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 June 30, 2019

OR

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

Commission file number 001-35281

__________________________________________________________

Forbes Energy Services Ltd.

(Exact name of registrant as specified in its charter)

__________________________________________________________

Delaware	98-0581100
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3000 South Business Highway 281 Alice, Texas	78332
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(361) 664-0549

__________________________________________________________

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.  x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    x  Yes    ¨  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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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 is a shell company (as defined in Exchange Act Rule 12b-2).    ¨  Yes    x  No

Indicate by check mark whether the registrant has filed all 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 confirmed by a court (as defined in Exchange Act Rule 12b-2).    x  Yes    ¨  No

Securities registered pursuant to Section 12(b) of the Act:

Common stock, $0.01 par value	FLSS	OTCQX Best Market
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

The number of shares of common stock, par value $0.01 per share, of Forbes Energy Services Ltd. outstanding as of August 13, 2019 was 5,446,447.

FORBES ENERGY SERVICES LTD.

TABLE OF CONTENTS

		Page
Part I—Financial Information
Item 1.	Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
Part II—Other Information
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Default Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
	Signatures	42

2

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and any oral statements made in connection with it include certain forward-looking statements within the meaning of the federal securities laws. You can generally identify forward-looking statements by the appearance in such a statement of words like “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project” or “should” or other comparable words or the negative of these words. When you consider our forward-looking statements, you should keep in mind the risk factors we describe and other cautionary statements we make in this Quarterly Report on Form 10-Q. Our forward-looking statements are only predictions based on expectations that we believe are reasonable. Our actual results could differ materially from those anticipated in, or implied by, these forward-looking statements as a result of known risks and uncertainties set forth below and elsewhere in this Quarterly Report on Form 10-Q. These factors include or relate to the following:

• the effect of the continuing industry-wide downturn in and the cyclical nature of, energy exploration and development activities;

• continuing incurrence of operating losses due to such downturn;

• oil and natural gas commodity prices;

• market response to global demands to curtail use of oil and natural gas;

• capital budgets and spending by the oil and natural gas industry;

• the ability or willingness of the Organization of Petroleum Exporting Countries, or OPEC, to set and maintain production levels for oil;

• oil and natural gas production levels by non-OPEC countries;

• supply and demand for oilfield services and industry activity levels;

• our ability to maintain stable pricing;

• possible impairment of our long-lived assets;

• potential for excess capacity;

• competition;

• substantial capital requirements;

• significant operating and financial restrictions under our loan and security agreement which provides for a term loan, or the Term Loan Agreement, excluding paid in kind interest;

• technological obsolescence of operating equipment;

• dependence on certain key employees;

• concentration of customers;

• substantial additional costs of compliance with reporting obligations, the Sarbanes-Oxley Act, Term Loan Agreement, Revolving Loan Agreement and the PIK Notes covenants;

• seasonality of oilfield services activity;

• collection of accounts receivable;

• environmental and other governmental regulation;

• the potential disruption of business activities caused by the physical effects, if any, of climate change;

• risks inherent in our operations;

• ability to fully integrate future acquisitions;

• variation from projected operating and financial data;

• variation from budgeted and projected capital expenditures;

• volatility of global financial markets; and

• the other factors discussed under “Risk Factors” beginning on page 10 of the Annual Report on Form 10-K for the year ended December 31, 2018.

3

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. To the extent these risks, uncertainties and assumptions give rise to events that vary from our expectations, the forward-looking events discussed in this Quarterly Report on Form 10-Q may not occur. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement.

4

PART I—FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

Forbes Energy Services Ltd.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except par value amounts)

	June 30, 2019			December 31, 2018
Assets
Current assets
Cash and cash equivalents	$	1,030		$	8,083
Cash - restricted	73			73
Accounts receivable - trade, net	42,468			45,950
Accounts receivable - other	2,552			2,228
Prepaid expenses and other current assets	10,516			14,691
Total current assets	56,639			71,025
Property and equipment, net	138,780			148,608
Operating lease right-of-use assets	5,785			—
Intangible assets, net	13,195			13,980
Goodwill	19,700			19,700
Other assets	2,020			3,072
Total assets	$	236,119		$	256,385
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable - trade	$	9,955		$	17,841
Accrued interest payable	2,646			1,993
Accrued expenses	12,633			14,348
Current portion of operating lease liabilities	756			—
Current portion of long-term debt	60,273			59,321
Total current liabilities	86,263			93,503
Long-term operating lease liabilities, net of current portion	5,029			—
Long-term debt, net of current portion and debt discount	74,928			71,095
Deferred tax liability	343			357
Total liabilities	166,563			164,955
Commitments and contingencies (Note 7)
Stockholders’ equity
Common stock, $0.01 par value, 40,000 shares authorized, 5,446 and 5,439 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	54			54
Additional paid-in capital	150,477			149,968
Accumulated deficit	(80,975		)	(58,592		)
Total stockholders’ equity	69,556			91,430
Total liabilities and stockholders’ equity	$	236,119		$	256,385

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Forbes Energy Services Ltd.

Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except per share amounts)

	Three Months Ended June 30,
	2019			2018
Revenues
Well servicing	$	25,762		$	20,415
Coiled tubing	13,292			6,960
Fluid logistics	12,011			13,866
Total revenues	51,065			41,241
Expenses
Well servicing	20,971			17,116
Coiled tubing	13,854			6,208
Fluid logistics	8,823			11,151
General and administrative	5,417			5,908
Depreciation and amortization	7,013			7,652
Total expenses	56,078			48,035
Operating loss	(5,013		)	(6,794		)
Other income (expense)
Interest income	1			—
Interest expense	(5,723		)	(2,426		)
Pre-tax loss	(10,735		)	(9,220		)
Income tax expense (benefit)	14			(454		)
Net loss	$	(10,749	)	$	(8,766	)
Loss per share of common stock
Basic and diluted	$	(1.97	)	$	(1.64	)
Weighted average number of shares of common stock outstanding:
Basic and diluted	5,446			5,336

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Forbes Energy Services Ltd.

Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except per share amounts)

	Six Months Ended June 30,
	2019			2018
Revenues
Well servicing	$	50,512		$	38,069
Coiled tubing	33,302			12,162
Fluid logistics	25,639			26,601
Total revenues	109,453			76,832
Expenses
Well servicing	38,520			31,968
Coiled tubing	31,792			10,371
Fluid logistics	19,475			21,840
General and administrative	12,242			10,796
Depreciation and amortization	16,452			14,815
Total expenses	118,481			89,790
Operating loss	(9,028		)	(12,958		)
Other income (expense)
Interest income	4			2
Interest expense	(13,409		)	(4,793		)
Pre-tax loss	(22,433		)	(17,749		)
Income tax benefit	(50		)	(454		)
Net loss	$	(22,383	)	$	(17,295	)
Loss per share of common stock
Basic and diluted	$	(4.11	)	$	(3.24	)
Weighted average number of shares of common stock outstanding:
Basic and diluted	5,444			5,336

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Forbes Energy Services Ltd.

Condensed Consolidated Statements of Cash Flows (unaudited)

(in thousands)

	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(22,383	)	$	(17,295	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	16,452			14,815
Share-based compensation	509			498
Deferred tax benefit	(14		)	(17		)
Gain on disposal of assets	(2,437		)	(67		)
Bad debt expense	243			54
Amortization of debt discount/deferred financing costs/premium conversion	4,391			413
Interest paid in kind	4,699			1,845
Changes in operating assets and liabilities:
Accounts receivable	2,915			(5,311		)
Prepaid expenses and other assets	(17		)	(423		)
Accounts payable - trade	(7,886		)	1,393
Accounts payable - related parties	—			(11		)
Accrued expenses	(1,742		)	1,488
Accrued interest payable	653			(257		)
Net cash used in operating activities	(4,617		)	(2,875		)
Cash flows from investing activities:
Purchases of property and equipment	(9,700		)	(7,044		)
Proceeds from sale of property and equipment	8,651			510
Net cash used in investing activities	(1,049		)	(6,534		)
Cash flows from financing activities:
Payments for finance leases	(2,387		)	(987		)
Proceeds from Revolving Loan Agreement	6,000			—
Payments on Term Loan Agreement	(5,000		)	—
Payments for Bridge Loan	(4,422		)	—
Proceeds from PIK Notes	4,422			—
Net cash used in financing activities	(1,387		)	(987		)
Net decrease in cash, cash equivalents and cash - restricted	(7,053		)	(10,396		)
Cash, cash equivalents and cash - restricted:
Beginning of period	8,156			35,480
End of period	$	1,103		$	25,084

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Forbes Energy Services Ltd.

Condensed Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

(in thousands)

For the three and six months endedJune 30, 2019

	Common Stock			Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2018	5,439	$	54	$	149,968	$	(58,592	)	$	91,430
Share-based compensation	7	—		253		—			253
Net loss	—	—		—		(11,634		)	(11,634		)
Balance at March 31, 2019	5,446	54		150,221		(70,226		)	80,049
Share-based compensation	—	—		256		—			256
Net loss	—	—		—		(10,749		)	(10,749		)
Balance at June 30, 2019	5,446	$	54	$	150,477	$	(80,975	)	$	69,556

For the three and six months endedJune 30, 2018

	Common Stock			Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2017	5,336	$	53	$	148,866	$	(25,985	)	$	122,934
Share-based compensation	—	—		251		—			251
Net loss	—	—		—		(8,529		)	(8,529		)
Balance at March 31, 2018	5,336	53		149,117		(34,514		)	114,656
Share-based compensation	—	—		247		—			247
Net loss	—	—		—		(8,766		)	(8,766		)
Balance at June 30, 2018	5,336	$	53	$	149,364	$	(43,280	)	$	106,137

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

Forbes Energy Services Ltd.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Nature of Operations

Nature of Operations

Forbes Energy Services Ltd., or FES Ltd., is an independent oilfield services contractor that provides well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include fluid hauling, fluid disposal, well maintenance, completion services, workovers and recompletions, plugging and abandonment, and tubing testing. The Company's operations are concentrated in the major onshore oil and natural gas producing regions of Texas, with an additional location in Pennsylvania. The Company believes that its broad range of services, which extends from initial drilling, through production, to eventual abandonment, is fundamental to establishing and maintaining the flow of oil and natural gas throughout the life cycle of our customers’ wells.

As used in these condensed consolidated financial statements, the “Company”, “we” and “our” mean FES Ltd. and its subsidiaries, except as otherwise indicated.

Estimates, Risks and Uncertainties

As an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas, the Company's revenue, profitability, cash flows and future rate of growth are substantially dependent on its ability to (1) maintain adequate equipment utilization, (2) maintain adequate pricing for the services it provides, and (3) maintain a trained workforce. Failure to do so could adversely affect the Company's financial position, results of operations, and cash flows.

Because the Company's revenues are generated primarily from customers who are subject to the same factors as the Company, the Company's operations are also susceptible to market volatility resulting from economic, cyclical, weather, or other factors related to such industry. The Company is subject to changes in the level of operating and capital spending in the industry, decreases in oil and natural gas prices, and/or industry perception about future oil and natural gas prices that may materially decrease demand for the Company's services, or may have an adverse effect on our financial position, results of operations and cash flows.

