10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

__________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-33816

_________________________________

__________________________________

Delaware	26-0287117
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6720 N. Scottsdale Road, Suite 190, Scottsdale, AZ 85253

(602) 903-7802

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

__________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed all the documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan of confirmation by a court. Yes  x    No  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No   x

The number of shares outstanding of the registrant’s common stock as of October 31, 2018 was 12,233,087.

TABLE OF CONTENTS

PART I —FINANCIAL INFORMATION		5
Item 1.	Condensed Consolidated Financial Statements	5
	Condensed Consolidated Balance Sheets as of September 30, 2018 (Successor) and December 31, 2017 (Successor)	5
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 (Successor), Two Months Ended September 30, 2017 (Successor), and One and Seven Months Ended July 31, 2017 (Predecessor)	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 (Successor), Two Months Ended September 30, 2017 (Successor), and Seven Months Ended July 31, 2017 (Predecessor)	8
	Condensed Consolidated Statements of Shareholders’ Equity as of September 30, 2018 (Successor) and September 30, 2017 (Successor)	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
PART II – OTHER INFORMATION		50
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51

2

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the United States Securities Exchange Act of 1934, as amended, or the “Exchange Act.” These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including, but not limited to, statements regarding:

• the expected benefits of our completed restructuring under chapter 11 of the United States Bankruptcy Code (“the Bankruptcy Code”) to improve our long-term capital structure;

• future financial performance and growth targets or expectations;

• market and industry trends and developments, including, but not limited to, statements regarding fluctuations in oil and natural gas prices and third-party projections for the markets in which we operate; and

• the potential benefits of our completed and any future merger, acquisition, disposition, restructuring, and financing transactions.

You can identify these and other forward-looking statements by the use of words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “might,” “will,” “should,” “would,” “could,” “potential,” “future,” “continue,” “ongoing,” “forecast,” “project,” “target” or similar expressions, and variations or negatives of these words.

These forward-looking statements are based on information available to us as of the date of this Quarterly Report and our current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured, and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include, among others:

• the effects of our completed restructuring on the Company and the interests of various constituents;

• risks and uncertainties associated with the restructuring process, including the outcome of a pending appeal of the order confirming the plan of reorganization and our ability to execute the requirements of the plan of reorganization subsequent to the effective date;

• the loss of one or more of our larger customers;

• our ability to attract and retain key executives and qualified employees in key areas of our business;

• our ability to attract and retain a sufficient number of qualified truck drivers in light of industry-wide driver shortages and high-turnover;

• risks associated with our indebtedness, including changes to interest rates, decreases in our borrowing availability, our ability to manage our liquidity needs and to comply with covenants under our credit facilities, including the requirement to conduct a rights offering;

• the availability of less favorable credit and payment terms due to changes in industry condition or our financial condition, which could constrain our liquidity and reduce availability under our revolving credit facility;

• difficulties in successfully executing our growth initiatives, including identifying and completing acquisitions and divestitures, successfully integrating acquired business operations, and identifying and managing risks inherent in acquisitions and divestitures, as well as differences in the type and availability of consideration or financing for such acquisitions and divestitures;

• higher than forecasted capital expenditures to maintain and repair our fleet of trucks, equipment and disposal wells;

• control of costs and expenses;

• risks associated with the limited trading volume of our common stock on the NYSE American Stock Exchange, including potential fluctuations in the trading prices of our common stock;

3

• risks associated with the reliance on third-party analyst and expert market projections and data for the markets in which we operate;

• risks associated with changes in industry practices and operational technologies and the impact on our business;

• present and possible future claims, litigation or enforcement actions or investigations;

• financial results that may be volatile and may not reflect historical trends due to, among other things, changes in commodity prices or general market conditions, acquisition and disposition activities, fluctuations in consumer trends, pricing pressures, transportation costs, changes in raw material or labor prices or rates related to our business and changing regulations or political developments in the markets in which we operate;

• changes in customer drilling, completion and production activities, operating methods and capital expenditure plans, including impacts due to low oil and/or natural gas prices or the economic or regulatory environment;

• risks associated with our customers’ access to sufficient capital to fund their business operations in the areas in which we operate, including unforeseen reductions in customer budget or capital availability, depletion of unallocated customer capital over the course of the applicable budget period, or redeployment of customer capital into different geographic areas;

• risks associated with the operation, construction, development and closure of saltwater disposal wells, solids and liquids treatment and transportation assets, landfills and pipelines, including access to additional locations and rights-of-way, environmental remediation obligations, unscheduled delays or inefficiencies and reductions in volume due to micro- and macro-economic factors or the availability of less expensive alternatives;

• the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets;

• changes in economic conditions in the markets in which we operate or in the world generally, including as a result of political uncertainty;

• the potential impact of changes in governmental trade policies, including the imposition of tariffs and taxes, which may increase costs or otherwise negatively impact our business or the business of our customers;

• reduced demand for our services due to regulatory or other influences related to extraction methods such as hydraulic fracturing, shifts in production among shale areas in which we operate or into shale areas in which we do not currently have operations;

• the unknown future impact of changes in laws and regulation on waste management and disposal activities, including those impacting the delivery, storage, collection, transportation, treatment and disposal of waste products, as well as the use or reuse of recycled or treated products or byproducts;

• risks involving developments in environmental or other governmental laws and regulations in the markets in which we operate and our ability to effectively respond to those developments including laws and regulations relating to oil and natural gas extraction businesses, particularly relating to water usage, and the disposal, transportation and treatment of liquid and solid wastes;

• natural disasters, such as hurricanes, earthquakes and floods, or acts of terrorism, or extreme weather conditions, that may impact our business locations, assets, including wells or pipelines, distribution channels, or which otherwise disrupt our or our customers’ operations or the markets we serve; and

• other risks identified in this Quarterly Report or referenced from time to time in our filings with the United States Securities and Exchange Commission.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.

4

PART I—FINANCIAL INFORMATION

Item  1. Financial Statements.

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	Successor
	September 30,			December 31,
	2018			2017
Assets
Cash and cash equivalents	$	15,077		$	5,488
Restricted cash	1,850			1,296
Accounts receivable, net of allowance for doubtful accounts of $1.8 million and $1.9 million at September 30, 2018 and December 31, 2017, respectively	29,706			30,965
Inventories	3,651			4,089
Prepaid expenses and other receivables	2,748			8,594
Other current assets	869			226
Assets held for sale	3,172			2,765
Total current assets	57,073			53,423
Property, plant and equipment, net of accumulated depreciation of $64.5 million and $35.8 million at September 30, 2018 and December 31, 2017, respectively	184,975			229,874
Equity investments	40			48
Intangibles, net	429			547
Goodwill	27,139			27,139
Deferred income taxes	73			84
Other assets	133			207
Total assets	$	269,862		$	311,322
Liabilities and Shareholders’ Equity
Accounts payable	$	7,102		$	7,946
Accrued liabilities	15,724			13,939
Current contingent consideration	500			500
Current portion of long-term debt	4,526			5,525
Derivative warrant liability	154			477
Total current liabilities	28,006			28,387
Long-term debt	31,088			33,524
Other long-term liabilities	6,763			6,438
Total liabilities	65,857			68,349
Shareholders’ equity:
Common stock	117			117
Additional paid-in capital	302,243			290,751
Accumulated deficit	(98,355		)	(47,895		)
Total shareholders’ equity	204,005			242,973
Total liabilities and shareholders’ equity	$	269,862		$	311,322

The accompanying notes are an integral part of these statements.

5

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Revenue:
Service revenue	$	45,694		$	30,620		$	13,608
Rental revenue	3,962			3,138			1,514
Total revenue	49,656			33,758			15,122
Costs and expenses:
Direct operating expenses	39,753			26,110			11,896
General and administrative expenses	5,849			4,928			1,326
Depreciation and amortization	10,018			17,321			4,003
Impairment of long-lived assets	100			2,404			—
Other, net	49			—			—
Total costs and expenses	55,769			50,763			17,225
Operating loss	(6,113		)	(17,005		)	(2,103		)
Interest expense, net	(1,241		)	(778		)	(3,246		)
Other income, net	169			294			7
Reorganization items, net	137			530			229,198
(Loss) income before income taxes	(7,048		)	(16,959		)	223,856
Income tax (expense) benefit	(69		)	(34		)	304
Net (loss) income	$	(7,117	)	$	(16,993	)	$	224,160
Earnings per common share:
Net (loss) income per basic common share	$	(0.61	)	$	(1.45	)	$	1.48
Net (loss) income per diluted common share	$	(0.61	)	$	(1.45	)	$	1.42
Weighted average shares outstanding:
Basic	11,696			11,696			150,951
Diluted	11,696			11,696			157,394

The accompanying notes are an integral part of these statements.

6

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Revenue:
Service revenue	$	136,541		$	30,620		$	86,564
Rental revenue	11,732			3,138			9,319
Total revenue	148,273			33,758			95,883
Costs and expenses:
Direct operating expenses	120,449			26,110			81,010
General and administrative expenses	31,183			4,928			22,552
Depreciation and amortization	36,731			17,321			28,981
Impairment of long-lived assets	4,563			2,404			—
Other, net	1,117			—			—
Total costs and expenses	194,043			50,763			132,543
Operating loss	(45,770		)	(17,005		)	(36,660		)
Interest expense, net	(3,695		)	(778		)	(22,792		)
Other income, net	683			294			4,247
Reorganization items, net	(1,609		)	530			223,494
(Loss) income before income taxes	(50,391		)	(16,959		)	168,289
Income tax (expense) benefit	(69		)	(34		)	322
Net (loss) income	$	(50,460	)	$	(16,993	)	$	168,611
Earnings per common share:
Net (loss) income per basic common share	$	(4.31	)	$	(1.45	)	$	1.12
Net (loss) income per diluted common share	$	(4.31	)	$	(1.45	)	$	0.97
Weighted average shares outstanding:
Basic	11,696			11,696			150,940
Diluted	11,696			11,696			174,304

7

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Cash flows from operating activities:
Net (loss) income	$	(50,460	)	$	(16,993	)	$	168,611
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	36,731			17,321			28,981
Amortization of debt issuance costs, net	—			—			2,135
Accrued interest added to debt principal	119			177			11,474
Stock-based compensation	11,492			181			457
Impairment of long-lived assets	4,563			2,404			—
Gain on sale of UGSI	(75		)	(76		)	—
(Gain) loss on disposal of property, plant and equipment	(919		)	687			(258		)
Bad debt (recoveries) expense	(164		)	41			788
Change in fair value of derivative warrant liability	(323		)	140			(4,025		)
Deferred income taxes	11			34			(337		)
Other, net	541			152			(11,295		)
Reorganization items, non-cash	—			—			(218,600		)
Changes in operating assets and liabilities:
Accounts receivable	1,423			(5,349		)	(4,528		)
Prepaid expenses and other receivables	487			(528		)	472
Accounts payable and accrued liabilities	1,028			(1,111		)	3,682
Other assets and liabilities, net	(234		)	(152		)	3,494
Net cash provided by (used in) operating activities	4,220			(3,072		)	(18,949		)
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment	19,066			1,623			3,083
Purchases of property, plant and equipment	(9,687		)	(404		)	(3,149		)
Proceeds from the sale of UGSI	75			76			—
Net cash provided by (used in) investing activities	9,454			1,295			(66		)
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	—			—			106,785
Payments on Predecessor revolving credit facility	—			—			(129,964		)
Proceeds from Predecessor term loan	—			—			15,700
Proceeds from debtor in possession term loan	—			—			6,875
Proceeds from Successor First and Second Lien Term Loans	—			—			36,053
Payments on Successor First and Second Lien Term Loans	(2,132		)	(442		)	—
Proceeds from Successor revolving facility	172,336			28,020			—
Payments on Successor revolving facility	(172,336		)	(28,020		)	—
Payments for debt issuance costs	—			—			(1,053		)
Payments on vehicle financing and other financing activities	(1,399		)	(1,773		)	(2,797		)
Net cash (used in) provided by financing activities	(3,531		)	(2,215		)	31,599
Change in cash, cash equivalents and restricted cash	10,143			(3,992		)	12,584
Cash and cash equivalents, beginning of period	5,488			7,193			994
Restricted cash, beginning of period	1,296			7,805			1,420
Cash, cash equivalents and restricted cash, beginning of period	6,784			14,998			2,414
Cash and cash equivalents, end of period	15,077			3,248			7,193
Restricted cash, end of period	1,850			7,758			7,805
Cash, cash equivalents and restricted cash, end of period	$	16,927		$	11,006		$	14,998

8

	Successor				Predecessor
	Nine Months Ended		Two Months Ended		Seven Months Ended
	September 30, 2018		September 30, 2017		July 31, 2017
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,835	$	218	$	1,568
Cash paid for taxes, net	390		23		193

The accompanying notes are an integral part of these statements.

9

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Common Stock			Additional Paid-In Capital		Accumulated Deficit			Total
	Shares	Amount
Balance at January 1, 2018 (Successor)	11,696	$	117	$	290,751	$	(47,895	)	$	242,973
Stock-based compensation	—	—		10,978		$	—		$	10,978
Net loss	—	—		—		(32,167		)	(32,167		)
Balance at March 31, 2018 (Successor)	11,696	$	117	$	301,729	$	(80,062	)	$	221,784
Stock-based compensation	—	—		416		$	—		$	416
Net loss	—	—		—		(11,176		)	(11,176		)
Balance at June 30, 2018 (Successor)	11,696	$	117	$	302,145	$	(91,238	)	$	211,024
Stock-based compensation	—	—		98		—			98
Net loss	—	—		—		(7,117		)	(7,117		)
Balance at September 30, 2018 (Successor)	11,696	$	117	$	302,243	$	(98,355	)	$	204,005

10

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Common Stock					Additional Paid-In Capital			Treasury Stock					Accumulated Deficit			Total
	Shares		Amount						Shares		Amount
Balance at January 1, 2017 (Predecessor)	152,433		$	152		$	1,407,867		(1,514	)	$	(19,807	)	$	(1,557,278	)	$	(169,066	)
Stock-based compensation	—		—			309			—		—			—			309
Issuance of common stock to employees	32		—			—			—		—			—			—
Treasury stock acquired through surrender of shares for tax withholding	—		—			—			(12	)	(2		)	—			(2		)
Issuance of common stock for warrants exercised	2		—			—			—		—			—
Net loss	—		—			—			—		—			(35,962		)	(35,962		)
Balance at March 31, 2017 (Predecessor)	152,467		$	152		$	1,408,176		(1,526	)	$	(19,809	)	$	(1,593,240	)	$	(204,721	)
Stock-based compensation	—		—			112			—		—			—			112
Net loss	—		—			—			—		—			(19,587		)	(19,587		)
Balance at June 30, 2017 (Predecessor)	152,467		$	152		$	1,408,288		(1,526	)	$	(19,809	)	$	(1,612,827	)	$	(224,196	)
Stock-based compensation	—		—			36			—		—			—			36
Issuance of common stock for warrants exercised	13		—			—			—		—			—			—
Net income	—		—			—			—		—			224,160			224,160
Balance at July 31, 2017 (Predecessor)	152,480		$	152		$	1,408,324		(1,526	)	$	(19,809	)	$	(1,388,667	)	$	—
Implementation of Plan and Application of Fresh Start Accounting:
Cancellation of Predecessor equity	(152,480	)	(152		)	(1,408,324		)	1,526		19,809			1,388,667			—
Issuance of Successor common stock and warrants	11,696		117			290,074			—		—			—			290,191
Balance at August 1, 2017 (Successor)	11,696		$	117		$	290,074		—		$	—		$	—		$	290,191
Stock-based compensation	—		—			181			—		—			—			181
Net loss	—		—			—			—		—			(16,993		)	(16,993		)
Balance at September 30, 2017 (Successor)	11,696		$	117		$	290,255		—		$	—		$	(16,993	)	$	273,379

11

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2017, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018 (as amended on April 19, 2018, the “2017 Annual Report on Form 10-K”).

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted.

On May 1, 2017, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed voluntary petitions under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to pursue prepackaged plans of reorganization (together, and as amended, the “Plan”). On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan became effective on August 7, 2017 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Upon emergence, we elected to apply fresh start accounting effective July 31, 2017, to coincide with the timing of our normal accounting period close. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the condensed consolidated financial statements on or after August 1, 2017, are not comparable with the condensed consolidated financial statements prior to that date.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on and prior to July 31, 2017.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (or “FASB”) issued Accounting Standards Update (or “ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in this update will be added to the Account Standards Codification (“ASC”) as ASC 606, Revenue from Contracts with Customers, and replaces the guidance in ASC 605, Revenue Recognition. The new guidance in ASC 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services.

On January 1, 2018, we adopted the guidance in ASC 606 and all the related amendments (the “new revenue standard”) and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. See Note 3 for further information on the new standard.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification and guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and contingent consideration payments made after a business combination. The pronouncement is effective for fiscal years, and for interim periods within those fiscal

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years, beginning after December 15, 2017, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning January 1, 2018, which did not have a significant impact on the consolidated statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is to be applied retrospectively. The adoption of this guidance as of January 1, 2018 did not have a significant impact on our consolidated statement of cash flows, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals. We have adjusted the prior year period to reflect this new presentation as well.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2017 Annual Report on Form 10-K.

Note 2 - Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-02 is permitted. We are nearing the completion of our assessment of the impact ASU 2016-02 will have on our consolidated financial statements. Based upon the work performed thus far, we expect the primary change upon adoption to be the recognition, on a discounted basis, of our minimum commitments under non-cancellable operating leases on our consolidated balance sheets resulting in the recording of right of use assets and lease obligations. We have also reviewed the various practical expedients that have been approved by the FASB for ASU 2016-02 and have selected which ones we plan to adopt when we implement the new standard effective January 1, 2019.

Note 3 - Revenues

On January 1, 2018, we adopted the guidance in ASC 606, including all related amendments, and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under ASC 605, or the accounting guidance in effect for those periods.

Revenue Recognition

Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues.

Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transfer services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering.

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The following tables present our revenues disaggregated by revenue source for each reportable segment for the three months ended September 30, 2018, two months ended September 30, 2017, and one month ended July 31, 2017:

	Successor
	For the Three Months Ended September 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	21,809	$	9,243	$	3,682	$	—	$	34,734
Disposal Services	5,235		1,329		1,234		—		7,798
Other Revenue	2,471		615		76		—		3,162
Total Service Revenue	29,515		11,187		4,992		—		45,694
Rental Revenue	3,884		60		18		—		3,962
Total Revenue	$	33,399	$	11,247	$	5,010	$	—	$	49,656

	Successor
	For the Two Months Ended September 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	13,573	$	5,830	$	4,708	$	—	$	24,111
Disposal Services	2,325		400		890		—		3,615
Other Revenue	1,935		892		67		—		2,894
Total Service Revenue	17,833		7,122		5,665		—		30,620
Rental Revenue	2,734		37		367		—		3,138
Total Revenue	$	20,567	$	7,159	$	6,032	$	—	$	33,758

	Predecessor
	For the One Month Ended July 31, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	5,878	$	2,777	$	2,697	$	—	$	11,352
Disposal Services	980		308		311		—		1,599
Other Revenue	325		297		35		—		657
Total Service Revenue	7,183		3,382		3,043		—		13,608
Rental Revenue	1,319		42		153		—		1,514
Total Revenue	$	8,502	$	3,424	$	3,196	$	—	$	15,122

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The following tables present our revenues disaggregated by revenue source for each reportable segment for the nine months endedSeptember 30, 2018, two months ended September 30, 2017 and seven months ended July 31, 2017:

	Successor
	For the Nine Months Ended September 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	65,036	$	25,492	$	16,807	$	—	$	107,335
Disposal Services	13,387		3,061		3,551		—		19,999
Other Revenue	7,715		1,231		261		—		9,207
Total Service Revenue	86,138		29,784		20,619		—		136,541
Rental Revenue	11,196		182		354		—		11,732
Total Revenue	$	97,334	$	29,966	$	20,973	$	—	$	148,273

	Successor
	For the Two Months Ended September 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	13,573	$	5,830	$	4,708	$	—	$	24,111
Disposal Services	2,325		400		890		—		3,615
Other Revenue	1,935		892		67		—		2,894
Total Service Revenue	17,833		7,122		5,665		—		30,620
Rental Revenue	2,734		37		367		—		3,138
Total Revenue	$	20,567	$	7,159	$	6,032	$	—	$	33,758

	Predecessor
	For the Seven Months Ended July 31, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	38,844	$	17,118	$	15,764	$	—	$	71,726
Disposal Services	6,506		1,284		1,522		—		9,312
Other Revenue	2,975		2,240		311		—		5,526
Total Service Revenue	48,325		20,642		17,597		—		86,564
Rental Revenue	8,221		109		989		—		9,319
Total Revenue	$	56,546	$	20,751	$	18,586	$	—	$	95,883

Water Transfer Services

The majority of our revenues are from the removal and disposal of flowback and produced saltwater originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transport pipelines. Water transfer rates for trucking are generally based upon a fixed fee per barrel of disposal water, but in certain circumstances may be based upon an hourly rate. Revenue is

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recognized once the water has been transferred, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our disposal water pipeline are priced at a fixed fee per disposal barrel transferred, with revenues recognized over time from when the water is injected into our pipeline until the transfer is complete. Water transfer services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month.

Disposal Services

Revenues for disposal services are generated through fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Disposal rates are generally based on a fixed fee per barrel of disposal water, or on a per ton basis for landfill disposal, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time.

Other Revenue

Other revenue primarily includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil at a point in time once the goods are transferred.

Other revenue also historically included small-scale construction or maintenance projects, however we exited that business during the three months ended June 30, 2018. Under the new revenue standard, revenue for construction and maintenance projects, which generally spanned approximately two to three months, was recognized over time under the milestone method which is considered an output method. Since our construction contracts were short term in nature, the contractual milestone dates occurred close together over time such that there was no risk that we would not recognize revenue for goods or services transferred to the customer. All construction costs were expensed as incurred.

Rental Revenue

We generate rental revenue from the rental of various equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 840, Leases. When ASC 842, Leases, becomes effective on January 1, 2019, the Company will continue to recognize the revenues from rental equipment under this new standard as a lessor.

Practical Expedients

The new revenue standard requires the transaction price to exclude amounts collected on behalf of third parties. However, the new revenue standard also provides a practical expedient to allow entities to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority. Upon implementing the new revenue standard we adopted this practical expedient and have excluded sales and usage-based taxes from the transaction price, rather than making a jurisdiction-by-jurisdiction assessment.

Note 4 - Earnings Per Common Share

Net (loss) income per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period. For the three and nine months endedSeptember 30, 2018, and the two months ended September 30, 2017, no shares of common stock underlying stock options, restricted stock or warrants were included in the computation of diluted earnings per common share because the inclusion of such shares would be anti-dilutive based on the net losses reported for those periods.

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The following table presents the calculation of basic and diluted net (loss) income per common share, as well as the anti-dilutive stock-based awards that were excluded from the calculation of diluted loss per share for the periods presented:

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Numerator:
Net (loss) income	$	(7,117	)	$	(16,993	)	$	224,160
Denominator:
Weighted average shares—basic	11,696			11,696			150,951
Common stock equivalents	—			—			6,443
Weighted average shares—diluted	11,696			11,696			157,394
Earnings per common share:
Net (loss) income per basic common share	$	(0.61	)	$	(1.45	)	$	1.48
Net (loss) income per diluted common share	$	(0.61	)	$	(1.45	)	$	1.42
Anti-dilutive stock-based awards excluded:	1,210			828			576

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Numerator:
Net (loss) income	$	(50,460	)	$	(16,993	)	$	168,611
Denominator:
Weighted average shares—basic	11,696			11,696			150,940
Common stock equivalents	—			—			23,364
Weighted average shares—diluted	11,696			11,696			174,304
Earnings per common share:
Net (loss) income per basic common share	$	(4.31	)	$	(1.45	)	$	1.12
Net (loss) income per diluted common share	$	(4.31	)	$	(1.45	)	$	0.97
Anti-dilutive stock-based awards excluded:	1,227			828			593

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Note 5 - Intangible Assets

Intangible assets consist of the following:

	Successor
	September 30, 2018
	Gross Carrying Amount		Additions/(Disposals)			Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	(13	)	$	(152	)	$	429	5.5
Total intangible assets	$	594	$	(13	)	$	(152	)	$	429	5.5

	Successor
	December 31, 2017
	Gross Carrying Amount		Additions/(Disposals)		Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	—	$	(47	)	$	547	6.2
Total intangible assets	$	594	$	—	$	(47	)	$	547	6.2

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

Note 6 - Assets Held for Sale and Impairment

During the three months ended March 31, 2018, management approved a plan to sell certain assets located in the Southern division as a result of exiting the Eagle Ford Shale area. As a result, we began to actively market these assets, which we expect to sell within one year. See Note 11 for additional details on the exit of the Eagle Ford Shale area. In addition, during the three months ended March 31, 2018, management approved the sale of certain assets, primarily frac tanks, located in the Northeast division, that are expected to sell within one year. In accordance with applicable accounting guidance, the assets were recorded at the lower of net book value or fair value less costs to sell and reclassified to “Assets held for sale” on the condensed consolidated balance sheet during the three months ended March 31, 2018. Upon reclassification we ceased to recognize depreciation expense on the assets. As the fair value of the assets reclassified as held for sale was lower than its net book value, we recorded an impairment charge of $4.1 million during the three months ended March 31, 2018. Of the $4.1 million recorded, $4.0 million related to the Southern division for the Eagle Ford exit and $0.1 million related to the Northeast division, and is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations.

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division to “Impairment of long-lived assets” on our condensed consolidated statements of operations related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure.

During the three months ended September 30, 2018, we recorded an impairment charge of$0.1 millionin the Southern division for the further write-down of buildings and land held for sale as a result of exiting the Eagle Ford Shale area due to updated market pricing. The$0.1 millionis included in“Impairment of long-lived assets” on our condensed consolidated statements of operations.

During the two months ended September 30, 2017, management approved plans to sell certain underutilized assets located in the Rocky Mountain and Southern divisions. As the fair value of the assets reclassified as held for sale during the quarter was lower than its net book value, an impairment charge of $2.4 million was recognized during the two months ended September 30, 2017, and is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations. Of the $2.4 million recorded during the two months ended September 30, 2017, $2.2 million related to the Rocky Mountain division and $0.2 million related to the Southern division.

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Note 7 - Fair Value Measurements

Measurements

Fair value represents an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Successor
	September 30, 2018		December 31, 2017
Derivative warrant liability	$	154	$	477
Contingent consideration	500		500

Derivative Warrant Liability

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. Additionally, on the Effective Date, pursuant to the Plan we issued to the holders of our pre-Effective Date9.875%Senior Notes due 2018 (the “2018 Notes”) and holders of certain claims relating to the rejection of executory contracts and unexpired leases118,137warrants with an exercise price of$39.82and a termexpiring seven years from the Effective Date. Each warrant is exercisable for one share of our common stock, par value$0.01. The warrants issued by the Successor Company were determined to be derivative liabilities.

Our derivative warrant liability is adjusted to reflect the estimated fair value at each quarter end, with any decrease or increase in the estimated fair value recorded in “Other (income) expense, net” in the condensed consolidated statements of operations. We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed using a Monte Carlo simulation model. The key inputs in determining our derivative warrant liability typically include our stock price, the volatility of our stock price, and the risk free interest rate. Future changes in these factors could have a significant impact on the computed fair value of the derivative warrant liability. As such, we expect future changes in the fair value of the warrants could vary significantly from quarter to quarter.

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the nine months endedSeptember 30, 2018, and the five months ended December 31, 2017.

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(323		)	(240		)
Balance at end of period	$	154		$	477

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Contingent Consideration

We are liable for contingent consideration payments in connection with an acquisition. The fair value of the contingent consideration obligation was determined using a probability-weighted income approach at the acquisition date and is revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the performance measurements upon which the obligation is based.

On June 28, 2017, certain of the Nuverra Parties filed a motion with the Bankruptcy Court seeking authorization to resolve unsecured claims related to the $8.5 million contingent consideration from the Ideal Oilfield Disposal LLC acquisition (the “Ideal Settlement”). On July 11, 2017, the Bankruptcy Court entered an order authorizing the Ideal Settlement. Pursuant to the approved settlement terms, the $8.5 million contingent claim was replaced with an obligation on the part of the applicable Nuverra Party to transfer $0.5 million to the counterparties to the Ideal Settlement upon emergence from chapter 11, and $0.5 million when the Ideal Settlement counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit. The $0.5 million due upon emergence from chapter 11 was paid during the five months ended December 31, 2017. The remaining $0.5 million due when the counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit has been classified as current, as these permits and certificates are expected to be received within one year.

