonment services is not significantly impacted by the demand for oil and natural gas because well operators are required by state regulations to plug wells that are no longer productive. Fishing and Rental Services We offer a full line of fishing services and rental equipment designed for use in providing drilling and workover services. Fishing services involve recovering lost or stuck equipment in the wellbore utilizing a broad array of “fishing tools.” Our rental tool inventory consists of drill pipe, tubulars, handling tools (including our patented Hydra-Walk ® pipe-handling units and services), pressure-control equipment, pumps, power swivels, reversing units and foam air units. We sold our well testing assets and our frac stack equipment used to support hydraulic fracturing operations and the associated flowback of frac fluids in the second quarter of 2017. Demand for our fishing and rental services is closely related to capital spending by oil and natural gas producers, which is generally a function of oil and natural gas prices. Coiled Tubing Services Coiled Tubing Services involve the use of a continuous metal pipe spooled onto a large reel which is then deployed into oil and natural gas wells to perform various applications, such as wellbore clean-outs, nitrogen jet lifts, through-tubing fishing, and formation stimulations utilizing acid and chemical treatments. Coiled tubing is also used for a number of horizontal well applications such as milling temporary isolation plugs that separate frac zones, and various other pre- and post-hydraulic fracturing well preparation services. Fluid Management Services We provide transportation and well-site storage services for various fluids utilized in connection with drilling, completions, workover and maintenance activities. We also provide disposal services for fluids produced subsequent to well completion. These fluids are removed from the well site and transported for disposal in saltwater disposal wells owned by us or a third party. In addition, we operate a fleet of hot oilers capable of pumping heated fluids used to clear soluble restrictions in a wellbore. Demand and pricing for these services generally correspond to demand for our well service rigs. Functional Support Our Functional Support segment includes unallocated overhead costs associated with administrative support for our reporting segments. Financial Summary The following tables set forth our unaudited segment information as of and for the three months ended March 31, 2020 and 2019 (in thousands): As of and for the three months ended March 31, 2020 Rig Services Fishing and Rental Services Coiled Tubing Services Fluid Management Services Functional Support Reconciling Eliminations Total Revenues from external customers $ 47,909 $ 9,592 $ 4,837 $ 12,970 $ — $ — $ 75,308 Intersegment revenues 115 171 — 29 5 (320 ) — Depreciation and amortization 4,029 2,833 1,174 1,511 679 — 10,226 Asset impairments — 17,551 — 23,691 — — 41,242 Other operating expenses 40,554 8,958 4,619 11,630 11,153 — 76,914 Operating income (loss) 3,326 (19,750 ) (956 ) (23,862 ) (11,832 ) — (53,074 ) Gain on debt restructuring — — — — (170,648 ) — (170,648 ) Interest expense, net of amounts capitalized 32 6 13 12 8,158 — 8,221 Income (loss) before income taxes 3,305 (19,750 ) (969 ) (23,873 ) 151,025 — 109,738 Long-lived assets(1) 118,636 17,272 16,150 16,312 28,898 — 197,268 Total assets 154,319 27,292 21,331 25,230 61,764 8,725 298,661 Capital expenditures 288 18 167 132 77 — 682 As of and for the three months ended March 31, 2019 Rig Services Fishing and Rental Services Coiled Tubing Services Fluid Management Services Functional Support Reconciling Eliminations Total Revenues from external customers $ 65,026 $ 14,587 $ 10,673 $ 18,987 $ — $ — $ 109,273 Intersegment revenues 88 908 — 43 — (1,039 ) — Depreciation and amortization 5,989 4,150 1,256 2,441 460 — 14,296 Other operating expenses 54,581 11,560 11,555 16,437 16,156 — 110,289 Operating income (loss) 4,456 (1,123 ) (2,138 ) 109 (16,616 ) — (15,312 ) Interest expense, net of amounts capitalized 10 7 16 11 9,189 — 9,233 Income (loss) before income taxes 4,469 (1,124 ) (2,153 ) 106 (24,701 ) — (23,403 ) Long-lived assets(1) 134,880 49,352 17,368 53,168 19,023 — 273,791 Total assets 185,482 61,353 27,417 66,407 62,841 9,252 412,752 Capital expenditures 1,830 2,073 766 157 214 — 5,040 (1) Long-lived assets include fixed assets, intangibles and other non-current assets. |
ASSET IMPAIRMENT (Notes)
ASSET IMPAIRMENT (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Asset Impairment [Abstract] | |
Asset Impairment Charges [Text Block] | ASSET IMPAIRMENT Asset Impairments During the three months ended March 31, 2020 the Company recognized an asset impairment of $41.2 million. The recent COVID-19 pandemic in March 2020 has resulted in significant economic disruption globally. Government action to restrict travel and suspend business operations has significantly reduced global economic activity. In addition, the recent step decline in the price of crude oil has decreased the value in some of our long-lived assets. The Company assesses triggering events in accordance with ASC 360-10-35-21. Triggering events that were deemed to be present included: a significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical location, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group), and a current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. During the first quarter of 2020, we recognized an impairment expense to long-lived assets. Impairment of