2. Basis of Presentation

Interim Financial Information

The unaudited condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, for interim financial reporting. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, these condensed consolidated financial statements should be read along with the annual audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments which are of normal recurring natures considered necessary for a fair representation have been made in the accompanying unaudited financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Reclassification

Certain prior year amounts have been reclassified to conform to the current year presentation with no material effect on the unaudited condensed consolidated financial statements.

10

Fair Values of Financial Instruments

Fair value is the price that would be received to sell an asset, or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date.

There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 - Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.

• Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The carrying amounts of cash and cash equivalents, accounts receivable-trade, accounts receivable-other, accounts payable-trade and insurance notes approximate fair value because of the short maturity of these instruments. The fair values of finance leases approximate their carrying values, based on current market rates at which the Company could borrow funds with similar maturities (Level 2 in the fair value hierarchy). The fair values of the Term Loan Agreement, Bridge Loan and the PIK Notes as of the respective dates are set forth below (in thousands):

	June 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term Loan Agreement	$	60,850	$	64,198	$	62,335	$	65,794
Bridge Loan	$	—	$	—	$	49,568	$	50,000
PIK Notes	$	54,131	$	61,919	$	—	$	—

Cash, Cash Equivalents and Cash - Restricted

The following table provides a reconciliation of cash, cash equivalents and cash - restricted reported within the consolidated balance sheets to the same such amounts shown in the consolidated statements of cash flows (in thousands).

	June 30,
	2019		2018
Cash and cash equivalents	$	1,030	$	5,383
Cash - restricted	73		19,701
Cash and cash equivalents and cash - restricted as shown in the consolidated statement of cash flows	$	1,103	$	25,084

The Company's restricted cash at June 30, 2018 included $11.0 million related to a prior restriction under the Term Loan Agreement and $8.7 million as collateral for certain outstanding letters of credit and the Company's corporate credit card program under a prior credit facility with Regions.

Revenue Recognition

Revenue is measured as consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by providing service to a customer. Amounts are billed upon completion of service and are generally due within 30 days.

11

The Company has its principal revenue generating activities organized into three service lines, well servicing, coiled tubing and fluid logistics. The Company's well servicing line consists primarily of maintenance, workover, completion, plugging and abandonment, and tubing testing services. The Company's coiled tubing line consists of maintenance, workover and completion services. The Company's fluid logistics line provides supporting services to the well servicing line as well as direct sales to customers for fluid management and movement. The Company generally establishes a master services agreement with each customer and provides associated services on a work order basis in increments of days, by the hour for services performed or on occasion, bid/turnkey pricing. Services provided under the well servicing, coiled tubing and the fluid logistics segments are short in duration and generally completed within 30 days.

The majority of the Company’s contracts with customers in the well servicing, coiled tubing and fluid logistics segments are short-term in nature and are recognized as “over-time” performance obligations as the services are performed. The Company applies the “as-invoiced” practical expedient as the amount of consideration the Company has a right to invoice corresponds directly with the value of the Company’s performance to date. Because of the short-term nature of the Company’s services, which generally last a few hours to multiple days, the Company does not have any contracts with a duration longer than one year that require disclosure. The Company has no material contract assets or liabilities.

The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods. The Company's significant judgments made in connection with the adoption of ASC 606 included the determination of when the Company satisfies its performance obligation to customers and the applicability of the as invoiced practical expedient.

Leases

Effective January 1, 2019, the Company adopted an accounting standard update issued by the Financial Accounting Standards Board (FASB) related to accounting for leases, which requires lessees to record assets and liabilities that arise for all leases on their balance sheet and expanded financial statement disclosures for both lessees and lessors. Previously, only capital leases were recorded on the balance sheet. This update requires lessees to recognize a lease liability equal to the present value of its lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and instead recognize lease expense for such leases generally on a straight-line basis over the lease term. Leases with a term of longer than 12 months will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted this standard on a prospective basis using the optional modified retrospective transition method. As such, the comparative financial information has not been restated and continues to be reported under the lease standard in effect during those periods. The Company also elected other practical expedients provided by the new standard, including the package of practical expedients, the hindsight practical expedient and the short-term lease recognition practical expedient in which leases with a term of 12 months or less are not recognized on the balance sheet. The adoption of this standard resulted in the recognition of approximately $6.2 million of operating lease right-of-use assets and operating lease liabilities on the balance sheet as of January 1, 2019. The adoption of this standard did not materially impact the condensed consolidated statements of operations for the three and six months ended June 30, 2019. See Note 8 for the expanded lease disclosures required by the new standard.

3. Acquisition of Cretic Energy Services, LLC

On November 16, 2018, the Company acquired 100% of the outstanding units of Cretic Energy Services, LLC (Cretic). The acquisition of Cretic was accounted for as a business combination using the acquisition method of accounting. The aggregate purchase price was $69.4 million in cash (net of $2.2 million cash acquired).

The purchase price paid in the acquisition has been preliminarily allocated to record the acquired assets and assumed liabilities based on their estimated fair value. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. Management estimated that consideration paid exceeded the fair value of the net assets acquired. The goodwill recorded was primarily attributable to synergies related to the Company’s coiled tubing business strategy that are expected to arise from the Cretic acquisition and was attributable to the Company’s coiled tubing segment.

Proforma Results from the Cretic Acquisition (unaudited)

The following unaudited consolidated pro forma information is presented as if the Cretic acquisition had occurred on January 1, 2018 (in thousands):

12

	Pro Forma
	Three Months Ended June 30, 2018			Six Months Ended June 30, 2018
Revenue	$	57,611		$	107,067
Net loss	$	(8,926	)	$	(19,498	)

The unaudited pro forma amounts above have been calculated after applying the Company’s accounting policies and adjusting the Cretic acquisition results to reflect the increase to interest expense and depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from January 1, 2018 and other related pro forma adjustments. The pro forma amounts do not include any potential synergies, cost savings or other expected benefits of the Cretic acquisition, and are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the Cretic acquisition had occurred as of January 1, 2018 or of future operating performance. 

4. Property and Equipment

Property and equipment consisted of the following (in thousands):

	Estimated Life in Years	June 30, 2019			December 31, 2018
Well servicing equipment	9-15 years	$	132,358		$	128,647
Autos and trucks	5-10 years	25,375			32,132
Autos and trucks - finance lease	5-10 years	23,198			20,416
Disposal wells	5-15 years	4,159			3,977
Building and improvements	5-30 years	5,901			5,705
Furniture and fixtures	3-15 years	3,032			2,797
Land		868			868
		194,891			194,542
Accumulated depreciation (1)		(56,111		)	(45,934		)
		$	138,780		$	148,608

⁽¹⁾ Includes accumulated depreciation of finance lease assets of $6.1 million and $4.5 million at June 30, 2019 and December 31, 2018, respectively.

Depreciation expense was $6.7 million and $7.4 million for the three months ended June 30, 2019 and 2018, respectively, and $15.7 million and $14.2 million for the six months ended June 30, 2019 and 2018, respectively. Depreciation of assets held under finance leases was $1.1 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively, and $2.3 million and $1.4 million for the six months ended June 30, 2019 and 2018, respectively, and is included in depreciation and amortization expense in the accompanying condensed consolidated statements of operations. 

5. Goodwill and Other Intangible Assets

Goodwill

Goodwill totaled $19.7 million at June 30, 2019 and December 31, 2018 related to the acquisition of Cretic and is deductible for tax purposes.

13

Other Intangible Assets

The following table sets forth the identified other intangible assets by major asset class (in thousands):

	Useful Life (years)	Gross Carrying Value		Accumulated Amortization			Net Book Value
June 30, 2019
Customer relationships	6-15	$	11,378	$	(1,318	)	$	10,060
Trade names	10-15	3,072		(608		)	2,464
Covenants not to compete	4	1,505		(834		)	671
		$	15,955	$	(2,760	)	$	13,195
December 31, 2018
Customer relationships	6-15	$	11,378	$	(832	)	$	10,546
Trade names	10-15	3,072		(496		)	2,576
Covenants not to compete	4	1,505		(647		)	858
		$	15,955	$	(1,975	)	$	13,980

Amortization expense was $0.3 million and $0.3 million for the three months ended June 30, 2019 and 2018, respectively, and $0.8 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively.

Future amortization of these intangibles will be as follows:

2019	$	819
2020	1,637
2021	1,367
2022	1,261
2023	1,261
Thereafter	6,850
	$	13,195

6. Long-Term Debt

Long-term debt consisted of the following (in thousands):

	June 30, 2019			December 31, 2018
Term Loan Agreement of $55.0 million and $60.0 million, plus $8.9 million and $6.0 million of accrued interest paid in kind and net of debt discount of $3.0 million and $3.6 million as of June 30, 2019 and December 31, 2018, respectively	$	60,850		$	62,335
PIK Notes, including $2.4 million accretion of interest and conversion premium	54,131			—
Bridge Loan of $50.0 million, net of debt discount of $0.4 million as of December 31, 2018	—			49,568
Revolving Loan Agreement	6,000			—
Finance leases	13,258			13,319
Insurance notes	962			5,194
Total debt	135,201			130,416
Less: Current portion	(60,273		)	(59,321		)
Total long-term debt	$	74,928		$	71,095

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Term Loan Agreement

On April 13, 2017, the Company entered into the Term Loan Agreement. FES LLC is the borrower, or the Borrower, under the Term Loan Agreement. The Borrower’s obligations have been guaranteed by FES Ltd. and by TES, CCF and FEI, each direct subsidiaries of the Borrower and indirect subsidiaries of FES Ltd. The Term Loan Agreement, as amended, provides for a term loan of $60.0 million, excluding paid in kind interest. Subject to certain exceptions and permitted encumbrances, the obligations under the Term Loan Agreement are secured by a first priority security interest in substantially all the assets of the Company other than accounts receivable, cash and related assets, which constitute priority collateral under the Revolving Loan Agreement (described below). The Term Loan Agreement has a stated maturity date of April 13, 2021.

Borrowings under the Term Loan Agreement bear interest at a rate equal to five percent (5%) per annum payable quarterly in cash, or the Cash Interest Rate, plus (ii) an initial paid in kind interest rate of seven percent (7%) commencing April 13, 2017 to be capitalized and added to the principal amount of the term loan or, at the election of the Borrower, paid in cash. The paid in kind interest increases by two percent (2%) twelve months after April 13, 2017 and every twelve months thereafter until maturity. Upon and after the occurrence of an event of default, the Cash Interest Rate will increase by two percentage points per annum. During the six months endedJune 30, 2019, $2.9 million of interest was paid in kind. At June 30, 2019, the paid in kind interest rate was 11%.

The Term Loan Agreement includes customary negative covenants for an asset-based term loan, including covenants limiting the ability of the Company to, among other things, (i) effect mergers and consolidations, (ii) sell assets, (iii) create or suffer to exist any lien, (iv) make certain investments, (v) incur debt and (vi) transact with affiliates. In addition, the Term Loan Agreement includes customary affirmative covenants for an asset-based term loan, including covenants regarding the delivery of financial statements, reports and notices to the Agent. The Term Loan Agreement also contains customary representations and warranties and event of default provisions for a secured term loan.