Changes to the fair value of contingent consideration are recorded as “Other (income) expense, net” in the condensed consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs. Changes to contingent consideration obligations during the nine months endedSeptember 30, 2018, and five months ended December 31, 2017, were as follows:

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	500		$	1,000
Cash payments	—			(500		)
Balance at end of period	500			500
Less: current portion	(500		)	(500		)
Long-term contingent consideration	$	—		$	—

Note 8 - Accrued Liabilities

Accrued liabilities consisted of the following at September 30, 2018 and December 31, 2017:

	Successor
	September 30, 2018		December 31, 2017
Accrued payroll and employee benefits	$	5,829	$	3,304
Accrued insurance	2,573		2,701
Accrued legal	718		1,749
Accrued taxes	2,228		2,362
Accrued interest	327		161
Accrued operating costs	3,719		2,663
Accrued other	330		999
Total accrued liabilities	$	15,724	$	13,939

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Note 9 - Debt

Debt consisted of the following at September 30, 2018 and December 31, 2017:

			Successor
			September 30, 2018					December 31, 2017
	Interest Rate	Maturity Date	Fair Value of Debt (d)		Carrying Value of Debt			Carrying Value of Debt
Successor Revolving Facility (a)	7.36%	Aug. 2020	$	—	$	—		$	—
Successor First Lien Term Loan (b)	9.36%	Aug. 2020	12,679		12,679			14,285
Successor Second Lien Term Loan (b)	11.00%	Feb 2021	20,592		20,592			21,000
Vehicle financings (c)	5.31%	Various	2,343		2,343			3,764
Total debt			$	35,614	35,614			39,049
Less: current portion of long-term debt					(4,526		)	(5,525		)
Long-term debt					$	31,088		$	33,524

_____________________

(a) The interest rate presented represents the interest rate on the $30.0 million Successor Revolving Facility as of September 30, 2018.

(b) Interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. Interest on the Successor Second Lien Term Loan accrues at both an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018, and on or after February 7, 2018, at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 5.31%, which mature in varying installments between 2018 and 2020.

(d) Our Successor Revolving Facility, Successor First Lien Term Loan, Successor Second Lien Term Loan, and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

For a discussion of material changes and developments in our debt and its principal terms, see our discussion below.

Indebtedness

As of September 30, 2018, we had $35.6 million of indebtedness outstanding, consisting of $12.7 million under the Successor First Lien Term Loan (as defined herein), $20.6 million under the Successor Second Lien Term Loan (as defined herein), and $2.3 million of capital leases for vehicle financings.

See the “Bridge Term Loan Credit Agreement, Guaranty Agreement, and Subordination Agreement” discussion in Note 18 for details on the Bridge Term Loan Credit Agreement.

First Lien Credit Agreement

On the Effective Date, pursuant to the Plan, the Company entered into a $45.0 million First Lien Credit Agreement (the “Credit Agreement”) by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the Credit Agreement, the Credit Agreement Lenders agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Successor Revolving Facility”) and a $15.0 million senior secured term loan facility (the “Successor First Lien Term Loan”) (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based lending facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses, and other general corporate purposes. The Credit Agreement also contains an accordion feature that provides for an increase in availability of up to an additional $20.0 million, subject to the satisfaction of certain terms and conditions contained in the Credit Agreement.

The Successor Revolving Facility and the Successor First Lien Term Loan mature on August 7, 2020, at which time the Company must repay the outstanding principal amount of the Successor Revolving Facility and the Successor First Lien Term Loan, together with interest accrued and unpaid thereon. The Successor Revolving Facility may be repaid and, subject to the

21

terms and conditions of the Credit Agreement, reborrowed at any time during the term of the Credit Agreement. The principal amount of the Successor First Lien Term Loan shall be repaid in installments of $178.6 thousand beginning on September 1, 2017 and the first day of each calendar month thereafter prior to maturity. Interest on the Successor Revolving Facility accrues at an annual rate equal to the LIBOR Rate (as defined in the Credit Agreement) plus 5.25%, and interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%; however, if there is an Event of Default (as defined in the Credit Agreement), the Credit Agreement Agent, in its sole discretion, may increase the applicable interest rate at a per annum rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Credit Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. As of September 30, 2018, we were in compliance with all covenants.

See the “Amendment to First Lien Credit Agreement and Joinder to First Lien Guaranty and Security Agreement” discussion in Note 18 for details on the First Amendment to the Credit Agreement.

Second Lien Term Loan Credit Agreement

On the Effective Date, pursuant to the Plan, the Company also entered into a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan Agreement”) by and among the lenders party thereto (the “Second Lien Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent (the “Second Lien Term Loan Agent”) and the Company. Pursuant to the Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to extend to the Company a $26.8 million second lien term loan facility (the “Successor Second Lien Term Loan”), of which $21.1 million was advanced on the Effective Date and up to an additional $5.7 million (“Delayed Draw Term Loan”) is available at the request of the Company after the closing date subject to the satisfaction of certain terms and conditions specified in the Second Lien Term Loan Agreement. The Second Lien Term Loan Lenders extended the Successor Second Lien Term Loan, among other things, (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based revolving facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses and other general corporate purposes.

The Successor Second Lien Term Loan matures on February 7, 2021, at which time the Company must repay all outstanding obligations under the Successor Second Lien Term Loan. The principal amount of the Successor Second Lien Term Loan shall be repaid in installments of $263.2 thousand beginning on October 1, 2017, and the first day of each fiscal quarter thereafter prior to maturity, with such amount to be proportionally increased as the result of the incurrence of a Delayed Draw Term Loan. Interest on the Successor Second Lien Term Loan accrues at an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018 (or such later date as the Company may select in accordance with the terms of the Second Lien Term Loan Agreement) and, on or after February 7, 2018 (or such later date) at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. However, upon the occurrence and during the continuation of an Event of Default (as defined in the Second Lien Term Loan Agreement) due to a voluntary or involuntary bankruptcy filing, automatically, or any other Event of Default, at the election of the Second Lien Term Loan Agent, the Successor Second Lien Term Loan and all obligations thereunder shall bear interest at an annual rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Second Lien Term Loan Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for term loans of this type. As of September 30, 2018, we were in compliance with all covenants.

See the “Amendment to Second Lien Credit Agreement and Joinder to Second Lien Guaranty and Security Agreement” discussion in Note 18 for details on the First Amendment to the Second Lien Term Loan Agreement.

Note 10 - Derivative Warrants

Predecessor Warrants

During the year ended December 31, 2016, we issued 26.4 million warrants, with 17.5 million warrants for the exchange of the 2018 Notes for new 12.5%/10.0% Senior Secured Second Lien Notes due 2021 (the “2021 Notes”), 0.1 million warrants for the exchange of the 2018 Notes for common stock, and 8.8 million warrants to the lenders under the Predecessor Term Loan. All warrants were issued with an exercise price of $0.01 and had a term of ten years.

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Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. The following table shows the Predecessor warrant activity for the seven months ended July 31, 2017:

	Predecessor
	Seven Months Ended
	July 31, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(16	)
Canceled due to emergence from chapter 11	(25,267	)
Outstanding at the end of the period	—

Successor Warrants

Pursuant to the Plan, on the Effective Date, we issued to the holders of the 2018 Notes and holders of certain claims relating to the rejection of executory contracts and unexpired leases warrants to purchase an aggregate of118,137shares of common stock, par value$0.01, at an exercise price of$39.82per share and with a termexpiring seven years from the Effective Date.

The following table shows the Successor warrant activity for the nine months endedSeptember 30, 2018:

	Successor
	Nine Months Ended
	September 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

Fair Value of Warrants

We account for warrants in accordance with the accounting guidance for derivatives, which sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the shareholders’ equity section of the entity’s balance sheet. We determined that the Predecessor warrants were ineligible for equity classification due to the anti-dilution provisions in the contract and were recorded as derivative liabilities at fair value in the condensed consolidated balance sheet. The Successor warrants are also ineligible for equity classification as the warrants are not indexed to our common stock and are recorded as derivative liabilities at fair value in the condensed consolidated balance sheets. The Successor warrants are classified as a current liability in the condensed consolidated balance sheets as they could be exercised by the holders at any time.

As discussed previously in Note 7, the fair value of the derivative warrant liability is estimated using a Monte Carlo simulation model on the date of issue and is re-measured at each quarter end until expiration or exercise of the underlying warrants with the resulting fair value adjustment recorded in “Other (income) expense, net” in the condensed consolidated statements of operations.

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The fair value of the derivative warrant liability as of September 30, 2018 and December 31, 2017 was estimated using the following model inputs:

	Successor
	As of September 30,			As of December 31,
	2018			2017
Exercise price	$	39.82		$	39.82
Closing stock price	$	11.12		$	18.18
Risk free rate	2.93		%	2.29		%
Expected volatility	42.31		%	40.59		%

Note 11 - Restructuring and Exit Costs

Eagle Ford Shale Area

On March 1, 2018, the Board of Directors (the “Board”) determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area in order to focus on other opportunities. The Board considered a number of factors in making this determination, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our operations, and recommendations from management. We substantially exited the Eagle Ford Shale area as of June 30, 2018. We continue to incur minimal related costs while the remaining assets previously used in the operation of our business in that basin are divested.

The total costs of the exit recorded during the three and nine months endedSeptember 30, 2018 were $49.0 thousand and $1.1 million, respectively, and are reflected in “Other, net” in the condensed consolidated statements of operations. Such costs consisted of the following and all related to the Southern operating segment:

	Successor
	Three Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2018
Severance and termination benefits	$	(11	)	$	225
Contract termination costs and exit costs	60			892
Total restructuring and exit costs for Eagle Ford	$	49		$	1,117

The remaining liability for the Eagle Ford exit, shown below, totaled approximately $50.0 thousand as of September 30, 2018 and is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through September 30, 2018 is as follows:

	Employee Termination Costs (a)			Lease Exit Costs (b)			Other Exit Costs (c)			Total
Balance accrued at beginning of period - Successor	$	—		$	—		$	—		$	—
Restructuring and exit-related costs	225			64			828			1,117
Cash payments	(225		)	(41		)	(801		)	(1,067		)
Balance accrued at end of period - Successor	$	—		$	23		$	27		$	50

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to the Company.

(c) Other exit costs include costs related to the movement of vehicles, tanks and rental fleet in connection with the exit from the Eagle Ford Shale area.

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Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business

In March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian shale area and the Tuscaloosa Marine Shale logistics business. Additionally, we closed certain yards within the Northeast and Southern divisions and transferred many of the related assets to our other operating locations. The total costs of the restructuring recognized in 2015 were approximately $7.1 million, and included severance and termination benefits, lease exit costs, other exits costs related to the movement of vehicles and rental fleet, and an asset impairment charge.

The remaining liability for the restructuring and exit costs incurred represents lease exit costs under non-cancellable operating leases and totaled approximately $45.0 thousand as of September 30, 2018, which is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through September 30, 2018 is as follows:

	Lease Exit Costs
Balance accrued at beginning of period - Successor	$	82
Cash payments	(37		)
Balance accrued at end of period - Successor	$	45

Note 12 - Income Taxes

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Current income tax expense	$	(58	)	$	—		$	(33	)
Deferred income tax (expense) benefit	(11		)	(34		)	337
Total income tax (expense) benefit	$	(69	)	$	(34	)	$	304

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Current income tax expense	$	(58	)	$	—		$	(15	)
Deferred income tax (expense) benefit	(11		)	(34		)	337
Total income tax (expense) benefit	$	(69	)	$	(34	)	$	322

The effective income tax rate for the three and nine months endedSeptember 30, 2018 was (1.0)% and (0.1)%, which differs from the federal statutory benefit rate of 21.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

The effective income tax rate for the two months ended September 30, 2017, was (0.2)%, which differed from the federal statutory rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses. The effective income tax rate for the one and seven months ended July 31, 2017, was (0.1)% and (0.2)%, respectively, which differed from the federal statutory benefit rate of 35.0%. The difference was primarily due to the change in the deferred tax liability related to certain long-lived assets resulting from the application of fresh start accounting.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant changes in U.S. tax law including a reduction in the corporate statutory income tax rate from 35% to 21%, changes to net operating loss (“NOL”) carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. As a result of the enacted law, we were required to revalue deferred tax assets and liabilities as of December 22, 2017 using the new statutory rate and have reflected this revaluation in our effective tax rate reconciliation. As we are subject to a valuation allowance, there was no material impact to our tax provision at either September 30, 2018 or December 31, 2017.

We have significant deferred tax assets, consisting primarily of NOLs, which have a limited life, generally expiring between the years 2031 and 2038, and capital losses, which have a five year carryforward expiring in 2020. We regularly assess the positive and negative evidence available to estimate if sufficient future taxable income will be generated to use the existing deferred tax

25

assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued ordinary losses, at September 30, 2018 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of our deferred tax assets that is not offset by deferred tax liabilities. We expect our effective income tax rate to be near zero for the remainder of 2018.

Note 13 - Share-based Compensation

Successor Share-based Compensation

The Second Amended and Restated Employment Agreement of Mr. Mark D. Johnsrud, our former Chairman and Chief Executive Officer, which was assumed by the Company on the Effective Date, provided for the issuance to Mr. Johnsrud of two tranches of options to purchase (i) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $475.0 million and (ii) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $525.0 million. Each tranche of options vests in substantially equal installments on the first three anniversaries following the Effective Date. Pursuant to Mr. Johnsrud’s Second Amended and Restated Employment Agreement and the Plan, the grant of stock options to Mr. Johnsrud was effective as of the Effective Date. On February 23, 2018, following the approval of the form of option agreement by the Compensation and Nominating Committee of the Board (the “Compensation Committee”), the Company and Mr. Johnsrud entered into a Notice of Grant of CEO Stock Options and Stock Option Award Agreement (the “Award Agreement”) to provide for the terms and conditions of Mr. Johnsrud’s stock option grant. Pursuant to the Award Agreement, Mr. Johnsrud was awarded 354,411 options to purchase common stock, with an exercise price of $37.03 per share, in Tranche 1, and 354,411 options to purchase common stock, with an exercise price of $41.31 per share, in Tranche 2. The stock options in Tranche 1 and Tranche 2 were scheduled to vest in three equal installments on the first three anniversaries of the Effective Date.

Pursuant to the requirements of the Plan, on February 22, 2018, the Board approved the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan (the “Incentive Plan”). The Incentive Plan is intended to provide for the grant of equity-based awards to designated members of the Company’s management and employees. Pursuant to the terms of the Plan, the Incentive Plan became effective on the Effective Date. The maximum number of shares of the Company’s common stock that is available for the issuance of awards under the Incentive Plan is 1,772,058.

On February 22, 2018, the Compensation Committee authorized the grant of performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“TRSUs”) under the Incentive Plan to Mr. Johnsrud, Edward A. Lang, the Company’s Executive Vice President and Chief Financial Officer, and Joseph M. Crabb, the Company’s Executive Vice President and Chief Legal Officer. On or after the applicable vesting date, the PRSUs and TRSUs will be settled for shares of common stock if all applicable conditions have been met. Mr. Johnsrud received 531,618 PRSUs, which initially were scheduled to vest in equal installments on the first two anniversaries of the Effective Date, but which partially vested on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 PRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020. Vesting of the PRSUs is subject to the achievement of pre-established performance targets during the applicable performance measurement periods. Mr. Johnsrud received 531,618 TRSUs, which were scheduled to vest in three equal installments on the date of grant, which was February 23, 2018, and the first two anniversaries of the Effective Date, but which vested in full on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 TRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020.

Further, the Compensation Committee on February 22, 2018 adopted the 2018 Restricted Stock Plan for Directors (the “Restricted Stock Plan”), which is subject to ratification by the Company’s shareholders at the Company’s 2018 Annual Meeting. The Restricted Stock Plan provides for the grant of restricted stock to the non-employee directors of the Company. The Restricted Stock Plan limits the shares that may be issued thereunder to 100,000 shares of common stock.

In coordination with the adoption of the Restricted Stock Plan, the Compensation Committee also authorized award grants of restricted stock to the current non-employee directors of the Company, which were granted on March 16, 2018 subject to ratification of the Restricted Stock Plan by the Company’s shareholders at the Company’s 2018 annual meeting. Each non-employee director was granted 4,688 shares of restricted stock for service during part of fiscal year 2017 and for fiscal 2018, all of which will fully vest on the first anniversary of the grant date.

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On May 29, 2018, the Compensation Committee authorized the grant of 5,889 shares of restricted stock to the Company’s interim Chief Executive Officer, Mr. Charles K. Thompson. Per the terms of the grant agreement, the shares immediately vested in full on the date of grant.

The total grants awarded during the three and nine months endedSeptember 30, 2018, and the two months ended September 30, 2017 are presented in the table below:

	Successor
	Three Months Ended	Nine Months Ended	Two Months Ended
	September 30, 2018	September 30, 2018	September 30, 2017
Stock option grants	—	—	709
Restricted stock grants	—	20	—
Restricted stock unit grants	—	1,311	—
Total grants in the Successor period	—	1,331	709

On March 2, 2018, the Company announced that Mr. Johnsrud was leaving the Company, effective as of March 2, 2018 (the “Separation Date”). Pursuant to a Separation Agreement and Mutual Release entered into between Mr. Johnsrud and the Company on the Separation Date, Mr. Johnsrud vested in the following: (a) 354,412 unvested TRSUs that were granted on February 22, 2018; and (b) 708,822 unvested stock options that were granted on February 23, 2018, which will remain exercisable through the first anniversary of the Separation Date. Vested restricted stock units subject to time based vesting will be settled in accordance with the terms and conditions set forth in the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan and any applicable award agreement(s). Additionally, Mr. Johnsrud continued to hold 88,603 PRSUs that were granted on February 22, 2018, with a performance period that began on January 1, 2018 and ended on June 30, 2018. As the pre-established performance target was not met as of June 30, 2018, Mr. Johnsrud’s 88,603 PRSUs were canceled during the three months ended June 30, 2018. All other unvested equity awards granted to Mr. Johnsrud under the Incentive Plan were canceled as of the Separation Date.

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and nine months endedSeptember 30, 2018 and the two months ended September 30, 2017 was as follows:

	Successor
	Three Months Ended		Nine Months Ended			Two Months Ended
	September 30, 2018		September 30, 2018			September 30, 2017
Stock options	$	—	$	(788	)	$	181
Restricted stock	76		236			—
Restricted stock units	22		12,044			—
Total expense	$	98	$	11,492		$	181

Predecessor Share-based Compensation

Prior to the Effective Date, we granted stock options, stock appreciation rights, restricted common stock and restricted stock units, performance shares and units, other share-based awards and cash-based awards to our employees, directors, consultants and advisors pursuant to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (as amended, the “2009 Plan”). On the Effective Date pursuant to the Plan, all of the pre-Effective Date share-based compensation awards issued and outstanding under the 2009 Plan were canceled.

There were no grants awarded during the one and seven months ended July 31, 2017 under the 2009 Plan. The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the one and seven months ended July 31, 2017 was as follows:

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	Predecessor
	One Month Ended		Seven Months Ended
	July 31, 2017		July 31, 2017
Stock options	$	12	$	109
Restricted stock	22		153
Restricted stock units	2		195
Total expense	$	36	$	457

Note 14 - Legal Matters

Environmental Liabilities

We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law.

We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheet at September 30, 2018 and December 31, 2017 did not include any accruals for environmental matters.

Litigation

There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in pending lawsuits are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Chapter 11 Proceedings

On May 1, 2017, the Nuverra Parties filed voluntary petitions under chapter 11 of the Bankruptcy Code in the Bankruptcy Court to pursue the Plan. On July 25, 2017, the Bankruptcy Court entered the Confirmation Order confirming the Plan. The Plan became effective on the Effective Date, when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Confirmation Order Appeal

On July 26, 2017, David Hargreaves, an individual holder of 2018 Notes, appealed the Confirmation Order to the District Court of the District of Delaware (the “District Court”) and filed a motion for a stay pending appeal from the District Court.  Although the motion for a stay pending appeal was denied, the appeal remained pending and the District Court heard oral arguments on May 14, 2018.  On August 21, 2018 the District Court issued an order dismissing the appeal.  Hargreaves subsequently filed a

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Notice of Appeal to the United States Court of Appeals for the Third Circuit on September 19, 2018, and as a result the appeal remains pending.  The ultimate outcome of this appeal and its effects on the Confirmation Order are impossible to predict with certainty. No assurance can be given that the final disposition of this appeal will not affect the validity, enforceability or finality of the Confirmation Order.

Note 15 - Related Party and Affiliated Company Transactions

There have been no significant changes to the other related party transactions as described in Note 21 to the consolidated financial statements in our 2017 Annual Report on Form 10-K other than described in Note 18.

Note 16 - Segments

We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our shale solutions business is comprised of three operating divisions, which we consider to be operating and reportable segments of our operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville Shale area and the Eagle Ford Shale area (which we substantially exited during the six months ended June 30, 2018) and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets.

Financial information for our reportable segments related to operations is presented below.

	Rocky Mountain			Northeast			Southern (b)			Corporate/ Other			Total
Three months ended September 30, 2018 - Successor
Revenue	$	33,399		$	11,247		$	5,010		$	—		$	49,656
Direct operating expenses	25,757			10,372			3,624			—			39,753
General and administrative expenses	1,605			442			106			3,696			5,849
Depreciation and amortization	5,698			1,976			2,331			13			10,018
Operating income (loss)	339			(1,543		)	(1,200		)	(3,709		)	(6,113		)
Income (loss) before income taxes	372			(1,628		)	(1,240		)	(4,552		)	(7,048		)
Nine months ended September 30, 2018 - Successor
Revenue	97,334			29,966			20,973			—			148,273
Direct operating expenses	77,702			26,696			16,051			—			120,449
General and administrative expenses	4,763			1,722			935			23,763			31,183
Depreciation and amortization	17,910			9,565			9,205			51			36,731
Operating loss	(3,041		)	(8,086		)	(10,497		)	(24,146		)	(45,770		)
Loss before income taxes	(3,033		)	(8,307		)	(10,646		)	(28,405		)	(50,391		)
As of September 30, 2018 - Successor
Total assets (a)	118,791			46,713			86,877			17,481			269,862
Total assets held for sale	—			116			2,278			778			3,172
Two months ended September 30, 2017 - Successor
Revenue	20,567			7,159			6,032			—			33,758
Direct operating expenses	15,779			5,962			4,369			—			26,110
General and administrative expenses	1,278			460			829			2,361			4,928
Depreciation and amortization	8,020			4,834			4,421			46			17,321
Operating loss	(6,676		)	(4,097		)	(3,825		)	(2,407		)	(17,005		)
Loss before income taxes	(7,190		)	(4,027		)	(3,744		)	(1,998		)	(16,959		)

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	Rocky Mountain		Northeast		Southern (b)		Corporate/ Other		Total
One month ended July 31, 2017 - Predecessor
Revenue	8,502		3,424		3,196		—		15,122
Direct operating expenses	6,434		3,329		2,133		—		11,896
General and administrative expenses	425		331		3		567		1,326
Depreciation and amortization	2,376		657		955		15		4,003
Operating (loss) income	(733	)	(893	)	105		(582	)	(2,103	)
(Loss) income before income taxes	(4,944	)	27,121		22,583		179,096		223,856
Seven months ended July 31, 2017 - Predecessor
Revenue	56,546		20,751		18,586		—		95,883
Direct operating expenses	46,837		21,117		13,056		—		81,010
General and administrative expenses	3,877		1,917		1,684		15,074		22,552
Depreciation and amortization	15,964		5,352		7,542		123		28,981
Operating loss	(10,132	)	(7,635	)	(3,696	)	(15,197	)	(36,660	)
(Loss) income before income taxes	(14,854	)	20,194		18,650		144,299		168,289
As of December 31, 2017 - Successor
Total assets (a)	137,213		54,218		111,457		8,434		311,322
Total assets held for sale	2,765		—		—		—		2,765

_____________________

(a) Total assets exclude intercompany receivables eliminated in consolidation.

(b) The Southern division includes the Eagle Ford Shale area which we substantially exited during the six months ended June 30, 2018. See Note 11 for further discussion.

Note 17 - Subsidiary Guarantors

The 2018 Notes and the 2021 Notes of the Predecessor Company were registered securities. As a result of these registered securities, we were required to present the following condensed consolidating financial information for the Predecessor periods pursuant to Rule 3-10 of SEC Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. Our Successor Revolving Facility, Successor First Lien Term Loan, and Successor Second Lien Term Loan are not registered securities. Therefore, the presentation of condensed consolidating financial information is not required for the Successor period.

The following tables present consolidating financial information for Nuverra Environmental Solutions, Inc. (“Parent”) and its 100% wholly owned subsidiaries (the “Guarantor Subsidiaries”) for the one and seven months ended July 31, 2017.

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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

ONE MONTH ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	15,122		$	—		$	15,122
Costs and expenses:
Direct operating expenses	—			11,896			—			11,896
General and administrative expenses	567			759			—			1,326
Depreciation and amortization	15			3,988			—			4,003
Total costs and expenses	582			16,643			—			17,225
Operating loss	(582		)	(1,521		)	—			(2,103		)
Interest expense, net	(3,207		)	(39		)	—			(3,246		)
Other income, net	—			7			—			7
Income (loss) from equity investments	122,214			—			(122,214		)	—
Reorganization items, net	182,885			46,313			—			229,198
Income (loss) before income taxes	301,310			44,760			(122,214		)	223,856
Income tax (expense) benefit	(77,150		)	77,454			—			304
Net income (loss)	$	224,160		$	122,214		$	(122,214	)	$	224,160

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SEVEN MONTHS ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	95,883		$	—		$	95,883
Costs and expenses:
Direct operating expenses	—			81,010			—			81,010
General and administrative expenses	15,074			7,478			—			22,552
Depreciation and amortization	123			28,858			—			28,981
Total costs and expenses	15,197			117,346			—			132,543
Operating loss	(15,197		)	(21,463		)	—			(36,660		)
Interest expense, net	(22,333		)	(459		)	—			(22,792		)
Other income, net	4,125			136			—			4,261
Income (loss) from equity investments	101,462			(14		)	(101,462		)	(14		)
Reorganization items, net	177,704			45,790			—			223,494
Income (loss) before income taxes	245,761			23,990			(101,462		)	168,289
Income tax (expense) benefit	(77,150		)	77,472			—			322
Net income (loss)	$	168,611		$	101,462		$	(101,462	)	$	168,611

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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SEVEN MONTHS ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	(18,672	)	$	(277	)	$	(18,949	)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	—			3,083			3,083
Purchase of property, plant and equipment	—			(3,149		)	(3,149		)
Net cash used in investing activities	—			(66		)	(66		)
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	106,785			—			106,785
Payments on Predecessor revolving credit facility	(129,964		)	—			(129,964		)
Proceeds from Predecessor term loan	15,700			—			15,700
Proceeds from debtor in possession term loan	6,875			—			6,875
Proceeds from Successor First and Second Lien Term Loans	36,053			—			36,053
Payments for debt issuance costs	(1,053		)	—			(1,053		)
Payments on vehicle financing and other financing activities	—			(2,797		)	(2,797		)
Net cash provided by (used in) financing activities	34,396			(2,797		)	31,599
Change in cash, cash equivalents and restricted cash	15,724			(3,140		)	12,584
Cash, cash equivalents and restricted cash - beginning of period	1,388			1,026			2,414
Cash, cash equivalents and restricted cash - end of period	$	17,112		$	(2,114	)	$	14,998

Note 18 - Subsequent Events

Acquisition of Clearwater

On October 5, 2018, we completed the acquisition of Clearwater Three, LLC, Clearwater Five, LLC, and Clearwater Solutions, LLC (collectively, “Clearwater”) for an initial purchase price of $41.9 million, subject to customary working capital adjustments (the “Acquisition”). Clearwater is a supplier of waste water disposal services used by the oil and gas industry in the Marcellus and Utica Shale areas. Clearwater has three salt water disposal wells in service, all of which are located in Ohio. This acquisition expands our service offerings in the Marcellus and Utica Shale areas in our Northeast division.

Consideration consisted of $41.9 million in cash which was funded primarily by a $32.5 million bridge loan that will be repaid with proceeds from a planned offering to shareholders of common stock purchase rights. In addition, the Credit Agreement Lenders provided us with an additional term loan under the Credit Agreement in the amount of $10.0 million which was used to finance a portion of the Acquisition.

In connection with the Acquisition, we incurred transaction costs of $0.4 million during the three and nine months ended September 30, 2018, which are included in general and administrative costs in the accompanying condensed consolidated statements of operations.

Under the acquisition method of accounting, the total purchase price was allocated to the identifiable assets acquired and the liabilities assumed based on our preliminary valuation estimates of the fair values as of the acquisition date. As the acquisition accounting allocation is preliminary and subject to adjustments for the final valuation and tax analysis, this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, and the determination of any residual amount that will be allocated to goodwill.

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The preliminary allocation of the purchase price at October 5, 2018 is summarized as follows:

Accounts receivable	$	1,897
Intangible assets	799
Property, plant and equipment	37,396
Goodwill	2,382
Accounts payable and accrued expenses	(574		)
Total	$	41,900

The preliminary purchase price allocation requires subjective estimates that, if incorrectly estimated, could be material to our condensed consolidated financial statements including the amount of depreciation and amortization expense. The fair value of the tangible assets, which are primarily comprised of the three salt water disposal wells, was estimated using the discounted cash flow method, a form of the income approach. This method estimates the fair value of the assets based upon the present value of the expected cash flows. Estimates that impact the measurement of the tangible assets using the discounted cash flow method are the discount rate and the timing and amount of cash flows. The intangible assets acquired, which primarily consists of the trade name, were valued using the relief from royalty method. The value of the trade name encompasses all items necessary to generate revenue utilizing the trade name. Estimates that impact the measurement of the intangible assets acquired are net sales projections, and the discount and royalty rates used.