Lon-Lived Assets The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets used in operations are assessed for impairment whenever changes circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. Long-lived assets must be grouped at the lowest level for which independent cash flows can be identified (asset groups). If the sum of the undiscounted cash flows is less than the carrying value of an asset group, the fair value of each asset group must be calculated and the carrying value is written down to the calculated fair value if necessary. If the fair value of an asset group exceeds the carrying value, no impairment expense is necessary for that asset group. During the first quarter of 2020, we identified long-lived asset impairment triggers relating to all five of our asset groups as a result of the significant economic impacts and the effects of COVID-19. The five asset groups were determined to be Rigs, Fluid Management Services - Trucks, Fluid Management Services - SWD, Fishing & Rental Services, and Coiled Tubing Services. We assessed each asset group for impairment by comparing the undiscounted pretax cash flows to the carrying value of each asset group. We determined that all our asset groups, excluding Rigs, had carrying values that exceeded the undiscounted cash flows. The determination of undiscounted cash flows included management’s best estimates of the expected future cash flows per asset group for the next five years. The determinations of expected future cash flows and the salvage value of long-lived assets require considerable judgement and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for the purposes of this impairment analysis will prove to be an accurate prediction of the future. Should our assumptions change significantly in future periods, it is possible we may determine the carrying values of the Rigs asset group exceeds the undiscounted pretax cashflows, which would result in an impairment expense. It was determined that the fair value of the Fluid Management Services - Trucks, Fluid Management Services - SWD, and Fishing & Rental Service asset groups was less than the carrying value of the respective asset groups by approximately $8.8 million , $14.8 million and $17.6 million , respectively. As a result, we recorded a total impairment charge of $41.2 million to asset impairment on the consolidated statements of income. We determined that the fair value of our Coiled Tubing Services asset group exceeded the carrying value. As such, no impairment expense was charged to the Coiled Tubing Services asset group. The Company incorporated the income, market, and cost approaches to determine the fair value of each asset group. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows and the estimated useful life of the asset group. The market approach was utilized when there was an observable secondary market or where there was ample asset data available. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence. Fair value determination requires a considerable amount of judgement and is sensitive to changes in underlying assumptions and economic factors. As a result, there can be no assurance that the fair value estimates made for the impairment analysis will prove to be an accurate prediction for the future. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Standards Not Yet Adopted in this Report | Recent Accounting Developments ASU 2016-13. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments that will change how companies measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount. The amendments in this update was effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. We adopted the new standard effective January 1, 2020 and the adoption of this standard did not have a material impact on our consolidated financial statements. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. It is a massive tax-and-spending package intended to provide additional economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant business tax provisions that, among other things, eliminate the taxable income limit for certain net operating losses (NOL) and allow businesses to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years; accelerate refunds of previously generated corporate alternative minimum tax (AMT) credits; and generally increased the business interest limitation under section 163(j) from 30 percent to 50 percent. Key Energy has analyzed the income tax provisions under the CARES Act, and concluded that none of the provisions have a significant impact to the Company's income tax positions. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. Besides income tax provisions, the CARES Act also includes tax provisions relating to refundable payroll tax credits and deferment of employer’s social security payments. Beginning in April of 2020, we began deferment of employer’s social security payments. The Company is currently evaluating the impact of the CARES Act on our financial position, results of operations and cash flows. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ADOPTION OF ASC 606, REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract] | |