Amendment to Term Loan Agreement and Joinder

In connection with the Cretic acquisition, on November 16, 2018, the Company, as a guarantor, FES LLC, as borrower, and certain of their subsidiaries, as guarantors, entered into Amendment No. 1 to Loan and Security Agreement and Pledge and Security Agreement (the “Term Loan Amendment”) with the lenders party thereto and Wilmington Trust, National Association, as agent (the “Term Loan Agent”), pursuant to which the Term Loan Agreement, was amended to, among other things, permit (i) debt under the Revolving Loan Agreement (described below) and the liens securing the obligations thereunder, (ii) the incurrence of add-on term loans under the Term Loan Agreement in an aggregate principal amount of $10.0 million and (iii) the incurrence of one-year “last-out” bridge loans under the Term Loan Agreement in an aggregate principal amount of $50.0 million (the “Bridge Loan”).

In addition, on November 16, 2018, Cretic entered into joinder documentation pursuant to which it became a guarantor under the Term Loan Agreement and a pledgor under the Pledge and Security Agreement referred to in the Term Loan Agreement.

Revolving Loan Agreement

In connection with the Cretic Acquisition, on November 16, 2018, the Company and certain of its subsidiaries, as borrowers, entered into a Credit Agreement (the “Revolving Loan Agreement”) with the lenders party thereto and Regions Bank, as administrative agent and collateral agent (the “Revolver Agent”). The Revolving Loan Agreement provides for $35 million of revolving loan commitments, subject to a borrowing base comprised of 85% of eligible accounts receivable, 90% of eligible investment grade accounts receivable and 100% of eligible cash, less reserves. The loans under the Revolving Loan Agreement accrue interest at a floating rate of LIBOR plus 2.50% - 3.25%, or a base rate plus 1.50% - 2.25%, with the margin based on the fixed charge coverage ratio from time to time.

The Revolving Loan Agreement is secured on a first lien basis by substantially all assets of the Company and its subsidiaries, subject to an intercreditor agreement between the Revolver Agent and the Term Loan Agent which provides that the priority collateral for the Revolving Loan Agreement consists of accounts receivable, cash and related assets, and that the other assets of the Company and its subsidiaries constitute priority collateral for the Term Loan Agreement. At June 30, 2019 we had $6.0 million borrowings outstanding, $6.1 million in letters of credit outstanding and availability of $9.9 million.

5% Subordinated Convertible PIK Notes

On March 4, 2019, the Company issued $51.8 million aggregate original principal amount of 5.00% Subordinated Convertible PIK Notes due June 30, 2020 (the “PIK Notes”). On March 4, 2019, the Company, as Issuer, and Wilmington Trust, National Association, as Trustee, entered into an Indenture governing the terms of the PIK Notes.

The PIK Notes bear interest at a rate of 5.00% per annum. Interest on the PIK Notes will be capitalized to principal semi-annually in arrears on July 1 and January 1 of each year, commencing on July 1, 2019.

The PIK Notes are the unsecured general subordinated obligations of the Company and are subordinated in right of payment to any existing and future secured or unsecured senior debt of the Company. The payment of the principal of, premium, if any, and interest on the PIK Notes will be subordinated to the prior payment in full of all of the Company’s existing and future senior

15

indebtedness. In the event of a liquidation, dissolution, reorganization or any similar proceeding, obligations on the PIK Notes will be paid only after senior indebtedness has been paid in full. Pursuant to the Indenture, the Company is not permitted to (1) make cash payments to pay principal of, premium, if any, and interest on or any other amounts owing in respect of the PIK Notes, or (2) purchase, redeem or otherwise retire the PIK Notes for cash, if any senior indebtedness is not paid when due or any other default on senior indebtedness occurs and the maturity of such indebtedness is accelerated in accordance with its terms unless, in any case, the default has been cured or waived, and the acceleration has been rescinded or the senior indebtedness has been repaid in full.

The Indenture also provides that upon a default by the Company in the payment when due of principal of, or premium, if any, or interest on, indebtedness in the aggregate principal amount then outstanding of $5.0 million or more, or acceleration of the Company’s indebtedness so that it becomes due and payable before the date on which it would otherwise have become due and payable, and if such default is not cured or waived within 30 days after notice to the Company by the Trustee or by holders of at least 25% in aggregate principal amount of the PIK Notes then outstanding, the principal of, (and premium, if any) and accrued and unpaid interest on, the PIK Notes may be declared immediately due and payable.

The PIK Notes are redeemable in whole or from time to time in part at the Company’s option at a redemption price equal to the sum of (i) 100.0% of the principal amount of the PIK Notes to be redeemed and (ii) accrued and unpaid interest thereon to, but excluding, the redemption date, which amounts may be payable in cash or in shares of the Company’s common stock, (subject to limitations, if any, in the documentation governing the Company’s senior indebtedness). If redeemed for the Company’s common stock the holder will receive a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share. The 15% discount represents an implied conversion premium at issuance which will be settled in common stock at the date of conversion.  As such, the face value of the PIK Notes will be accreted to the settlement amount at June 30, 2020.  For the three and six months ended June 30, 2019, the Company recorded $1.8 million and $2.4 million, respectively in interest expense related to the accretion of the conversion premium.

The Indenture contains provisions permitting the Company and the trustee in certain circumstances, without the consent of the holders of the PIK Notes, and in certain other circumstances, with the consent of the holders of not less than a majority in aggregate principal amount of the PIK Notes at the time outstanding to execute supplemental indentures modifying the terms of the Indenture and the PIK Notes as described It also provided in the Indenture that, subject to certain exceptions, the holders of a majority in aggregate principal amount of the PIK Notes at the time outstanding may on behalf of the holders of all the PIK Notes waive any past default or event of default under the Indenture and its consequences.

The Indenture provides for mandatory conversion of the PIK Notes at maturity (or such earlier date as the Company shall elect to redeem the PIK Notes), or upon a Marketed Public Offering of the Company’s common stock or a Change of Control, in each case as defined in the Indenture, at a conversion rate per $100 principal amount of PIK Notes into a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share.

Fair Market Value means fair market value as determined by (A) in the case of a Marketed Public Offering, the offering price per share paid by public investors in the Marketed Public Offering, (B) in the case of a Change of Control, the value of the consideration paid per share by the acquirer in the Change of Control transaction, or (C) in the case of mandatory conversion at the Maturity Date (or such earlier date as the Company shall elect to redeem the PIK Notes), such value as shall be determined by a nationally recognized investment banking firm engaged by the Board of Directors of the Company.

The Company used the gross proceeds of $51.8 million that it received from the issuance of the PIK Notes to repay all of the outstanding principal and accrued and unpaid interest on the Bridge Loan.

Interest on the Bridge Loan prior to its repayment accrued at a rate of 14% (5% cash interest plus 9% PIK interest). The payment obligations of the Borrower under the Bridge Loan have been fully satisfied as of March 4, 2019.

The exchange of the Bridge Loan for the PIK Notes was recognized as a modification of the Term Loan as the amended Term Loan, resulting from the exchange, was not substantially different from the Term Loan. As such, the net carrying value of the Term Loan was not adjusted and a new effective interest that equates the revised cash flows of the modified Term Loan to the existing carrying value of the Term Loan was computed and applied prospectively. Costs incurred with third parties of approximately $1.6 million, related to the issuance of the PIK Notes, were recognized in interest expense for the six months endedJune 30, 2019.

Insurance Notes

The Company entered into insurance promissory notes for the payment of insurance premiums at an interest rate of 4.99% and 3.27% respectively, with an aggregate principal amount outstanding of approximately $1.0 million and $5.2 million as of June 30, 2019 and December 31, 2018, respectively. The amount outstanding could be substantially offset by the cancellation of the related insurance coverage which is classified in prepaid insurance.

7. Commitments and Contingencies

Concentrations of Credit Risk

Financial instruments which subject the Company to credit risk consist primarily of cash balances maintained in excess of federal depository insurance limits and trade receivables. Insurance coverage is currently $250,000 per depositor at each financial institution, and the Company's non-interest bearing cash balances exceeded federally insured limits. The Company restricts investment of temporary cash investments to financial institutions with high credit standings.

The Company’s customer base consists primarily of multi-national and independent oil and natural gas producers. The Company does not require collateral on its trade receivables. For the six months ended June 30, 2019, the Company's largest customer, five largest customers, and ten largest customers constituted 10.0%, 33.8% and 46.5% of consolidated revenues, respectively. The loss of any one of the Company's top five customers could have a materially adverse effect on the revenues and profits of the Company. Further, the Company's trade accounts receivable are from companies within the oil and natural gas industry and as such the Company is exposed to normal industry credit risks. As of June 30, 2019, the Company's largest customer, five largest customers, and ten largest customers constituted 4.8%, 27.0% and 44.2% of accounts receivable, respectively. The Company continually evaluates its reserves for potential credit losses and establishes reserves for such losses.

Employee Benefit Plan

The Company has a 401(k) retirement plan for substantially all of its employees based on certain eligibility requirements. The Company may provide profit sharing contributions to the plan at the discretion of management. No such discretionary contributions have been made since inception of the plan.

Litigation

The Company is subject to various other claims and legal actions that arise in the ordinary course of business. The Company does not believe that any of the currently existing claims and actions, separately or in the aggregate, will have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. It is reasonably possible that cases could be resolved and result in liabilities that exceed the amounts currently reserved; however, we cannot reasonably estimate a range of loss based on the status of the cases. If one or more negative outcomes were to occur relative to these matters, the aggregate impact to the Company’s financial condition could be material.

Self-Insurance

The Company is self-insured under its Employee Group Medical Plan for the first $150 thousand per individual. The Company is self-insured with a retention for the first $250 thousand in general liability. The Company has an additional premium payable clause under its lead $10 million limit excess policy that states in the event a loss exceeds $1 million, a loss additional premium of up to 15% to 17% of paid losses in excess of $1 million will be due. The loss additional premium is payable at the time when the loss is paid and will be payable over a period agreed by insurers. The Company has accrued liabilities totaling $5.9 million and $5.2 million as of June 30, 2019 and December 31, 2018, respectively, for the projected additional premium and self-insured portion of these insurance claims as of the financial statement dates. This accrual includes claims made as well as an estimate for claims incurred but not reported by using third party data and claims history as of the financial statement dates.

Other

The Company is currently undergoing sales and use tax audits for multi-year periods. The Company believes the outcome of these audits will not have a material adverse effect on its results of operations or financial position. Because certain of these audits are in a preliminary stage, an estimate of the possible loss or range of loss cannot reasonably be made.

8. Leases

The Company adopted a comprehensive new lease accounting standard effective January 1, 2019. The details of the significant changes to our accounting policies resulting from the adoption of the new standard are set out below. The Company adopted the standard on a prospective basis using the optional modified retrospective transition method; accordingly, the comparative information as of December 31, 2018 and for the three and six months ended June 30, 2018 has not been adjusted and continues to be reported under the previous lease standard. Under the new lease standard, assets and liabilities that arise from all leases are required to be recognized on the balance sheet for lessees. Previously, only capital leases, which are now referred to as finance leases, were recorded on the balance sheet.