Bridge Term Loan Credit Agreement, Guaranty Agreement, and Subordination Agreement

In connection with the Acquisition, on October 5, 2018, we entered into a Bridge Term Loan Credit Agreement (the “Bridge Term Loan Credit Agreement”) with the lenders party thereto (the “Bridge Term Loan Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent (the “Bridge Term Loan Agent”). The Bridge Term Loan Lenders are our two largest shareholders that, in the aggregate, hold approximately 90% of our stock. Pursuant to the Bridge Term Loan Credit Agreement, the Bridge Term Loan Lenders provided a term loan to us in the aggregate amount of $32.5 million, of which $22.5 million was used to finance the Acquisition and the remaining $10.0 million was used to pay down certain amounts outstanding under the Successor Second Lien Term Loan. The Bridge Term Loan Agreement matures on April 5, 2019 and has an interest rate of 11.0% per annum, payable in cash, in arrears, on the first day of each month. Under the terms of the Bridge Term Loan Credit Agreement, the outstanding amounts may be accelerated upon the occurrence of an Event of Default (as defined in the Bridge Term Loan Credit Agreement), including as a result of a payment default under the Successor First Lien Term Loan or Successor Second Lien Term Loan after expiration of a ten day cure period or a default resulting in acceleration of the obligations due under the Successor First Lien Term Loan or Successor Second Lien Term Loan.

The Bridge Term Loan Credit Agreement requires us to use our reasonable best efforts to effectuate and close the Rights Offering (as defined below) as soon as reasonably practicable following October 5, 2018. Concurrently with the completion of the Rights Offering, we are required to prepay all outstanding amounts under the Bridge Term Loan Credit Agreement in cash in an amount equal to the net cash proceeds received from the Rights Offering.

We also have the option to prepay principal amounts outstanding under the Bridge Term Loan Credit Agreement at any time without premium or penalty. Except upon the completion of the Rights Offering or in the event that an insolvency proceeding is pending against us, all principal payments (whether at maturity or otherwise) are required to be tendered in the form of common stock of the Company, with the value of such common stock determined based on its volume weighted average price during the 20-day period preceding the announcement of the Acquisition.

Amendment to First Lien Credit Agreement and Joinder to First Lien Guaranty and Security Agreement

On October 5, 2018, in connection with the Acquisition, we entered into a First Amendment to the Credit Agreement (the “First Amendment to the Credit Agreement”) with the Credit Agreement Lenders and the Credit Agreement Agent, which amends the Credit Agreement. Pursuant to the First Amendment to the Credit Agreement, the Credit Agreement Lenders provided us with an additional term loan under the Credit Agreement in the amount of $10.0 million, which was used to finance a portion of the Acquisition. The First Amendment to the Credit Agreement also amended the Credit Agreement to extend the maturity date from August 7, 2020 to February 7, 2021, in addition to allowing for the Acquisition and providing us with additional flexibility under the Credit Agreement, including certain availability, mandatory prepayment and financial reporting provisions thereunder.

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On October 5, 2018, in connection with the First Amendment to the Credit Agreement, Nuverra Ohio Disposal LLC and Clearwater (collectively, the “New Grantors”) entered into a Joinder to the First Lien Guaranty and Security Agreement, pursuant to which the New Grantors agreed to become party to that First Lien Guaranty and Security Agreement by and among the Company, the other grantors party thereto, and the Credit Agreement Agent.

Amendment to Second Lien Credit Agreement and Joinder to the Second Lien Guaranty and Security Agreement

On October 5, 2018, in connection with the Acquisition, we entered into a First Amendment to the Second Lien Term Loan Agreement (the “First Amendment to the Second Lien Term Loan Agreement”) with the Second Lien Term Loan Lenders and the Second Lien Term Loan Agent, which amends the Second Lien Term Loan Agreement. Pursuant to the First Amendment to Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to certain conforming amendments to the Credit Agreement to allow for the funding of the additional term loan in the amount of $10.0 million under the First Amendment to the Credit Agreement and the term loans pursuant to the Bridge Term Loan Credit Agreement. The First Amendment to the Second Lien Term Loan Agreement also extended the maturity date from February 7, 2021 to October 7, 2021.

On October 5, 2018, in connection with the First Amendment to Second Lien Term Loan Agreement, the New Grantors entered into the Second Lien Guaranty and Security Agreement Joinder, pursuant to which the New Grantors agreed to become party to that Second Lien Guaranty and Security Agreement by and among the Company, the other grantors party thereto, and the Second Lien Agent.

First Amendment to Intercreditor Agreement and Joinder to Intercompany Subordination Agreement

On October 5, 2018, in connection with the First Amendment to the Credit Agreement, we acknowledged the terms and conditions under a First Amendment to the Intercreditor Agreement, dated October 5, 2018, by and between the Credit Agreement Agent and the Second Lien Term Loan Agent, which amends the Subordination and Intercreditor Agreement, dated as of August 7, 2017, by and between the Credit Agreement Agent and the Second Lien Term Loan Agent. On October 5, 2018, the New Grantors also entered into the Joinder to Intercompany Subordination Agreement, pursuant to which the New Grantors agreed to become party to that Intercompany Subordination Agreement by and among the persons originally party thereto as an “Obligor”, the Credit Agreement Agent and the Second Lien Term Loan Agent.

Rights Offering and Backstop Commitment Letter

We have agreed, pursuant to the Bridge Term Loan Credit Agreement, to use our reasonable best efforts to effectuate and close a rights offering as soon as reasonably practicable following October 5, 2018 pursuant to which we plan to dividend to our holders of common stock subscription rights to purchase shares of our common stock on a pro rata basis with an aggregate offering price of $32.5 million (the “Rights Offering”). The proceeds of the Rights Offering will be used by us to pay the obligations under the Bridge Term Loan Credit Agreement.

In connection with the Rights Offering, we entered into a Backstop Commitment Letter on October 5, 2018 (the “Backstop Commitment Letter”) with certain backstop parties named therein (the “Backstop Parties”), pursuant to which the Backstop Parties agreed, subject to the terms and conditions in the Backstop Commitment Letter, to participate in the Rights Offering and backstop the full amount of the Rights Offering. The Backstop Parties are our two largest shareholders that, in the aggregate, hold approximately 90% of our stock. In exchange for the commitments under the Backstop Commitment Letter, we paid to the Backstop Parties, in the aggregate, a nonrefundable cash payment equal to 1.0% of the full amount of the Rights Offering. Pursuant to the Backstop Commitment Letter, we are required to file a registration statement with the SEC within 20 days following October 5, 2018. This registration statement was filed with the SEC on October 25, 2018. The record date for the Rights Offering will be set by the Board of Directors of the Company upon the registration statement being declared effective by the SEC. Pursuant to the Backstop Commitment Letter, the exercise price for each share of common stock issuable upon exercise of a subscription right will be $9.61, which is equal to the 20-day volume weighted average price of the common stock of the Company preceding the public announcement of the completion of the Acquisition on October 5, 2018.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note about Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and related notes thereto. See “Forward-Looking Statements” on page 3 of this Quarterly Report and “Risk Factors” included in our 2017 Annual Report on Form 10-K and in our other filings with the U.S. Securities and Exchange Commission (“SEC”) for a description of important factors that could cause actual results to differ from expected results.

Company Overview

Nuverra is a leading provider of comprehensive, full-cycle environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations in the United States. We provide total environmental solutions and wellsite logistics management, including delivery, collection, treatment and disposal of solid and liquid materials that are used in and generated by the drilling, completion, and ongoing production of shale oil and natural gas.

We operate in shale basins where customer exploration and production (“E&P”) activities are predominantly focused on shale oil and natural gas as follows:

• Oil shale area: includes our operations in the Bakken Shale area.

• Natural gas shale areas: includes our operations in the Marcellus, Utica, and Haynesville Shale areas.

We support our customers’ demand for diverse, comprehensive and regulatory compliant environmental solutions required for the safe and efficient drilling, completion and production of oil and natural gas from shale formations.

Our service offering focuses on providing comprehensive environmental and logistics management solutions within three primary groups:

• Logistics and Wellsite Services:Delivery of freshwater to wellsites, freshwater procurement and transfer services, staging and storage of equipment and materials and rental of wellsite equipment.

• Water Midstream:Collection and transportation of produced and flowback water from wellsites to disposal network via truck or fixed pipeline system; supply of freshwater for drilling and completion via pipeline system; provision and operation of gathering systems for collection and transportation of produced and flowback water to disposal wells.

• Disposal Wells and Landfill:Disposal of liquid waste water from well completion operations and well production; disposal of solid drilling waste.

We utilize a broad array of assets to meet our customers’ logistics and environmental management needs. Our logistics assets include trucks and trailers, temporary and permanent pipelines, temporary and permanent storage facilities, ancillary rental equipment, treatment facilities, and liquid and solid waste disposal sites. We continue to optimize our suite of solutions for customers who demand safety, environmental compliance and accountability from their service providers. While we have agreements in place with certain of our customers to establish pricing for our services and various other terms and conditions, these agreements typically do not contain minimum volume commitments or otherwise require the customer to use us to provide covered services.  Accordingly, our customer agreements generally provide the customer the ability to change the relationship by either insourcing some or all services historically provided or by contracting with other service providers.  As a result, even with respect to customers with which we have an agreement to establish pricing, the revenue we ultimately receive from that customer, and the mix of revenue among lines of services provided, is unpredictable and subject to significant variation over time.

In order to address our liquidity issues due to the prolonged depression in oil and natural gas prices that began in 2014, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed voluntary petitions under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on May 1, 2017 to pursue prepackaged plans of reorganization (together, and as amended, the “Plan”). On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan became effective on August 7, 2017 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

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Upon emergence, we elected to apply fresh start accounting effective July 31, 2017, to coincide with the timing of our normal accounting period close. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the condensed consolidated financial statements on or after August 1, 2017, are not comparable with the condensed consolidated financial statements prior to that date.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on and prior to July 31, 2017.

Trends Affecting Our Operating Results

Our results are driven by demand for our services, which are in turn affected by E&P spending trends in the shale basins in which we operate, in particular the level of drilling and completion activities (which impacts the amount of environmental waste products being managed) and active wells (which impacts the amount of produced water being managed). In general, drilling and completion activities in the oil and natural gas industry are affected by the market prices (or anticipated prices) for those commodities.

We continue to see improvement in West Texas Intermediate (“WTI) crude oil prices in 2018, with average oil prices of $69.69 during the third quarter of 2018 as compared to $48.18 in the third quarter of 2017, while Henry Hub (“HH”) natural gas prices remained flat as compared to the prior year. According to Baker Hughes, average rig count in our active basins increased 4.3% year over year to 179 in the third quarter of 2018, and completed wells in those basins increased 21.8% year over year to 945. (Average rig count and completed wells in our active basins no longer includes those in the Eagle Ford Shale area as we have substantially exited that basin as of June 30, 2018.) Per the US Energy Information Association (“EIA”), both oil production and natural gas production in the basins in which we operate were up during the third quarter of 2018 as compared to the prior year, with an 18.8% increase in oil production and a 23.8% increase in natural gas production. As a result of the increases in oil prices, average rig count, completed wells and overall production, we saw an increase in drilling and completion activities primarily in the Rocky Mountain and Northeast divisions in the third quarter of 2018 as compared with the third quarter of 2017.

Our results are also driven by a number of other factors, including (i) availability of our equipment, which we have assembled through acquisitions and capital expenditures, (ii) transportation costs, which are affected by fuel costs, (iii) utilization rates for our equipment, which are also affected by the level of our customers’ drilling and production activities and competition, and our ability to relocate our equipment to areas in which oil and natural gas exploration and production activities are growing, (iv) the availability of qualified drivers (or alternatively, subcontractors) in the areas in which we operate, particularly in the Bakken, Marcellus, and Utica shale basins, (v) labor costs, (vi) developments in governmental regulations, (vii) seasonality and weather events, (viii) pricing and (ix) our health, safety and environmental performance record.

The following tables summarize our total revenues by oil and natural gas shale area for the three and nine months endedSeptember 30, 2018, two months ended September 30, 2017, and one and seven months ended July 31, 2017 (in thousands):

	Successor				Predecessor
	Three Months Ended		Two Months Ended		One Month Ended
	September 30,		September 30,		July 31,
	2018		2017		2017
Revenue - from predominantly oil shale areas (a)	$	33,399	$	22,290	$	9,420
Revenue - from predominantly natural gas shale areas (b)	16,257		11,468		5,702
Total revenue	$	49,656	$	33,758	$	15,122

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	Successor				Predecessor
	Nine Months Ended		Two Months Ended		Seven Months Ended
	September 30,		September 30,		July 31,
	2018		2017		2017
Revenue - from predominantly oil shale areas (a)	$	99,474	$	22,290	$	62,302
Revenue - from predominantly natural gas shale areas (b)	48,799		11,468		33,581
Total revenue	$	148,273	$	33,758	$	95,883

(a) Represents revenues that are derived from predominantly oil-rich areas consisting of the Bakken Shale area and Eagle Ford Shale area (which we substantially exited during the six months ended June 30, 2018).

(b) Represents revenues that are derived from predominantly gas-rich areas consisting of the Marcellus, Utica and Haynesville Shale areas.

The results reported in the accompanying condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our 2017 Annual Report on Form 10-K.

Results of Operations:

Three Months Ended September 30, 2018 Compared to the Three Months Ended September 30, 2017

The following table sets forth for each of the periods indicated our statements of operations data (dollars in thousands):  

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30,			September 30,			July 31,			Increase (Decrease)
	2018			2017			2017			2018 vs 2017 (Combined)
Service revenue	$	45,694		$	30,620		$	13,608		$	1,466		3.3	%
Rental revenue	3,962			3,138			1,514			(690		)	(14.8	)%
Total revenue	49,656			33,758			15,122			776			1.6	%
Costs and expenses:
Direct operating expenses	39,753			26,110			11,896			1,747			4.6	%
General and administrative expenses	5,849			4,928			1,326			(405		)	(6.5	)%
Depreciation and amortization	10,018			17,321			4,003			(11,306		)	(53.0	)%
Impairment of long-lived assets	100			2,404			—			(2,304		)	(95.8	)%
Other, net	49			—			—			49			100.0	%
Total costs and expenses	55,769			50,763			17,225			(12,219		)	(18.0	)%
Operating loss	(6,113		)	(17,005		)	(2,103		)	(12,995		)	(68.0	)%
Interest expense, net	(1,241		)	(778		)	(3,246		)	(2,783		)	(69.2	)%
Other income, net	169			294			7			(132		)	(43.9	)%
Reorganization items, net	137			530			229,198			(229,591		)	(99.9	)%
(Loss) income before income taxes	(7,048		)	(16,959		)	223,856			(213,945		)	(103.4	)%
Income tax (expense) benefit	(69		)	(34		)	304			(339		)	(125.6	)%
Net (loss) income	$	(7,117	)	$	(16,993	)	$	224,160		$	(214,284	)	(103.4	)%

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Service Revenue

Service revenue consists of fees charged to customers for the removal and disposal of flowback and produced water originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and completion activities by trucks or through temporary or permanent water transport pipelines. Service revenue also includes fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Service revenue for the three months ended September 30, 2018 was $45.7 million, up $1.5 million, or 3.3%, from $44.2 million in the prior year period. Service revenue growth was driven primarily by improvements in activity levels for water transfer and disposal services in the Rocky Mountain and Northeast divisions, offset by a decrease in activity levels for water transfer services, including our permanent disposal water pipeline, in the Southern division. Due to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018, no revenues associated with the Eagle Ford Shale area were included in service revenues for the Southern division for the three months ended September 30, 2018, while $2.2 million was included during the prior year period.

Rental Revenue

Rental revenue consists of fees charged to customers over the term of the rental for use of equipment owned by us, as well as other fees charged to customers for items such as delivery and pickup. Rental revenue for the three months ended September 30, 2018 was $4.0 million, down $0.7 million, or 14.8%, from $4.7 million in the prior year period. The decrease was largely the result of management’s decision to exit the Eagle Ford Shale area as of March 1, 2018. As a result, no rental revenues were reported for the Eagle Ford Shale area for the three months ended September 30, 2018, while $0.5 million were included in rental revenue during the prior year period.

Direct Operating Expenses

Direct operating expenses for the three months ended September 30, 2018 increased $1.7 million to $39.8 million compared to the prior year period. The increase in direct operating expenses is primarily attributable to the use of higher cost third party or subcontracted truck drivers due to difficulties in recruiting and retaining enough full-time drivers to satisfy customer demand, particularly in our Rocky Mountain division. Additionally, the increase in direct operating expenses is attributable to higher revenues resulting from increased demand for our services.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2018 were $5.8 million, down $0.4 million, or 6.5% from $6.3 million in the same period in the prior year. The decrease is primarily due to lower legal and payroll expenses, as well as a reduction in bad debt expense, offset by transaction costs incurred during the three months ended September 30, 2018 for the Clearwater acquisition that closed on October 5, 2018. See Note 18 in the Notes to the Condensed Consolidated Financial Statements for further details on the Clearwater acquisition.

Depreciation and Amortization

Depreciation and amortization for the three months ended September 30, 2018 was $10.0 million, down 53.0% as compared to $21.3 million in the prior year period. The decrease is primarily the result of higher depreciation recorded during the three months ended September 30, 2017 as a result of a higher depreciable asset base with shorter useful lives due to the new fair values applied by fresh start accounting upon emergence from chapter 11. This primarily impacted depreciation expense for the first six months after the application of fresh start accounting.

Impairment of long-lived assets

During the three months ended September 30, 2018, we recorded an impairment charge of $0.1 million in the Southern division for the further write-down of buildings and land held for sale as a result of exiting the Eagle Ford Shale area due to updated market pricing.

During the three months ended September 30, 2017, management approved plans to sell certain underutilized assets in the Rocky Mountain and Southern division. These assets qualified to be classified as assets held for sale and as a result the assets were recorded at the lower of net book value or fair value less costs to sell, resulting in a long-lived asset impairment charge of $2.4 million for the three months ended September 30, 2017.

Other, net

On March 1, 2018, the Board determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area. In making this determination, the Board considered a number of factors, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our business operations,

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and recommendations from management. We substantially exited the Eagle Ford Shale area as of June 30, 2018. We continue to incur minimal related costs while the remaining assets previously used in the operation of our business in that basin are divested. Those costs were $49.0 thousand during the three months ended September 30, 2018.

Interest Expense, net

Interest expense, net during the three months ended September 30, 2018 was $1.2 million, down $2.8 million or 69.2% from $4.0 million in the prior year period. The lower interest expense is primarily due to an average debt balance of $36.1 million during the three months ended September 30, 2018, compared to an average debt balance of $272.4 million during the prior year period.

Other Income, net

Other income, net was $0.2 million for the three months ended September 30, 2018, compared to $0.3 million in the prior year period. The three months ended September 30, 2018 includes a $33.3 thousand gain associated with the change in the fair value of the derivative warrant liability, while the three months ended September 30, 2017 included a $140.1 thousand loss. We issued warrants with derivative features in connection with our chapter 11 filing in 2017 and our debt restructuring during 2016. These instruments are accounted for as derivative liabilities with any decrease or increase in the estimated fair value recorded in “Other income, net.” See Note 7 and Note 10 in the Notes to the Condensed Consolidated Financial Statements for further details on the warrants.

Reorganization Items, net

Expenses, gains and losses directly associated with the chapter 11 proceedings are reported as “Reorganization items, net” in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2018 and September 30, 2017. These fees are primarily comprised of professional and legal fees, debtor in possession credit agreement financing costs, and retention payments.

Income Taxes

The income tax expense for the three months ended September 30, 2018 was $0.1 million compared to a benefit of $0.3 million for the three months ended September 30, 2017. The primary item impacting income taxes for the three months ended September 30, 2018 was the valuation allowance against our deferred tax assets. The primary items impacting income taxes for the three months ended September 30, 2017 was the change in the deferred tax liability related to certain long-lived assets resulting from the application of fresh start accounting. See Note 12 in the Notes to the Condensed Consolidated Financial Statements herein for additional information.

Segment Operating Results: Three Months Ended September 30, 2018 and 2017

The following table shows operating results for each of our segments for the three months ended September 30, 2018 and 2017:

	Rocky Mountain			Northeast			Southern			Corp/Other			Total
Three months ended September 30, 2018 (1)
Revenue	$	33,399		$	11,247		$	5,010		$	—		$	49,656
Direct operating expenses	25,757			10,372			3,624			—			39,753
Operating income (loss)	339			(1,543		)	(1,200		)	(3,709		)	(6,113		)
Three months ended September 30, 2017 (2)
Revenue	$	29,069		$	10,583		$	9,228		$	—		$	48,880
Direct operating expenses	22,213			9,291			6,502			—			38,006
Operating loss	(7,409		)	(4,990		)	(3,720		)	(2,989		)	(19,108		)

(1)     Successor period

(2) Represents the combined results from the two months ended September 30, 2017 (Successor) and the one month ended July 31, 2017 (Predecessor).

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Rocky Mountain

Revenues for the Rocky Mountain division increased during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017 due primarily to increased activity for water transfer and disposal services. Specifically, water transfer service volumes have increased due to more active operating rigs in the Rocky Mountain division during the three months ended September 30, 2018 as compared to the prior year period. To meet the increased demand in the region, we hired additional third party or subcontracted truck drivers. Additionally, volumes at the landfill and the disposal wells also increased over the same period in the prior year.

For the Rocky Mountain division, direct operating costs increased during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017 due primarily to the reliance on third party or subcontracted truck drivers to meet the increased demand.

Northeast

Revenues for the Northeast division increased during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017 due to higher activity levels for water transfer and disposal services. Additionally, pricing increases for disposal services contributed to the increase in revenues.

For the Northeast division, direct operating costs increased during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017 due to higher activity levels.

Southern

Revenues for the Southern division decreased during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017 due primarily to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018. As a result, there were no revenues associated with the Eagle Ford Shale area included for the three months ended September 30, 2018, while $2.7 million was included during the prior year period. Additionally, activity levels for water transfer services, including our permanent disposal water pipeline, were down in the Southern division during the three months ended September 30, 2018.

In the Southern division, direct operating costs decreased during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017 due to the exit of the Eagle Ford Shale area and lower activity levels.

Corporate/Other

The costs associated with the Corporate/Other division are primarily general and administrative costs. The Corporate general and administrative costs for the three months ended September 30, 2018 were higher than those reported for the three months ended September 30, 2017 due primarily to transaction costs incurred during the current year related to the acquisition of Clearwater that closed on October 5, 2018. See Note 18 in the Notes to the Condensed Consolidated Financial Statements for further details on the Clearwater acquisition.

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Nine Months EndedSeptember 30, 2018 Compared to the Nine Months EndedSeptember 30, 2017

The following table sets forth for each of the periods indicated our statements of operations data (dollars in thousands):

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30,			September 30,			July 31,			Increase (Decrease)
	2018			2017			2017			2018 vs 2017 (Combined)
Service revenue	$	136,541		$	30,620		$	86,564		$	19,357		16.5	%
Rental revenue	11,732			3,138			9,319			(725		)	(5.8	)%
Total revenue	148,273			33,758			95,883			18,632			14.4	%
Costs and expenses:
Direct operating expenses	120,449			26,110			81,010			13,329			12.4	%
General and administrative expenses	31,183			4,928			22,552			3,703			13.5	%
Depreciation and amortization	36,731			17,321			28,981			(9,571		)	(20.7	)%
Impairment of long-lived assets	4,563			2,404			—			2,159			89.8	%
Other, net	1,117			—			—			1,117			100.0	%
Total costs and expenses	194,043			50,763			132,543			10,737			5.9	%
Operating loss	(45,770		)	(17,005		)	(36,660		)	(7,895		)	(14.7	)%
Interest expense, net	(3,695		)	(778		)	(22,792		)	(19,875		)	(84.3	)%
Other income, net	683			294			4,247			(3,858		)	(85.0	)%
Reorganization items, net	(1,609		)	530			223,494			(225,633		)	(100.7	)%
(Loss) income before income taxes	(50,391		)	(16,959		)	168,289			(201,721		)	(133.3	)%
Income tax (expense) benefit	(69		)	(34		)	322			(357		)	(124.0	)%
Net (loss) income	$	(50,460	)	$	(16,993	)	$	168,611		$	(202,078	)	(133.3	)%

Service Revenue

Service revenue for the nine months endedSeptember 30, 2018 was $136.5 million, up $19.4 million, or 16.5% from $117.2 million in the prior year period. With oil prices continuing to stabilize, customer demand for our disposal services has increased in all divisions, and demand for our water transfer services has increased in the Rocky Mountain and Northeast divisions as compared to the same period in the prior year. Additionally, pricing increases have also contributed to the increase in service revenue. Due to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018, only $1.8 million in revenues associated with the Eagle Ford Shale area were included in service revenues for the nine months ended September 30, 2018, while $6.2 million was included in service revenue during the prior year period.

Rental Revenue

Rental revenue for the nine months endedSeptember 30, 2018 was $11.7 million, down $0.7 million as compared to the prior year period. However, the prior year period included $1.3 million of rental revenues from the Eagle Ford Shale area, while the nine months ended September 30, 2018 only included $0.3 million of rental revenues due to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018.

Direct Operating Expenses

Direct operating expenses for the nine months endedSeptember 30, 2018 were $120.4 million, compared to $107.1 million in the prior year period. The increase in direct operating expenses is primarily attributable to the use of higher cost third party or subcontracted truck drivers due to difficulties in recruiting and retaining enough full-time drivers to satisfy customer demand, particularly in our Rocky Mountain division. Additionally, the increase in direct operating expenses is attributable to higher revenues resulting from increased demand for our services.

General and Administrative Expenses

General and administrative expenses for the nine months endedSeptember 30, 2018 amounted to $31.2 million, up $3.7 million from $27.5 million in the prior year period. The increase was primarily due to higher compensation costs, including $14.0

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million related to the departure of our former Chief Executive Officer, offset by decreases in professional fees. General and administrative expenses for the nine months endedSeptember 30, 2017 included $8.8 million in legal and professional fees for our chapter 11 filing that were incurred prior to the May 1, 2017 filing date. The legal and professional fees for our chapter 11 filing incurred after the May 1, 2017 filing date have been included in “Reorganization items, net” for the nine months endedSeptember 30, 2017.

Depreciation and Amortization

Depreciation and amortization for the nine months endedSeptember 30, 2018 was $36.7 million, down approximately $9.6 million from $46.3 million in the prior year period. The decrease is primarily the result of higher depreciation recorded during the nine months ended September 30, 2017 as a result of a higher depreciable asset base with shorter useful lives due to the new fair values applied by fresh start accounting upon emergence from chapter 11. This primarily impacted depreciation expense for the first six months after the application of fresh start accounting.

Impairment of long-lived assets

During the three months ended March 31, 2018, management approved a plan to sell certain assets located in the Southern division as a result of exiting the Eagle Ford Shale area. In addition, during the three months ended March 31, 2018, management approved the sale of certain assets, primarily frac tanks, located in the Northeast division, that are expected to sell within one year. These assets qualified to be classified as assets held for sale and as a result the assets were recorded at the lower of net book value or fair value less costs to sell, resulting in an impairment charge of $4.1 million during the three months ended March 31, 2018. Of the $4.1 million recorded, $4.0 million related to the Southern division and $0.1 million related to the Northeast division.

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure.

During the three months ended September 30, 2018, we recorded an impairment charge of $0.1 million in the Southern division for the further write-down of buildings and land held for sale as a result of exiting the Eagle Ford Shale area due to updated market pricing.

During the nine months ended September 30, 2017, management approved plans to sell certain underutilized assets in the Rocky Mountain and Southern division. These assets qualified to be classified as assets held for sale and as a result the assets were recorded at the lower of net book value or fair value less costs to sell, resulting in a long-lived asset impairment charge of $2.4 million for the nine months ended September 30, 2017, of which $2.2 million related to the Rocky Mountain division and $0.2 million related to the Southern division.

Other, net

On March 1, 2018, the Board determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area. In making this determination, the Board considered a number of factors, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our business operations, and recommendations from management. We substantially exited the Eagle Ford Shale area as of June 30, 2018. The total costs related to the exit recorded during the nine months endedSeptember 30, 2018 were $1.1 million.

Interest Expense, net

Interest expense, net during the nine months endedSeptember 30, 2018 was $3.7 million, or $19.9 million lower than the $23.6 million in the prior year period. The lower interest expense is primarily due to an average debt balance of $37.3 million during the nine months endedSeptember 30, 2018, compared to an average debt balance of $256.0 million during the prior year period.

Other Income, net

Other income, net was $0.7 million for the nine months endedSeptember 30, 2018, compared to $4.5 million in the prior year period. The difference is primarily attributable to the $0.3 million gain associated with the change in the fair value of the derivative warrant liability during the nine months endedSeptember 30, 2018, compared to a $3.9 million gain during the nine months endedSeptember 30, 2017. See Note 7 and Note 10 in the Notes to the Condensed Consolidated Financial Statements for further details on the warrants.