REVENUES ADOPTION OF ASC 606 [Table Text Block] | Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The following table presents our revenues disaggregated by revenue source (in thousands). Sales taxes are excluded from revenues. Three Months Ended March 31, 2020 2019 Rig Services $ 47,909 $ 65,026 Fishing and Rental Services 9,592 14,587 Coiled Tubing Services 4,837 10,673 Fluid Management Services 12,970 18,987 Total $ 75,308 $ 109,273 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | A reconciliation of the total carrying amount of our equity accounts for the three months ended March 31, 2020 is as follows (in thousands): COMMON STOCKHOLDERS Common Stock Additional Paid-in Capital Retained Deficit Total Number of Shares Amount at Par Balance at December 31, 2019 411 $ 206 $ 265,588 $ (317,047 ) $ (51,253 ) Common stock purchases (1 ) (1 ) (7 ) — (8 ) Share-based compensation 3 2 (75 ) — (73 ) Issuance of shares pursuant to the Restructuring Support Agreement 13,368 133 41,855 — 41,988 Issuance of warrants pursuant to the Restructuring Support Agreement — — 296 — 296 Net income — — — 108,994 108,994 Balance at March 31, 2020 13,781 $ 340 $ 307,657 $ (208,053 ) $ 99,944 A reconciliation of the total carrying amount of our equity accounts for the three months ended March 31, 2019 is as follows (in thousands): COMMON STOCKHOLDERS Common Stock Additional Paid-in Capital Retained Deficit Total Number of Shares Amount at Par Balance at December 31, 2018 407 $ 204 $ 264,945 $ (219,629 ) $ 45,520 Share-based compensation — — 816 — 816 Net loss — — — (23,441 ) (23,441 ) Balance at March 31, 2019 407 $ 204 $ 265,761 $ (243,070 ) $ 22,895 |
OTHER BALANCE SHEET INFORMATI_2
OTHER BALANCE SHEET INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Balance Sheet Disclosures [Abstract] | |
Other Current Assets | The table below presents comparative detailed information about other current assets at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other current assets: Prepaid current assets $ 8,188 $ 13,118 Reinsurance receivable 6,695 6,475 Operating lease right-of-use assets 1,398 2,394 Other 364 273 Total $ 16,645 $ 22,260 |
Other Noncurrent Assets | The table below presents comparative detailed information about other non-current assets at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other non-current assets: Reinsurance receivable $ 7,128 $ 6,887 Deposits 10,812 8,689 Operating lease right-of-use assets 3,264 2,404 Other 295 386 Total $ 21,499 $ 18,366 |
Other Current Liabilities | The table below presents comparative detailed information about other current liabilities at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other current liabilities: Accrued payroll, taxes and employee benefits $ 10,039 $ 14,463 Accrued operating expenditures 9,407 12,919 Income, sales, use and other taxes 2,814 5,115 Self-insurance reserve 25,556 25,366 Accrued interest 962 15,476 Accrued insurance premiums 8,099 4,990 Unsettled legal claims 2,020 7,020 Accrued severance 314 2,636 Operating leases 2,722 2,502 Other 129 228 Total $ 62,062 $ 90,715 |
Other Noncurrent Liabilities | The table below presents comparative detailed information about other non-current liabilities at March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Other non-current liabilities: Asset retirement obligations $ 8,931 $ 9,035 Environmental liabilities 1,927 2,047 Accrued sales, use and other taxes 17,005 17,005 Deferred tax liabilities 681 — Operating leases 2,370 2,590 Other 32 33 Total $ 30,946 $ 30,710 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | The components of our other intangible assets as of March 31, 2020 and December 31, 2019 are as follows (in thousands): March 31, 2020 December 31, 2019 Trademark: Gross carrying value $ 520 $ 520 Accumulated amortization (188 ) (173 ) Net carrying value $ 332 $ 347 |
Weighted Average Remaining Amortization Periods and Expected Amortization Expense for the Next Five Years for Intangible | The weighted average remaining amortization periods and expected amortization expense for the next five years for our definite lived intangible assets are as follows: Weighted average remaining amortization period (years) Expected amortization expense (in thousands) Remainder 2021 2022 2023 2024 Trademarks 5.8 $ 43 $ 58 $ 58 $ 58 $ 58 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | As of March 31, 2020 and December 31, 2019 , the components of our debt were as follows (in thousands): March 31, 2020 December 31, 2019 Term Loan Facility due 2025 $ 50,000 $ — Term Loan Facility due 2021 1,209 243,125 Unamortized debt issuance costs (3,112 ) (1,799 ) Finance lease obligation 1,497 1,600 Total 49,594 242,926 Less current portion (1) (438 ) (2,919 ) Long-term debt $ 49,156 $ 240,007 |
Weighted Average Interest Rates | The weighted average interest rate on the outstanding borrowings under the Prior Term Loan Facility for the three month period ended March 31, 2020 were as follows: Three Months Ended March 31, 2020 Term Loan Facility 15.45 % |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Income and Expense | The table below presents comparative detailed information about our other income and expense, shown on the condensed consolidated statements of operations as “ other income, net ” for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 Interest income $ (57 ) $ (323 ) Other (328 ) (819 ) Total $ (385 ) $ (1,142 ) |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of our earnings (loss) per share are as follows (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019 Basic EPS Calculation: Numerator Net income (loss) $ 108,994 $ (23,441 ) Denominator Weighted average shares outstanding 4,089 407 Basic and diluted earnings (loss) per share $ 26.66 $ (57.59 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended March 31, 2020 2019 RSUs 13,133 37,280 Stock options 1,084 1,477 Warrants 836,602 36,759 Total 850,819 75,516 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Operating