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Beginning January 1, 2019, for all leases with a term in excess of 12 months, the Company recognized a lease liability equal to the present value of the lease payments and a right-of-use asset representing our right to use the underlying asset for the lease term. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term, while finance leases include both an operating expense and an interest expense component. For all leases with a term of 12 months or less, the Company elected the practical expedient to not recognize lease assets and liabilities. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases including month-to-month agreements that continue in perpetuity until the lessor or the Company terminates the lease agreement.

The Company is a lessee for operating leases, primarily related to real estate, salt water disposal wells and equipment. The vast majority of our operating leases have remaining lease terms of 10 years or less, some of which include options to extend the leases, and some of which include options to terminate the leases. The Company generally does not include renewal or termination options in the assessment of leases unless extension or termination is deemed to be reasonably certain. The accounting for some leases may require significant judgment, which includes determining whether a contract contains a lease, determining the incremental borrowing rates to utilize in the net present value calculation of lease payments for lease agreements which do not provide an implicit rate, and assessing the likelihood of renewal or termination options. Salt water disposal well locations have fixed or both fixed and variable lease amounts where the variable lease payments are based on the volume of fluids injected into to the well and/or sales of products by the Company. The Company also has some lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

The Company is a lessee for finance leases related to autos and trucks and well servicing equipment. The vast majority of the Company's finance leases have remaining lease terms of three years or less, all of which include options to terminate the leases after one year and do not include options to extend the lease. For all finance leases, the Company is subject to a residual value guarantee established by the lessor and based upon the calculated net book value of the vehicle as of the date of early termination of the lease. The loans are collateralized by equipment purchased with the proceeds of such loans. For finance leases, the Company uses discount rates similar to incremental borrowing rates available for comparable equipment financing in our net present value calculation of lease payments. The Company's vehicle finance lease agreements contain lease and non-lease components, which are accounted for separately.

The following tables illustrate the financial impact of the Company's leases as of and for the three and six months ended June 30, 2019, along with other supplemental information about the Company's leases (in thousands, except years and percentages):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Components of lease expense:
Finance lease cost:
Amortization of right-of-use assets	$	1,110	$	2,324
Interest on lease liabilities	154		293
Operating lease cost:
Lease expense (1)	367		733
Short-term lease cost	647		1,306
Total lease cost	$	2,278	$	4,656

⁽¹⁾ Includes variable lease costs of $75 thousand and $150 thousand for the three and six months ended June 30, 2019, respectively.

	As of
	June 30, 2019
Components of balance sheet:
Operating leases:
Operating lease right-of-use assets (non-current)	$	5,785
Current portion of operating lease liabilities	$	756
Long-term operating lease liabilities, net of current portion	$	5,029
Finance leases:
Property and equipment, net	$	17,068
Current portion of long-term debt	$	5,180
Long-term debt, net of current portion and debt discount	$	8,078

17

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Other supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,014	$	2,039
Operating cash flows for finance leases - interest	$	154	$	293
Financing cash flows for finance leases	$	1,219	$	2,387
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	6,150
Finance leases	$	890	$	2,326
Weighted-average remaining lease term:
Operating leases			8.5 years
Finance leases			2.6 years
Weighted-average discount rate:
Operating leases			7.50		%
Finance leases			4.19		%

The following table summarizes the maturity of the Company's operating and finance leases as of June 30, 2019 (in thousands):

	Operating Leases - Related Party			Operating Leases - Other			Finance Leases
2019	$	39		$	1,235		$	3,248
2020	58			1,060			5,474
2021	8			1,035			3,974
2022	—			872			1,266
2023	—			747			96
Thereafter	—			3,608			—
Total minimum lease payments	105			8,557			14,058
Less imputed interest	(10		)	(2,166		)	(800		)
Less short-term leases excluded from the balance sheet	—			(701		)	—
Total lease liabilities per balance sheet	$	95		$	5,690		$	13,258

The Company adopted ASU 2016-02 on January 1, 2019 as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future annual minimum lease payments and capital lease commitments as of December 31, 2018 were as follows (in thousands):

	Operating Leases - Related Party		Operating Leases - Other		Capital Leases
2019	$	30	$	2,027	$	4,559
2020	30		986		4,334
2021	8		946		3,375
2022	—		781		1,051
2023	—		386		—
Thereafter	—		1,350		—
Total	$	68	$	6,476	$	13,319

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9. Share-Based Compensation

Management Incentive Plan

A summary of the Company's share-based compensation expense during the periods presented are as follows (in thousands):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Share based compensation expense recognized	$	256	$	509
			As of
			June 30, 2019
Unrecognized compensation cost (in thousands)			$	2,459
Remaining weighted-average service period (years)			3.00

During the six months ended June 30, 2019, the Company granted no restricted stock units to officers and employees subject to the Management Incentive Plan. Below is a summary of the unvested restricted stock units.

	Number of Shares		Weighted Average Fair Value
Unvested as of December 31, 2018	329,240		$	9.68
Granted	—		$	—
Vested	(7,200	)	$	11.00
Forfeited	—		$	—
Unvested as of June 30, 2019	322,040		$	9.99

10. Related Party Transactions

The Company incurred related party expenses, primarily related to lease rents, of $0.2 million and $0.3 million during the three months ended June 30, 2019 and 2018, respectively, and $0.5 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively.

There was no related party revenue for the three months ended June 30, 2019 and 2018 or for the six months ended June 30, 2019 and 2018.

There were no related party accounts receivable or accounts payable as of June 30, 2019 or December 31, 2018.

In addition to such related party transactions above, Lawrence “Larry” First, a director of FES Ltd., serves as the Chief Investment Officer and Managing Director of Ascribe Capital LLC, or Ascribe, and Brett G. Wyard, also a director of FES Ltd., serves as a Managing Partner of Solace Capital Partners, or Solace. Ascribe and/or one or more of its affiliates own approximately 23.6% of the outstanding common stock as of June 30, 2019, and is owed approximately $16.5 million of the aggregate principal amount of the Term Loan Agreement and approximately $27.5 million of the aggregate principle amount of the PIK Notes. Solace and/or one of its affiliates own approximately 17.4% of the outstanding common stock as of June 30, 2019, and is owed approximately $15.1 million of the aggregate principal amount of the term loan covered by the Term Loan Agreement and approximately $20.3 million of the aggregate principal amount of the PIK Notes. Moreover, an affiliate of Solace and affiliates of Ascribe are parties to certain registration rights agreement by and among the Company and certain stockholders of the Company.

11. Earnings per Share

Basic earnings (loss) per share, or EPS, is computed by dividing net income (loss) available to common stockholders by the weighted-average common stock outstanding during the period. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock, such as restricted stock units or the PIK Notes, were exercised and converted into common stock. Potential common stock equivalents relate to outstanding stock options and unvested restricted stock units, which are determined using the treasury stock method, and the PIK Notes, which were determined using the "if-converted" method. In applying the if-converted method, conversion is not assumed for purposes of computing diluted EPS if the effect would be antidilutive.

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The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts):

	Three Months Ended June 30,
	2019			2018
Basic and diluted:
Net loss	$	(10,749	)	$	(8,766	)
Weighted-average common shares	5,446			5,336
Basic and diluted net loss per share	$	(1.97	)	$	(1.64	)

	Six Months Ended June 30,
	2019			2018
Basic and diluted:
Net loss	$	(22,383	)	$	(17,295	)
Weighted-average common shares	5,444			5,336
Basic and diluted net loss per share	$	(4.11	)	$	(3.24	)

There were 322,040 and 363,300 unvested restricted stock units that were not included in the calculation of diluted EPS for the three and six months ended June 30, 2019 and 2018, respectively, and approximately 28.3 million shares related to the potential conversion of the PIK Notes at June 30, 2019 because their effect would have been antidilutive.

12. Business Segment Information

The Company has three reportable segments organized based on its products and services—well servicing, coiled tubing and fluid logistics. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Upon the acquisition of Cretic, we evaluated our segment information and determined that coiled tubing represented a separate segment under our current facts. All prior year segment information has been recast to reflect the change in our segment reporting.

Well Servicing

The Company's well servicing segment utilizes a fleet of well servicing rigs, which was comprised of workover rigs and swabbing rigs and other related assets and equipment to provide the following services:(i) well maintenance, including remedial repairs and removal and replacement of downhole production equipment, (ii) well workovers, including significant downhole repairs, re-completions and re-perforations, (iii) completion and swabbing activities, (iv) plugging and abandonment services, and (v) pressure testing of oil and natural gas production tubing and scanning tubing for pitting and wall thickness using tubing testing units.

Coiled Tubing

The coiled tubing segment utilizes our fleet of coiled tubing units to provide a range of services accomplishing a wide variety of goals including horizontal completions, well bore clean-outs and maintenance, nitrogen services, thru-tubing services, formation stimulation using acid and other chemicals, and other pre- and post-hydraulic fracturing well preparation services.

Fluid Logistics

The Company's fluid logistics segment utilizes a fleet of fluid transport trucks and related assets, including specialized vacuum, high-pressure pump and tank trucks, frac tanks, water wells, salt water disposal wells and facilities, and related equipment to provide services such as transportation, storage and disposal of a variety of drilling and produced fluids used in, and generated by, oil and natural gas production. These services are required in most workover and completion projects and are routinely used in the daily operation of producing wells.

The following table sets forth certain financial information with respect to the Company’s reportable segments (in thousands):

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	Well Servicing		Coiled Tubing			Fluid Logistics		Total
Three Months Ended June 30, 2019
Operating revenues	$	25,762	$	13,292		$	12,011	$	51,065
Direct operating costs	20,971		13,854			8,823		43,648
Segment profits	$	4,791	$	(562	)	$	3,188	$	7,417
Depreciation and amortization	$	2,783	$	2,531		$	1,699	$	7,013
Capital expenditures (1)	$	2,724	$	2,851		$	1,370	$	6,945
Three Months Ended June 30, 2018
Operating revenues	$	20,415	$	6,960		$	13,866	$	41,241
Direct operating costs	17,116		6,208			11,151		34,475
Segment profits	$	3,299	$	752		$	2,715	$	6,766
Depreciation and amortization	$	2,688	$	1,498		$	3,466	$	7,652
Capital expenditures (1)	$	2,016	$	2,304		$	1,500	$	5,820
(1) Capital expenditures listed above include all cash and non-cash additions to property and equipment, including finance leases and fixed assets recorded in accounts payable at year-end.

