Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Recurring Fair Value Measurements

The following table summarizes our liability measured at fair value on a recurring basis:


		Year Ended December 31,
		2020				2019
	Hierarchy	Carrying		Fair		Carrying		Fair
(in thousands)	Level	Amount		Value		Amount		Value
Make-Whole Reimbursement Amount	3	$	4,847	$	4,847	$	—	$	—

As a result of the CJWS acquisition, the Company has a Make-Whole Reimbursement derivative in place, which is classified within Other Current Liabilities on our consolidated balance sheet. Changes in the fair value of derivative instruments subsequent to the initial measurement are recorded as Gain (Loss) on Derivative in the accompanying consolidated statement of operations. The estimated fair value of the Company’s derivative liability is determined at discrete points in time derived from the fair value of our Senior Notes, which resulted in the Company classifying the derivative liability as Level 3. As of December 31, 2020, the fair value of the Make-Whole Reimbursement derivative is based on the risk-adjusted value of the $28.5 million estimated Make-Whole Reimbursement Amount, which is calculated based on the differential between the trading value of the Ascribe Senior Notes as of December 31, 2020 and their $34.4 million par value. The Company recorded a gain of $4.9 million as a result of the change in fair value of the Make-Whole Reimbursement derivative in the year ended December 31, 2020. The Company did not have any additional assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2020 or December 31, 2019.

Nonrecurring Fair Value Measurements

Certain assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments only in certain circumstances. These assets can include long-lived assets that have been reduced to fair value when they are held for sale and long-lived assets, including goodwill, that are written down to fair value when they are impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. For further discussion of these impairments, see Note 11. "Impairments and Other Charges." See Note 6. "Series A Participating Preferred Stock" for further discussion of the valuation of this instrument.

The following table summarizes our fair value measurements made on a nonrecurring basis as of various dates during the periods presented. Please note that these amounts represent the carrying amounts and fair values at the time of each measurement.




	Date of	Hierarchy	Carrying		Fair
(in thousands)	Measurement	Level	Amount		Value

Well Servicing long-lived assets	March 31, 2020	3	$	153,879	$	69,535
Series A Participating Preferred Stock	March 9, 2020	3	$	22,000	$	22,000
Non-strategic real estate assets to be disposed	Dec 31, 2020	3	$	8,231	$	6,657
Well Servicing goodwill	March 31, 2020	3	$	10,565	$	—
Water Logistics goodwill	Dec 31, 2020	3	$	8,524	$	—

Fair Values of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities approximate fair value due to the short maturities of these instruments. The carrying amount, if any,

of our ABL Credit Facility in Long-Term Debt also approximates fair value due to its priority on security and variable-rate characteristics. The carrying amount of the Second Lien Promissory Note, issued in October 2020, also approximates fair value as of December 31, 2020, after considering the sufficiency of its security. The following is a summary of the carrying amounts, net of discounts, and estimated fair values of the Company's Senior Notes, Senior Secured Promissory Note, and Second Lien Promissory Note as of December 31, 2020 and 2019:


		December 31, 2020				December 31, 2019
	Hierarchy	Carrying		Fair		Carrying		Fair
(in thousands)	Level	Amount		Value		Amount		Value

10.75% Senior Notes due 2023	2	$	289,359	$	44,992	$	297,844	$	213,246
Senior Secured Promissory Note	3	$	9,184	$	2,103	$	—	$	—
Second Lien Delayed Draw Promissory Note	3	$	15,000	$	15,000	$	—	$	—

The fair value of the 10.75% Senior Notes is based on their trading price as of December 31, 2020. The fair value of the Senior Secured Promissory Note as of December 31, 2020 is calculated in accordance with ASC 820 "Fair Value Measurements" considering its security as compared to the Senior Notes as well as the difference between the stated interest rate of this promissory note and market rates.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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