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Reorganization Items, net

Expenses, gains and losses directly associated with the chapter 11 proceedings are reported as “Reorganization items, net” in the Condensed Consolidated Statements of Operations for the nine months endedSeptember 30, 2018 and September 30, 2017, which includes the net gain on debt discharge, professional and insurance fees, debtor in possession credit agreement financing costs, retention payments, and other chapter 11 related items. Included in Reorganization items, net for the nine months ended September 30, 2018 was $1.3 million in chapter 11 fees paid to the US Trustee.

Income Taxes

The income tax expense for the nine months endedSeptember 30, 2018 was $0.1 million, compared to a benefit of $0.3 million for the nine months endedSeptember 30, 2017. The primary item impacting income taxes for the nine months endedSeptember 30, 2018 was the valuation allowance against our deferred tax assets. The primary items impacting income taxes for the nine months ended September 30, 2017 was the change in the deferred tax liability related to certain long-lived assets resulting from the application of fresh start accounting. See Note 12 in the Notes to the Condensed Consolidated Financial Statements herein for additional information.

Segment Operating Results: Nine Months EndedSeptember 30, 2018 and 2017

The following table shows operating results for each of our segments for the nine months endedSeptember 30, 2018 and 2017:

	Rocky Mountain			Northeast			Southern			Corp/Other			Total
Nine months ended September 30, 2018 (1)
Revenue	$	97,334		$	29,966		$	20,973		$	—		$	148,273
Direct operating expenses	77,702			26,696			16,051			—			120,449
Operating loss	(3,041		)	(8,086		)	(10,497		)	(24,146		)	(45,770		)
Nine months ended September 30, 2017 (2)
Revenue	$	77,113		$	27,910		$	24,618		$	—		$	129,641
Direct operating expenses	62,616			27,079			17,425			—			107,120
Operating loss	(16,808		)	(11,732		)	(7,521		)	(17,604		)	(53,665		)

(1) Successor period

(2) Represents the combined results from the two months ended September 30, 2017 (Successor) and the seven months ended July 31, 2017 (Predecessor).

Rocky Mountain

Revenues for the Rocky Mountain division increased during the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017 due primarily to increased activity for water transfer and disposal services. Specifically, water transfer service volumes have increased due to more active operating rigs in the Rocky Mountain division during the nine months ended September 30, 2018 as compared to the prior year period. Revenue improvement also came from the purchase and deployment of additional temporary water transport pipeline in early 2018. Additionally, volumes at the landfill and the disposal wells also increased over the same period in the prior year.

For the Rocky Mountain division, direct operating costs increased during the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017 due primarily to increased activity.

Northeast

Revenues for the Northeast division increased during the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017 due to higher activity levels for water transfer and disposal services. Additionally, pricing increases for disposal services contributed to the increase in revenues.

For the Northeast division, direct operating costs increased during the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017 due to higher activity levels.

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Southern

Revenues for the Southern division decreased during the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017 due primarily to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018. As a result, only $2.1 million in revenues associated with the Eagle Ford Shale area were included for the nine months ended September 30, 2018, while $7.5 million was included during the prior year period. Additionally, activity levels for water transfer services, including our permanent disposal water pipeline, were down in the Southern division during the nine months ended September 30, 2018.

In the Southern division, direct operating costs decreased during the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017 due to the exit of the Eagle Ford Shale area and lower activity levels.

Corporate/Other

The costs associated with the Corporate/Other division are primarily general and administrative costs. The Corporate general and administrative costs for the nine months endedSeptember 30, 2018 were higher than those reported for the nine months endedSeptember 30, 2017 due primarily to higher compensation costs related to the departure of our former Chief Executive Officer in the first quarter of 2018.

Liquidity and Capital Resources

Cash Flows and Liquidity

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. Cash provided by operating activities was $4.2 million for three months ended September 30, 2018. Total liquidity as of September 30, 2018, consisting of cash and available borrowings, was $21.1 million. Not included in the $21.1 million of liquidity, was an additional $10.2 million of borrowings available under the Successor Revolving Facility (as defined herein) that could be spent only on capital expenditures. Our sources of cash for 2018 have included cash generated by our operations, asset sales, and borrowings from our Successor Revolving Facility. Based on our current sources of cash, we believe we have adequate liquidity to meet our current and future needs.

The following table summarizes our sources and uses of cash for the nine months endedSeptember 30, 2018, two months ended September 30, 2017, and the seven months ended July 31, 2017 (in thousands):

	Successor						Predecessor
	Nine Months Ended September 30,			Two Months Ended September 30,			Seven Months Ended July 31,
Net cash (used in) provided by:	2018			2017			2017
Operating activities	$	4,220		$	(3,072	)	$	(18,949	)
Investing activities	9,454			1,295			(66		)
Financing activities	(3,531		)	(2,215		)	31,599
Net change in cash, cash equivalents and restricted cash	$	10,143		$	(3,992	)	$	12,584

Operating Activities

Net cash provided by operating activities was $4.2 million for the nine months endedSeptember 30, 2018. The net loss, after adjustments for non-cash items, provided cash of $1.5 million, compared to the use of $18.0 million in the corresponding 2017 period. Changes in operating assets and liabilities provided $2.7 million in cash primarily due to a decrease in accounts receivable and an increase in accounts payable and other accrued expenses. The non-cash items and other adjustments included $36.7 million of depreciation and amortization, stock-based compensation expense of $11.5 million, long-lived asset impairment charges of $4.6 million, accrued interest added to debt principal of $0.1 million, offset by a $0.9 million gain on the sale of assets and $0.3 million gain resulting from the change in the fair value of the derivative warrant liability.

Net cash used in operating activities was $22.0 million for the nine months endedSeptember 30, 2017. The net loss, after adjustments for non-cash items, used cash of $18.0 million. Changes in operating assets and liabilities used $4.0 million in cash primarily due to increases in accounts receivable, accounts payable and accrued expenses, and other long term liabilities as a result of the chapter 11 filing and the fresh start accounting. The non-cash items and other adjustments included $46.3 million

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of depreciation and amortization, accrued interest added to debt principal of $11.7 million, a $3.9 million gain resulting from the change in the fair value of the derivative warrant liability, amortization of debt issuance costs of $2.1 million, an increase in bad debt expense of $0.8 million, and stock-based compensation expense of $0.6 million.

Investing Activities

Net cash provided by investing activities was $9.5 million for the nine months endedSeptember 30, 2018 and primarily consisted of $19.1 million of proceeds from the sale of property, plant and equipment, offset by $9.7 million of purchases of property, plant and equipment.

Net cash provided in investing activities was $1.2 million for the nine months endedSeptember 30, 2017 which consisted primarily of $4.7 million of proceeds from the sale of property, plant and equipment, offset by $3.6 million of purchases of property, plant and equipment.

Financing Activities

Net cash used in financing activities was $3.5 million for the nine months endedSeptember 30, 2018 and was primarily comprised of $2.1 million of payments on the Successor First Lien Term Loan and the Successor Second Lien Term Loan and $1.4 million of payments on vehicle financing and other financing activities.

Net cash provided by financing activities was $29.4 million for the nine months endedSeptember 30, 2017 and consisted of $15.7 million in additional proceeds from our Predecessor term loan, $6.9 million in cash proceeds from our Predecessor debtor in possession term loan, and $36.1 million in cash proceeds from our Successor First Lien Term Loan and Successor Second Lien Term Loan, offset by $23.2 million of net payments under our Predecessor asset-based lending facility and $4.6 million of payments on vehicle financing and other financing activities.

Capital Expenditures

Our capital expenditure program is subject to market conditions, including customer activity levels, commodity prices, industry capacity and specific customer needs. During the recent industry downturn, we sought to maximize liquidity by limiting our capital expenditures to only those deemed critical to our ongoing operations and those necessary to support our key growth initiatives. Coming out of the downturn, we have reinvested more heavily in our service lines and growth projects. Cash required for capital expenditures for the nine months endedSeptember 30, 2018 totaled $9.7 million compared to $3.6 million for the nine months endedSeptember 30, 2017. These capital expenditures were more than offset by proceeds received from the sale of under-utilized or non-core assets of $19.1 million and $4.7 million in the nine months endedSeptember 30, 2018 and 2017, respectively. Although the proceeds from asset sales exceeded capital expenditures during the nine months ended September 30, 2018, we intend to reinvest these proceeds in both maintenance and growth projects, including the purchase of new trucks for our Northeast fleet and the acquisition of new disposal wells in Ohio (which is discussed further in Note 18 in the Notes to the Condensed Consolidated Financial Statements herein).

Historically, a portion of our transportation-related capital requirements were financed through capital leases. We had no new equipment additions under capital leases in the nine months endedSeptember 30, 2018 or September 30, 2017. We continue to focus on improving the utilization of our existing assets and optimizing the allocation of resources in the various shale areas in which we operate. Our planned capital expenditures for the remainder of 2018 could be financed through cash flow from operations, borrowings under the Successor Revolving Facility and Successor Second Lien Term Loan, capital leases, other financing structures, or a combination of the foregoing.

Indebtedness

As of September 30, 2018, we had $35.6 million of indebtedness outstanding, consisting of $12.7 million under the Successor First Lien Term Loan (as defined herein), $20.6 million under the Successor Second Lien Term Loan (as defined herein), and $2.3 million of capital leases for vehicle financings.

See the “Bridge Term Loan Credit Agreement, Guaranty Agreement, and Subordination Agreement” discussion below under “Subsequent Events - Acquisition of Clearwater and Changes to Indebtedness,” in addition to the discussion in Note 18 of the Notes to the Condensed Consolidated Financial Statements.

First Lien Credit Agreement

On the Effective Date, pursuant to the Plan, the Company entered into a $45.0 million First Lien Credit Agreement (the “Credit Agreement”) by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the Credit Agreement, the Credit Agreement Lenders

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agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Successor Revolving Facility”) and a $15.0 million senior secured term loan facility (the “Successor First Lien Term Loan”) (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset based lending facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses, and other general corporate purposes. The Credit Agreement also contains an accordion feature that provides for an increase in availability of up to an additional $20.0 million, subject to the satisfaction of certain terms and conditions contained in the Credit Agreement.

The Successor Revolving Facility and the Successor First Lien Term Loan mature on August 7, 2020, at which time the Company must repay the outstanding principal amount of the Successor Revolving Facility and the Successor First Lien Term Loan, together with interest accrued and unpaid thereon. The Successor Revolving Facility may be repaid and, subject to the terms and conditions of the Credit Agreement, reborrowed at any time during the term of the Credit Agreement. The principal amount of the Successor First Lien Term Loan shall be repaid in installments of $178.6 thousand beginning on September 1, 2017 and the first day of each calendar month thereafter prior to maturity. Interest on the Successor Revolving Facility accrues at an annual rate equal to the LIBOR Rate (as defined in the Credit Agreement) plus 5.25%, and interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%; however, if there is an Event of Default (as defined in the Credit Agreement), the Credit Agreement Agent, in its sole discretion, may increase the applicable interest rate at a per annum rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Credit Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. As of September 30, 2018, we were in compliance with all covenants.

See the “Amendment to First Lien Credit Agreement and Joinder to First Lien Guaranty and Security Agreement” below under “Subsequent Events - Acquisition of Clearwater and Changes to Indebtedness,” in addition to the discussion in Note 18 of the Notes to the Condensed Consolidated Financial Statements.

Second Lien Term Loan Credit Agreement

On the Effective Date, pursuant to the Plan, the Company also entered into a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan Agreement”) by and among the lenders party thereto (the “Second Lien Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent (the “Second Lien Term Loan Agent”), and the Company. Pursuant to the Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to extend to the Company a $26.8 million second lien term loan facility (the “Successor Second Lien Term Loan”), of which $21.1 million was advanced on the Effective Date and up to an additional $5.7 million (“Delayed Draw Term Loan”) is available at the request of the Company after the closing date, subject to the satisfaction of certain terms and conditions specified in the Second Lien Term Loan Agreement. The Second Lien Term Loan Lenders extended the Successor Second Lien Term Loan, among other things, (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based revolving facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses and other general corporate purposes.

The Successor Second Lien Term Loan matures on February 7, 2021, at which time the Company must repay all outstanding obligations under the Successor Second Lien Term Loan. The principal amount of the Successor Second Lien Term Loan shall be repaid in installments of $263.2 thousand beginning on October 1, 2017, and the first day of each fiscal quarter thereafter prior to maturity, with such amount to be proportionally increased as the result of the incurrence of a Delayed Draw Term Loan. Interest on the Successor Second Lien Term Loan accrues at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. However, upon the occurrence and during the continuation of an Event of Default (as defined in the Second Lien Term Loan Agreement) due to a voluntary or involuntary bankruptcy filing, automatically, or any other Event of Default, at the election of the Second Lien Term Loan Agent, the Successor Second Lien Term Loan and all obligations thereunder shall bear interest at an annual rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Second Lien Term Loan Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for term loans of this type. As of September 30, 2018, we were in compliance with all covenants.

See the “Amendments to Second Lien Credit Agreement and Joinder to Second Lien Guaranty and Security Agreement” below under “Subsequent Events - Acquisition of Clearwater and Changes to Indebtedness,” in addition to the discussion in Note 18

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of the Notes to the Condensed Consolidated Financial Statements.

Subsequent Events - Acquisition of Clearwater and Changes to Indebtedness

Acquisition of Clearwater

On October 5, 2018, we entered into a definitive agreement to acquire Clearwater Three, LLC, Clearwater Five, LLC, and Clearwater Solutions, LLC (collectively, “Clearwater”) for an initial purchase price of $41.9 million, subject to customary working capital adjustments (the “Acquisition”). Clearwater is a supplier of waste water disposal services used by the oil and gas industry in the Marcellus and Utica Shale areas. Clearwater has three salt water disposal wells in service, all of which are located in Ohio. This acquisition expands our service offerings in the Marcellus and Utica Shale areas in our Northeast division.

Consideration consisted of $41.9 million in cash which was funded primarily by a $32.5 million bridge loan that will be repaid with proceeds from a planned offering to shareholders of common stock purchase rights. In addition, the Credit Agreement Lenders provided us with an additional term loan under the Credit Agreement in the amount of $10.0 million which was used to finance a portion of the Acquisition.

In connection with the Acquisition, we incurred transaction costs of $0.4 million, which are included in general and administrative costs in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2018.

Bridge Term Loan Credit Agreement, Guaranty Agreement, and Subordination Agreement

In connection with the Acquisition, on October 5, 2018, we entered into a Bridge Term Loan Credit Agreement (the “Bridge Term Loan Credit Agreement”) with the lenders party thereto (the “Bridge Term Loan Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent (the “Bridge Term Loan Agent”). The Bridge Term Loan Lenders are our two largest shareholders that, in the aggregate, hold approximately 90% of our stock. Pursuant to the Bridge Term Loan Credit Agreement, the Bridge Term Loan Lenders provided a term loan to us in the aggregate amount of $32.5 million, of which $22.5 million was used to finance the Acquisition and the remaining $10.0 million was used to pay down certain amounts outstanding under the Successor Second Lien Term Loan. The Bridge Term Loan Agreement matures on April 5, 2019 and has an interest rate of 11.0% per annum, payable in cash, in arrears, on the first day of each month. Under the terms of the Bridge Term Loan Credit Agreement, the outstanding amounts may be accelerated upon the occurrence of an Event of Default (as defined in the Bridge Term Loan Credit Agreement), including as a result of a payment default under the Successor First Lien Term Loan or Successor Second Lien Term Loan after expiration of a ten day cure period or a default resulting in acceleration of the obligations due under the Successor First Lien Term Loan or Successor Second Lien Term Loan.

The Bridge Term Loan Credit Agreement requires us to use our reasonable best efforts to effectuate and close the Rights Offering (as defined below) as soon as reasonably practicable following October 5, 2018. Concurrently with the completion of the Rights Offering, we are required to prepay all outstanding amounts under the Bridge Term Loan Credit Agreement in cash in an amount equal to the net cash proceeds received from the Rights Offering.

We also have the option to prepay principal amounts outstanding under the Bridge Term Loan Credit Agreement at any time without premium or penalty. Except upon the completion of the Rights Offering or in the event that an insolvency proceeding is pending against us, all principal payments (whether at maturity or otherwise) are required to be tendered in the form of common stock of the Company, with the value of such common stock determined based on its volume weighted average price during the 20-day period preceding the announcement of the Acquisition.

Amendment to First Lien Credit Agreement and Joinder to First Lien Guaranty and Security Agreement

On October 5, 2018, in connection with the Acquisition, we entered into a First Amendment to the Credit Agreement (the “First Amendment to the Credit Agreement”) with the Credit Agreement Lenders and the Credit Agreement Agent, which amends the Credit Agreement. Pursuant to the First Amendment to the Credit Agreement, the Credit Agreement Lenders provided us with an additional term loan under the Credit Agreement in the amount of $10.0 million, which was used to finance a portion of the Acquisition. The First Amendment to the Credit Agreement also amended the Credit Agreement to extend the maturity date from August 7, 2020 to February 7, 2021, in addition to allowing for the Acquisition and providing us with additional flexibility under the Credit Agreement, including certain availability, mandatory prepayment and financial reporting provisions thereunder.

47

On October 5, 2018, in connection with the First Amendment to the Credit Agreement, Nuverra Ohio Disposal LLC, and Clearwater (collectively, the “New Grantors”) entered into a Joinder to the First Lien Guaranty and Security Agreement, pursuant to which the New Grantors agreed to become party to that First Lien Guaranty and Security Agreement by and among the Company, the other grantors party thereto, and the Credit Agreement Agent.

Amendment to Second Lien Credit Agreement and Joinder to the Second Lien Guaranty and Security Agreement

On October 5, 2018, in connection with the Acquisition, we entered into a First Amendment to the Second Lien Term Loan Agreement (the “First Amendment to the Second Lien Term Loan Agreement”) with the Second Lien Term Loan Lenders and the Second Lien Term Loan Agent, which amends the Second Lien Term Loan Agreement. Pursuant to the First Amendment to Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to certain conforming amendments to the Credit Agreement to allow for the funding of the additional term loan in the amount of $10.0 million under the First Amendment to the Credit Agreement and the term loans pursuant to the Bridge Term Loan Credit Agreement. The First Amendment to the Second Lien Term Loan Agreement also extended the maturity date from February 7, 2021 to October 7, 2021.

On October 5, 2018, in connection with the First Amendment to Second Lien Term Loan Agreement, the New Grantors entered into the Second Lien Guaranty and Security Agreement Joinder, pursuant to which the New Grantors agreed to become party to that Second Lien Guaranty and Security Agreement by and among the Company, the other grantors party thereto, and the Second Lien Agent.

First Amendment to Intercreditor Agreement and Joinder to Intercompany Subordination Agreement

On October 5, 2018, in connection with the First Amendment to the Credit Agreement, we acknowledged the terms and conditions under a First Amendment to the Intercreditor Agreement, dated October 5, 2018, by and between the Credit Agreement Agent and the Second Lien Term Loan Agent, which amends the Subordination and Intercreditor Agreement, dated as of August 7, 2017, by and between the Credit Agreement Agent and the Second Lien Term Loan Agent. On October 5, 2018, the New Grantors also entered into the Joinder to Intercompany Subordination Agreement, pursuant to which the New Grantors agreed to become party to that Intercompany Subordination Agreement by and among the persons originally party thereto as an “Obligor”, the Credit Agreement Agent and the Second Lien Term Loan Agent.

Rights Offering and Backstop Commitment Letter

We have agreed, pursuant to the Bridge Term Loan Credit Agreement, to use our reasonable best efforts to effectuate and close a rights offering as soon as reasonably practicable following October 5, 2018 pursuant to which we plan to dividend to our holders of common stock subscription rights to purchase shares of our common stock on a pro rata basis with an aggregate offering price of $32.5 million (the “Rights Offering”). The proceeds of the Rights Offering will be used by us to pay the obligations under the Bridge Term Loan Credit Agreement.

In connection with the Rights Offering, we entered into a Backstop Commitment Letter on October 5, 2018 (the “Backstop Commitment Letter”) with certain backstop parties named therein (the “Backstop Parties”), pursuant to which the Backstop Parties agreed, subject to the terms and conditions in the Backstop Commitment Letter, to participate in the Rights Offering and backstop the full amount of the Rights Offering. In exchange for the commitments under the Backstop Commitment Letter, we paid to the Backstop Parties, in the aggregate, a nonrefundable cash payment equal to 1.0% of the full amount of the Rights Offering. The Backstop Parties are our two largest shareholders that, in the aggregate, hold approximately 90% of our stock. Pursuant to the Backstop Commitment Letter, we are required to file a registration statement with the SEC within 20 days following October 5, 2018. This registration statement was filed with the SEC on October 25, 2018. The record date for the Rights Offering will be set by the Board of Directors of the Company upon the registration statement being declared effective by the SEC. Pursuant to the Backstop Commitment Letter, the exercise price for each share of common stock issuable upon exercise of a subscription right will be $9.61, which is equal to the 20-day volume weighted average price of the common stock of the Company preceding the public announcement of the completion of the Acquisition on October 5, 2018.

48

Off Balance Sheet Arrangements

As of September 30, 2018, other than operating leases, we did not have any off-balance-sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Contractual Obligations

Our contractual obligations at September 30, 2018 did not change materially from those disclosed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Contractual Obligations” of our 2017 Annual Report on Form 10-K.

In connection with the Clearwater acquisition, on October 5, 2018, we entered into a Bridge Term Loan Credit Agreement, a First Amendment to the Credit Agreement, and First Amendment to the Second Lien Term Loan Agreement, thereby increasing our contractual obligations for long-term debt. See the discussion in “Item 2. Subsequent Events - Acquisition of Clearwater and Changes to Indebtedness” for additional details.

Critical Accounting Policies

There have been no significant changes to our Critical Accounting Policies in the nine months endedSeptember 30, 2018 from those disclosed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2017 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

See Note 2 in the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of accounting pronouncements recently issued that could potentially impact our consolidated financial statements.

Item  3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our 2017 Annual Report on Form 10-K.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we performed an evaluation, under the supervision and with the participation of our Interim Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at that time to provide reasonable assurance that the information required to be disclosed in our reports filed with the SEC under the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and are accumulated and communicated to our management, including the Interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended September 30, 2018 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

49

PART II—OTHER INFORMATION

Item  1. Legal Proceedings

See “Legal Matters” in Note 14 of the Notes to the Condensed Consolidated Financial Statements for a description of our material legal proceedings.

Item  1A. Risk Factors

In addition to the risk factors below and other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors of our 2017 Annual Report on Form 10-K.

Risks Related to Our Company

We may not be able to grow successfully through future acquisitions or successfully manage future growth, and we may not be able to effectively integrate the businesses we do acquire.

Our business strategy includes growth through the acquisitions of other businesses. We may not be able to continue to identify attractive acquisition opportunities or successfully acquire identified targets. In addition, we may not be successful in integrating our current or future acquisitions into our existing operations, which may result in unforeseen operational difficulties or diminished financial performance or require a disproportionate amount of our management’s attention. Even if we are successful in integrating our current or future acquisitions into our existing operations, we may not derive the benefits, such as operational or administrative synergies, that we expected from such acquisitions, which may result in the investment of our capital resources without realizing the expected returns on such investment. Furthermore, competition for acquisition opportunities may increase our cost of making further acquisitions or cause us to refrain from making additional acquisitions. We also may be limited in our ability to incur additional indebtedness in connection with or to fund future acquisitions under our credit agreements.

Whether we realize the anticipated benefits from an acquisition depends, in part, upon our ability to integrate the operations of the acquired business, the quality and performance of the operating assets of the acquired business, the performance of the underlying product and service portfolio, and the performance of the management team and other personnel of the acquired operations. Accordingly, our financial results could be adversely affected by unanticipated performance issues, legacy liabilities, transaction-related charges, amortization of expenses related to intangibles, charges for impairment of long-term assets, indemnifications and other unforeseen events or circumstances. While we believe that we have established appropriate and adequate procedures and processes to mitigate these risks, there is no assurance that these transactions will be successful.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item  5. Other Information

None.

50

Item 6. Exhibits

The exhibits listed on the “Exhibit Index” set forth below are filed or furnished with this Quarterly Report on Form 10-Q or incorporated by reference as set forth therein.

Exhibit Number	Description
10.1	Equity Purchase Agreement, dated October 5, 2018, by and among the David Niederst Irrevocable Trust, Stillwater Seven, LLC and Nuverra Ohio Disposal LLC (incorporated by reference to Exhibit 10.1 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.2	Bridge Term Loan Credit Agreement, dated October 5, 2018, by and among Wilmington Savings Fund Society, FSB, the lenders party thereto, and the Company (incorporated by reference to Exhibit 10.2 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.3	Guaranty Agreement, dated October 5, 2018, by and among the Company, the other grantors party thereto, and Wilmington Savings Fund Society, FSB (incorporated by reference to Exhibit 10.3 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.4	Subordination Agreement, dated October 5, 2018, by and among ACF FinCo I LP and Wilmington Savings Fund Society, FSB (incorporated by reference to Exhibit 10.4 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.5	First Amendment to Credit Agreement, dated October 5, 2018, by and among ACF FinCo I LP, the lenders thereto, the Company, and the other loan parties thereto (incorporated by reference to Exhibit 10.5 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.6	Joinder to First Lien Guaranty and Security Agreement, dated October 5, 2018, by and among the Company, the grantors party thereto, and ACF FinCo I LP (incorporated by reference to Exhibit 10.6 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.7	First Amendment to Credit Agreement, dated October 5, 2018, by and among Wilmington Savings Fund Society, FSB, the lenders party thereto, and the Company (incorporated by reference to Exhibit 10.7 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.8	Second Lien Guaranty and Security Agreement Joinder, dated October 5, 2018, by and among the Company, the other grantors party thereto, and Wilmington Savings Fund Society, FSB (incorporated by reference to Exhibit 10.8 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.9	First Amendment to Intercreditor Agreement, dated October 5, 2018, by and among ACF FinCo I LP, Wilmington Savings Fund Society, FSB, and the Company (incorporated by reference to Exhibit 10.9 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.10	Joinder to Intercompany Subordination Agreement, dated October 5, 2018, by and among the obligors party thereto, ACF FinCo I LP, and Wilmington Savings Fund Society, FSB (incorporated by reference to Exhibit 10.10 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
10.11	Backstop Commitment Letter, dated October 5, 2018, by and between the Company and the backstop parties named therein (incorporated by reference to Exhibit 10.11 to Nuverra’s Current Report on Form 8-K filed with the SEC on October 11, 2018).
31.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

51

Exhibit Number	Description
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

_______________

* Filed herewith.