Lease, Lease Income [Table Text Block] | Supplemental balance sheet information related to leases as of March 31, 2020 and December 31, 2019 are as follows (in thousands): March 31, 2020 December 31, 2019 Right-of-Use Assets under Operating Leases Operating lease right-of-use assets, current portion $ 1,398 $ 2,394 Operating lease right-of-use assets, non-current portion 3,264 2,404 Total operating lease assets $ 4,662 $ 4,798 Operating lease liabilities, current portion $ 2,722 $ 2,502 Operating lease liabilities, non-current portion 2,370 2,590 Total operating lease liabilities $ 5,092 $ 5,092 Right-of-Use Assets under Finance Leases Property and equipment, at cost $ 1,760 $ 1,760 Less accumulated depreciation 293 183 Property and equipment, net $ 1,467 $ 1,577 Current portion of long-term debt $ 424 $ 419 Long-term debt 1,073 1,181 Total finance lease liabilities $ 1,497 $ 1,600 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The maturities of our operating and finance lease liabilities as of March 31, 2020 are as follows (in thousands): March 31, 2020 Operating Leases Finance Leases Remainder of 2020 $ 2,276 $ 363 2021 1,738 485 2022 705 485 2023 528 283 2024 188 — Total lease payments 5,435 1,616 Less imputed interest (343 ) (119 ) Total $ 5,092 $ 1,497 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | The following tables set forth our unaudited segment information as of and for the three months ended March 31, 2020 and 2019 (in thousands): As of and for the three months ended March 31, 2020 Rig Services Fishing and Rental Services Coiled Tubing Services Fluid Management Services Functional Support Reconciling Eliminations Total Revenues from external customers $ 47,909 $ 9,592 $ 4,837 $ 12,970 $ — $ — $ 75,308 Intersegment revenues 115 171 — 29 5 (320 ) — Depreciation and amortization 4,029 2,833 1,174 1,511 679 — 10,226 Asset impairments — 17,551 — 23,691 — — 41,242 Other operating expenses 40,554 8,958 4,619 11,630 11,153 — 76,914 Operating income (loss) 3,326 (19,750 ) (956 ) (23,862 ) (11,832 ) — (53,074 ) Gain on debt restructuring — — — — (170,648 ) — (170,648 ) Interest expense, net of amounts capitalized 32 6 13 12 8,158 — 8,221 Income (loss) before income taxes 3,305 (19,750 ) (969 ) (23,873 ) 151,025 — 109,738 Long-lived assets(1) 118,636 17,272 16,150 16,312 28,898 — 197,268 Total assets 154,319 27,292 21,331 25,230 61,764 8,725 298,661 Capital expenditures 288 18 167 132 77 — 682 As of and for the three months ended March 31, 2019 Rig Services Fishing and Rental Services Coiled Tubing Services Fluid Management Services Functional Support Reconciling Eliminations Total Revenues from external customers $ 65,026 $ 14,587 $ 10,673 $ 18,987 $ — $ — $ 109,273 Intersegment revenues 88 908 — 43 — (1,039 ) — Depreciation and amortization 5,989 4,150 1,256 2,441 460 — 14,296 Other operating expenses 54,581 11,560 11,555 16,437 16,156 — 110,289 Operating income (loss) 4,456 (1,123 ) (2,138 ) 109 (16,616 ) — (15,312 ) Interest expense, net of amounts capitalized 10 7 16 11 9,189 — 9,233 Income (loss) before income taxes 4,469 (1,124 ) (2,153 ) 106 (24,701 ) — (23,403 ) Long-lived assets(1) 134,880 49,352 17,368 53,168 19,023 — 273,791 Total assets 185,482 61,353 27,417 66,407 62,841 9,252 412,752 Capital expenditures 1,830 2,073 766 157 214 — 5,040 (1) Long-lived assets include fixed assets, intangibles and other non-current assets. |
GENERAL (Details)
GENERAL (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Extinguishment of Debt, Amount | $ 241.9 |
Term Loan Facility | $ 51.2 |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 50 |
Cash Proceeds For Supporting Term Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Term Loan Facility | $ 20 |
New Cash Proceeds [Member] | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Term Loan Facility | 30 |
Cash Proceeds For Non-Supporting Term Lenders [Member] | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Term Loan Facility | $ 1.2 |
Common Stock | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Issuance of shares pursuant to the Restructuring Support Agreement | shares | 13,368,000 |
Warrants - Series 2 [Member] | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 1,252,297 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 28.85 |
Warrants - Series 1 [Member] | |
Troubled Debt Restructuring, Debtor, Current Period [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 1,669,730 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 19.23 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
REVENUES ADOPTION OF ASC 606 [Line Items] | ||
REVENUES | $ 75,308 | $ 109,273 |
Rig Services | ||
REVENUES ADOPTION OF ASC 606 [Line Items] | ||
REVENUES | 47,909 | 65,026 |
Fluid Management Services | ||
REVENUES ADOPTION OF ASC 606 [Line Items] | ||
REVENUES | 12,970 | 18,987 |
Coiled Tubing Services | ||
REVENUES ADOPTION OF ASC 606 [Line Items] | ||
REVENUES | 4,837 | 10,673 |
Fishing And Rental Services | ||
REVENUES ADOPTION OF ASC 606 [Line Items] | ||
REVENUES | $ 9,592 | $ 14,587 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 410,990 | |
Balance at end of period (in shares) | 13,781,034 | |
Balance at beginning of period | $ (51,253) | $ 45,520 |
Common stock purchases | (8) | |
Share-based compensation | (73) | 816 |
Issuance of shares pursuant to the Restructuring Support Agreement, value | 41,988 | |
Issuance of warrants pursuant to the Restructuring Support Agreement, value | 296 | |
Net loss | 108,994 | (23,441) |