	Three Months Ended June 30,
	2019			2018
Reconciliation of Operating Loss As Reported:
Segment profits	$	7,417		$	6,766
Less:
General and administrative expense	5,417			5,908
Depreciation and amortization	7,013			7,652
Operating loss	(5,013		)	(6,794		)
Other income (expenses), net	(5,722		)	(2,426		)
Pre-tax loss	$	(10,735	)	$	(9,220	)

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	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Six Months Ended June 30, 2019
Operating revenues	$	50,512	$	33,302	$	25,639	$	109,453
Direct operating costs	38,520		31,792		19,475		89,787
Segment profits	$	11,992	$	1,510	$	6,164	$	19,666
Depreciation and amortization	$	4,959	$	6,069	$	5,424	$	16,452
Capital expenditures (1)	$	5,167	$	5,149	$	1,710	$	12,026
Total assets	$	75,829	$	102,190	$	50,909	$	228,928
Long lived assets	$	57,078	$	80,320	$	39,292	$	176,690
Six Months Ended June 30, 2018
Operating revenues	$	38,069	$	12,162	$	26,601	$	76,832
Direct operating costs	31,968		10,371		21,840		64,179
Segment profits	$	6,101	$	1,791	$	4,761	$	12,653
Depreciation and amortization	$	5,124	$	2,794	$	6,897	$	14,815
Capital expenditures (1)	$	2,945	$	5,518	$	2,494	$	10,957
Total assets	$	134,527	$	22,848	$	30,354	$	187,729
Long lived assets	$	65,920	$	17,228	$	41,618	$	124,766
(1) Capital expenditures listed above include all cash and non-cash additions to property and equipment, including finance leases and fixed assets recorded in accounts payable at year-end.

	Six Months Ended June 30,
	2019			2018
Reconciliation of Operating Loss As Reported:
Segment profits	$	19,666		$	12,653
Less:
General and administrative expense	12,242			10,796
Depreciation and amortization	16,452			14,815
Operating loss	(9,028		)	(12,958		)
Other income (expenses), net	(13,405		)	(4,791		)
Pre-tax loss	$	(22,433	)	$	(17,749	)
	June 30, 2019			December 31, 2018
Reconciliation of Total Assets As Reported:
Total reportable segments	$	228,928		$	243,199
Parent	7,191			13,186
Total assets	$	236,119		$	256,385

13. Revenue

The following tables show revenue disaggregated by primary geographical markets and major service lines (in thousands):

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	Three months ended June 30, 2019
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	18,292	$	4,300	$	6,035	$	28,627
East Texas (1)	1,897		—		811		2,708
Central Texas	—		—		2,976		2,976
West Texas	5,573		8,992		2,189		16,754
Total	$	25,762	$	13,292	$	12,011	$	51,065
	Three months ended June 30, 2018
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	11,081	$	3,799	$	6,669	$	21,549
East Texas (1)	1,097		—		577		1,674
Central Texas	—		—		3,461		3,461
West Texas	8,237		3,161		3,159		14,557
Total	$	20,415	$	6,960	$	13,866	$	41,241
(1) Includes revenues from the Company's operations in Pennsylvania.

	Six months ended June 30, 2019
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	36,469	$	9,001	$	12,207	$	57,677
East Texas (1)	2,751		—		1,646		4,397
Central Texas	—		—		6,072		6,072
West Texas	11,292		24,301		5,714		41,307
Total	$	50,512	$	33,302	$	25,639	$	109,453
	Six months ended June 30, 2018
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	23,893	$	7,642	$	13,297	$	44,832
East Texas (1)	1,749		—		1,155		2,904
Central Texas	—		—		6,465		6,465
West Texas	12,427		4,520		5,684		22,631
Total	$	38,069	$	12,162	$	26,601	$	76,832
(1) Includes revenues from the Company's operations in Pennsylvania.

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14. Supplemental Cash Flow Information

	Six Months Ended June 30,
	2019		2018
Cash paid for
Interest	$	2,197	$	136
Income tax	$	—	$	—
Supplemental schedule of non-cash investing and financing activities
Change in accounts payable related to capital expenditures	$	—	$	2,201
Exchange of Bridge Loan for PIK Notes	$	47,346	$	—
Finance leases on equipment	$	2,326	$	1,712

15. Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASU 2016-13, which introduces a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. The amendments in ASU 2016-13 are effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment", or ASU 2017-04, which addresses concerns over the cost and complexity of the two-step goodwill impairment test by removing the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. ASU 2017-04 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The guidance is effective for all entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with the audited consolidated financial statements for the year ended December 31, 2018 included in our Annual Report on Form 10-K. Any forward-looking statements made by or on our behalf are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that such forward-looking statements involve risks and uncertainties in that the actual results may differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ include risks set forth in the Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018.

Overview

Forbes Energy Services Ltd., or FES Ltd., is an independent oilfield services contractor that provides well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include fluid hauling, fluid disposal, well maintenance, completion services, workovers and recompletions, plugging and abandonment, and tubing testing. Our operations are concentrated in the major onshore oil and natural gas producing regions of Texas, with an additional location in Pennsylvania. We believe that our broad range of services, which extends from initial drilling, through production, to eventual abandonment, is fundamental to establishing and maintaining the flow of oil and natural gas throughout the life cycle of our customers’ wells. Our headquarters and executive offices are located at 3000 South Business Highway 281, Alice, Texas 78332. We can be reached by phone at (361) 664-0549.

As used in this Quarterly Report on Form 10-Q, the “Company,” “we,” and “our” mean FES Ltd. and its subsidiaries, except as otherwise indicated.

We provide a wide range of services to a diverse group of companies. For the six months ended June 30, 2019, we provided services to 406 companies. John E. Crisp, Steve Macek and our senior management team have cultivated deep and ongoing relationships with these customers during their combined experience of over 40 years in the oilfield services industry.

We conduct our operations through the following three business segments:

• Well Servicing. Our well servicing segment comprised 46.2% of our consolidated revenues for the six months ended June 30, 2019. Our well servicing segment utilizes our fleet of well servicing rigs, which at June 30, 2019 was comprised of 139 workover rigs and 7 swabbing rigs and other related assets and equipment. These assets are used to provide (i) well maintenance, including remedial repairs and removal and replacement of downhole production equipment, (ii) well workovers, including significant downhole repairs, re-completions and re-perforations, (iii) completion and swabbing activities, (iv) plugging and abandonment services, and (v) pressure testing of oil and natural gas production tubing and scanning tubing for pitting and wall thickness using tubing testing units.

• Coiled Tubing. Our coiled tubing segment comprised 30.4% of our consolidated revenues for the six months ended June 30, 2019.  This segment utilizes our fleet of 14 coiled tubing units, of which 11 are large diameter units (2 3/8” or larger).  These units provide a range of services accomplishing a wide variety of goals including horizontal completions, well bore clean-outs and maintenance, nitrogen services, thru-tubing services, formation stimulation using acid and other chemicals, and other pre- and post-hydraulic fracturing well preparation services.

• Fluid Logistics. Our fluid logistics segment comprised 23.4% of our consolidated revenues for the six months ended June 30, 2019. Our fluid logistics segment utilizes our fleet of owned or leased fluid transport trucks and related assets, including specialized vacuum, high-pressure pump and tank trucks, hot oil trucks, frac tanks, fluid mixing tanks, salt water disposal wells and facilities, and related equipment. These assets are used to provide, transport, store, and dispose of a variety of drilling and produced fluids used in, and generated by, oil and natural gas production. These services are required in most workover and completion projects and are routinely used in daily operations of producing wells.

We believe that our three business segments are complementary and create synergies in terms of selling opportunities. Our multiple lines of service are designed to capitalize on our existing customer base to grow it within existing markets, generate more business from existing customers, and increase our operating performance. By offering our customers the ability to reduce the number of vendors they use, we believe that we help improve our customers’ efficiency. Further, by having multiple service offerings that span the life cycle of the well, we believe that we have a competitive advantage over smaller competitors offering more limited services.

Cretic Energy Services, LLC Acquisition

On November 16, 2018, we completed our acquisition of Cretic. Cretic provides coiled tubing services to E&P companies in the United States, primarily in the Permian Basin in Texas . The total consideration was approximately $69.4 million in cash. We believe the acquisition significantly enhanced our coiled tubing services and our position in the Permian Basin. See Note 3

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- Acquisition of Cretic Energy Services, LLC to these unaudited condensed consolidated financial statements for further discussion regarding the acquisition of Cretic.

Going forward, we intend to pursue selective, accretive acquisitions of complementary assets, businesses and technologies, and believe we are well positioned to capture attractive opportunities due to our market position, customer relationships and industry experience and expertise.

Factors Affecting Results of Operations

Market Conditions

Commodity prices improved in the first half of 2019 then moderated through April resulting in quarter end and July 2019 ending crude oil prices in the mid-50’s.  This has delayed the demand for completion driven services, such as those offered specifically by our coiled tubing segment.  However, we believe continued aging of horizontal wells through 2019 and future periods, and customers choosing to increase production through accretive regular well maintenance in these horizontal wells, will strengthen demand and pricing for our well maintenance services over the next several years. On June 30, 2019, the price of WTI was approximately $54.66 per barrel. As oil prices began to rise, U.S. drilling rig count increased from 404 rigs in May 2016 to 967 rigs in June 30, 2019, an increase of 563, with the count stabilizing in the last half of 2017 then experiencing a modest increase in the first half of 2018. During this same time period Texas drilling rig count increased from 173 rigs to 464 rigs, an increase of 291. The two basins in which we primarily operate, the Eagle Ford and Permian, had rig count decreases of 9 and 38 from June 30, 2018 to June 30, 2019, respectively.

Below are three charts that provide total U.S. rig counts, total Texas rig counts and WTI oil price trends for the twelve months ended June 30, 2019 and 2018.

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Source: Rig counts are per Baker Hughes, Inc. (www.bakerhughes.com). Rig counts are the averages of the weekly rig count activity.

Impact of the Current Market Environment

The declines in oil and natural gas prices and exploration activities that began in 2014 and continued through the first half of 2017 created a challenging market for the provision of our services. In response to the market conditions in 2015 and 2016, we implemented cost reduction measures and continue to analyze cost reduction opportunities today while ensuring that appropriate functions and capacity are preserved to allow us to be opportunistic in the current environment. During the second half of 2017, and through June 2019, market conditions improved and stabilized for our well servicing and fluid logistics segments. Our coiled tubing segment experienced stable operations through the middle of the fourth quarter of 2018, then due to a change in completion activity, which is the focus of our coil operations, we experienced lower utilization that has continued through the second quarter of 2019.

Although market conditions are improving, we continue to focus on meeting our customers' expectations and adjusting our cost structure where possible. We are also maintaining our focus on maximizing use of our active operating assets and maintaining cost controls that were established in the prior twenty-four months.

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Oil and Natural Gas Prices

Demand for well servicing and fluid logistics services is generally a function of the willingness of oil and natural gas companies to make operating and capital expenditures to explore for, develop, and produce oil and natural gas, which in turn is affected by current and anticipated levels of oil and natural gas prices. Exploration and production spending is generally categorized as either operating expenditures or capital expenditures. Activities by oil and natural gas companies designed to add oil and natural gas reserves are classified as capital expenditures, and those associated with maintaining or accelerating production, such as workover and fluid logistics services, are categorized as operating expenditures. Operating expenditures are typically more stable than capital expenditures and may be less sensitive to oil and natural gas price volatility. In contrast, capital expenditures for drilling are more directly influenced by current and expected oil and natural gas prices and generally reflect the volatility of commodity prices.