52

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	November 6, 2018
/s/ Charles K. Thompson
Name:	Charles K. Thompson
Title:	Interim Chief Executive Officer
	(Principal Executive Officer)
/s/ Edward A. Lang
Name:	Edward A. Lang
Title:	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

53

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Charles K. Thompson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2018 of Nuverra Environmental Solutions, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. As the registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. As the registrant's certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2018

By:	/s/ Charles K. Thompson
Name:	Charles K. Thompson
Title:	Interim Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Edward A. Lang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2018 of Nuverra Environmental Solutions, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. As the registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. As the registrant's certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2018

By:	/s/ Edward A. Lang
Name:	Edward A. Lang
Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the report of Nuverra Environmental Solutions, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018 (the “Report”) as filed with the Securities and Exchange Commission on the date hereof, I, Charles K. Thompson, the Interim Chief Executive Officer of the Company, and I, Edward A. Lang, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2018

By:	/s/ Charles K. Thompson	By:	/s/ Edward A. Lang
Name:	Charles K. Thompson	Name:	Edward A. Lang
Title:	Interim Chief Executive Officer (Principal Executive Officer)	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the Secretary of the Company and will be retained by the Office of General Counsel of the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	NES
Entity Registrant Name	Nuverra Environmental Solutions, Inc.
Entity Central Index Key	0001403853
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		12,233,087

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	$ 15,077	$ 5,488
Restricted cash	1,850	1,296
Accounts receivable, net of allowance for doubtful accounts of $1.8 million and $1.9 million at September 30, 2018 and December 31, 2017, respectively	29,706	30,965
Inventories	3,651	4,089
Prepaid expenses and other receivables	2,748	8,594
Other current assets	869	226
Assets held for sale	3,172	2,765
Total current assets	57,073	53,423
Property, plant and equipment, net of accumulated depreciation of $64.5 million and $35.8 million at September 30, 2018 and December 31, 2017, respectively	184,975	229,874
Equity investments	40	48
Intangibles, net	429	547
Goodwill	27,139	27,139
Deferred income taxes	73	84
Other assets	133	207
Total assets	269,862	311,322
Liabilities and Shareholders’ Equity
Accounts payable	7,102	7,946
Accrued liabilities	15,724	13,939
Current contingent consideration	500	500
Current portion of long-term debt	4,526	5,525
Derivative warrant liability	154	477
Total current liabilities	28,006	28,387
Long-term debt	31,088	33,524
Other long-term liabilities	6,763	6,438
Total liabilities	65,857	68,349
Shareholders’ equity:
Common stock	117	117
Additional paid-in capital	302,243	290,751
Accumulated deficit	(98,355)	(47,895)
Total shareholders’ equity	204,005	242,973
Total liabilities and shareholders’ equity	$ 269,862	$ 311,322

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1.8	$ 1.9
Property, plant and equipment, accumulated depreciation	$ 64.5	$ 35.8

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jul. 31, 2017	Sep. 30, 2018
Revenue:
Service revenue		$ 30,620	$ 45,694		$ 136,541
Rental revenue		3,138	3,962		11,732
Total revenue		33,758	49,656		148,273
Costs and expenses:
Direct operating expenses		26,110	39,753		120,449
General and administrative expenses		4,928	5,849		31,183
Depreciation and amortization		17,321	10,018		36,731
Impairment of long-lived assets		2,404	100		4,563
Other, net		0	49		1,117
Total costs and expenses		50,763	55,769		194,043
Operating loss		(17,005)	(6,113)		(45,770)
Interest expense, net		(778)	(1,241)		(3,695)
Other income, net		294	169		683
Reorganization items, net		530	137		(1,609)
(Loss) income before income taxes		(16,959)	(7,048)		(50,391)
Income tax (expense) benefit		(34)	(69)		(69)
Net (loss) income		$ (16,993)	$ (7,117)		$ (50,460)
Earnings per common share:
Net loss per basic common share (usd per share)		$ (1.45)	$ (0.61)		$ (4.31)
Net loss per diluted common share (usd per share)		$ (1.45)	$ (0.61)		$ (4.31)
Weighted average shares outstanding:
Basic (in shares)		11,696	11,696		11,696
Diluted (in shares)		11,696	11,696		11,696
Predecessor
Revenue:
Service revenue	$ 13,608			$ 86,564
Rental revenue	1,514			9,319
Total revenue	15,122			95,883
Costs and expenses:
Direct operating expenses	11,896			81,010
General and administrative expenses	1,326			22,552
Depreciation and amortization	4,003			28,981
Impairment of long-lived assets	0			0
Other, net	0			0
Total costs and expenses	17,225			132,543
Operating loss	(2,103)			(36,660)
Interest expense, net	(3,246)			(22,792)
Other income, net	7			4,247
Reorganization items, net	229,198			223,494
(Loss) income before income taxes	223,856			168,289
Income tax (expense) benefit	304			322
Net (loss) income	$ 224,160			$ 168,611
Earnings per common share:
Net loss per basic common share (usd per share)	$ 1.48			$ 1.12
Net loss per diluted common share (usd per share)	$ 1.42			$ 0.97
Weighted average shares outstanding:
Basic (in shares)	150,951			150,940
Diluted (in shares)	157,394			174,304

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	2 Months Ended	7 Months Ended	9 Months Ended
	Sep. 30, 2017	Jul. 31, 2017	Sep. 30, 2018
Cash flows from operating activities:
Net (loss) income	$ (16,993)		$ (50,460)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	17,321		36,731
Amortization of debt issuance costs, net	0		0
Accrued interest added to debt principal	177		119
Stock-based compensation	181		11,492
Impairment of long-lived assets	2,404		4,563
Gain on sale of UGSI	(76)		(75)
(Gain) loss on disposal of property, plant and equipment	687		(919)
Bad debt (recoveries) expense	41		(164)
Change in fair value of derivative warrant liability	140		(323)
Deferred income taxes	34		11
Other, net	152		541
Reorganization items, non-cash	0		0
Changes in operating assets and liabilities:
Accounts receivable	(5,349)		1,423
Prepaid expenses and other receivables	(528)		487
Accounts payable and accrued liabilities	(1,111)		1,028
Other assets and liabilities, net	(152)		(234)
Net cash provided by (used in) operating activities	(3,072)		4,220
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment	1,623		19,066
Purchases of property, plant and equipment	(404)		(9,687)
Proceeds from the sale of UGSI	76		75
Net cash provided by (used in) investing activities	1,295		9,454
Cash flows from financing activities:
Proceeds from debtor in possession term loan	0		0
Payments for debt issuance costs	0		0
Payments on vehicle financing and other financing activities	(1,773)		(1,399)
Net cash (used in) provided by financing activities	(2,215)		(3,531)
Change in cash, cash equivalents and restricted cash	(3,992)		10,143
Cash and cash equivalents, beginning of period	7,193		5,488
Restricted cash, beginning of period	7,805		1,296
Cash and cash equivalents, beginning of period	14,998		6,784
Cash and cash equivalents, end of period	3,248	$ 7,193	15,077
Restricted cash, end of period	7,758	7,805	1,850
Cash, cash equivalents and restricted cash, end of period	11,006	14,998	16,927
Supplemental disclosure of cash flow information:
Cash paid for interest	218		2,835
Cash paid for taxes, net	23		390
Predecessor Revolving Credit Facility
Cash flows from financing activities:
Proceeds from revolving credit facility	0		0
Payments on long-term lines of credit	0		0
Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans	0		0
First and Second Lien Term Loans
Cash flows from financing activities:
Payments on long-term lines of credit	(442)		(2,132)
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans	0		0
Successor Revolving Facility
Cash flows from financing activities:
Proceeds from revolving credit facility	28,020		172,336
Payments on long-term lines of credit	(28,020)		$ (172,336)
Predecessor
Cash flows from operating activities:
Net (loss) income		168,611
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		28,981
Amortization of debt issuance costs, net		2,135
Accrued interest added to debt principal		11,474
Stock-based compensation		457
Impairment of long-lived assets		0
Gain on sale of UGSI		0
(Gain) loss on disposal of property, plant and equipment		(258)
Bad debt (recoveries) expense		788
Change in fair value of derivative warrant liability		(4,025)
Deferred income taxes		(337)
Other, net		(11,295)
Reorganization items, non-cash		(218,600)
Changes in operating assets and liabilities:
Accounts receivable		(4,528)
Prepaid expenses and other receivables		472
Accounts payable and accrued liabilities		3,682
Other assets and liabilities, net		3,494
Net cash provided by (used in) operating activities		(18,949)
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment		3,083
Purchases of property, plant and equipment		(3,149)
Proceeds from the sale of UGSI		0
Net cash provided by (used in) investing activities		(66)
Cash flows from financing activities:
Proceeds from revolving credit facility		106,785
Payments on long-term lines of credit		(129,964)
Proceeds from debtor in possession term loan		6,875
Payments for debt issuance costs		(1,053)
Payments on vehicle financing and other financing activities		(2,797)
Net cash (used in) provided by financing activities		31,599
Change in cash, cash equivalents and restricted cash		12,584
Cash and cash equivalents, beginning of period	7,193	994
Restricted cash, beginning of period		1,420
Cash and cash equivalents, beginning of period	$ 14,998	2,414
Cash and cash equivalents, end of period		7,193
Cash, cash equivalents and restricted cash, end of period		14,998
Supplemental disclosure of cash flow information:
Cash paid for interest		1,568
Cash paid for taxes, net		193
Predecessor | Predecessor Revolving Credit Facility
Cash flows from financing activities:
Proceeds from revolving credit facility		106,785
Payments on long-term lines of credit		(129,964)
Predecessor | Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans		15,700
Predecessor | First and Second Lien Term Loans
Cash flows from financing activities:
Payments on long-term lines of credit		0
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans		36,053
Predecessor | Successor Revolving Facility
Cash flows from financing activities:
Proceeds from revolving credit facility		0
Payments on long-term lines of credit		$ 0

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Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Reorganization, Cancellation And Issuance Of Stock	Common Stock	Common Stock Reorganization, Cancellation And Issuance Of Stock	Additional Paid-In Capital	Additional Paid-In Capital Reorganization, Cancellation And Issuance Of Stock	Treasury Stock	Treasury Stock Reorganization, Cancellation And Issuance Of Stock	Accumulated Deficit	Accumulated Deficit Reorganization, Cancellation And Issuance Of Stock
Beginning balance (Predecessor) at Dec. 31, 2016	$ (169,066)		$ 152		$ 1,407,867		$ (19,807)		$ (1,557,278)
Beginning balance (in shares) (Predecessor) at Dec. 31, 2016			152,433				(1,514)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation | Predecessor	309				309
Issuance of common stock to employees (in shares) | Predecessor			32
Treasury stock acquired through surrender of shares for tax withholding | Predecessor							$ (2)
Treasury stock acquired through surrender of shares for tax withholding	(2)
Treasury stock acquired through surrender of shares for tax withholding (in shares) | Predecessor							(12)
Issuance of common stock for warrants exercised (in shares) | Predecessor			2
Net (loss) income | Predecessor	(35,962)								(35,962)
Ending balance (Predecessor) at Mar. 31, 2017	(204,721)		$ 152		1,408,176		$ (19,809)		(1,593,240)
Ending balance (in shares) (Predecessor) at Mar. 31, 2017			152,467				(1,526)
Beginning balance (Predecessor) at Dec. 31, 2016	(169,066)		$ 152		1,407,867		$ (19,807)		(1,557,278)
Beginning balance (in shares) (Predecessor) at Dec. 31, 2016			152,433				(1,514)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income | Predecessor	168,611
Ending balance (Predecessor) at Jul. 31, 2017	0		$ 152		1,408,324		$ (19,809)		(1,388,667)
Ending balance (Successor) at Jul. 31, 2017	290,191		$ 117		290,074		$ 0		0
Ending balance (in shares) (Predecessor) at Jul. 31, 2017			152,480	(152,480)			(1,526)	1,526
Ending balance (in shares) (Successor) at Jul. 31, 2017			11,696	11,696			0
Beginning balance (Predecessor) at Mar. 31, 2017	(204,721)		$ 152		1,408,176		$ (19,809)		(1,593,240)
Beginning balance (in shares) (Predecessor) at Mar. 31, 2017			152,467				(1,526)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation | Predecessor	112				112
Net (loss) income | Predecessor	(19,587)								(19,587)
Ending balance (Predecessor) at Jun. 30, 2017	(224,196)		$ 152		1,408,288		$ (19,809)		(1,612,827)
Ending balance (in shares) (Predecessor) at Jun. 30, 2017			152,467				(1,526)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation | Predecessor	36				36
Issuance of common stock for warrants exercised (in shares) | Predecessor			13
Net (loss) income | Predecessor	224,160								224,160
Ending balance (Predecessor) at Jul. 31, 2017	0		$ 152		1,408,324		$ (19,809)		(1,388,667)
Ending balance (Successor) at Jul. 31, 2017	290,191		$ 117		290,074		$ 0		0
Ending balance (in shares) (Predecessor) at Jul. 31, 2017			152,480	(152,480)			(1,526)	1,526
Ending balance (in shares) (Successor) at Jul. 31, 2017			11,696	11,696			0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cancellation of Predecessor Equity/Issuance of Successor common stock and warrants | Predecessor		$ 0		$ (152)		$ (1,408,324)		$ 19,809		$ 1,388,667
Cancellation of Predecessor Equity/Issuance of Successor common stock and warrants | Successor		$ 290,191		$ 117		$ 290,074
Stock-based compensation | Successor	181				181
Net (loss) income | Successor	(16,993)								(16,993)
Net (loss) income	(16,993)
Ending balance (Successor) at Sep. 30, 2017	273,379		$ 117		290,255		$ 0		(16,993)
Ending balance (in shares) (Successor) at Sep. 30, 2017			11,696				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cancellation of Predecessor Equity/Issuance of Successor common stock and warrants	242,973
Beginning balance at Dec. 31, 2017	242,973		$ 117		290,751				(47,895)
Beginning balance (in shares) at Dec. 31, 2017			11,696
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	10,978				10,978
Net (loss) income	(32,167)								(32,167)
Ending balance at Mar. 31, 2018	221,784		$ 117		301,729				(80,062)
Ending balance (in shares) at Mar. 31, 2018			11,696
Beginning balance at Dec. 31, 2017	242,973		$ 117		290,751				(47,895)
Beginning balance (in shares) at Dec. 31, 2017			11,696
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(50,460)
Ending balance at Sep. 30, 2018	204,005		$ 117		302,243				(98,355)
Ending balance (in shares) at Sep. 30, 2018			11,696
Beginning balance at Mar. 31, 2018	221,784		$ 117		301,729				(80,062)
Beginning balance (in shares) at Mar. 31, 2018			11,696
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	416				416
Net (loss) income	(11,176)								(11,176)
Ending balance at Jun. 30, 2018	211,024		$ 117		302,145				(91,238)
Ending balance (in shares) at Jun. 30, 2018			11,696
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	98				98
Net (loss) income	(7,117)								(7,117)
Ending balance at Sep. 30, 2018	204,005		$ 117		$ 302,243				$ (98,355)
Ending balance (in shares) at Sep. 30, 2018			11,696
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cancellation of Predecessor Equity/Issuance of Successor common stock and warrants	$ 204,005

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Basis of Presentation

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2017, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018 (as amended on April 19, 2018, the “2017 Annual Report on Form 10-K”).

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted.

On May 1, 2017, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed voluntary petitions under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to pursue prepackaged plans of reorganization (together, and as amended, the “Plan”). On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan became effective on August 7, 2017 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Upon emergence, we elected to apply fresh start accounting effective July 31, 2017, to coincide with the timing of our normal accounting period close. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the condensed consolidated financial statements on or after August 1, 2017, are not comparable with the condensed consolidated financial statements prior to that date.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on and prior to July 31, 2017.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (or “FASB”) issued Accounting Standards Update (or “ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in this update will be added to the Account Standards Codification (“ASC”) as ASC 606, Revenue from Contracts with Customers, and replaces the guidance in ASC 605, Revenue Recognition. The new guidance in ASC 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services.

On January 1, 2018, we adopted the guidance in ASC 606 and all the related amendments (the “new revenue standard”) and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. See Note 3 for further information on the new standard.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification and guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and contingent consideration payments made after a business combination. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning January 1, 2018, which did not have a significant impact on the consolidated statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is to be applied retrospectively. The adoption of this guidance as of January 1, 2018 did not have a significant impact on our consolidated statement of cash flows, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals. We have adjusted the prior year period to reflect this new presentation as well.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2017 Annual Report on Form 10-K.

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Recently Issued Accounting Pronouncements

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-02 is permitted. We are nearing the completion of our assessment of the impact ASU 2016-02 will have on our consolidated financial statements. Based upon the work performed thus far, we expect the primary change upon adoption to be the recognition, on a discounted basis, of our minimum commitments under non-cancellable operating leases on our consolidated balance sheets resulting in the recording of right of use assets and lease obligations. We have also reviewed the various practical expedients that have been approved by the FASB for ASU 2016-02 and have selected which ones we plan to adopt when we implement the new standard effective January 1, 2019.

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Revenues

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

On January 1, 2018, we adopted the guidance in ASC 606, including all related amendments, and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under ASC 605, or the accounting guidance in effect for those periods.

Revenue Recognition

Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues.

Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transfer services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering.

The following tables present our revenues disaggregated by revenue source for each reportable segment for the three months ended September 30, 2018, two months ended September 30, 2017, and one month ended July 31, 2017:

	Successor
	For the Three Months Ended September 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	21,809	$	9,243	$	3,682	$	—	$	34,734
Disposal Services	5,235		1,329		1,234		—		7,798
Other Revenue	2,471		615		76		—		3,162
Total Service Revenue	29,515		11,187		4,992		—		45,694
Rental Revenue	3,884		60		18		—		3,962
Total Revenue	$	33,399	$	11,247	$	5,010	$	—	$	49,656

	Successor
	For the Two Months Ended September 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	13,573	$	5,830	$	4,708	$	—	$	24,111
Disposal Services	2,325		400		890		—		3,615
Other Revenue	1,935		892		67		—		2,894
Total Service Revenue	17,833		7,122		5,665		—		30,620
Rental Revenue	2,734		37		367		—		3,138
Total Revenue	$	20,567	$	7,159	$	6,032	$	—	$	33,758

	Predecessor
	For the One Month Ended July 31, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	5,878	$	2,777	$	2,697	$	—	$	11,352
Disposal Services	980		308		311		—		1,599
Other Revenue	325		297		35		—		657
Total Service Revenue	7,183		3,382		3,043		—		13,608
Rental Revenue	1,319		42		153		—		1,514
Total Revenue	$	8,502	$	3,424	$	3,196	$	—	$	15,122

The following tables present our revenues disaggregated by revenue source for each reportable segment for the nine months endedSeptember 30, 2018, two months ended September 30, 2017 and seven months ended July 31, 2017:

	Successor
	For the Nine Months Ended September 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	65,036	$	25,492	$	16,807	$	—	$	107,335
Disposal Services	13,387		3,061		3,551		—		19,999
Other Revenue	7,715		1,231		261		—		9,207
Total Service Revenue	86,138		29,784		20,619		—		136,541
Rental Revenue	11,196		182		354		—		11,732
Total Revenue	$	97,334	$	29,966	$	20,973	$	—	$	148,273

	Successor
	For the Two Months Ended September 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	13,573	$	5,830	$	4,708	$	—	$	24,111
Disposal Services	2,325		400		890		—		3,615
Other Revenue	1,935		892		67		—		2,894
Total Service Revenue	17,833		7,122		5,665		—		30,620
Rental Revenue	2,734		37		367		—		3,138
Total Revenue	$	20,567	$	7,159	$	6,032	$	—	$	33,758

	Predecessor
	For the Seven Months Ended July 31, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	38,844	$	17,118	$	15,764	$	—	$	71,726
Disposal Services	6,506		1,284		1,522		—		9,312
Other Revenue	2,975		2,240		311		—		5,526
Total Service Revenue	48,325		20,642		17,597		—		86,564
Rental Revenue	8,221		109		989		—		9,319
Total Revenue	$	56,546	$	20,751	$	18,586	$	—	$	95,883

Water Transfer Services

The majority of our revenues are from the removal and disposal of flowback and produced saltwater originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transport pipelines. Water transfer rates for trucking are generally based upon a fixed fee per barrel of disposal water, but in certain circumstances may be based upon an hourly rate. Revenue is recognized once the water has been transferred, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our disposal water pipeline are priced at a fixed fee per disposal barrel transferred, with revenues recognized over time from when the water is injected into our pipeline until the transfer is complete. Water transfer services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month.

Disposal Services

Revenues for disposal services are generated through fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Disposal rates are generally based on a fixed fee per barrel of disposal water, or on a per ton basis for landfill disposal, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time.

Other Revenue

Other revenue primarily includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil at a point in time once the goods are transferred.

Other revenue also historically included small-scale construction or maintenance projects, however we exited that business during the three months ended June 30, 2018. Under the new revenue standard, revenue for construction and maintenance projects, which generally spanned approximately two to three months, was recognized over time under the milestone method which is considered an output method. Since our construction contracts were short term in nature, the contractual milestone dates occurred close together over time such that there was no risk that we would not recognize revenue for goods or services transferred to the customer. All construction costs were expensed as incurred.

Rental Revenue

We generate rental revenue from the rental of various equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 840, Leases. When ASC 842, Leases, becomes effective on January 1, 2019, the Company will continue to recognize the revenues from rental equipment under this new standard as a lessor.

Practical Expedients

The new revenue standard requires the transaction price to exclude amounts collected on behalf of third parties. However, the new revenue standard also provides a practical expedient to allow entities to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority. Upon implementing the new revenue standard we adopted this practical expedient and have excluded sales and usage-based taxes from the transaction price, rather than making a jurisdiction-by-jurisdiction assessment.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Net (loss) income per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period. For the three and nine months endedSeptember 30, 2018, and the two months ended September 30, 2017, no shares of common stock underlying stock options, restricted stock or warrants were included in the computation of diluted earnings per common share because the inclusion of such shares would be anti-dilutive based on the net losses reported for those periods.

The following table presents the calculation of basic and diluted net (loss) income per common share, as well as the anti-dilutive stock-based awards that were excluded from the calculation of diluted loss per share for the periods presented:

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Numerator:
Net (loss) income	$	(7,117	)	$	(16,993	)	$	224,160
Denominator:
Weighted average shares—basic	11,696			11,696			150,951
Common stock equivalents	—			—			6,443
Weighted average shares—diluted	11,696			11,696			157,394
Earnings per common share:
Net (loss) income per basic common share	$	(0.61	)	$	(1.45	)	$	1.48
Net (loss) income per diluted common share	$	(0.61	)	$	(1.45	)	$	1.42
Anti-dilutive stock-based awards excluded:	1,210			828			576

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Numerator:
Net (loss) income	$	(50,460	)	$	(16,993	)	$	168,611
Denominator:
Weighted average shares—basic	11,696			11,696			150,940
Common stock equivalents	—			—			23,364
Weighted average shares—diluted	11,696			11,696			174,304
Earnings per common share:
Net (loss) income per basic common share	$	(4.31	)	$	(1.45	)	$	1.12
Net (loss) income per diluted common share	$	(4.31	)	$	(1.45	)	$	0.97
Anti-dilutive stock-based awards excluded:	1,227			828			593

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Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets consist of the following:

	Successor
	September 30, 2018
	Gross Carrying Amount		Additions/(Disposals)			Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	(13	)	$	(152	)	$	429	5.5
Total intangible assets	$	594	$	(13	)	$	(152	)	$	429	5.5

	Successor
	December 31, 2017
	Gross Carrying Amount		Additions/(Disposals)		Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	—	$	(47	)	$	547	6.2
Total intangible assets	$	594	$	—	$	(47	)	$	547	6.2

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

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Assets Held for Sale and Impairment

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Assets Held for Sale and Impairment

Assets Held for Sale and Impairment

During the three months ended March 31, 2018, management approved a plan to sell certain assets located in the Southern division as a result of exiting the Eagle Ford Shale area. As a result, we began to actively market these assets, which we expect to sell within one year. See Note 11 for additional details on the exit of the Eagle Ford Shale area. In addition, during the three months ended March 31, 2018, management approved the sale of certain assets, primarily frac tanks, located in the Northeast division, that are expected to sell within one year. In accordance with applicable accounting guidance, the assets were recorded at the lower of net book value or fair value less costs to sell and reclassified to “Assets held for sale” on the condensed consolidated balance sheet during the three months ended March 31, 2018. Upon reclassification we ceased to recognize depreciation expense on the assets. As the fair value of the assets reclassified as held for sale was lower than its net book value, we recorded an impairment charge of $4.1 million during the three months ended March 31, 2018. Of the $4.1 million recorded, $4.0 million related to the Southern division for the Eagle Ford exit and $0.1 million related to the Northeast division, and is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations.

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division to “Impairment of long-lived assets” on our condensed consolidated statements of operations related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure.

During the three months ended September 30, 2018, we recorded an impairment charge of$0.1 millionin the Southern division for the further write-down of buildings and land held for sale as a result of exiting the Eagle Ford Shale area due to updated market pricing. The$0.1 millionis included in“Impairment of long-lived assets” on our condensed consolidated statements of operations.

During the two months ended September 30, 2017, management approved plans to sell certain underutilized assets located in the Rocky Mountain and Southern divisions. As the fair value of the assets reclassified as held for sale during the quarter was lower than its net book value, an impairment charge of $2.4 million was recognized during the two months ended September 30, 2017, and is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations. Of the $2.4 million recorded during the two months ended September 30, 2017, $2.2 million related to the Rocky Mountain division and $0.2 million related to the Southern division.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Measurements

Fair value represents an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Successor
	September 30, 2018		December 31, 2017
Derivative warrant liability	$	154	$	477
Contingent consideration	500		500

Derivative Warrant Liability

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. Additionally, on the Effective Date, pursuant to the Plan we issued to the holders of our pre-Effective Date9.875%Senior Notes due 2018 (the “2018 Notes”) and holders of certain claims relating to the rejection of executory contracts and unexpired leases118,137warrants with an exercise price of$39.82and a termexpiring seven years from the Effective Date. Each warrant is exercisable for one share of our common stock, par value$0.01. The warrants issued by the Successor Company were determined to be derivative liabilities.

Our derivative warrant liability is adjusted to reflect the estimated fair value at each quarter end, with any decrease or increase in the estimated fair value recorded in “Other (income) expense, net” in the condensed consolidated statements of operations. We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed using a Monte Carlo simulation model. The key inputs in determining our derivative warrant liability typically include our stock price, the volatility of our stock price, and the risk free interest rate. Future changes in these factors could have a significant impact on the computed fair value of the derivative warrant liability. As such, we expect future changes in the fair value of the warrants could vary significantly from quarter to quarter.

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the nine months endedSeptember 30, 2018, and the five months ended December 31, 2017.

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(323		)	(240		)
Balance at end of period	$	154		$	477

Contingent Consideration

We are liable for contingent consideration payments in connection with an acquisition. The fair value of the contingent consideration obligation was determined using a probability-weighted income approach at the acquisition date and is revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the performance measurements upon which the obligation is based.

On June 28, 2017, certain of the Nuverra Parties filed a motion with the Bankruptcy Court seeking authorization to resolve unsecured claims related to the $8.5 million contingent consideration from the Ideal Oilfield Disposal LLC acquisition (the “Ideal Settlement”). On July 11, 2017, the Bankruptcy Court entered an order authorizing the Ideal Settlement. Pursuant to the approved settlement terms, the $8.5 million contingent claim was replaced with an obligation on the part of the applicable Nuverra Party to transfer $0.5 million to the counterparties to the Ideal Settlement upon emergence from chapter 11, and $0.5 million when the Ideal Settlement counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit. The $0.5 million due upon emergence from chapter 11 was paid during the five months ended December 31, 2017. The remaining $0.5 million due when the counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit has been classified as current, as these permits and certificates are expected to be received within one year.

Changes to the fair value of contingent consideration are recorded as “Other (income) expense, net” in the condensed consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs. Changes to contingent consideration obligations during the nine months endedSeptember 30, 2018, and five months ended December 31, 2017, were as follows:

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	500		$	1,000
Cash payments	—			(500		)
Balance at end of period	500			500
Less: current portion	(500		)	(500		)
Long-term contingent consideration	$	—		$	—

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Accrued Liabilities

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following at September 30, 2018 and December 31, 2017:

	Successor
	September 30, 2018		December 31, 2017
Accrued payroll and employee benefits	$	5,829	$	3,304
Accrued insurance	2,573		2,701
Accrued legal	718		1,749
Accrued taxes	2,228		2,362
Accrued interest	327		161
Accrued operating costs	3,719		2,663
Accrued other	330		999
Total accrued liabilities	$	15,724	$	13,939

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Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

Debt consisted of the following at September 30, 2018 and December 31, 2017:

			Successor
			September 30, 2018					December 31, 2017
	Interest Rate	Maturity Date	Fair Value of Debt (d)		Carrying Value of Debt			Carrying Value of Debt
Successor Revolving Facility (a)	7.36%	Aug. 2020	$	—	$	—		$	—
Successor First Lien Term Loan (b)	9.36%	Aug. 2020	12,679		12,679			14,285
Successor Second Lien Term Loan (b)	11.00%	Feb 2021	20,592		20,592			21,000
Vehicle financings (c)	5.31%	Various	2,343		2,343			3,764
Total debt			$	35,614	35,614			39,049
Less: current portion of long-term debt					(4,526		)	(5,525		)
Long-term debt					$	31,088		$	33,524

_____________________

(a) The interest rate presented represents the interest rate on the $30.0 million Successor Revolving Facility as of September 30, 2018.

(b) Interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. Interest on the Successor Second Lien Term Loan accrues at both an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018, and on or after February 7, 2018, at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 5.31%, which mature in varying installments between 2018 and 2020.

(d) Our Successor Revolving Facility, Successor First Lien Term Loan, Successor Second Lien Term Loan, and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

For a discussion of material changes and developments in our debt and its principal terms, see our discussion below.

Indebtedness

As of September 30, 2018, we had $35.6 million of indebtedness outstanding, consisting of $12.7 million under the Successor First Lien Term Loan (as defined herein), $20.6 million under the Successor Second Lien Term Loan (as defined herein), and $2.3 million of capital leases for vehicle financings.

See the “Bridge Term Loan Credit Agreement, Guaranty Agreement, and Subordination Agreement” discussion in Note 18 for details on the Bridge Term Loan Credit Agreement.

First Lien Credit Agreement

On the Effective Date, pursuant to the Plan, the Company entered into a $45.0 million First Lien Credit Agreement (the “Credit Agreement”) by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the Credit Agreement, the Credit Agreement Lenders agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Successor Revolving Facility”) and a $15.0 million senior secured term loan facility (the “Successor First Lien Term Loan”) (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based lending facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses, and other general corporate purposes. The Credit Agreement also contains an accordion feature that provides for an increase in availability of up to an additional $20.0 million, subject to the satisfaction of certain terms and conditions contained in the Credit Agreement.

The Successor Revolving Facility and the Successor First Lien Term Loan mature on August 7, 2020, at which time the Company must repay the outstanding principal amount of the Successor Revolving Facility and the Successor First Lien Term Loan, together with interest accrued and unpaid thereon. The Successor Revolving Facility may be repaid and, subject to the terms and conditions of the Credit Agreement, reborrowed at any time during the term of the Credit Agreement. The principal amount of the Successor First Lien Term Loan shall be repaid in installments of $178.6 thousand beginning on September 1, 2017 and the first day of each calendar month thereafter prior to maturity. Interest on the Successor Revolving Facility accrues at an annual rate equal to the LIBOR Rate (as defined in the Credit Agreement) plus 5.25%, and interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%; however, if there is an Event of Default (as defined in the Credit Agreement), the Credit Agreement Agent, in its sole discretion, may increase the applicable interest rate at a per annum rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Credit Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. As of September 30, 2018, we were in compliance with all covenants.