Balance at end of period | $ 99,944 | $ 22,895 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 411,000 | 407,000 |
Common stock purchases (in shares) | (1,000) | |
Share-based compensation (in shares) | 3,000 | 0 |
Balance at end of period (in shares) | 13,781,000 | 407,000 |
Balance at beginning of period | $ 206 | $ 204 |
Common stock purchases | (1) | |
Share-based compensation | $ 2 | 0 |
Issuance of shares pursuant to the Restructuring Support Agreement | 13,368,000 | |
Issuance of shares pursuant to the Restructuring Support Agreement, value | $ 133 | |
Issuance of warrants pursuant to the Restructuring Support Agreement | $ 0 | |
Balance at end of period | $ 340 | 204 |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | 265,588 | 264,945 |
Common stock purchases | (7) | |
Share-based compensation | (75) | 816 |
Issuance of shares pursuant to the Restructuring Support Agreement, value | 41,855 | |
Issuance of warrants pursuant to the Restructuring Support Agreement, value | 296 | |
Balance at end of period | 307,657 | 265,761 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period | (317,047) | (219,629) |
Common stock purchases | 0 | |
Net loss | 108,994 | (23,441) |
Balance at end of period | $ (208,053) | $ (243,070) |
OTHER BALANCE SHEET INFORMATI_3
OTHER BALANCE SHEET INFORMATION - Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other current assets: | ||
Prepaid current assets | $ 8,188 | $ 13,118 |
Reinsurance receivable | 6,695 | 6,475 |
Operating lease right-of-use assets | 1,398 | 2,394 |
Other | 364 | 273 |
Total | $ 16,645 | $ 22,260 |
OTHER BALANCE SHEET INFORMATI_4
OTHER BALANCE SHEET INFORMATION - Other Noncurrent Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other non-current assets: | ||
Reinsurance receivable | $ 7,128 | $ 6,887 |
Deposits | 10,812 | 8,689 |
Operating Lease Right of Use Asset Non-Current | 3,264 | 2,404 |
Other | 295 | 386 |
Total | $ 21,499 | $ 18,366 |
OTHER BALANCE SHEET INFORMATI_5
OTHER BALANCE SHEET INFORMATION - Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other current liabilities: | ||
Accrued payroll, taxes and employee benefits | $ 10,039 | $ 14,463 |
Accrued operating expenditures | 9,407 | 12,919 |
Income, sales, use and other taxes | 2,814 | 5,115 |
Self-insurance reserve | 25,556 | 25,366 |
Accrued interest | 962 | 15,476 |
Accrued insurance premiums | 8,099 | 4,990 |
Unsettled legal claims | 2,020 | 7,020 |
Accrued severance | 314 | 2,636 |
Operating leases | 2,722 | 2,502 |
Other | 129 | 228 |
Total | $ 62,062 | $ 90,715 |
OTHER BALANCE SHEET INFORMATI_6
OTHER BALANCE SHEET INFORMATION - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other non-current liabilities: | ||
Asset retirement obligations | $ 8,931 | $ 9,035 |
Environmental liabilities | 1,927 | 2,047 |
Accrued sales, use and other taxes | 17,005 | 17,005 |
Deferred tax liabilities | 681 | 0 |
Operating leases | 2,370 | 2,590 |
Other | 32 | 33 |
Total | $ 30,946 | $ 30,710 |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 100 | $ 100 | |
Patents, trademarks and tradename | |||
Intangible Assets [Line Items] | |||
Gross carrying value | 520 | $ 520 | |
Accumulated amortization | 188 | 173 | |
Net carrying value | $ 332 | $ 347 |
INTANGIBLE ASSETS - Weighted Av
INTANGIBLE ASSETS - Weighted Average Remaining Amortization Periods and Expected Amortization Expense for Next Five Years for Intangible Assets (Details) - Patents, trademarks and tradename $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years 9 months |
Expected Amortization Expense-Remainder of 2020 | $ 43 |
Expected Amortization Expense-2021 | 58 |
Expected Amortization Expense-2022 | 58 |
Expected Amortization Expense-2023 | 58 |
Expected Amortization Expense-2024 | $ 58 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Term Loan Facility | $ 51,200 | |
Unamortized debt issuance costs | (3,112) | $ (1,799) |
Finance lease obligation | 1,497 | 1,600 |
Total debt | 49,594 | 242,926 |
Current portion of long-term debt | 438 | 2,919 |
Long-term debt | 49,156 | 240,007 |
Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | 50,000 | 0 |
Due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | $ 1,209 | $ 243,125 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - ABL Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 06, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | |||
Deposits | $ 10,812 | $ 8,689 | |
ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 70,000 | ||
Eligible Accounts Receivable for ABL Facility Borrowings | 85.00% | ||
Eligible Unbilled Accounts Receivable For ABL Facility Borrowings | 80.00% | ||
Maximum Eligible Unbilled Accounts Receivable For ABL Facility Borrowings | $ 30,000 | ||
Maximum Percent Of Commitment For ABL Facility Borrowings | 25.00% | ||
Line of Credit Facility, Borrowing Capacity, Description | The ABL Facility provides the ABL Borrowers with the ability to borrow up to an aggregate principal amount equal to the lesser of (i) the aggregate revolving commitments then in effect and (ii) the sum of 85% of the value of eligible accounts receivable plus (b) 80% of the value of eligible unbilled accounts receivable, subject to a limit equal to the greater of (x) $35 million and (y) 25% of the Commitments. | ||
Fixed charge coverage ratio | 1 | ||
Credit Facility revolving loans, carrying value | $ 0 | ||
Letters of Credit Outstanding, Amount | 36,300 | ||
Deposits | $ 7,200 | ||