Seasonality and Cyclical Trends

Our operations are impacted by seasonal factors. Historically, our business has been negatively impacted during the winter months due to inclement weather, fewer daylight hours, and holidays. We typically experience a significant slowdown during the Thanksgiving and Christmas holiday seasons. Our well servicing rigs and coiled tubing units are mobile, and we operate a significant number of oilfield vehicles. During periods of heavy snow, ice or rain, we may not be able to move our equipment between locations, thereby reducing our ability to generate rig, coiled tubing or truck hours. In addition, the majority of our well servicing rigs work only during daylight hours. In the winter months, as daylight time becomes shorter, the amount of time that the well servicing rigs work is shortened, having a negative impact on total hours worked.

In addition, the oil and natural gas industry has traditionally been volatile and is influenced by a combination of long-term, short-term and cyclical trends, including the domestic and international supply and demand for oil and natural gas, current and expected future prices for oil and natural gas and the perceived stability and sustainability of those prices. Such cyclical trends also include the resultant levels of cash flows generated and allocated by exploration and production companies to their drilling, completion and workover budget.

Results of Operations

Three Months Ended June 30, 2019 Compared to the Three Months Ended June 30, 2018

The following tables compare our segment operating results for the three months ended June 30, 2019 and 2018 (in thousands):

Revenues
	Three Months Ended June 30,
	2019		% of revenue		2018		% of revenue		$ change			% change
Well Servicing	$	25,762	50.5	%	$	20,415	49.4	%	$	5,347		26	%
Coiled Tubing	13,292		26.0	%	6,960		16.9	%	6,332			91	%
Fluid Logistics	12,011		23.5	%	13,866		33.7	%	(1,855		)	(13	)%
Total	$	51,065			$	41,241			$	9,824		24	%
Direct Operating Expenses(1)
	Three Months Ended June 30,
	2019		% of segment revenue		2018		% of segment revenue		$ change			% change
Well Servicing	$	20,971	81.4	%	$	17,116	83.8	%	$	3,855		23	%
Coiled Tubing	13,854		104.2	%	6,208		89.2	%	7,646			123	%
Fluid Logistics	8,823		73.5	%	11,151		80.4	%	(2,328		)	(21	)%
Total	$	43,648			$	34,475			$	9,173		27	%

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Segment Profit (1)
	Three Months Ended June 30,
	2019			Segment profit %		2018		Segment profit %		$ change			% change
Well Servicing	$	4,791		18.6	%	$	3,299	16.2	%	$	1,492		45	%
Coiled Tubing	(562		)	(4.2	)%	752		10.8	%	(1,314		)	(175	)%
Fluid Logistics	3,188			26.5	%	2,715		19.6	%	473			17	%
Total	$	7,417		14.5	%	$	6,766	16.4	%	$	651		10	%
(1) Excluding general and administrative expenses and depreciation and amortization.

Revenues

Consolidated Revenues. Consolidated revenues during the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 as a direct result of increased spending by our customers during this period due to increased activity and our acquisition of Cretic in November 2018.

Well Servicing. Revenues from our well servicing segment during the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 due to increased rig hours.

Coiled Tubing.  Revenues from our coiled tubing segment during the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 due to an increase in coiled tubing unit hours.  The increase in hours resulted from the addition of two large diameter coiled tubing units in 2018 and the acquisition of Cretic in November of 2018. 

Fluid Logistics. Revenues from our fluid logistics segment during the three months ended June 30, 2019decreased as compared to the three months ended June 30, 2018 due to a reduction in trucking hours that followed the sale of certain trucking assets in under performing yards in West Texas. The decrease in trucking revenue was offset by an increase in frac tank revenue.

Segment Profit

Well Servicing. Segment profit from our well servicing segment during the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 due to an increase in revenues offset by a decrease in expenses as a percentage of revenues due to more efficient use of personnel at higher operating levels.

Coiled Tubing.  Segment profit from our coiled tubing segment during the three months ended June 30, 2019decreased as compared to the three months ended June 30, 2018, due in large part to the Cretic acquisition. During the second quarter of 2019 we continued to see a decline in revenues as compared to the first quarter of 2019 in our coiled tubing segment.  We believe the decline is a result of a slight downturn in the market for coiled tubing services and certain quality issues experienced in the integration of the Cretic acquisition.  As a result of the declining revenues we have made certain reductions in personnel and other cost reduction initiatives in our coiled tubing segment in June, July and August 2019 to properly align our costs with our new forecasted revenues.  We expect revenues to remain constant in the third quarter of 2019 and increase slightly through the fourth quarter of 2019 and into 2020.  Based on the cost cutting initiatives discussed above we expect our operating costs to be lower resulting in improved segment performance for the remainder of 2019 and 2020.

Fluid Logistics. Segment profit from our fluid logistics segment during the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 due to a decrease in direct operating cost as a percentage of revenue and a $1.7 million gain on disposal on certain assets sold in the second quarter of 2019.

Operating Expenses

The following tables compares our operating expenses for the three months ended June 30, 2019 and 2018 (in thousands):

29

	Three Months Ended June 30,
	2019		2018		$ change			% change
Well servicing direct operating expenses	$	20,971	$	17,116	$	3,855		23	%
Coiled tubing direct operating expenses	13,854		6,208		7,646			123	%
Fluid logistics direct operating expenses	8,823		11,151		(2,328		)	(21	)%
General and administrative	5,417		5,908		(491		)	(8	)%
Depreciation and amortization	7,013		7,652		(639		)	(8	)%
Total expenses	$	56,078	$	48,035	$	8,043		17	%

Well Servicing Direct Operating Expenses. Direct operating expenses for our well servicing segment for the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 due to increases in wages, repairs and maintenance, supplies and parts, fuel costs and out of town travel, consistent with the increase in revenues.

Coiled Tubing Direct Operating Expenses.  Direct operating expenses for our coiled tubing segment for the three months ended June 30, 2019increased as compared to three months ended June 30, 2018 due to an increase in activity and as a percentage of revenues. The higher costs were mainly associated with wages (including severance payments), equipment rental, supplies and parts and travel, primarily driven by the Cretic acquisition.

Fluid Logistics Direct Operating Expenses. Direct operating expenses for our fluid logistics segment for the three months ended June 30, 2019decreased as compared to the three months ended June 30, 2018 mainly due to a gain on the sale of certain fluid logistics equipment, along with a decrease in wages and increase in settlement and litigation expenses.

General and Administrative Expenses. General and administrative expenses for the three months ended June 30, 2019decreased as compared to three months ended June 30, 2018 due to a decrease in professional fees related to the acquisition of Cretic, offset in part by an increase in wages.

Depreciation and Amortization. Depreciation and amortization expenses for the three months ended June 30, 2019decreased as compared to three months ended June 30, 2018 due to approximately $19.5 million of depreciable assets becoming fully depreciated in April 2019, offset in part by depreciation and amortization on the additional assets acquired in the Cretic acquisition in November 2018.

Other Income (Expense)

The following tables compares our other income (expense) for the three months ended June 30, 2019 and 2018 (in thousands):

	Three Months Ended June 30,
	2019			2018			$ change			% change
Interest income	$	1		$	—		$	1		100	%
Interest expense	(5,723		)	(2,426		)	(3,297		)	136	%
Other income (expense), net	$	(5,722	)	$	(2,426	)	$	(3,296	)	136	%
Income tax expense (benefit)	$	14		$	(454	)	$	468		(103	)%

Interest Expense. Interest expense for the three months ended June 30, 2019increased as compared to the three months ended June 30, 2018 due to the additional debt outstanding under the Revolving Loan Agreement and Term Loan Agreement, plus associated amortization of debt discount and deferred financing costs. In addition, the Company incurred significant debt with the acquisition of Cretic, including third party equipment finance leases and the interest and accretion of the new issued PIK Notes for its conversion feature at a 15% premium.

Income Taxes. We recognized income tax expense of $14 thousand for the three months ended June 30, 2019, compared to $454 thousand of income tax expense for the three months ended June 30, 2018. At June 30, 2019, we estimate our gross NOL carryforwards are approximately $85.7 million (representing $16.2 million of gross deferred tax asset), $34.9 million of which ($8.3 million tax effected) represent unrecognized tax benefits.

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Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2018

The following tables compare our segment operating results for the six months ended June 30, 2019 and 2018 (in thousands):

Revenues
	Six Months Ended June 30,
	2019		% of revenue		2018		% of revenue		$ change			% change
Well Servicing	$	50,512	46.2	%	$	38,069	49.5	%	$	12,443		33	%
Coiled Tubing	33,302		30.4	%	12,162		15.8	%	21,140			174	%
Fluid Logistics	25,639		23.4	%	26,601		34.7	%	(962		)	(4	)%
Total	$	109,453			$	76,832			$	32,621		42	%
Direct Operating Expenses(1)
	Six Months Ended June 30,
	2019		% of segment revenue		2018		% of segment revenue		$ change			% change
Well Servicing	$	38,520	76.3	%	$	31,968	84.0	%	$	6,552		20	%
Coiled Tubing	31,792		95.5	%	10,371		85.3	%	21,421			207	%
Fluid Logistics	19,475		76.0	%	21,840		82.1	%	(2,365		)	(11	)%
Total	$	89,787			$	64,179			$	25,608		40	%
Segment Profit (1)
	Six Months Ended June 30,
	2019		Segment profit %		2018		Segment profit %		$ change			% change
Well Servicing	$	11,992	23.7	%	$	6,101	16.0	%	$	5,891		97	%
Coiled Tubing	1,510		4.5	%	1,791		14.7	%	(281		)	(16	)%
Fluid Logistics	6,164		24.0	%	4,761		17.9	%	1,403			29	%
Total	$	19,666	18.0	%	$	12,653	16.5	%	$	7,013		55	%
(1) Excluding general and administrative expenses and depreciation and amortization.

Revenues

Consolidated Revenues. Consolidated revenues during the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 as a direct result of increased spending by our customers during this period due to increased activity and our acquisition of Cretic in November 2018.

Well Servicing. Revenues from our well servicing segment during the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 due to increased rig hours.

Coiled Tubing.  Revenues from our coiled tubing segment during the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 due to an increase in coiled tubing unit hours.  The increase in hours resulted from the addition of two large diameter coiled tubing units in 2018 and the acquisition of Cretic in November of 2018. 

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Fluid Logistics. Revenues from our fluid logistics segment during the six months ended June 30, 2019decreased as compared to the six months ended June 30, 2018 due to a decrease in our trucking hours and an increase in frac tank rentals, offset by a decrease in our disposal operations.

Segment Profit

Well Servicing. Segment profit from our well servicing segment during the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 due to an increase in revenues offset by a decrease in expenses as a percentage of revenues due to more efficient use of personnel at higher operating levels.