See the “Amendment to First Lien Credit Agreement and Joinder to First Lien Guaranty and Security Agreement” discussion in Note 18 for details on the First Amendment to the Credit Agreement.

Second Lien Term Loan Credit Agreement

On the Effective Date, pursuant to the Plan, the Company also entered into a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan Agreement”) by and among the lenders party thereto (the “Second Lien Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent (the “Second Lien Term Loan Agent”) and the Company. Pursuant to the Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to extend to the Company a $26.8 million second lien term loan facility (the “Successor Second Lien Term Loan”), of which $21.1 million was advanced on the Effective Date and up to an additional $5.7 million (“Delayed Draw Term Loan”) is available at the request of the Company after the closing date subject to the satisfaction of certain terms and conditions specified in the Second Lien Term Loan Agreement. The Second Lien Term Loan Lenders extended the Successor Second Lien Term Loan, among other things, (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based revolving facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses and other general corporate purposes.

The Successor Second Lien Term Loan matures on February 7, 2021, at which time the Company must repay all outstanding obligations under the Successor Second Lien Term Loan. The principal amount of the Successor Second Lien Term Loan shall be repaid in installments of $263.2 thousand beginning on October 1, 2017, and the first day of each fiscal quarter thereafter prior to maturity, with such amount to be proportionally increased as the result of the incurrence of a Delayed Draw Term Loan. Interest on the Successor Second Lien Term Loan accrues at an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018 (or such later date as the Company may select in accordance with the terms of the Second Lien Term Loan Agreement) and, on or after February 7, 2018 (or such later date) at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. However, upon the occurrence and during the continuation of an Event of Default (as defined in the Second Lien Term Loan Agreement) due to a voluntary or involuntary bankruptcy filing, automatically, or any other Event of Default, at the election of the Second Lien Term Loan Agent, the Successor Second Lien Term Loan and all obligations thereunder shall bear interest at an annual rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Second Lien Term Loan Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for term loans of this type. As of September 30, 2018, we were in compliance with all covenants.

See the “Amendment to Second Lien Credit Agreement and Joinder to Second Lien Guaranty and Security Agreement” discussion in Note 18 for details on the First Amendment to the Second Lien Term Loan Agreement.

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Derivative Warrants

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Derivative Warrants

Derivative Warrants

Predecessor Warrants

During the year ended December 31, 2016, we issued 26.4 million warrants, with 17.5 million warrants for the exchange of the 2018 Notes for new 12.5%/10.0% Senior Secured Second Lien Notes due 2021 (the “2021 Notes”), 0.1 million warrants for the exchange of the 2018 Notes for common stock, and 8.8 million warrants to the lenders under the Predecessor Term Loan. All warrants were issued with an exercise price of $0.01 and had a term of ten years.

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. The following table shows the Predecessor warrant activity for the seven months ended July 31, 2017:

	Predecessor
	Seven Months Ended
	July 31, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(16	)
Canceled due to emergence from chapter 11	(25,267	)
Outstanding at the end of the period	—

Successor Warrants

Pursuant to the Plan, on the Effective Date, we issued to the holders of the 2018 Notes and holders of certain claims relating to the rejection of executory contracts and unexpired leases warrants to purchase an aggregate of118,137shares of common stock, par value$0.01, at an exercise price of$39.82per share and with a termexpiring seven years from the Effective Date.

The following table shows the Successor warrant activity for the nine months endedSeptember 30, 2018:

	Successor
	Nine Months Ended
	September 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

Fair Value of Warrants

We account for warrants in accordance with the accounting guidance for derivatives, which sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the shareholders’ equity section of the entity’s balance sheet. We determined that the Predecessor warrants were ineligible for equity classification due to the anti-dilution provisions in the contract and were recorded as derivative liabilities at fair value in the condensed consolidated balance sheet. The Successor warrants are also ineligible for equity classification as the warrants are not indexed to our common stock and are recorded as derivative liabilities at fair value in the condensed consolidated balance sheets. The Successor warrants are classified as a current liability in the condensed consolidated balance sheets as they could be exercised by the holders at any time.

As discussed previously in Note 7, the fair value of the derivative warrant liability is estimated using a Monte Carlo simulation model on the date of issue and is re-measured at each quarter end until expiration or exercise of the underlying warrants with the resulting fair value adjustment recorded in “Other (income) expense, net” in the condensed consolidated statements of operations.

The fair value of the derivative warrant liability as of September 30, 2018 and December 31, 2017 was estimated using the following model inputs:

	Successor
	As of September 30,			As of December 31,
	2018			2017
Exercise price	$	39.82		$	39.82
Closing stock price	$	11.12		$	18.18
Risk free rate	2.93		%	2.29		%
Expected volatility	42.31		%	40.59		%

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Restructuring and Exit Costs

9 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Exit Costs

Restructuring and Exit Costs

Eagle Ford Shale Area

On March 1, 2018, the Board of Directors (the “Board”) determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area in order to focus on other opportunities. The Board considered a number of factors in making this determination, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our operations, and recommendations from management. We substantially exited the Eagle Ford Shale area as of June 30, 2018. We continue to incur minimal related costs while the remaining assets previously used in the operation of our business in that basin are divested.

The total costs of the exit recorded during the three and nine months endedSeptember 30, 2018 were $49.0 thousand and $1.1 million, respectively, and are reflected in “Other, net” in the condensed consolidated statements of operations. Such costs consisted of the following and all related to the Southern operating segment:

	Successor
	Three Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2018
Severance and termination benefits	$	(11	)	$	225
Contract termination costs and exit costs	60			892
Total restructuring and exit costs for Eagle Ford	$	49		$	1,117

The remaining liability for the Eagle Ford exit, shown below, totaled approximately $50.0 thousand as of September 30, 2018 and is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through September 30, 2018 is as follows:

	Employee Termination Costs (a)			Lease Exit Costs (b)			Other Exit Costs (c)			Total
Balance accrued at beginning of period - Successor	$	—		$	—		$	—		$	—
Restructuring and exit-related costs	225			64			828			1,117
Cash payments	(225		)	(41		)	(801		)	(1,067		)
Balance accrued at end of period - Successor	$	—		$	23		$	27		$	50

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to the Company.

(c) Other exit costs include costs related to the movement of vehicles, tanks and rental fleet in connection with the exit from the Eagle Ford Shale area.

Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business

In March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian shale area and the Tuscaloosa Marine Shale logistics business. Additionally, we closed certain yards within the Northeast and Southern divisions and transferred many of the related assets to our other operating locations. The total costs of the restructuring recognized in 2015 were approximately $7.1 million, and included severance and termination benefits, lease exit costs, other exits costs related to the movement of vehicles and rental fleet, and an asset impairment charge.

The remaining liability for the restructuring and exit costs incurred represents lease exit costs under non-cancellable operating leases and totaled approximately $45.0 thousand as of September 30, 2018, which is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through September 30, 2018 is as follows:

	Lease Exit Costs
Balance accrued at beginning of period - Successor	$	82
Cash payments	(37		)
Balance accrued at end of period - Successor	$	45

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Current income tax expense	$	(58	)	$	—		$	(33	)
Deferred income tax (expense) benefit	(11		)	(34		)	337
Total income tax (expense) benefit	$	(69	)	$	(34	)	$	304

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Current income tax expense	$	(58	)	$	—		$	(15	)
Deferred income tax (expense) benefit	(11		)	(34		)	337
Total income tax (expense) benefit	$	(69	)	$	(34	)	$	322

The effective income tax rate for the three and nine months endedSeptember 30, 2018 was (1.0)% and (0.1)%, which differs from the federal statutory benefit rate of 21.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

The effective income tax rate for the two months ended September 30, 2017, was (0.2)%, which differed from the federal statutory rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses. The effective income tax rate for the one and seven months ended July 31, 2017, was (0.1)% and (0.2)%, respectively, which differed from the federal statutory benefit rate of 35.0%. The difference was primarily due to the change in the deferred tax liability related to certain long-lived assets resulting from the application of fresh start accounting.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant changes in U.S. tax law including a reduction in the corporate statutory income tax rate from 35% to 21%, changes to net operating loss (“NOL”) carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. As a result of the enacted law, we were required to revalue deferred tax assets and liabilities as of December 22, 2017 using the new statutory rate and have reflected this revaluation in our effective tax rate reconciliation. As we are subject to a valuation allowance, there was no material impact to our tax provision at either September 30, 2018 or December 31, 2017.

We have significant deferred tax assets, consisting primarily of NOLs, which have a limited life, generally expiring between the years 2031 and 2038, and capital losses, which have a five year carryforward expiring in 2020. We regularly assess the positive and negative evidence available to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued ordinary losses, at September 30, 2018 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of our deferred tax assets that is not offset by deferred tax liabilities. We expect our effective income tax rate to be near zero for the remainder of 2018.

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Share-based Compensation

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

Successor Share-based Compensation

The Second Amended and Restated Employment Agreement of Mr. Mark D. Johnsrud, our former Chairman and Chief Executive Officer, which was assumed by the Company on the Effective Date, provided for the issuance to Mr. Johnsrud of two tranches of options to purchase (i) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $475.0 million and (ii) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $525.0 million. Each tranche of options vests in substantially equal installments on the first three anniversaries following the Effective Date. Pursuant to Mr. Johnsrud’s Second Amended and Restated Employment Agreement and the Plan, the grant of stock options to Mr. Johnsrud was effective as of the Effective Date. On February 23, 2018, following the approval of the form of option agreement by the Compensation and Nominating Committee of the Board (the “Compensation Committee”), the Company and Mr. Johnsrud entered into a Notice of Grant of CEO Stock Options and Stock Option Award Agreement (the “Award Agreement”) to provide for the terms and conditions of Mr. Johnsrud’s stock option grant. Pursuant to the Award Agreement, Mr. Johnsrud was awarded 354,411 options to purchase common stock, with an exercise price of $37.03 per share, in Tranche 1, and 354,411 options to purchase common stock, with an exercise price of $41.31 per share, in Tranche 2. The stock options in Tranche 1 and Tranche 2 were scheduled to vest in three equal installments on the first three anniversaries of the Effective Date.

Pursuant to the requirements of the Plan, on February 22, 2018, the Board approved the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan (the “Incentive Plan”). The Incentive Plan is intended to provide for the grant of equity-based awards to designated members of the Company’s management and employees. Pursuant to the terms of the Plan, the Incentive Plan became effective on the Effective Date. The maximum number of shares of the Company’s common stock that is available for the issuance of awards under the Incentive Plan is 1,772,058.

On February 22, 2018, the Compensation Committee authorized the grant of performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“TRSUs”) under the Incentive Plan to Mr. Johnsrud, Edward A. Lang, the Company’s Executive Vice President and Chief Financial Officer, and Joseph M. Crabb, the Company’s Executive Vice President and Chief Legal Officer. On or after the applicable vesting date, the PRSUs and TRSUs will be settled for shares of common stock if all applicable conditions have been met. Mr. Johnsrud received 531,618 PRSUs, which initially were scheduled to vest in equal installments on the first two anniversaries of the Effective Date, but which partially vested on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 PRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020. Vesting of the PRSUs is subject to the achievement of pre-established performance targets during the applicable performance measurement periods. Mr. Johnsrud received 531,618 TRSUs, which were scheduled to vest in three equal installments on the date of grant, which was February 23, 2018, and the first two anniversaries of the Effective Date, but which vested in full on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 TRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020.

Further, the Compensation Committee on February 22, 2018 adopted the 2018 Restricted Stock Plan for Directors (the “Restricted Stock Plan”), which is subject to ratification by the Company’s shareholders at the Company’s 2018 Annual Meeting. The Restricted Stock Plan provides for the grant of restricted stock to the non-employee directors of the Company. The Restricted Stock Plan limits the shares that may be issued thereunder to 100,000 shares of common stock.

In coordination with the adoption of the Restricted Stock Plan, the Compensation Committee also authorized award grants of restricted stock to the current non-employee directors of the Company, which were granted on March 16, 2018 subject to ratification of the Restricted Stock Plan by the Company’s shareholders at the Company’s 2018 annual meeting. Each non-employee director was granted 4,688 shares of restricted stock for service during part of fiscal year 2017 and for fiscal 2018, all of which will fully vest on the first anniversary of the grant date.

On May 29, 2018, the Compensation Committee authorized the grant of 5,889 shares of restricted stock to the Company’s interim Chief Executive Officer, Mr. Charles K. Thompson. Per the terms of the grant agreement, the shares immediately vested in full on the date of grant.

The total grants awarded during the three and nine months endedSeptember 30, 2018, and the two months ended September 30, 2017 are presented in the table below:

	Successor
	Three Months Ended	Nine Months Ended	Two Months Ended
	September 30, 2018	September 30, 2018	September 30, 2017
Stock option grants	—	—	709
Restricted stock grants	—	20	—
Restricted stock unit grants	—	1,311	—
Total grants in the Successor period	—	1,331	709

On March 2, 2018, the Company announced that Mr. Johnsrud was leaving the Company, effective as of March 2, 2018 (the “Separation Date”). Pursuant to a Separation Agreement and Mutual Release entered into between Mr. Johnsrud and the Company on the Separation Date, Mr. Johnsrud vested in the following: (a) 354,412 unvested TRSUs that were granted on February 22, 2018; and (b) 708,822 unvested stock options that were granted on February 23, 2018, which will remain exercisable through the first anniversary of the Separation Date. Vested restricted stock units subject to time based vesting will be settled in accordance with the terms and conditions set forth in the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan and any applicable award agreement(s). Additionally, Mr. Johnsrud continued to hold 88,603 PRSUs that were granted on February 22, 2018, with a performance period that began on January 1, 2018 and ended on June 30, 2018. As the pre-established performance target was not met as of June 30, 2018, Mr. Johnsrud’s 88,603 PRSUs were canceled during the three months ended June 30, 2018. All other unvested equity awards granted to Mr. Johnsrud under the Incentive Plan were canceled as of the Separation Date.

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and nine months endedSeptember 30, 2018 and the two months ended September 30, 2017 was as follows:

	Successor
	Three Months Ended		Nine Months Ended			Two Months Ended
	September 30, 2018		September 30, 2018			September 30, 2017
Stock options	$	—	$	(788	)	$	181
Restricted stock	76		236			—
Restricted stock units	22		12,044			—
Total expense	$	98	$	11,492		$	181

Predecessor Share-based Compensation

Prior to the Effective Date, we granted stock options, stock appreciation rights, restricted common stock and restricted stock units, performance shares and units, other share-based awards and cash-based awards to our employees, directors, consultants and advisors pursuant to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (as amended, the “2009 Plan”). On the Effective Date pursuant to the Plan, all of the pre-Effective Date share-based compensation awards issued and outstanding under the 2009 Plan were canceled.

There were no grants awarded during the one and seven months ended July 31, 2017 under the 2009 Plan. The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the one and seven months ended July 31, 2017 was as follows:

	Predecessor
	One Month Ended		Seven Months Ended
	July 31, 2017		July 31, 2017
Stock options	$	12	$	109
Restricted stock	22		153
Restricted stock units	2		195
Total expense	$	36	$	457

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Legal Matters

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Legal Matters

Legal Matters

Environmental Liabilities

We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law.

We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheet at September 30, 2018 and December 31, 2017 did not include any accruals for environmental matters.

Litigation

There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in pending lawsuits are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Chapter 11 Proceedings

On May 1, 2017, the Nuverra Parties filed voluntary petitions under chapter 11 of the Bankruptcy Code in the Bankruptcy Court to pursue the Plan. On July 25, 2017, the Bankruptcy Court entered the Confirmation Order confirming the Plan. The Plan became effective on the Effective Date, when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Confirmation Order Appeal

On July 26, 2017, David Hargreaves, an individual holder of 2018 Notes, appealed the Confirmation Order to the District Court of the District of Delaware (the “District Court”) and filed a motion for a stay pending appeal from the District Court.  Although the motion for a stay pending appeal was denied, the appeal remained pending and the District Court heard oral arguments on May 14, 2018.  On August 21, 2018 the District Court issued an order dismissing the appeal.  Hargreaves subsequently filed a Notice of Appeal to the United States Court of Appeals for the Third Circuit on September 19, 2018, and as a result the appeal remains pending.  The ultimate outcome of this appeal and its effects on the Confirmation Order are impossible to predict with certainty. No assurance can be given that the final disposition of this appeal will not affect the validity, enforceability or finality of the Confirmation Order.

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Related Party and Affiliated Company Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party and Affiliated Company Transactions

Related Party and Affiliated Company Transactions

There have been no significant changes to the other related party transactions as described in Note 21 to the consolidated financial statements in our 2017 Annual Report on Form 10-K other than described in Note 18.

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Segments

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segments

Segments

We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our shale solutions business is comprised of three operating divisions, which we consider to be operating and reportable segments of our operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville Shale area and the Eagle Ford Shale area (which we substantially exited during the six months ended June 30, 2018) and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets.

Financial information for our reportable segments related to operations is presented below.

	Rocky Mountain			Northeast			Southern (b)			Corporate/ Other			Total
Three months ended September 30, 2018 - Successor
Revenue	$	33,399		$	11,247		$	5,010		$	—		$	49,656
Direct operating expenses	25,757			10,372			3,624			—			39,753
General and administrative expenses	1,605			442			106			3,696			5,849
Depreciation and amortization	5,698			1,976			2,331			13			10,018
Operating income (loss)	339			(1,543		)	(1,200		)	(3,709		)	(6,113		)
Income (loss) before income taxes	372			(1,628		)	(1,240		)	(4,552		)	(7,048		)
Nine months ended September 30, 2018 - Successor
Revenue	97,334			29,966			20,973			—			148,273
Direct operating expenses	77,702			26,696			16,051			—			120,449
General and administrative expenses	4,763			1,722			935			23,763			31,183
Depreciation and amortization	17,910			9,565			9,205			51			36,731
Operating loss	(3,041		)	(8,086		)	(10,497		)	(24,146		)	(45,770		)
Loss before income taxes	(3,033		)	(8,307		)	(10,646		)	(28,405		)	(50,391		)
As of September 30, 2018 - Successor
Total assets (a)	118,791			46,713			86,877			17,481			269,862
Total assets held for sale	—			116			2,278			778			3,172
Two months ended September 30, 2017 - Successor
Revenue	20,567			7,159			6,032			—			33,758
Direct operating expenses	15,779			5,962			4,369			—			26,110
General and administrative expenses	1,278			460			829			2,361			4,928
Depreciation and amortization	8,020			4,834			4,421			46			17,321
Operating loss	(6,676		)	(4,097		)	(3,825		)	(2,407		)	(17,005		)
Loss before income taxes	(7,190		)	(4,027		)	(3,744		)	(1,998		)	(16,959		)

	Rocky Mountain		Northeast		Southern (b)		Corporate/ Other		Total
One month ended July 31, 2017 - Predecessor
Revenue	8,502		3,424		3,196		—		15,122
Direct operating expenses	6,434		3,329		2,133		—		11,896
General and administrative expenses	425		331		3		567		1,326
Depreciation and amortization	2,376		657		955		15		4,003
Operating (loss) income	(733	)	(893	)	105		(582	)	(2,103	)
(Loss) income before income taxes	(4,944	)	27,121		22,583		179,096		223,856
Seven months ended July 31, 2017 - Predecessor
Revenue	56,546		20,751		18,586		—		95,883
Direct operating expenses	46,837		21,117		13,056		—		81,010
General and administrative expenses	3,877		1,917		1,684		15,074		22,552
Depreciation and amortization	15,964		5,352		7,542		123		28,981
Operating loss	(10,132	)	(7,635	)	(3,696	)	(15,197	)	(36,660	)
(Loss) income before income taxes	(14,854	)	20,194		18,650		144,299		168,289
As of December 31, 2017 - Successor
Total assets (a)	137,213		54,218		111,457		8,434		311,322
Total assets held for sale	2,765		—		—		—		2,765

_____________________

(a) Total assets exclude intercompany receivables eliminated in consolidation.

(b) The Southern division includes the Eagle Ford Shale area which we substantially exited during the six months ended June 30, 2018. See Note 11 for further discussion.

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Subsidiary Guarantors

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Subsidiary Guarantors

Subsidiary Guarantors

The 2018 Notes and the 2021 Notes of the Predecessor Company were registered securities. As a result of these registered securities, we were required to present the following condensed consolidating financial information for the Predecessor periods pursuant to Rule 3-10 of SEC Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. Our Successor Revolving Facility, Successor First Lien Term Loan, and Successor Second Lien Term Loan are not registered securities. Therefore, the presentation of condensed consolidating financial information is not required for the Successor period.

The following tables present consolidating financial information for Nuverra Environmental Solutions, Inc. (“Parent”) and its 100% wholly owned subsidiaries (the “Guarantor Subsidiaries”) for the one and seven months ended July 31, 2017.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

ONE MONTH ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	15,122		$	—		$	15,122
Costs and expenses:
Direct operating expenses	—			11,896			—			11,896
General and administrative expenses	567			759			—			1,326
Depreciation and amortization	15			3,988			—			4,003
Total costs and expenses	582			16,643			—			17,225
Operating loss	(582		)	(1,521		)	—			(2,103		)
Interest expense, net	(3,207		)	(39		)	—			(3,246		)
Other income, net	—			7			—			7
Income (loss) from equity investments	122,214			—			(122,214		)	—
Reorganization items, net	182,885			46,313			—			229,198
Income (loss) before income taxes	301,310			44,760			(122,214		)	223,856
Income tax (expense) benefit	(77,150		)	77,454			—			304
Net income (loss)	$	224,160		$	122,214		$	(122,214	)	$	224,160

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SEVEN MONTHS ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	95,883		$	—		$	95,883
Costs and expenses:
Direct operating expenses	—			81,010			—			81,010
General and administrative expenses	15,074			7,478			—			22,552
Depreciation and amortization	123			28,858			—			28,981
Total costs and expenses	15,197			117,346			—			132,543
Operating loss	(15,197		)	(21,463		)	—			(36,660		)
Interest expense, net	(22,333		)	(459		)	—			(22,792		)
Other income, net	4,125			136			—			4,261
Income (loss) from equity investments	101,462			(14		)	(101,462		)	(14		)
Reorganization items, net	177,704			45,790			—			223,494
Income (loss) before income taxes	245,761			23,990			(101,462		)	168,289
Income tax (expense) benefit	(77,150		)	77,472			—			322
Net income (loss)	$	168,611		$	101,462		$	(101,462	)	$	168,611

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SEVEN MONTHS ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	(18,672	)	$	(277	)	$	(18,949	)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	—			3,083			3,083
Purchase of property, plant and equipment	—			(3,149		)	(3,149		)
Net cash used in investing activities	—			(66		)	(66		)
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	106,785			—			106,785
Payments on Predecessor revolving credit facility	(129,964		)	—			(129,964		)
Proceeds from Predecessor term loan	15,700			—			15,700
Proceeds from debtor in possession term loan	6,875			—			6,875
Proceeds from Successor First and Second Lien Term Loans	36,053			—			36,053
Payments for debt issuance costs	(1,053		)	—			(1,053		)
Payments on vehicle financing and other financing activities	—			(2,797		)	(2,797		)
Net cash provided by (used in) financing activities	34,396			(2,797		)	31,599
Change in cash, cash equivalents and restricted cash	15,724			(3,140		)	12,584
Cash, cash equivalents and restricted cash - beginning of period	1,388			1,026			2,414
Cash, cash equivalents and restricted cash - end of period	$	17,112		$	(2,114	)	$	14,998

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Acquisition of Clearwater

On October 5, 2018, we completed the acquisition of Clearwater Three, LLC, Clearwater Five, LLC, and Clearwater Solutions, LLC (collectively, “Clearwater”) for an initial purchase price of $41.9 million, subject to customary working capital adjustments (the “Acquisition”). Clearwater is a supplier of waste water disposal services used by the oil and gas industry in the Marcellus and Utica Shale areas. Clearwater has three salt water disposal wells in service, all of which are located in Ohio. This acquisition expands our service offerings in the Marcellus and Utica Shale areas in our Northeast division.

Consideration consisted of $41.9 million in cash which was funded primarily by a $32.5 million bridge loan that will be repaid with proceeds from a planned offering to shareholders of common stock purchase rights. In addition, the Credit Agreement Lenders provided us with an additional term loan under the Credit Agreement in the amount of $10.0 million which was used to finance a portion of the Acquisition.

In connection with the Acquisition, we incurred transaction costs of $0.4 million during the three and nine months ended September 30, 2018, which are included in general and administrative costs in the accompanying condensed consolidated statements of operations.

Under the acquisition method of accounting, the total purchase price was allocated to the identifiable assets acquired and the liabilities assumed based on our preliminary valuation estimates of the fair values as of the acquisition date. As the acquisition accounting allocation is preliminary and subject to adjustments for the final valuation and tax analysis, this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, and the determination of any residual amount that will be allocated to goodwill.

The preliminary allocation of the purchase price at October 5, 2018 is summarized as follows:

Accounts receivable	$	1,897
Intangible assets	799
Property, plant and equipment	37,396
Goodwill	2,382
Accounts payable and accrued expenses	(574		)
Total	$	41,900

The preliminary purchase price allocation requires subjective estimates that, if incorrectly estimated, could be material to our condensed consolidated financial statements including the amount of depreciation and amortization expense. The fair value of the tangible assets, which are primarily comprised of the three salt water disposal wells, was estimated using the discounted cash flow method, a form of the income approach. This method estimates the fair value of the assets based upon the present value of the expected cash flows. Estimates that impact the measurement of the tangible assets using the discounted cash flow method are the discount rate and the timing and amount of cash flows. The intangible assets acquired, which primarily consists of the trade name, were valued using the relief from royalty method. The value of the trade name encompasses all items necessary to generate revenue utilizing the trade name. Estimates that impact the measurement of the intangible assets acquired are net sales projections, and the discount and royalty rates used.

Bridge Term Loan Credit Agreement, Guaranty Agreement, and Subordination Agreement

In connection with the Acquisition, on October 5, 2018, we entered into a Bridge Term Loan Credit Agreement (the “Bridge Term Loan Credit Agreement”) with the lenders party thereto (the “Bridge Term Loan Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent (the “Bridge Term Loan Agent”). The Bridge Term Loan Lenders are our two largest shareholders that, in the aggregate, hold approximately 90% of our stock. Pursuant to the Bridge Term Loan Credit Agreement, the Bridge Term Loan Lenders provided a term loan to us in the aggregate amount of $32.5 million, of which $22.5 million was used to finance the Acquisition and the remaining $10.0 million was used to pay down certain amounts outstanding under the Successor Second Lien Term Loan. The Bridge Term Loan Agreement matures on April 5, 2019 and has an interest rate of 11.0% per annum, payable in cash, in arrears, on the first day of each month. Under the terms of the Bridge Term Loan Credit Agreement, the outstanding amounts may be accelerated upon the occurrence of an Event of Default (as defined in the Bridge Term Loan Credit Agreement), including as a result of a payment default under the Successor First Lien Term Loan or Successor Second Lien Term Loan after expiration of a ten day cure period or a default resulting in acceleration of the obligations due under the Successor First Lien Term Loan or Successor Second Lien Term Loan.

The Bridge Term Loan Credit Agreement requires us to use our reasonable best efforts to effectuate and close the Rights Offering (as defined below) as soon as reasonably practicable following October 5, 2018. Concurrently with the completion of the Rights Offering, we are required to prepay all outstanding amounts under the Bridge Term Loan Credit Agreement in cash in an amount equal to the net cash proceeds received from the Rights Offering.

We also have the option to prepay principal amounts outstanding under the Bridge Term Loan Credit Agreement at any time without premium or penalty. Except upon the completion of the Rights Offering or in the event that an insolvency proceeding is pending against us, all principal payments (whether at maturity or otherwise) are required to be tendered in the form of common stock of the Company, with the value of such common stock determined based on its volume weighted average price during the 20-day period preceding the announcement of the Acquisition.

Amendment to First Lien Credit Agreement and Joinder to First Lien Guaranty and Security Agreement

On October 5, 2018, in connection with the Acquisition, we entered into a First Amendment to the Credit Agreement (the “First Amendment to the Credit Agreement”) with the Credit Agreement Lenders and the Credit Agreement Agent, which amends the Credit Agreement. Pursuant to the First Amendment to the Credit Agreement, the Credit Agreement Lenders provided us with an additional term loan under the Credit Agreement in the amount of $10.0 million, which was used to finance a portion of the Acquisition. The First Amendment to the Credit Agreement also amended the Credit Agreement to extend the maturity date from August 7, 2020 to February 7, 2021, in addition to allowing for the Acquisition and providing us with additional flexibility under the Credit Agreement, including certain availability, mandatory prepayment and financial reporting provisions thereunder.

On October 5, 2018, in connection with the First Amendment to the Credit Agreement, Nuverra Ohio Disposal LLC and Clearwater (collectively, the “New Grantors”) entered into a Joinder to the First Lien Guaranty and Security Agreement, pursuant to which the New Grantors agreed to become party to that First Lien Guaranty and Security Agreement by and among the Company, the other grantors party thereto, and the Credit Agreement Agent.