Debt Instrument, Description of Variable Rate Basis | Borrowings under the New ABL Facility will bear interest, at the ABL Borrowers’ option, at a per annum rate equal to (i) LIBOR for 30, 60, 90, 180, or, with the consent of the ABL Lenders, 360 days, plus an applicable margin that varies from 2.75% to 3.25% depending on the ABL Borrowers’ fixed charge coverage ratio at such time or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the federal funds rate, plus 0.50% or (z) 30-day LIBOR plus 1.0% plus (b) an applicable margin that varies from 1.75% to 2.25% depending on the ABL Borrowers’ fixed charge coverage ratio at such time. | ||
Amendment Description | On April 5, 2019, the ABL Borrowers, as borrowers, the financial institutions party thereto as lenders and Bank of America, N.A. (the “ABL Agent”), as administrative agent for the lenders, entered into Amendment No. 1 (“Amendment No. 1”) to the ABL Facility, among the ABL Borrowers, the financial institutions party thereto from time to time as lenders, the ABL Agent and the co-collateral agents for the lenders, Bank of America, N.A. and Wells Fargo Bank, National Association. The amendment makes changes to, among other things, lower (i) the applicable margin for borrowings to (x) from between 2.50% and 4.50% to between 2.00% and 2.50% for LIBOR borrowings and (y) from 1.50% and 3.50% to between 1.00% and 1.50% for base rate borrowings, in each case depending on the ABL Borrowers’ fixed charge coverage ratio at such time, (ii) appoint the Bank of America, N.A. as sole collateral agent under the ABL Facility, (iii) extend the maturity of the credit facility from June 15, 2021 to the earlier of (x) April 5, 2024 and (y) 6 months prior to the maturity date of the ABL Borrowers’ term loan credit agreement and other material debts, as identified under the ABL Facility, (iv) increase the maximum amount of revolving loan commitment increases from $30 million to $50 million and (v) revise certain triggers applicable to the covenants under the ABL Facility. | ||
Line of Credit Facility, Remaining Borrowing Capacity | $ 10,200 | ||
Federal Funds Purchased [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
30-day LIBOR [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||
Maximum [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Commitment Fee Minimum | 0.50% | ||
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Maximum [Member] | Prime Rate [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | ||
Maximum [Member] | Federal Funds rate, plus 0.50% [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ||
Maximum [Member] | 30-day LIBOR, plus 1.0% [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ||
Minimum [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Commitment Fee Minimum | 0.375% | ||
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | ||
Minimum [Member] | Prime Rate [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||
Minimum [Member] | Federal Funds rate, plus 0.50% [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | ||
Minimum [Member] | 30-day LIBOR, plus 1.0% [Member] | ABL Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.50% |
LONG-TERM DEBT LONG-TERM DEBT_2
LONG-TERM DEBT LONG-TERM DEBT - Term Loan Facility (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||
Interest payable | $ 16,283,000 | $ 0 |
Term Loan Facility | 51,200,000 | |
Debt Payment At Maturity | $ 1,190,625 | |
Term Loan Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Description of Variable Rate Basis | Borrowings under the Term Loan Facility will bear interest, at the Company’s option, at a per annum rate equal to (i) LIBOR for one, two, three, six, or, with the consent of the Term Loan Lenders, 12 months, plus 10.25% or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the Federal Funds rate, plus 0.50% and (z) 30-day LIBOR, plus 1.0% plus (b) 9.25%. | |
Debt Instrument, Periodic Payment, Principal | $ 3,125 | |
Loan Facility Weighted Average Interest Rate During Period | 15.45% | |
Term Loan Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 10.25% | |
Interest Rate For Option In Kind Interest Payments | 12.25% | |
Term Loan Facility [Member] | Federal Funds rate, plus 0.50% [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 9.25% | |
Term Loan Facility [Member] | 30-day LIBOR, plus 1.0% [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 9.25% | |
ABL Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Description of Variable Rate Basis | Borrowings under the New ABL Facility will bear interest, at the ABL Borrowers’ option, at a per annum rate equal to (i) LIBOR for 30, 60, 90, 180, or, with the consent of the ABL Lenders, 360 days, plus an applicable margin that varies from 2.75% to 3.25% depending on the ABL Borrowers’ fixed charge coverage ratio at such time or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the federal funds rate, plus 0.50% or (z) 30-day LIBOR plus 1.0% plus (b) an applicable margin that varies from 1.75% to 2.25% depending on the ABL Borrowers’ fixed charge coverage ratio at such time. | |
Fixed charge coverage ratio | 1 | |
Letters of Credit Outstanding, Amount | $ 36,300,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 10,200,000 | |
Credit Facility revolving loans, carrying value | $ 0 | |
ABL Facility [Member] | Federal Funds Purchased [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |
ABL Facility [Member] | 30-day LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | |
ABL Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Commitment Fee Minimum | 0.50% | |
ABL Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | |
ABL Facility [Member] | Maximum [Member] | Prime Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |
ABL Facility [Member] | Maximum [Member] | Federal Funds rate, plus 0.50% [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |
ABL Facility [Member] | Maximum [Member] | 30-day LIBOR, plus 1.0% [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | |
ABL Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Commitment Fee Minimum | 0.375% | |
ABL Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | |
ABL Facility [Member] | Minimum [Member] | Prime Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |
ABL Facility [Member] | Minimum [Member] | Federal Funds rate, plus 0.50% [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |
ABL Facility [Member] | Minimum [Member] | 30-day LIBOR, plus 1.0% [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |
Prior ABL Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Description of Variable Rate Basis | Borrowings under the ABL Facility will bear interest, at the ABL Borrowers’ option, at a per annum rate equal to (i) LIBOR for 30, 60, 90, 180, or, with the consent of the ABL Lenders, 360 days, plus an applicable margin that varies from 2.0% to 2.5% depending on the Borrowers’ fixed charge coverage ratio at such time or (ii) a base rate equal to the sum of (a) the greatest of (x) the prime rate, (y) the federal funds rate, plus 0.50% or (z) 30-day LIBOR, plus 1.0% plus (b) an applicable margin that varies from 1.0% to 1.5% depending on the Borrowers’ fixed charge coverage ratio at such time. In addition, the ABL Facility provides for unused line fees of 1.00% to 1.25% per year, depending on utilization, letter of credit fees and certain other factors. | |
Cash Proceeds For Supporting Term Lenders [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | $ 20,000,000 | |
New Cash Proceeds [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | 30,000,000 | |
Cash Proceeds For Non-Supporting Term Lenders [Member] | ||
Debt Instrument [Line Items] | ||
Term Loan Facility | $ 1,200,000 |
OTHER INCOME, NET (Detail)
OTHER INCOME, NET (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Interest income | $ (57) | $ (323) |
Other | (328) | (819) |
Total | $ 385 | $ 1,142 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards | $ 476.8 | |
Effective tax rate | 0.70% | (0.20%) |
Cancellation Of Indebtedness Income | $ 206 | |
Cancellation Of Indebtedness Income - Non-Taxable | 197.8 | |
Cancellation Of Indebtedness Income - Taxable | $ 8.2 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | ||
Unsettled legal claims | $ 2,020 | $ 7,020 |
Maximum Vehicular Liability Claim Deductible | 5,000 | |
Maximum General Liability Claim Deductible | 2,000 | |
Maximum Workers Compensation Claim Deductible | 1,000 | |
Self-insurance liabilities related to workers' compensation, vehicular liabilities, and general liability claims recorded | 53,200 | 51,400 |
Insurance receivables which partially offset self-insurance liabilities | 13,800 | 13,400 |
Environmental remediation liabilities recorded | $ 1,900 | $ 2,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Earnings Per Share, Basic | $ 26.66 | $ (57.59) |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 850,819 | 75,516 |
Numerator | ||
Net loss | $ 108,994 | $ (23,441) |
Denominator | ||
Basic and diluted | 4,089 | 407 |
Basic and diluted (per share) | $ 26.66 | $ (57.59) |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,133 | 37,280 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,084 | 1,477 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 836,602 | 36,759 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense recognized | $ (1) | $ 0.7 |
Compensation expense expected to be recognized | $ 1.3 | |
Compensation expense expected to be recognized, weighted average remaining vesting period | 1 year | |
Phantom Share Units (PSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense recognized | $ (0.1) | 0.1 |
Compensation expense expected to be recognized | $ 0.1 | |
Compensation expense expected to be recognized, weighted average remaining vesting period | 9 months 18 days | |
Outside directors | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense recognized | $ (1) | $ 0.1 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Operating Lease, Cost | $ 700 | |
Operating Lease, Weighted Average Remaining Lease Term | 2 years 6 months | |
Operating Lease, Weighted Average Discount Rate, Percent | 5.70% | |
Finance Lease, Interest Expense | $ 100 | |
Finance Lease, Weighted Average Discount Rate, Percent | 4.80% | |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 4 months 24 days | |
Operating Lease, Right-of-Use Asset, Current | $ 1,398 | $ 2,394 |
Operating Lease Right of Use Asset Non-Current | 3,264 | 2,404 |
Operating Lease, Right-of-Use Asset | 4,662 | 4,798 |
Operating Lease, Liability, Current | 2,722 | 2,502 |
Operating Lease, Liability, Noncurrent | 2,370 | 2,590 |
Operating Lease, Liability | 5,092 | 5,092 |
Capital Leased Assets, Gross | 1,760 | 1,760 |
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Flight Equipment, Accumulated Depreciation | 293 | 183 |
Finance Lease, Right-of-Use Asset | 1,467 | 1,577 |
Finance Lease, Liability, Current | 424 | 419 |
Finance Lease, Liability, Noncurrent | 1,073 | 1,181 |
Finance Lease, Liability | 1,497 | $ 1,600 |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | 2,276 | |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 1,738 | |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 705 | |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 528 | |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 188 | |