Coiled Tubing.  Segment profit from our coiled tubing segment during the six months ended June 30, 2019decreased as compared to the six months ended June 30, 2018, due in large part to the Cretic acquisition. During the second quarter of 2019 we continued to see a decline in revenues as compared to the first quarter of 2019 in our coiled tubing segment.  We believe the decline is a result of a slight downturn in the market for coiled tubing services and certain quality issues experienced in the integration of the Cretic acquisition. As a result of the declining revenues we have made certain reductions in personnel and other cost reduction initiatives in our coiled tubing segment in June, July and August 2019 to properly align our costs with our new forecasted revenues. We expect revenues to remain constant in the third quarter of 2019 and increase slightly through the fourth quarter of 2019 and into 2020.  Based on the cost cutting initiatives discussed above we expect our operating costs to be lower resulting in improved segment performance for the remainder of 2019 and 2020.

Fluid Logistics. Segment profit from our fluid logistics segment during the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 due to an increase in revenue and a decrease in direct operating cost as a percentage of revenue and a $2.6 million gain on disposal of certain assets sold in 2019.

Operating Expenses

The following tables compares our operating expenses for the six months ended June 30, 2019 and 2018 (in thousands):

	Six Months Ended June 30,
	2019		2018		$ change			% change
Well servicing direct operating expenses	$	38,520	$	31,968	$	6,552		20	%
Coiled tubing direct operating expenses	31,792		10,371		21,421			207	%
Fluid logistics direct operating expenses	19,475		21,840		(2,365		)	(11	)%
General and administrative	12,242		10,796		1,446			13	%
Depreciation and amortization	16,452		14,815		1,637			11	%
Total expenses	$	118,481	$	89,790	$	28,691		32	%

Well Servicing Direct Operating Expenses. Direct operating expenses for our well servicing segment for the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 due to increases in repairs and maintenance, supplies and parts, fuel costs and out of town travel, consistent with the increase in revenues.

Coiled Tubing Direct Operating Expenses.  Direct operating expenses for our coiled tubing segment for the six months ended June 30, 2019increased as compared to six months ended June 30, 2018 due to an increase in activity. The higher costs were mainly associated with wages, equipment rental, supplies and parts and travel, primarily driven by the Cretic acquisition.

Fluid Logistics Direct Operating Expenses. Direct operating expenses for our fluid logistics segment for the six months ended June 30, 2019decreased as compared to the six months ended June 30, 2018 mainly due to a gain on the sale of certain fluid logistics equipment, along with a decrease in wages and increase in settlement and litigation expenses.

General and Administrative Expenses. General and administrative expenses for the six months ended June 30, 2019increased as compared to six months ended June 30, 2018 due to an increase in wages and professional fees related to the acquisition of Cretic.

Depreciation and Amortization. Depreciation and amortization expenses for the six months ended June 30, 2019increased as compared to six months ended June 30, 2018 due to the acquisition of Cretic in November 2018.

Other Income (Expense)

The following tables compares our other income (expense) for the six months ended June 30, 2019 and 2018 (in thousands):

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	Six Months Ended June 30,
	2019			2018			$ change			% change
Interest income	$	4		$	2		$	2		100	%
Interest expense	(13,409		)	(4,793		)	(8,616		)	180	%
Other income (expense), net	$	(13,405	)	$	(4,791	)	$	(8,614	)	180	%
Income tax benefit	$	(50	)	$	(454	)	$	404		(89	)%

Interest Expense. Interest expense for the six months ended June 30, 2019increased as compared to the six months ended June 30, 2018 due to the additional debt outstanding under the Revolving Loan Agreement and Term Loan Agreement, plus associated amortization of debt discount and deferred financing costs. In addition, the Company incurred additional debt with the acquisition of Cretic, including third party equipment finance leases, write-off of certain debt costs with the modification accounting related to the PIK Notes and the accretion of the PIK Notes for its conversion feature at a 15% premium.

Income Taxes. We recognized an income tax benefit of $50 thousand for the six months ended June 30, 2019, compared to $454 thousand of income tax benefit for the six months ended June 30, 2018. At June 30, 2019, we estimate our gross NOL carryforwards are approximately $85.7 million (representing $16.2 million of gross deferred tax asset), $34.9 million of which ($8.3 million tax effected) represent unrecognized tax benefits.

Adjusted EBITDA

“Adjusted EBITDA” is defined as income (loss) before interest, taxes, depreciation, amortization, gain (loss) on early extinguishment of debt and non-cash stock based compensation, excluding non-recurring items. Management does not include gain (loss) on extinguishment of debt, non-cash stock based compensation or other nonrecurring items in its calculations of EBITDA because it believes that such amounts are not representative of our core operations. Further, management believes that most investors exclude gain (loss) on extinguishment of debt, stock based compensation recorded under FASB ASC Topic 718 and other nonrecurring items from customary EBITDA calculations as those items are often viewed as either non-recurring and not reflective of ongoing financial performance or have no cash impact on operations.

Adjusted EBITDA is a non-GAAP financial measure that is used as a supplemental financial measure by our management and directors and by our investors to assess the financial performance of our assets without regard to financing methods, capital structure or historical cost basis; the ability of our assets to generate cash sufficient to pay interest on our indebtedness; and our operating performance and return on invested capital as compared to those of other companies in the well services industry, without regard to financing methods and capital structure.

Adjusted EBITDA has limitations as an analytical tool and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Limitations to using Adjusted EBITDA as an analytical tool include:

• Adjusted EBITDA does not reflect our current or future requirements for capital expenditures or capital commitments;

• Adjusted EBITDA does not reflect changes in, or cash requirements necessary to service interest or principal payments on our debt;

• Adjusted EBITDA does not reflect income taxes;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

• Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

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Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(in thousands)						(in thousands)
Net loss	$	(10,749	)	$	(8,766	)	$	(22,383	)	$	(17,295	)
Interest income	(1		)	—			(4		)	(2		)
Interest expense	5,723			2,426			13,409			4,793
Income tax (benefit) expense	14			(454		)	(50		)	(454		)
Depreciation and amortization	7,013			7,652			16,452			14,815
Share-based compensation	256			247			509			498
Acquisition related costs	34			881			1,094			1,073
Restructuring expenses	—			2			—			190
Gain on disposal of assets	(1,320		)	(47		)	(2,437		)	(67		)
Adjusted EBITDA	$	969		$	1,941		$	6,590		$	3,551

Settlement expenses related to litigation was $2.0 million and $0.9 million for the three months ended June 30, 2019 and 2018, respectively and $2.3 million and $1.0 million for the six months ended June 30, 2019 and 2018, repectively. We have not included expenses related to settlement of litigation in our Adjusted EBITDA as they are not considered non-recurring.

Liquidity and Capital Resources

Our current and future liquidity is greatly dependent upon our operating results. Our ability to continue to meet our liquidity needs is subject to and will be affected by cash utilized in operations, the economic or business environment in which we operate, weakness in oil and natural gas industry conditions, the financial condition of our customers and vendors, and other factors. Furthermore, as a result of the challenging market conditions we continue to face, for the short term, we anticipate continuing to use net cash in operating activities. We believe that our current reserves of cash and cash equivalents and availability of $9.9 million under our Revolving Loan Agreement are sufficient to finance our cash requirements for current and future operations, budgeted capital expenditures, debt service and other obligations for at least the next twelve months.

Historically, we have funded our operations, including capital expenditures, through the credit facilities, vendor financings, and cash flow from operations, the issuance of senior notes and the proceeds from our public and private equity offerings. More recently, since our emergence from chapter 11 reorganization, we have funded our operations through our Term Loan Agreement, Bridge Loan, PIK Notes, Revolving Loan Agreement and other financing activities.

As of June 30, 2019, we had $1.0 million in cash and cash equivalents and $135.2 million in contractual debt.

The $135.2 million in contractual debt was comprised of $60.9 million under the Term Loan Agreement, $54.1 million under the PIK Notes, $6.0 million under the Revolving Loan Agreement, $13.3 million in finance leases and $1.0 million in insurance notes related to our general liability, workers compensation and other insurance. Of our total debt, $60.3 million was classified as current portion of long-term debt, and $74.9 million was classified as long-term.

Term Loan Agreement

On April 13, 2017, the Company entered into the Term Loan Agreement. FES LLC is the borrower, or the Borrower, under the Term Loan Agreement. The Borrower’s obligations have been guaranteed by FES Ltd. and by TES, CCF and FEI, each direct subsidiaries of the Borrower and indirect subsidiaries of FES Ltd. The Term Loan Agreement provides for a term loan of $60.0 million, excluding accrued PIK interest at June 30, 2019. Subject to certain exceptions and permitted encumbrances, the obligations under the Term Loan Agreement are secured by a first priority security interest in substantially all the assets of the Company other than accounts receivable, cash and related assets, which constitute priority collateral under the Revolving Loan Agreement (described below). The Term Loan Agreement has a stated maturity date of April 13, 2021.

Borrowings under the Term Loan Agreement bear interest at a rate equal to five percent (5%) per annum payable quarterly in cash, or the Cash Interest Rate, plus (ii) an initial paid in kind interest rate of seven percent (7%) commencing April 13, 2017 to be capitalized and added to the principal amount of the term loan or, at the election of the Borrower, paid in cash. The paid in kind interest increases by two percent (2%) twelve months after April 13, 2017 and every twelve months thereafter until maturity. Upon and after the occurrence of an event of default, the Cash Interest Rate will increase by two percentage points per annum.

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During the six months ended June 30, 2019, $2.9 million of interest was paid in kind. At June 30, 2019 and December 31, 2018, the paid in kind interest rate was 11%.

The Term Loan Agreement includes customary negative covenants for an asset-based term loan, including covenants limiting the ability of the Company to, among other things, (i) effect mergers and consolidations, (ii) sell assets, (iii) create or suffer to exist any lien, (iv) make certain investments, (v) incur debt and (vi) transact with affiliates. In addition, the Term Loan Agreement includes customary affirmative covenants for an asset-based term loan, including covenants regarding the delivery of financial statements, reports and notices to the Agent. The Term Loan Agreement also contains customary representations and warranties and event of default provisions for a secured term loan.

Amendment to Term Loan Agreement and Joinder

In connection with the Cretic Acquisition, on November 16, 2018, the Company, as a guarantor, FES LLC, as borrower, and certain of their subsidiaries, as guarantors, entered into Amendment No. 1 to Loan and Security Agreement and Pledge and Security Agreement (the “Term Loan Amendment”) with the lenders party thereto and Wilmington Trust, National Association, as agent (the “Term Loan Agent”), pursuant to which the Term Loan Agreement, was amended to, among other things, permit (i) debt under the Revolving Loan Agreement (described below) and the liens securing the obligations thereunder, (ii) the incurrence of add-on term loans under the Term Loan Agreement in an aggregate principal amount of $10.0 million and (iii) the incurrence of one-year “last-out” bridge loans under the Term Loan Agreement in an aggregate principal amount of $50.0 million (the “Bridge Loan”).

In addition, on November 16, 2018, Cretic entered into joinder documentation pursuant to which it became a guarantor under the Term Loan Agreement and a pledgor under the Pledge and Security Agreement referred to in the Term Loan Agreement.