Amendment to Second Lien Credit Agreement and Joinder to the Second Lien Guaranty and Security Agreement

On October 5, 2018, in connection with the Acquisition, we entered into a First Amendment to the Second Lien Term Loan Agreement (the “First Amendment to the Second Lien Term Loan Agreement”) with the Second Lien Term Loan Lenders and the Second Lien Term Loan Agent, which amends the Second Lien Term Loan Agreement. Pursuant to the First Amendment to Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to certain conforming amendments to the Credit Agreement to allow for the funding of the additional term loan in the amount of $10.0 million under the First Amendment to the Credit Agreement and the term loans pursuant to the Bridge Term Loan Credit Agreement. The First Amendment to the Second Lien Term Loan Agreement also extended the maturity date from February 7, 2021 to October 7, 2021.

On October 5, 2018, in connection with the First Amendment to Second Lien Term Loan Agreement, the New Grantors entered into the Second Lien Guaranty and Security Agreement Joinder, pursuant to which the New Grantors agreed to become party to that Second Lien Guaranty and Security Agreement by and among the Company, the other grantors party thereto, and the Second Lien Agent.

First Amendment to Intercreditor Agreement and Joinder to Intercompany Subordination Agreement

On October 5, 2018, in connection with the First Amendment to the Credit Agreement, we acknowledged the terms and conditions under a First Amendment to the Intercreditor Agreement, dated October 5, 2018, by and between the Credit Agreement Agent and the Second Lien Term Loan Agent, which amends the Subordination and Intercreditor Agreement, dated as of August 7, 2017, by and between the Credit Agreement Agent and the Second Lien Term Loan Agent. On October 5, 2018, the New Grantors also entered into the Joinder to Intercompany Subordination Agreement, pursuant to which the New Grantors agreed to become party to that Intercompany Subordination Agreement by and among the persons originally party thereto as an “Obligor”, the Credit Agreement Agent and the Second Lien Term Loan Agent.

Rights Offering and Backstop Commitment Letter

We have agreed, pursuant to the Bridge Term Loan Credit Agreement, to use our reasonable best efforts to effectuate and close a rights offering as soon as reasonably practicable following October 5, 2018 pursuant to which we plan to dividend to our holders of common stock subscription rights to purchase shares of our common stock on a pro rata basis with an aggregate offering price of $32.5 million (the “Rights Offering”). The proceeds of the Rights Offering will be used by us to pay the obligations under the Bridge Term Loan Credit Agreement.

In connection with the Rights Offering, we entered into a Backstop Commitment Letter on October 5, 2018 (the “Backstop Commitment Letter”) with certain backstop parties named therein (the “Backstop Parties”), pursuant to which the Backstop Parties agreed, subject to the terms and conditions in the Backstop Commitment Letter, to participate in the Rights Offering and backstop the full amount of the Rights Offering. The Backstop Parties are our two largest shareholders that, in the aggregate, hold approximately 90% of our stock. In exchange for the commitments under the Backstop Commitment Letter, we paid to the Backstop Parties, in the aggregate, a nonrefundable cash payment equal to 1.0% of the full amount of the Rights Offering. Pursuant to the Backstop Commitment Letter, we are required to file a registration statement with the SEC within 20 days following October 5, 2018. This registration statement was filed with the SEC on October 25, 2018. The record date for the Rights Offering will be set by the Board of Directors of the Company upon the registration statement being declared effective by the SEC. Pursuant to the Backstop Commitment Letter, the exercise price for each share of common stock issuable upon exercise of a subscription right will be $9.61, which is equal to the 20-day volume weighted average price of the common stock of the Company preceding the public announcement of the completion of the Acquisition on October 5, 2018.

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Basis of Presentation Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2017, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018 (as amended on April 19, 2018, the “2017 Annual Report on Form 10-K”).

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted.

Recently Adopted/Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (or “FASB”) issued Accounting Standards Update (or “ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in this update will be added to the Account Standards Codification (“ASC”) as ASC 606, Revenue from Contracts with Customers, and replaces the guidance in ASC 605, Revenue Recognition. The new guidance in ASC 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services.

On January 1, 2018, we adopted the guidance in ASC 606 and all the related amendments (the “new revenue standard”) and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. See Note 3 for further information on the new standard.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification and guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and contingent consideration payments made after a business combination. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning January 1, 2018, which did not have a significant impact on the consolidated statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is to be applied retrospectively. The adoption of this guidance as of January 1, 2018 did not have a significant impact on our consolidated statement of cash flows, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals. We have adjusted the prior year period to reflect this new presentation as well.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2017 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-02 is permitted. We are nearing the completion of our assessment of the impact ASU 2016-02 will have on our consolidated financial statements. Based upon the work performed thus far, we expect the primary change upon adoption to be the recognition, on a discounted basis, of our minimum commitments under non-cancellable operating leases on our consolidated balance sheets resulting in the recording of right of use assets and lease obligations. We have also reviewed the various practical expedients that have been approved by the FASB for ASU 2016-02 and have selected which ones we plan to adopt when we implement the new standard effective January 1, 2019.

Revenue Recognition

Water Transfer Services

The majority of our revenues are from the removal and disposal of flowback and produced saltwater originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transport pipelines. Water transfer rates for trucking are generally based upon a fixed fee per barrel of disposal water, but in certain circumstances may be based upon an hourly rate. Revenue is recognized once the water has been transferred, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our disposal water pipeline are priced at a fixed fee per disposal barrel transferred, with revenues recognized over time from when the water is injected into our pipeline until the transfer is complete. Water transfer services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month.

Disposal Services

Revenues for disposal services are generated through fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Disposal rates are generally based on a fixed fee per barrel of disposal water, or on a per ton basis for landfill disposal, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time.

Other Revenue

Other revenue primarily includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil at a point in time once the goods are transferred.

Other revenue also historically included small-scale construction or maintenance projects, however we exited that business during the three months ended June 30, 2018. Under the new revenue standard, revenue for construction and maintenance projects, which generally spanned approximately two to three months, was recognized over time under the milestone method which is considered an output method. Since our construction contracts were short term in nature, the contractual milestone dates occurred close together over time such that there was no risk that we would not recognize revenue for goods or services transferred to the customer. All construction costs were expensed as incurred.

Rental Revenue

We generate rental revenue from the rental of various equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 840, Leases. When ASC 842, Leases, becomes effective on January 1, 2019, the Company will continue to recognize the revenues from rental equipment under this new standard as a lessor.

Practical Expedients

The new revenue standard requires the transaction price to exclude amounts collected on behalf of third parties. However, the new revenue standard also provides a practical expedient to allow entities to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority. Upon implementing the new revenue standard we adopted this practical expedient and have excluded sales and usage-based taxes from the transaction price, rather than making a jurisdiction-by-jurisdiction assessment.

Revenue Recognition

Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues.

Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transfer services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering.

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Revenues (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Revenues Disaggregated by Revenue Source

The following tables present our revenues disaggregated by revenue source for each reportable segment for the three months ended September 30, 2018, two months ended September 30, 2017, and one month ended July 31, 2017:

	Successor
	For the Three Months Ended September 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	21,809	$	9,243	$	3,682	$	—	$	34,734
Disposal Services	5,235		1,329		1,234		—		7,798
Other Revenue	2,471		615		76		—		3,162
Total Service Revenue	29,515		11,187		4,992		—		45,694
Rental Revenue	3,884		60		18		—		3,962
Total Revenue	$	33,399	$	11,247	$	5,010	$	—	$	49,656

	Successor
	For the Two Months Ended September 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	13,573	$	5,830	$	4,708	$	—	$	24,111
Disposal Services	2,325		400		890		—		3,615
Other Revenue	1,935		892		67		—		2,894
Total Service Revenue	17,833		7,122		5,665		—		30,620
Rental Revenue	2,734		37		367		—		3,138
Total Revenue	$	20,567	$	7,159	$	6,032	$	—	$	33,758

	Predecessor
	For the One Month Ended July 31, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	5,878	$	2,777	$	2,697	$	—	$	11,352
Disposal Services	980		308		311		—		1,599
Other Revenue	325		297		35		—		657
Total Service Revenue	7,183		3,382		3,043		—		13,608
Rental Revenue	1,319		42		153		—		1,514
Total Revenue	$	8,502	$	3,424	$	3,196	$	—	$	15,122

The following tables present our revenues disaggregated by revenue source for each reportable segment for the nine months endedSeptember 30, 2018, two months ended September 30, 2017 and seven months ended July 31, 2017:

	Successor
	For the Nine Months Ended September 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	65,036	$	25,492	$	16,807	$	—	$	107,335
Disposal Services	13,387		3,061		3,551		—		19,999
Other Revenue	7,715		1,231		261		—		9,207
Total Service Revenue	86,138		29,784		20,619		—		136,541
Rental Revenue	11,196		182		354		—		11,732
Total Revenue	$	97,334	$	29,966	$	20,973	$	—	$	148,273

	Successor
	For the Two Months Ended September 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	13,573	$	5,830	$	4,708	$	—	$	24,111
Disposal Services	2,325		400		890		—		3,615
Other Revenue	1,935		892		67		—		2,894
Total Service Revenue	17,833		7,122		5,665		—		30,620
Rental Revenue	2,734		37		367		—		3,138
Total Revenue	$	20,567	$	7,159	$	6,032	$	—	$	33,758

	Predecessor
	For the Seven Months Ended July 31, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	38,844	$	17,118	$	15,764	$	—	$	71,726
Disposal Services	6,506		1,284		1,522		—		9,312
Other Revenue	2,975		2,240		311		—		5,526
Total Service Revenue	48,325		20,642		17,597		—		86,564
Rental Revenue	8,221		109		989		—		9,319
Total Revenue	$	56,546	$	20,751	$	18,586	$	—	$	95,883

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents the calculation of basic and diluted net (loss) income per common share, as well as the anti-dilutive stock-based awards that were excluded from the calculation of diluted loss per share for the periods presented:

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Numerator:
Net (loss) income	$	(7,117	)	$	(16,993	)	$	224,160
Denominator:
Weighted average shares—basic	11,696			11,696			150,951
Common stock equivalents	—			—			6,443
Weighted average shares—diluted	11,696			11,696			157,394
Earnings per common share:
Net (loss) income per basic common share	$	(0.61	)	$	(1.45	)	$	1.48
Net (loss) income per diluted common share	$	(0.61	)	$	(1.45	)	$	1.42
Anti-dilutive stock-based awards excluded:	1,210			828			576

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Numerator:
Net (loss) income	$	(50,460	)	$	(16,993	)	$	168,611
Denominator:
Weighted average shares—basic	11,696			11,696			150,940
Common stock equivalents	—			—			23,364
Weighted average shares—diluted	11,696			11,696			174,304
Earnings per common share:
Net (loss) income per basic common share	$	(4.31	)	$	(1.45	)	$	1.12
Net (loss) income per diluted common share	$	(4.31	)	$	(1.45	)	$	0.97
Anti-dilutive stock-based awards excluded:	1,227			828			593

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets consist of the following:

	Successor
	September 30, 2018
	Gross Carrying Amount		Additions/(Disposals)			Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	(13	)	$	(152	)	$	429	5.5
Total intangible assets	$	594	$	(13	)	$	(152	)	$	429	5.5

	Successor
	December 31, 2017
	Gross Carrying Amount		Additions/(Disposals)		Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	—	$	(47	)	$	547	6.2
Total intangible assets	$	594	$	—	$	(47	)	$	547	6.2

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy of the Valuation Techniques

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Successor
	September 30, 2018		December 31, 2017
Derivative warrant liability	$	154	$	477
Contingent consideration	500		500

Schedule of Stockholders' Equity Note, Warrants or Rights

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the nine months endedSeptember 30, 2018, and the five months ended December 31, 2017.

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(323		)	(240		)
Balance at end of period	$	154		$	477

The following table shows the Predecessor warrant activity for the seven months ended July 31, 2017:

	Predecessor
	Seven Months Ended
	July 31, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(16	)
Canceled due to emergence from chapter 11	(25,267	)
Outstanding at the end of the period	—

The following table shows the Successor warrant activity for the nine months endedSeptember 30, 2018:

	Successor
	Nine Months Ended
	September 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

Changes to Contingent Consideration

Changes to contingent consideration obligations during the nine months endedSeptember 30, 2018, and five months ended December 31, 2017, were as follows:

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	500		$	1,000
Cash payments	—			(500		)
Balance at end of period	500			500
Less: current portion	(500		)	(500		)
Long-term contingent consideration	$	—		$	—

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Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following at September 30, 2018 and December 31, 2017:

	Successor
	September 30, 2018		December 31, 2017
Accrued payroll and employee benefits	$	5,829	$	3,304
Accrued insurance	2,573		2,701
Accrued legal	718		1,749
Accrued taxes	2,228		2,362
Accrued interest	327		161
Accrued operating costs	3,719		2,663
Accrued other	330		999
Total accrued liabilities	$	15,724	$	13,939

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Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt consisted of the following at September 30, 2018 and December 31, 2017:

			Successor
			September 30, 2018					December 31, 2017
	Interest Rate	Maturity Date	Fair Value of Debt (d)		Carrying Value of Debt			Carrying Value of Debt
Successor Revolving Facility (a)	7.36%	Aug. 2020	$	—	$	—		$	—
Successor First Lien Term Loan (b)	9.36%	Aug. 2020	12,679		12,679			14,285
Successor Second Lien Term Loan (b)	11.00%	Feb 2021	20,592		20,592			21,000
Vehicle financings (c)	5.31%	Various	2,343		2,343			3,764
Total debt			$	35,614	35,614			39,049
Less: current portion of long-term debt					(4,526		)	(5,525		)
Long-term debt					$	31,088		$	33,524

_____________________

(a) The interest rate presented represents the interest rate on the $30.0 million Successor Revolving Facility as of September 30, 2018.

(b) Interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. Interest on the Successor Second Lien Term Loan accrues at both an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018, and on or after February 7, 2018, at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 5.31%, which mature in varying installments between 2018 and 2020.

(d) Our Successor Revolving Facility, Successor First Lien Term Loan, Successor Second Lien Term Loan, and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

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Derivative Warrants (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the nine months endedSeptember 30, 2018, and the five months ended December 31, 2017.

	Successor
	Nine Months Ended			Five Months Ended
	September 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(323		)	(240		)
Balance at end of period	$	154		$	477

The following table shows the Predecessor warrant activity for the seven months ended July 31, 2017:

	Predecessor
	Seven Months Ended
	July 31, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(16	)
Canceled due to emergence from chapter 11	(25,267	)
Outstanding at the end of the period	—

The following table shows the Successor warrant activity for the nine months endedSeptember 30, 2018:

	Successor
	Nine Months Ended
	September 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

Schedule of Assumptions Used

The fair value of the derivative warrant liability as of September 30, 2018 and December 31, 2017 was estimated using the following model inputs:

	Successor
	As of September 30,			As of December 31,
	2018			2017
Exercise price	$	39.82		$	39.82
Closing stock price	$	11.12		$	18.18
Risk free rate	2.93		%	2.29		%
Expected volatility	42.31		%	40.59		%

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Restructuring and Exit Costs (Tables)

9 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

Such costs consisted of the following and all related to the Southern operating segment:

	Successor
	Three Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2018
Severance and termination benefits	$	(11	)	$	225
Contract termination costs and exit costs	60			892
Total restructuring and exit costs for Eagle Ford	$	49		$	1,117

A rollforward of the liability from December 31, 2017 through September 30, 2018 is as follows:

	Lease Exit Costs
Balance accrued at beginning of period - Successor	$	82
Cash payments	(37		)
Balance accrued at end of period - Successor	$	45

A rollforward of the liability from December 31, 2017 through September 30, 2018 is as follows:

	Employee Termination Costs (a)			Lease Exit Costs (b)			Other Exit Costs (c)			Total
Balance accrued at beginning of period - Successor	$	—		$	—		$	—		$	—
Restructuring and exit-related costs	225			64			828			1,117
Cash payments	(225		)	(41		)	(801		)	(1,067		)
Balance accrued at end of period - Successor	$	—		$	23		$	27		$	50

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to the Company.

(c) Other exit costs include costs related to the movement of vehicles, tanks and rental fleet in connection with the exit from the Eagle Ford Shale area.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Components of income tax expense (benefit)

	Successor						Predecessor
	Three Months Ended			Two Months Ended			One Month Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Current income tax expense	$	(58	)	$	—		$	(33	)
Deferred income tax (expense) benefit	(11		)	(34		)	337
Total income tax (expense) benefit	$	(69	)	$	(34	)	$	304

	Successor						Predecessor
	Nine Months Ended			Two Months Ended			Seven Months Ended
	September 30, 2018			September 30, 2017			July 31, 2017
Current income tax expense	$	(58	)	$	—		$	(15	)
Deferred income tax (expense) benefit	(11		)	(34		)	337
Total income tax (expense) benefit	$	(69	)	$	(34	)	$	322

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Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the one and seven months ended July 31, 2017 was as follows:

	Predecessor
	One Month Ended		Seven Months Ended
	July 31, 2017		July 31, 2017
Stock options	$	12	$	109
Restricted stock	22		153
Restricted stock units	2		195
Total expense	$	36	$	457

The total grants awarded during the three and nine months endedSeptember 30, 2018, and the two months ended September 30, 2017 are presented in the table below:

	Successor
	Three Months Ended	Nine Months Ended	Two Months Ended
	September 30, 2018	September 30, 2018	September 30, 2017
Stock option grants	—	—	709
Restricted stock grants	—	20	—
Restricted stock unit grants	—	1,311	—
Total grants in the Successor period	—	1,331	709

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and nine months endedSeptember 30, 2018 and the two months ended September 30, 2017 was as follows:

	Successor
	Three Months Ended		Nine Months Ended			Two Months Ended
	September 30, 2018		September 30, 2018			September 30, 2017
Stock options	$	—	$	(788	)	$	181
Restricted stock	76		236			—
Restricted stock units	22		12,044			—
Total expense	$	98	$	11,492		$	181

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Segments (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Financial Information for Reportable Segments

Financial information for our reportable segments related to operations is presented below.

	Rocky Mountain			Northeast			Southern (b)			Corporate/ Other			Total
Three months ended September 30, 2018 - Successor
Revenue	$	33,399		$	11,247		$	5,010		$	—		$	49,656
Direct operating expenses	25,757			10,372			3,624			—			39,753
General and administrative expenses	1,605			442			106			3,696			5,849
Depreciation and amortization	5,698			1,976			2,331			13			10,018
Operating income (loss)	339			(1,543		)	(1,200		)	(3,709		)	(6,113		)
Income (loss) before income taxes	372			(1,628		)	(1,240		)	(4,552		)	(7,048		)
Nine months ended September 30, 2018 - Successor
Revenue	97,334			29,966			20,973			—			148,273
Direct operating expenses	77,702			26,696			16,051			—			120,449
General and administrative expenses	4,763			1,722			935			23,763			31,183
Depreciation and amortization	17,910			9,565			9,205			51			36,731
Operating loss	(3,041		)	(8,086		)	(10,497		)	(24,146		)	(45,770		)
Loss before income taxes	(3,033		)	(8,307		)	(10,646		)	(28,405		)	(50,391		)
As of September 30, 2018 - Successor
Total assets (a)	118,791			46,713			86,877			17,481			269,862
Total assets held for sale	—			116			2,278			778			3,172
Two months ended September 30, 2017 - Successor
Revenue	20,567			7,159			6,032			—			33,758
Direct operating expenses	15,779			5,962			4,369			—			26,110
General and administrative expenses	1,278			460			829			2,361			4,928
Depreciation and amortization	8,020			4,834			4,421			46			17,321
Operating loss	(6,676		)	(4,097		)	(3,825		)	(2,407		)	(17,005		)
Loss before income taxes	(7,190		)	(4,027		)	(3,744		)	(1,998		)	(16,959		)

	Rocky Mountain		Northeast		Southern (b)		Corporate/ Other		Total
One month ended July 31, 2017 - Predecessor
Revenue	8,502		3,424		3,196		—		15,122
Direct operating expenses	6,434		3,329		2,133		—		11,896
General and administrative expenses	425		331		3		567		1,326
Depreciation and amortization	2,376		657		955		15		4,003
Operating (loss) income	(733	)	(893	)	105		(582	)	(2,103	)
(Loss) income before income taxes	(4,944	)	27,121		22,583		179,096		223,856
Seven months ended July 31, 2017 - Predecessor
Revenue	56,546		20,751		18,586		—		95,883
Direct operating expenses	46,837		21,117		13,056		—		81,010
General and administrative expenses	3,877		1,917		1,684		15,074		22,552
Depreciation and amortization	15,964		5,352		7,542		123		28,981
Operating loss	(10,132	)	(7,635	)	(3,696	)	(15,197	)	(36,660	)
(Loss) income before income taxes	(14,854	)	20,194		18,650		144,299		168,289
As of December 31, 2017 - Successor
Total assets (a)	137,213		54,218		111,457		8,434		311,322
Total assets held for sale	2,765		—		—		—		2,765

_____________________

(a) Total assets exclude intercompany receivables eliminated in consolidation.

(b) The Southern division includes the Eagle Ford Shale area which we substantially exited during the six months ended June 30, 2018. See Note 11 for further discussion.

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Subsidiary Guarantors (Tables)

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

ONE MONTH ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	15,122		$	—		$	15,122
Costs and expenses:
Direct operating expenses	—			11,896			—			11,896
General and administrative expenses	567			759			—			1,326
Depreciation and amortization	15			3,988			—			4,003
Total costs and expenses	582			16,643			—			17,225
Operating loss	(582		)	(1,521		)	—			(2,103		)
Interest expense, net	(3,207		)	(39		)	—			(3,246		)
Other income, net	—			7			—			7
Income (loss) from equity investments	122,214			—			(122,214		)	—
Reorganization items, net	182,885			46,313			—			229,198
Income (loss) before income taxes	301,310			44,760			(122,214		)	223,856
Income tax (expense) benefit	(77,150		)	77,454			—			304
Net income (loss)	$	224,160		$	122,214		$	(122,214	)	$	224,160

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SEVEN MONTHS ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	95,883		$	—		$	95,883
Costs and expenses:
Direct operating expenses	—			81,010			—			81,010
General and administrative expenses	15,074			7,478			—			22,552
Depreciation and amortization	123			28,858			—			28,981
Total costs and expenses	15,197			117,346			—			132,543
Operating loss	(15,197		)	(21,463		)	—			(36,660		)
Interest expense, net	(22,333		)	(459		)	—			(22,792		)
Other income, net	4,125			136			—			4,261
Income (loss) from equity investments	101,462			(14		)	(101,462		)	(14		)
Reorganization items, net	177,704			45,790			—			223,494
Income (loss) before income taxes	245,761			23,990			(101,462		)	168,289
Income tax (expense) benefit	(77,150		)	77,472			—			322
Net income (loss)	$	168,611		$	101,462		$	(101,462	)	$	168,611

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SEVEN MONTHS ENDED JULY 31, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	(18,672	)	$	(277	)	$	(18,949	)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	—			3,083			3,083
Purchase of property, plant and equipment	—			(3,149		)	(3,149		)
Net cash used in investing activities	—			(66		)	(66		)
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	106,785			—			106,785
Payments on Predecessor revolving credit facility	(129,964		)	—			(129,964		)
Proceeds from Predecessor term loan	15,700			—			15,700
Proceeds from debtor in possession term loan	6,875			—			6,875
Proceeds from Successor First and Second Lien Term Loans	36,053			—			36,053
Payments for debt issuance costs	(1,053		)	—			(1,053		)
Payments on vehicle financing and other financing activities	—			(2,797		)	(2,797		)
Net cash provided by (used in) financing activities	34,396			(2,797		)	31,599
Change in cash, cash equivalents and restricted cash	15,724			(3,140		)	12,584
Cash, cash equivalents and restricted cash - beginning of period	1,388			1,026			2,414
Cash, cash equivalents and restricted cash - end of period	$	17,112		$	(2,114	)	$	14,998

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Acquisition of Clearwater (Tables)

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Preliminary Allocation of Purchase Price

The preliminary allocation of the purchase price at October 5, 2018 is summarized as follows:

Accounts receivable	$	1,897
Intangible assets	799
Property, plant and equipment	37,396
Goodwill	2,382
Accounts payable and accrued expenses	(574		)
Total	$	41,900

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Revenues - Schedule of Revenues Disaggregated by Revenue Source (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jul. 31, 2017	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Service revenue		$ 30,620	$ 45,694		$ 136,541
Rental revenue		3,138	3,962		11,732
Total revenue		33,758	49,656		$ 148,273
Minimum
Disaggregation of Revenue [Line Items]
Revenue from construction and maintenance projects period (in months)					2 months
Maximum
Disaggregation of Revenue [Line Items]
Revenue from construction and maintenance projects period (in months)					3 months
Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0	0		$ 0
Rental revenue		0	0		0
Total revenue		0	0		0
Water Transfer Services
Disaggregation of Revenue [Line Items]
Service revenue		24,111	34,734		107,335
Water Transfer Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0	0		0
Disposal Services
Disaggregation of Revenue [Line Items]
Service revenue		3,615	7,798		19,999
Disposal Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0	0		0
Other Revenue
Disaggregation of Revenue [Line Items]
Service revenue		2,894	3,162		9,207
Other Revenue | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0	0		0
Rocky Mountain | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		17,833	29,515		86,138
Rental revenue		2,734	3,884		11,196
Total revenue		20,567	33,399		97,334
Rocky Mountain | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		13,573	21,809		65,036
Rocky Mountain | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		2,325	5,235		13,387
Rocky Mountain | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		1,935	2,471		7,715
Northeast | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		7,122	11,187		29,784
Rental revenue		37	60		182
Total revenue		7,159	11,247		29,966
Northeast | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		5,830	9,243		25,492
Northeast | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		400	1,329		3,061
Northeast | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		892	615		1,231
Southern | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		5,665	4,992		20,619
Rental revenue		367	18		354
Total revenue		6,032	5,010		20,973
Southern | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		4,708	3,682		16,807
Southern | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		890	1,234		3,551
Southern | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		$ 67	$ 76		$ 261
Predecessor
Disaggregation of Revenue [Line Items]
Service revenue	$ 13,608			$ 86,564
Rental revenue	1,514			9,319
Total revenue	15,122			95,883
Predecessor | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0			0
Rental revenue	0			0
Total revenue	0			0
Predecessor | Water Transfer Services
Disaggregation of Revenue [Line Items]
Service revenue	11,352			71,726
Predecessor | Water Transfer Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0			0
Predecessor | Disposal Services
Disaggregation of Revenue [Line Items]
Service revenue	1,599			9,312
Predecessor | Disposal Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0			0
Predecessor | Other Revenue
Disaggregation of Revenue [Line Items]
Service revenue	657			5,526
Predecessor | Other Revenue | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0			0
Predecessor | Rocky Mountain | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	7,183			48,325
Rental revenue	1,319			8,221
Total revenue	8,502			56,546
Predecessor | Rocky Mountain | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	5,878			38,844
Predecessor | Rocky Mountain | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	980			6,506
Predecessor | Rocky Mountain | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	325			2,975
Predecessor | Northeast | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	3,382			20,642
Rental revenue	42			109
Total revenue	3,424			20,751
Predecessor | Northeast | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	2,777			17,118
Predecessor | Northeast | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	308			1,284
Predecessor | Northeast | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	297			2,240
Predecessor | Southern | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	3,043			17,597
Rental revenue	153			989
Total revenue	3,196			18,586
Predecessor | Southern | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	2,697			15,764
Predecessor | Southern | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	311			1,522
Predecessor | Southern | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	$ 35			$ 311

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Earnings Per Common Share - Narrative (Details) - shares	2 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Common stock equivalents (in shares)	0	0	0	0	0

XML

Earnings Per Common Share - Schedule of Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended						7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Jul. 31, 2017	Sep. 30, 2018	Sep. 30, 2017
Numerator:
Net (loss) income		$ (16,993)	$ (7,117)	$ (11,176)	$ (32,167)					$ (50,460)
Denominator:
Weighted average shares—basic (in shares)		11,696,000	11,696,000							11,696,000
Common stock equivalents (in shares)		0	0			0				0	0
Weighted average shares—diluted (in shares)		11,696,000	11,696,000							11,696,000
Earnings per common share:
Net loss per basic common share (usd per share)		$ (1.45)	$ (0.61)							$ (4.31)
Net loss per diluted common share (usd per share)		$ (1.45)	$ (0.61)							$ (4.31)
Antidilutive stock-based awards excluded (in shares)		828,000	1,210,000							1,227,000
Predecessor
Numerator:
Net (loss) income	$ 224,160						$ (19,587)	$ (35,962)	$ 168,611
Denominator:
Weighted average shares—basic (in shares)	150,951,000								150,940,000
Common stock equivalents (in shares)	6,443,000								23,364,000
Weighted average shares—diluted (in shares)	157,394,000								174,304,000
Earnings per common share:
Net loss per basic common share (usd per share)	$ 1.48								$ 1.12
Net loss per diluted common share (usd per share)	$ 1.42								$ 0.97
Antidilutive stock-based awards excluded (in shares)	576,000								593,000