Lessee, Operating Lease, Liability, Payments, Due | 5,435 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (343) | |
Finance Lease, Liability, Payments, Remainder of Fiscal Year | 363 | |
Finance Lease, Liability, Payments, Due Year Two | 485 | |
Finance Lease, Liability, Payments, Due Year Three | 485 | |
Finance Lease, Liability, Payments, Due Year Four | 283 | |
Finance Lease, Liability, Payments, Due Year Five | 0 | |
Finance Lease, Liability, Payments, Due | 1,616 | |
Finance Lease, Liability, Undiscounted Excess Amount | $ 119 | |
Maximum [Member] | ||
Lessee, Operating Lease, Term of Contract | 5 years | |
Lessee, Operating Lease, Renewal Term | 5 years | |
Minimum [Member] | ||
Lessee, Operating Lease, Term of Contract | 1 year | |
Lessee, Operating Lease, Renewal Term | 1 year |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | ||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | $ 75,308 | $ 109,273 | ||
Intersegment revenues | 0 | 0 | ||
Depreciation and amortization | 10,226 | 14,296 | ||
Asset impairments | 41,242 | 0 | ||
Other operating expenses | 76,914 | 110,289 | ||
Operating income (loss) | (53,074) | (15,312) | ||
Gain on debt restructuring | (170,648) | 0 | ||
Interest expense, net of amounts capitalized | 8,221 | 9,233 | ||
Income (loss) before income taxes | 109,738 | (23,403) | ||
Long-lived assets | [1] | 197,268 | 273,791 | |
Total assets | 298,661 | 412,752 | $ 347,870 | |
Capital expenditures | 682 | 5,040 | ||
Rig Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 47,909 | 65,026 | ||
Intersegment revenues | 115 | 88 | ||
Depreciation and amortization | 4,029 | 5,989 | ||
Asset impairments | 0 | |||
Other operating expenses | 40,554 | 54,581 | ||
Operating income (loss) | 3,326 | 4,456 | ||
Gain on debt restructuring | 0 | |||
Interest expense, net of amounts capitalized | 32 | 10 | ||
Income (loss) before income taxes | 3,305 | 4,469 | ||
Long-lived assets | [1] | 118,636 | 134,880 | |
Total assets | 154,319 | 185,482 | ||
Capital expenditures | 288 | 1,830 | ||
Coiled Tubing Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 4,837 | 10,673 | ||
Intersegment revenues | 0 | 0 | ||
Depreciation and amortization | 1,174 | 1,256 | ||
Asset impairments | 0 | |||
Other operating expenses | 4,619 | 11,555 | ||
Operating income (loss) | (956) | (2,138) | ||
Gain on debt restructuring | 0 | |||
Interest expense, net of amounts capitalized | 13 | 16 | ||
Income (loss) before income taxes | (969) | (2,153) | ||
Long-lived assets | [1] | 16,150 | 17,368 | |
Total assets | 21,331 | 27,417 | ||
Capital expenditures | 167 | 766 | ||
Fluid Management Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 12,970 | 18,987 | ||
Intersegment revenues | 29 | 43 | ||
Depreciation and amortization | 1,511 | 2,441 | ||
Asset impairments | 23,691 | |||
Other operating expenses | 11,630 | 16,437 | ||
Operating income (loss) | (23,862) | 109 | ||
Gain on debt restructuring | 0 | |||
Interest expense, net of amounts capitalized | 12 | 11 | ||
Income (loss) before income taxes | (23,873) | 106 | ||
Long-lived assets | [1] | 16,312 | 53,168 | |
Total assets | 25,230 | 66,407 | ||
Capital expenditures | 132 | 157 | ||
Fishing And Rental Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 9,592 | 14,587 | ||
Intersegment revenues | 171 | 908 | ||
Depreciation and amortization | 2,833 | 4,150 | ||
Asset impairments | 17,551 | |||
Other operating expenses | 8,958 | 11,560 | ||
Operating income (loss) | (19,750) | (1,123) | ||
Gain on debt restructuring | 0 | |||
Interest expense, net of amounts capitalized | 6 | 7 | ||
Income (loss) before income taxes | (19,750) | (1,124) | ||
Long-lived assets | [1] | 17,272 | 49,352 | |
Total assets | 27,292 | 61,353 | ||
Capital expenditures | 18 | 2,073 | ||
Functional Support | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 0 | 0 | ||
Intersegment revenues | 5 | 0 | ||
Depreciation and amortization | 679 | 460 | ||
Asset impairments | [2] | 0 | ||
Other operating expenses | 11,153 | 16,156 | ||
Operating income (loss) | (11,832) | (16,616) | ||
Gain on debt restructuring | (170,648) | |||
Interest expense, net of amounts capitalized | 8,158 | 9,189 | ||
Income (loss) before income taxes | 151,025 | (24,701) | ||
Long-lived assets | [1] | 28,898 | 19,023 | |
Total assets | 61,764 | 62,841 | ||
Capital expenditures | 77 | 214 | ||
Reconciling Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues from external customers | 0 | 0 | ||
Intersegment revenues | (320) | (1,039) | ||
Depreciation and amortization | 0 | 0 | ||
Asset impairments | 0 | |||
Other operating expenses | 0 | 0 | ||
Operating income (loss) | 0 | 0 | ||
Gain on debt restructuring | 0 | |||
Interest expense, net of amounts capitalized | 0 | 0 | ||
Income (loss) before income taxes | 0 | 0 | ||
Long-lived assets | [1] | 0 | 0 | |
Total assets | 8,725 | 9,252 | ||
Capital expenditures | $ 0 | $ 0 | ||
[1] | Long-lived assets include fixed assets, intangibles and other non-current assets | |||
[2] | . |
ASSET IMPAIRMENT (Details)
ASSET IMPAIRMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Asset impairments | $ 41,242 | $ 0 |
Fishing And Rental Services | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Asset impairments | 17,551 | |
Fluid Management Services | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Asset impairments | 23,691 | |
Fluid Management Services | Trucks [Member] | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Asset impairments | 8,800 | |
Fluid Management Services | Disposal Wells [Member] | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Asset impairments | $ 14,800 |