XML

Intangible Assets (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 594	$ 594
Additions/(Disposals)	(13)	0
Accumulated Amortization	(152)	(47)
Net	$ 429	$ 547
Remaining Useful Life (Years)	5 years 5 months 24 days	6 years 2 months
Disposal permits
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 594	$ 594
Additions/(Disposals)	(13)	0
Accumulated Amortization	(152)	(47)
Net	$ 429	$ 547
Remaining Useful Life (Years)	5 years 5 months 24 days	6 years 2 months

XML

Assets Held for Sale and Impairment - Additional Information (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2018
Goodwill [Line Items]
Impairment of assets to be disposed of	$ 2,400			$ 4,100
Impairment of long-lived assets	2,404	$ 100	$ 300		$ 4,563
Southern
Goodwill [Line Items]
Impairment of assets to be disposed of	200	$ 100		4,000
Northeast
Goodwill [Line Items]
Impairment of assets to be disposed of				$ 100
Rocky Mountain
Goodwill [Line Items]
Impairment of assets to be disposed of	$ 2,200

XML

Fair Value Measurements - Measured on a Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Jul. 31, 2017
Liabilities:
Derivative warrant liability	$ 154	$ 477	$ 0
Contingent consideration	$ 500	$ 500

XML

Fair Value Measurements - Derivative Warrant Liability (Details) $ / shares in Units, $ in Thousands		2 Months Ended	5 Months Ended	9 Months Ended
	Jul. 31, 2017 USD ($) warrants $ / shares	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2018 USD ($) $ / shares
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Plan of reorganization, number of warrants Issued | warrants	118,137
Exercise price of warrants (in USD per warrant) | $ / shares	$ 39.82			$ 39.82
Expiration term (in years)	7 years
Par value of successor common stock (USD per share) | $ / shares	$ 0.01
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period		$ 0	$ 0	$ 477
Issuance of warrants			717	0
Adjustments to estimated fair value		$ 140	(240)	(323)
Balance at end of period	$ 0		$ 477	$ 154
2018 Notes
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Interest rate	9.875%

XML

Fair Value Measurements - Changes to Contingent Consideration (Detail) - USD ($) $ in Thousands		5 Months Ended	9 Months Ended
	Jul. 11, 2017	Dec. 31, 2017	Sep. 30, 2018	Jun. 28, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Less: current portion		$ (500)	$ (500)
Contingent consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		1,000	500
Liability settlements		(500)	0
Balance at end of period		500	500
Less: current portion		(500)	(500)
Long-term contingent consideration		$ 0	$ 0
Chapter 11 Bankruptcy
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amount to be transferred upon emergence from Chapter 11	$ 500
Amount to be transferred when required permits are delivered	$ 500
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Long-term contingent consideration				$ 8,500

XML

Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued payroll and employee benefits	$ 5,829	$ 3,304
Accrued insurance	2,573	2,701
Accrued legal	718	1,749
Accrued taxes	2,228	2,362
Accrued interest	327	161
Accrued operating costs	3,719	2,663
Accrued other	330	999
Total accrued liabilities	$ 15,724	$ 13,939

XML

Debt - Schedule of Debt (Detail) - USD ($)		9 Months Ended
	Jul. 31, 2017	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Fair Value of Debt		$ 35,614,000
Carrying Value of Debt		35,614,000	$ 39,049,000
Less: current portion of long-term debt		(4,526,000)	(5,525,000)
Long-term debt		$ 31,088,000	33,524,000
Successor Second Lien Term Loan | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 26,800,000.0
Interest rate		11.00%
Interest rate payable in cash		5.50%
Interest rate payable in kind		5.50%
ACF FinCo I, LP | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	30,000,000.0	$ 30,000,000.0
ACF FinCo I, LP | First Lien Credit Agreement | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 45,000,000.0
ACF FinCo I, LP | First Lien Credit Agreement | Line of Credit | LIBOR
Debt Instrument [Line Items]
Variable interest rate	5.25%
Successor Revolving Facility
Debt Instrument [Line Items]
Variable interest rate		7.36%
Fair Value of Debt		$ 0
Carrying Value of Debt		$ 0	0
Successor First Lien Term Loan
Debt Instrument [Line Items]
Variable interest rate		9.36%
Fair Value of Debt		$ 12,679,000
Carrying Value of Debt		$ 12,679,000	14,285,000
Successor First Lien Term Loan | First Lien Credit Agreement | LIBOR
Debt Instrument [Line Items]
Variable interest rate		7.25%
Successor First Lien Term Loan | ACF FinCo I, LP | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 15,000,000.0
Successor Second Lien Term Loan
Debt Instrument [Line Items]
Variable interest rate		11.00%
Fair Value of Debt		$ 20,592,000
Carrying Value of Debt		$ 20,592,000	21,000,000
Vehicle Financings
Debt Instrument [Line Items]
Weighted-average interest rate		5.31%
Fair Value of Debt		$ 2,343,000
Carrying Value of Debt		$ 2,343,000	$ 3,764,000

XML

Debt - Additional Information (Details) - USD ($)		9 Months Ended
	Jul. 31, 2017	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Carrying Value of Debt		$ 35,614,000	$ 39,049,000
First Lien Credit Agreement
Debt Instrument [Line Items]
Credit agreement, accordion feature	$ 20,000,000.0
Line of Credit | First Lien Credit Agreement | ACF FinCo I, LP
Debt Instrument [Line Items]
Maximum amount from credit agreement	45,000,000.0
Installment payment amount	$ 178,600
Increase in interest rate in event of default (percent)	3.00%
Line of Credit | First Lien Credit Agreement | ACF FinCo I, LP | LIBOR
Debt Instrument [Line Items]
Variable interest rate	5.25%
Line of Credit | Revolving Credit Facility | ACF FinCo I, LP
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 30,000,000.0	$ 30,000,000.0
Line of Credit | Successor Second Lien Term Loan
Debt Instrument [Line Items]
Maximum amount from credit agreement	26,800,000.0
Installment payment amount	$ 263,200
Increase in interest rate in event of default (percent)	3.00%
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans	$ 21,100,000
Additional borrowings available at request	5,700,000
Interest rate		11.00%
Interest rate payable in cash		5.50%
Interest rate payable in kind		5.50%
Successor First Lien Term Loan
Debt Instrument [Line Items]
Carrying Value of Debt		$ 12,679,000	14,285,000
Variable interest rate		9.36%
Successor First Lien Term Loan | First Lien Credit Agreement | LIBOR
Debt Instrument [Line Items]
Variable interest rate		7.25%
Successor First Lien Term Loan | Line of Credit | Revolving Credit Facility | ACF FinCo I, LP
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 15,000,000.0
Successor Second Lien Term Loan
Debt Instrument [Line Items]
Carrying Value of Debt		$ 20,592,000	21,000,000
Variable interest rate		11.00%
Vehicle Financings
Debt Instrument [Line Items]
Carrying Value of Debt		$ 2,343,000	$ 3,764,000
Vehicle Financings | Appalachian Water Services
Debt Instrument [Line Items]
Carrying Value of Debt		$ 2,300,000

XML

Derivative Warrants - Additional Information (Details) shares in Millions		12 Months Ended
	Jul. 31, 2017 warrants $ / shares	Dec. 31, 2016 $ / shares shares	Sep. 30, 2018 $ / shares
Derivative [Line Items]
Exercise price of warrants (in USD per warrant) | $ / shares	$ 39.82		$ 39.82
Plan of reorganization, number of warrants Issued | warrants	118,137
Par value of successor common stock (USD per share) | $ / shares	$ 0.01
Expiration term (in years)	7 years
2021 Notes | Minimum
Derivative [Line Items]
Interest rate		10.00%
2021 Notes | Maximum
Derivative [Line Items]
Interest rate		12.50%
Warrant
Derivative [Line Items]
Warrants issued during period (shares)		26.4
Exercise price of warrants (in USD per warrant) | $ / shares		$ 0.01
Class of warrant or right, term		10 years
Warrant | Common Class A
Derivative [Line Items]
Warrants issued during period (shares)		0.1
Warrant | 2021 Notes
Derivative [Line Items]
Warrants issued during period (shares)		17.5
Warrant | Term Loan
Derivative [Line Items]
Warrants issued during period (shares)		8.8

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Derivative Warrants - Warrants Outstanding Reconciliation (Details) - USD ($) shares in Thousands, $ in Thousands	5 Months Ended	7 Months Ended	9 Months Ended
	Dec. 31, 2017	Jul. 31, 2017	Sep. 30, 2018
Increase (Decrease) in Temporary Equity [Roll Forward]
Issued	$ 717		$ 0
Warrant
Increase (Decrease) in Temporary Equity [Roll Forward]
Outstanding at the beginning of the period			118
Issued			$ 0
Exercised			$ 0
Outstanding at the end of the period	118		118
Predecessor | Warrant
Increase (Decrease) in Temporary Equity [Roll Forward]
Outstanding at the beginning of the period	0	25,283
Issued		$ 0
Exercised		(16)
Canceled due to emergence from chapter 11		$ (25,267)
Outstanding at the end of the period		0

XML

Derivative Warrants - Schedule of Assumptions Used (Details)	Sep. 30, 2018 $ / shares	Dec. 31, 2017 $ / shares	Jul. 31, 2017 $ / shares
Class of Warrant or Right [Line Items]
Exercise price of warrants (in USD per warrant)	$ 39.82		$ 39.82
Closing stock price (in USD per share)	$ 11.12
Risk free rate
Class of Warrant or Right [Line Items]
Measurement input	0.0293
Expected volatility
Class of Warrant or Right [Line Items]
Measurement input	0.4231
Predecessor
Class of Warrant or Right [Line Items]
Exercise price of warrants (in USD per warrant)		$ 39.82
Closing stock price (in USD per share)		$ 18.18
Predecessor | Risk free rate
Class of Warrant or Right [Line Items]
Measurement input		0.0229
Predecessor | Expected volatility
Class of Warrant or Right [Line Items]
Measurement input		0.4059

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Restructuring and Exit Costs - Additional Information (Details) - USD ($)	2 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2015	Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs	$ 0	$ 49,000	$ 1,117,000
Eagle Ford Shale Area
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs		49,000	1,117,000
Restructuring reserve		50,000	50,000		$ 0
Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs				$ 7,100,000
Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business | Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Restructuring reserve		$ 45,000	$ 45,000

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Restructuring and Exit Costs - Schedule of Restructuring Costs (Details) - USD ($)	2 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018
Restructuring Cost and Reserve [Line Items]
Total restructuring and exit costs for Eagle Ford	$ 0	$ 49,000	$ 1,117,000
Eagle Ford Shale Area
Restructuring Cost and Reserve [Line Items]
Severance and termination benefits		(11,000)	225,000
Contract termination costs and exit costs		60,000	892,000
Total restructuring and exit costs for Eagle Ford		$ 49,000	$ 1,117,000

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Restructuring and Exit Costs - Liability Rollforward (Details) - USD ($)	2 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs	$ 0	$ 49,000	$ 1,117,000
Eagle Ford Shale Area
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor			0
Restructuring and exit-related costs		49,000	1,117,000
Cash payments			(1,067,000)
Balance accrued at end of period - Successor		50,000	50,000
Eagle Ford Shale Area | Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor			0
Restructuring and exit-related costs			225,000
Cash payments			(225,000)
Balance accrued at end of period - Successor		0	0
Eagle Ford Shale Area | Lease Exit Costs
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor			0
Restructuring and exit-related costs			64,000
Cash payments			(41,000)
Balance accrued at end of period - Successor		23,000	23,000
Eagle Ford Shale Area | Other Exit Costs
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor			0
Restructuring and exit-related costs			828,000
Cash payments			(801,000)
Balance accrued at end of period - Successor		$ 27,000	$ 27,000

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Restructuring and Exit Costs - Restructuring Reserve (Details) - Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business - Facility Closing $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Restructuring Reserve [Roll Forward]
Balance accrued at beginning of period - Successor	$ 82
Cash payments	(37)
Balance accrued at end of period - Successor	$ 45

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Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jul. 31, 2017	Sep. 30, 2018
Income Tax Contingency [Line Items]
Current income tax expense		$ 0	$ (58)		$ (58)
Deferred income tax (expense) benefit		(34)	(11)		(11)
Total income tax (expense) benefit		$ (34)	$ (69)		$ (69)
Predecessor
Income Tax Contingency [Line Items]
Current income tax expense	$ (33)			$ (15)
Deferred income tax (expense) benefit	337			337
Total income tax (expense) benefit	$ 304			$ 322

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Income Taxes - Narrative (Detail)	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended	12 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jul. 31, 2017	Sep. 30, 2018	Dec. 31, 2018
Income Tax Contingency [Line Items]
Effective income tax benefit rate	(0.10%)	(0.20%)	(1.00%)	(0.20%)	(0.10%)
Scenario, Forecast
Income Tax Contingency [Line Items]
Effective income tax benefit rate						0.00%

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Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions					2 Months Ended	3 Months Ended	9 Months Ended
	May 29, 2018	Feb. 23, 2018	Feb. 22, 2018	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018	Mar. 02, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares of common stock available for issuance of awards (in shares)			100,000
2017 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares of common stock available for issuance of awards (in shares)			1,772,058
Chief Executive Officer | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)		33.33%		33.33%
Chief Executive Officer | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)		33.33%		33.33%
Chief Executive Officer | Share-based Compensation Award, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)		33.33%		33.33%
Chief Financial Officer | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)			33.33%
Chief Financial Officer | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)			33.33%
Chief Financial Officer | Share-based Compensation Award, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)			33.33%
Stock options, tranche one | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option award (percent)				2.50%
Enterprise valuation of company's common stock				$ 475.0
Options awarded to purchase common stock (in shares)		354,411
Exercise price (in dollars per share)		$ 37.03
Stock options, tranche two | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option award (percent)				2.50%
Enterprise valuation of company's common stock				$ 525.0
Options awarded to purchase common stock (in shares)		354,411
Exercise price (in dollars per share)		$ 41.31
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants (in shares)					0	0	1,311,000
Restricted stock units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awarded to purchase common stock (in shares)			88,603					354,412
Restricted stock units | Interim Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants (in shares)	5,889
Performance-based Restricted Stock Units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			531,618
Performance-based Restricted Stock Units | Chief Financial Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			62,022
Performance-based Restricted Stock Units | Chief Legal Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awarded to purchase common stock (in shares)			62,022
Time-based Restricted Stock Units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			531,618
Time-based Restricted Stock Units | Chief Financial Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			62,022
Time-based Restricted Stock Units | Chief Legal Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			62,022
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock received for service by non-employee directors (in shares)			4,688
Restricted stock and stock unit grants (in shares)					0	0	20,000
Stock options | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awarded to purchase common stock (in shares)								708,822

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Share-based Compensation (Details) - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jul. 31, 2017	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grants		709	0		1,331
Stock-based compensation		$ 181	$ 98		$ 11,492
Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 36			$ 457
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option grants		709	0		0
Stock-based compensation		$ 181	$ 0		$ (788)
Stock options | Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	12			109
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants		0	0		20
Stock-based compensation		$ 0	$ 76		$ 236
Restricted stock | Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	22			153
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants		0	0		1,311
Restricted stock units		$ 0	$ 22		$ 12,044
Restricted stock units | Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units	$ 2			$ 195

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Segments - Additional Information (Detail)	Sep. 30, 2018 operating_division
Segment Reporting [Abstract]
Number of operating divisions	3

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Segments - Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jul. 31, 2017	Sep. 30, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Revenue		$ 33,758	$ 49,656		$ 148,273
Direct operating expenses		26,110	39,753		120,449
General and administrative expenses		4,928	5,849		31,183
Depreciation and amortization		17,321	10,018		36,731
Operating income (loss)		(17,005)	(6,113)		(45,770)
Income (loss) before income taxes		(16,959)	(7,048)		(50,391)
Total assets			269,862		269,862	$ 311,322
Total assets held for sale			3,172		3,172	2,765
Operating Segments | Rocky Mountain
Segment Reporting Information [Line Items]
Revenue		20,567	33,399		97,334
Direct operating expenses		15,779	25,757		77,702
General and administrative expenses		1,278	1,605		4,763
Depreciation and amortization		8,020	5,698		17,910
Operating income (loss)		(6,676)	339		(3,041)
Income (loss) before income taxes		(7,190)	372		(3,033)
Total assets			118,791		118,791	137,213
Total assets held for sale			0		0	2,765
Operating Segments | Northeast
Segment Reporting Information [Line Items]
Revenue		7,159	11,247		29,966
Direct operating expenses		5,962	10,372		26,696
General and administrative expenses		460	442		1,722
Depreciation and amortization		4,834	1,976		9,565
Operating income (loss)		(4,097)	(1,543)		(8,086)
Income (loss) before income taxes		(4,027)	(1,628)		(8,307)
Total assets			46,713		46,713	54,218
Total assets held for sale			116		116	0
Operating Segments | Southern
Segment Reporting Information [Line Items]
Revenue		6,032	5,010		20,973
Direct operating expenses		4,369	3,624		16,051
General and administrative expenses		829	106		935
Depreciation and amortization		4,421	2,331		9,205
Operating income (loss)		(3,825)	(1,200)		(10,497)
Income (loss) before income taxes		(3,744)	(1,240)		(10,646)
Total assets			86,877		86,877	111,457
Total assets held for sale			2,278		2,278	0
Corporate/ Other
Segment Reporting Information [Line Items]
Revenue		0	0		0
Direct operating expenses		0	0		0
General and administrative expenses		2,361	3,696		23,763
Depreciation and amortization		46	13		51
Operating income (loss)		(2,407)	(3,709)		(24,146)
Income (loss) before income taxes		$ (1,998)	(4,552)		(28,405)
Total assets			17,481		17,481	8,434
Total assets held for sale			$ 778		$ 778	$ 0
Predecessor
Segment Reporting Information [Line Items]
Revenue	$ 15,122			$ 95,883
Direct operating expenses	11,896			81,010
General and administrative expenses	1,326			22,552
Depreciation and amortization	4,003			28,981
Operating income (loss)	(2,103)			(36,660)
Income (loss) before income taxes	223,856			168,289
Predecessor | Operating Segments | Rocky Mountain
Segment Reporting Information [Line Items]
Revenue	8,502			56,546
Direct operating expenses	6,434			46,837
General and administrative expenses	425			3,877
Depreciation and amortization	2,376			15,964
Operating income (loss)	(733)			(10,132)
Income (loss) before income taxes	(4,944)			(14,854)
Predecessor | Operating Segments | Northeast
Segment Reporting Information [Line Items]
Revenue	3,424			20,751
Direct operating expenses	3,329			21,117
General and administrative expenses	331			1,917
Depreciation and amortization	657			5,352
Operating income (loss)	(893)			(7,635)
Income (loss) before income taxes	27,121			20,194
Predecessor | Operating Segments | Southern
Segment Reporting Information [Line Items]
Revenue	3,196			18,586
Direct operating expenses	2,133			13,056
General and administrative expenses	3			1,684
Depreciation and amortization	955			7,542
Operating income (loss)	105			(3,696)
Income (loss) before income taxes	22,583			18,650
Predecessor | Corporate/ Other
Segment Reporting Information [Line Items]
Revenue	0			0
Direct operating expenses	0			0
General and administrative expenses	567			15,074
Depreciation and amortization	15			123
Operating income (loss)	(582)			(15,197)
Income (loss) before income taxes	$ 179,096			$ 144,299

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Subsidiary Guarantors - Additional Information (Detail)	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Subsidiary ownership percentage	100.00%	100.00%

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Subsidiary Guarantors - Condensed Consolidating Statement of Operations (Detail) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended					7 Months Ended	9 Months Ended
	Jul. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Mar. 31, 2017	Jul. 31, 2017	Sep. 30, 2018
Condensed Income Statements, Captions [Line Items]
Revenue		$ 33,758	$ 49,656						$ 148,273
Costs and expenses:
Direct operating expenses		26,110	39,753						120,449
General and administrative expenses		4,928	5,849						31,183
Depreciation and amortization		17,321	10,018						36,731
Total costs and expenses		50,763	55,769						194,043
Operating loss		(17,005)	(6,113)						(45,770)
Interest expense, net		(778)	(1,241)						(3,695)
Reorganization items, net		530	137						(1,609)
(Loss) income before income taxes		(16,959)	(7,048)						(50,391)
Income tax (expense) benefit		(34)	(69)						(69)
Net (loss) income		$ (16,993)	$ (7,117)	$ (11,176)	$ (32,167)				$ (50,460)
Predecessor
Condensed Income Statements, Captions [Line Items]
Revenue	$ 15,122							$ 95,883
Costs and expenses:
Direct operating expenses	11,896							81,010
General and administrative expenses	1,326							22,552
Depreciation and amortization	4,003							28,981
Total costs and expenses	17,225							132,543
Operating loss	(2,103)							(36,660)
Interest expense, net	(3,246)							(22,792)
Other income, net	7							4,261
Income (loss) from equity investments	0							(14)
Reorganization items, net	229,198							223,494
(Loss) income before income taxes	223,856							168,289
Income tax (expense) benefit	304							322
Net (loss) income	224,160					$ (19,587)	$ (35,962)	168,611
Predecessor | Reportable Legal Entities | Parent
Condensed Income Statements, Captions [Line Items]
Revenue	0							0
Costs and expenses:
Direct operating expenses	0							0
General and administrative expenses	567							15,074
Depreciation and amortization	15							123
Total costs and expenses	582							15,197
Operating loss	(582)							(15,197)
Interest expense, net	(3,207)							(22,333)
Other income, net	0							4,125
Income (loss) from equity investments	122,214							101,462
Reorganization items, net	182,885							177,704
(Loss) income before income taxes	301,310							245,761
Income tax (expense) benefit	(77,150)							(77,150)
Net (loss) income	224,160							168,611
Predecessor | Reportable Legal Entities | Guarantor Subsidiaries
Condensed Income Statements, Captions [Line Items]
Revenue	15,122							95,883
Costs and expenses:
Direct operating expenses	11,896							81,010
General and administrative expenses	759							7,478
Depreciation and amortization	3,988							28,858
Total costs and expenses	16,643							117,346
Operating loss	(1,521)							(21,463)
Interest expense, net	(39)							(459)
Other income, net	7							136
Income (loss) from equity investments	0							(14)
Reorganization items, net	46,313							45,790
(Loss) income before income taxes	44,760							23,990
Income tax (expense) benefit	77,454							77,472
Net (loss) income	122,214							101,462
Predecessor | Consolidation, Eliminations
Condensed Income Statements, Captions [Line Items]
Revenue	0							0
Costs and expenses:
Direct operating expenses	0							0
General and administrative expenses	0							0
Depreciation and amortization	0							0
Total costs and expenses	0							0
Operating loss	0							0
Interest expense, net	0							0
Other income, net	0							0
Income (loss) from equity investments	(122,214)							(101,462)
Reorganization items, net	0							0
(Loss) income before income taxes	(122,214)							(101,462)
Income tax (expense) benefit	0							0
Net (loss) income	$ (122,214)							$ (101,462)

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Subsidiary Guarantors - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands	2 Months Ended	7 Months Ended	9 Months Ended
	Sep. 30, 2017	Jul. 31, 2017	Sep. 30, 2018
Cash flows from operating activities:
Net cash used in operating activities	$ (3,072)		$ 4,220
Cash flows from investing activities:
Proceeds from the sale of property and equipment	1,623		19,066
Purchase of property, plant and equipment	(404)		(9,687)
Net cash provided by (used in) investing activities	1,295		9,454
Cash flows from financing activities:
Payments for debt issuance costs	0		0
Proceeds from debtor in possession term loan	0		0
Payments on vehicle financing and other financing activities	(1,773)		(1,399)
Net cash (used in) provided by financing activities	(2,215)		(3,531)
Change in cash, cash equivalents and restricted cash	(3,992)		10,143
Cash and cash equivalents, beginning of period	14,998		6,784
Cash, cash equivalents and restricted cash, end of period	11,006	$ 14,998	16,927
Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan	0		0
First and Second Lien Term Loans
Cash flows from financing activities:
Payments on long-term lines of credit	(442)		(2,132)
Proceeds from Predecessor term loan	0		$ 0
Predecessor
Cash flows from operating activities:
Net cash used in operating activities		(18,949)
Cash flows from investing activities:
Proceeds from the sale of property and equipment		3,083
Purchase of property, plant and equipment		(3,149)
Net cash provided by (used in) investing activities		(66)
Cash flows from financing activities:
Proceeds from revolving credit facility		106,785
Payments on long-term lines of credit		(129,964)
Payments for debt issuance costs		(1,053)
Proceeds from debtor in possession term loan		6,875
Payments on vehicle financing and other financing activities		(2,797)
Net cash (used in) provided by financing activities		31,599
Change in cash, cash equivalents and restricted cash		12,584
Cash and cash equivalents, beginning of period	14,998	2,414
Cash, cash equivalents and restricted cash, end of period		14,998
Predecessor | Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan		15,700
Predecessor | First and Second Lien Term Loans
Cash flows from financing activities:
Payments on long-term lines of credit		0
Proceeds from Predecessor term loan		36,053
Predecessor | Reportable Legal Entities | Parent
Cash flows from operating activities:
Net cash used in operating activities		(18,672)
Cash flows from investing activities:
Proceeds from the sale of property and equipment		0
Purchase of property, plant and equipment		0
Net cash provided by (used in) investing activities		0
Cash flows from financing activities:
Proceeds from revolving credit facility		106,785
Payments on long-term lines of credit		(129,964)
Payments for debt issuance costs		(1,053)
Proceeds from debtor in possession term loan		6,875
Payments on vehicle financing and other financing activities		0
Net cash (used in) provided by financing activities		34,396
Change in cash, cash equivalents and restricted cash		15,724
Cash and cash equivalents, beginning of period	17,112	1,388
Cash, cash equivalents and restricted cash, end of period		17,112
Predecessor | Reportable Legal Entities | Parent | Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan		15,700
Predecessor | Reportable Legal Entities | Parent | First and Second Lien Term Loans
Cash flows from financing activities:
Proceeds from Predecessor term loan		36,053
Predecessor | Reportable Legal Entities | Guarantor Subsidiaries
Cash flows from operating activities:
Net cash used in operating activities		(277)
Cash flows from investing activities:
Proceeds from the sale of property and equipment		3,083
Purchase of property, plant and equipment		(3,149)
Net cash provided by (used in) investing activities		(66)
Cash flows from financing activities:
Proceeds from revolving credit facility		0
Payments on long-term lines of credit		0
Payments for debt issuance costs		0
Proceeds from debtor in possession term loan		0
Payments on vehicle financing and other financing activities		(2,797)
Net cash (used in) provided by financing activities		(2,797)
Change in cash, cash equivalents and restricted cash		(3,140)
Cash and cash equivalents, beginning of period	$ (2,114)	1,026
Cash, cash equivalents and restricted cash, end of period		(2,114)
Predecessor | Reportable Legal Entities | Guarantor Subsidiaries | Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan		0
Predecessor | Reportable Legal Entities | Guarantor Subsidiaries | First and Second Lien Term Loans
Cash flows from financing activities:
Proceeds from Predecessor term loan		$ 0

XML

Subsequent Events - Narrative (Details)		3 Months Ended	9 Months Ended
	Oct. 05, 2018 USD ($) well day $ / shares	Sep. 30, 2018 USD ($) $ / shares	Sep. 30, 2018 USD ($) $ / shares	Jul. 31, 2017 $ / shares
Business Acquisition [Line Items]
Exercise price of subscription right (in USD per share) | $ / shares		$ 39.82	$ 39.82	$ 39.82
Clearwater
Business Acquisition [Line Items]
Transaction costs		$ 400,000	$ 400,000
Subsequent Event
Business Acquisition [Line Items]
Volume weighted average price of common stock	20 days
Rights offering, aggregate offering price	$ 32,500,000
Percentage of nonrefundable cash payments	1.00%
Required period for registration statement (in days) | day	20
Exercise price of subscription right (in USD per share) | $ / shares	$ 9.61
Subsequent Event | Two Largest Shareholders
Business Acquisition [Line Items]
Percentage of stock held by largest shareholders	90.00%
Subsequent Event | Term Loan | Ares | Line of Credit
Business Acquisition [Line Items]
Additional term loan from credit agreement	$ 10,000,000
Subsequent Event | Bridge Term Loan Credit Agreement
Business Acquisition [Line Items]
Bridge loan	$ 32,500,000.0
Interest rate	11.00%
Cure period, expiration	10 days
Volume weighted average price of common stock	20 days
Subsequent Event | Bridge Term Loan Credit Agreement - Portion Used to Fund Acquisition
Business Acquisition [Line Items]
Bridge loan	$ 22,500,000
Subsequent Event | Successor Second Lien Term Loan
Business Acquisition [Line Items]
Repayments of outstanding debt	10,000,000
Subsequent Event | Clearwater
Business Acquisition [Line Items]
Consideration	$ 41,900,000
Number of salt water disposal wells in service | well	3
Bridge loan	$ 32,500,000

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Subsequent Events - Preliminary Allocation of Purchase Price (Details) - USD ($) $ in Thousands	Oct. 05, 2018	Sep. 30, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill		$ 27,139	$ 27,139
Subsequent Event | Clearwater
Business Acquisition [Line Items]
Accounts receivable	$ 1,897
Intangibles	799
Property, plant and equipment	37,396
Goodwill	2,382
Accounts payable and accrued expenses	(574)
Total	$ 41,900