Revolving Loan Agreement

In connection with the Cretic Acquisition, on November 16, 2018, the Company and certain of its subsidiaries, as borrowers, entered into a Credit Agreement (the “Revolving Loan Agreement”) with the lenders party thereto and Regions Bank, as administrative agent and collateral agent (the “Revolver Agent”). The Revolving Loan Agreement provides for $35 million of revolving loan commitments, subject to a borrowing base comprised of 85% of eligible accounts receivable, 90% of eligible investment grade accounts receivable and 100% of eligible cash, less reserves. The loans under the Revolving Loan Agreement accrue interest at a floating rate of LIBOR plus 2.50% - 3.25%, or a base rate plus 1.50% - 2.25%, with the margin based on the fixed charge coverage ratio from time to time.

The Revolving Loan Agreement is secured on a first lien basis by substantially all assets of the Company and its subsidiaries, subject to an intercreditor agreement between the Revolver Agent and the Term Loan Agent which provides that the priority collateral for the Revolving Loan Agreement consists of accounts receivable, cash and related assets, and that the other assets of the Company and its subsidiaries constitute priority collateral for the Term Loan Agreement. At June 30, 2019 we had six million borrowings outstanding, $6.1 million in letters of credit outstanding and availability of $9.9 million.

5% Subordinated Convertible PIK Notes

On March 4, 2019, the Company issued $51.8 million aggregate original principal amount of 5.00% Subordinated Convertible PIK Notes due June 30, 2020 (the “PIK Notes”). On March 4, 2019, the Company, as Issuer, and Wilmington Trust, National Association, as Trustee, entered into an Indenture governing the terms of the PIK Notes.

The PIK Notes bear interest at a rate of 5.00% per annum. Interest on the PIK Notes will be capitalized to principal semi-annually in arrears on July 1 and January 1 of each year, commencing on July 1, 2019.

The PIK Notes are the unsecured general subordinated obligations of the Company and are subordinated in right of payment to any existing and future secured or unsecured senior debt of the Company. The payment of the principal of, premium, if any, and interest on the PIK Notes will be subordinated to the prior payment in full of all of the Company’s existing and future senior indebtedness. In the event of a liquidation, dissolution, reorganization or any similar proceeding, obligations on the PIK Notes will be paid only after senior indebtedness has been paid in full. Pursuant to the Indenture, the Company is not permitted to (1) make cash payments to pay principal of, premium, if any, and interest on or any other amounts owing in respect of the PIK Notes, or (2) purchase, redeem or otherwise retire the PIK Notes for cash, if any senior indebtedness is not paid when due or any other default on senior indebtedness occurs and the maturity of such indebtedness is accelerated in accordance with its terms unless, in any case, the default has been cured or waived, and the acceleration has been rescinded or the senior indebtedness has been repaid in full.

The Indenture also provides that upon a default by the Company in the payment when due of principal of, or premium, if any, or interest on, indebtedness in the aggregate principal amount then outstanding of $5.0 million or more, or acceleration of the Company’s indebtedness so that it becomes due and payable before the date on which it would otherwise have become due and payable, and if such default is not cured or waived within 30 days after notice to the Company by the Trustee or by holders of at least 25% in aggregate principal amount of the PIK Notes then outstanding, the principal of, (and premium, if any) and accrued and unpaid interest on, the PIK Notes may be declared immediately due and payable.

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The PIK Notes are redeemable in whole or from time to time in part at the Company’s option at a redemption price equal to the sum of (i) 100.0% of the principal amount of the PIK Notes to be redeemed and (ii) accrued and unpaid interest thereon to, but excluding, the redemption date, which amounts may be payable in cash or in shares of the Company’s common stock, (subject to limitations, if any, in the documentation governing the Company’s senior indebtedness). If redeemed for the Company’s common stock the holder will receive a number of shares of the Company’s common stock calculated based on the fair market value of a share of the Company’s common stock at such time, in each case less a 15% discount per share. The 15% discount represents an implied conversion premium at issuance which will be settled in common stock at the date of conversion.  As such, the face value of the PIK Notes will be accreted to the settlement amount at June 30, 2020.  For the three and six months ended June 30, 2019, the Company recorded $1.8 million and $2.4 million, respectively in interest expense related to the accretion of the conversion premium.

The Indenture contains provisions permitting the Company and the trustee in certain circumstances, without the consent of the holders of the PIK Notes, and in certain other circumstances, with the consent of the holders of not less than a majority in aggregate principal amount of the PIK Notes at the time outstanding to execute supplemental indentures modifying the terms of the Indenture and the PIK Notes as described It also provided in the Indenture that, subject to certain exceptions, the holders of a majority in aggregate principal amount of the PIK Notes at the time outstanding may on behalf of the holders of all the PIK Notes waive any past default or event of default under the Indenture and its consequences.

The Indenture provides for mandatory conversion of the PIK Notes at maturity (or such earlier date as the Company shall elect to redeem the PIK Notes), or upon a Marketed Public Offering of the Company’s common stock or a Change of Control, in each case as defined in the Indenture, at a conversion rate per $100 principal amount of PIK Notes into a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share.

Fair Market Value means fair market value as determined by (A) in the case of a Marketed Public Offering, the offering price per share paid by public investors in the Marketed Public Offering, (B) in the case of a Change of Control, the value of the consideration paid per share by the acquirer in the Change of Control transaction, or (C) in the case of mandatory conversion at the Maturity Date (or such earlier date as the Company shall elect to redeem the PIK Notes), such value as shall be determined by a nationally recognized investment banking firm engaged by the Board of Directors of the Company.

The Company used the gross proceeds of $51.8 million that it received from the issuance of the PIK Notes to repay all of the outstanding principal and accrued and unpaid interest on the Bridge Loan.

Interest on the Bridge Loan prior to its repayment accrued at a rate of 14% (5% cash interest plus 9% PIK interest). The payment obligations of the Borrower under the Bridge Loan have been fully satisfied as of March 4, 2019.

Cash Flows

Our cash flows depend, to a large degree, on the level of spending by oil and gas companies' development and production activities. Although the prices of oil and natural gas have recovered somewhat since the decline that began in 2014 and continued into 2016, completion activity again slowed for our customer base in the fourth quarter of 2018 and has continued into the first quarter of 2019. These lower levels of activities will likely also materially affect our future cash flows.

	Six months ended June 30,
	2019			2018
Net cash used in operating activities	$	(4,617	)	$	(2,875	)
Net cash used in investing activities	(1,049		)	(6,534		)
Net cash used in financing activities	(1,387		)	(987		)
Net decrease in cash, cash equivalents and cash - restricted	(7,053		)	(10,396		)
Cash, cash equivalents and cash - restricted
Beginning of period	8,156			35,480
End of period	$	1,103		$	25,084

Cash flows used in operating activities for the six months ended June 30, 2019decreased as compared to the six months ended June 30, 2018. The decrease resulted from working capital needs related to accounts receivable, accounts payable and accrued liabilities.

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Cash flows used in investing activities for the six months ended June 30, 2019decreased as compared to the six months ended June 30, 2018. The decrease is related to proceeds from the sale of certain assets and insurance proceeds from assets for which there was a casualty loss.

Cash flows from financing activities were $1.4 million and $1.0 million for the six months ended June 30, 2019 and 2018, respectively. During the six months ended June 30, 2019 we borrowed on the Revolving Loan Agreement to make a $5.0 million principal payment on our Term Loan Agreement.

Capital Expenditures

Capital expenditures, including assets acquired with finance leases, for the six months ended June 30, 2019 and 2018 were additions of $12.0 million and $11.0 million, respectively. Additions to our fluid logistics segment were primarily purchases of vacuum trucks and light trucks. Additions to our well servicing segment were for well service equipment and light trucks. Additions to our coiled tubing segment were for light trucks and pumping and support.

Off-Balance Sheet Arrangements

We are often party to certain transactions that require off-balance sheet arrangements such as performance bonds, guarantees, operating leases for equipment, and bank guarantees that are not reflected in our condensed consolidated balance sheets. These arrangements are made in our normal course of business and they are not reasonably likely to have a current or future material adverse effect on our financial condition, results of operations, liquidity, or cash flows. See Note 7 - Commitments and Contingencies.

Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the applicable reporting periods. On an ongoing basis, management reviews its estimates, particularly those related to depreciation and amortization methods and useful lives and impairment of long-lived assets, using currently available information. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates. There have been no material changes to the critical accounting policies and estimates set forth in Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2018, except for the application of ASU No. 2016-02 which created FASB ASC Topic 842, "Leases" to our accounting and financial reporting activities. See Note 8 - Leases.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the market risk disclosures set forth in Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2019. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Security and Exchange Commission, or the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2019, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures over financial reporting were effective.

Changes in Internal Control over Financial Reporting

37

On January 1, 2019, we adopted ASC 842, Leases. Although the new lease standard did not have a material impact on our condensed consolidated financial statements, we nevertheless implemented changes to our processes related to leases and the control activities within them.

There was no change in our internal control over financial reporting (as defined in Rules 13-a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

There are no pending material legal proceedings, and the Company is not aware of any material threatened legal proceedings, to which the Company is a party or to which its property is subject that would have a material adverse effect on the Company's financial statements as of June 30, 2019.

Item 1A. Risk Factors

A description of our risk factors can be found in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018.

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

None.

Item 3.Default Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Number		Description of Exhibits
3.1	—	Certificate of Incorporation of Forbes Energy Services Ltd. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A filed April 18, 2017).
3.2	—	Second Amended and Restated Bylaws of Forbes Energy Services Ltd. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 8-A filed April 18, 2017).
4.1	—	Specimen Certificate for the Company’s common stock, $0.01 par value (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed April 18, 2017).
4.2		Indenture, dated as of March 4, 2019 between Forbes Energy Services Ltd. and Wilmington Trust, National Association, as trustee (including form of Note) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 4, 2018).
10.1	—	Registration Rights Agreement by and among Forbes Energy Services Ltd. and certain holders identified therein dated as of April 13, 2017 (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form 8-A filed April 18, 2017).
10.2	—	Loan and Security Agreement, dated as of April 13, 2017, by and among Forbes Energy Services LLC, as borrower, Forbes Energy International, LLC, TX Energy Services, LLC, C.C. Forbes, LLC and Forbes Energy Services Ltd., as guarantors, Wilmington Trust, N.A., as agent, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 18, 2017).
10.3	—	Agreement regarding Cash Collateral and Letters of Credit dated as of April 13, 2017 by and among Forbes Energy Services LLC, Forbes Energy International, LLC, TX Energy Services, LLC, C.C. Forbes, LLC, Forbes Energy Services Ltd. and Regions Bank (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed April 18, 2017).
10.4	—	Forbes Energy Services Ltd. 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed April 18, 2017).
10.5	—	Amended and Restated Employment Agreement effective April 13, 2017, by and between John E. Crisp and Forbes Energy Services LLC (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed April 18, 2017).
10.6	—	Amended and Restated Employment Agreement effective April 13, 2017, by and between L. Melvin Cooper and Forbes Energy Services LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed April 18, 2017).
10.7	—	Employment Agreement effective April 13, 2017, by and between Steve Macek and Forbes Energy Services LLC (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed April 18, 2017).
10.8	—	Form of Time-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed May 15, 2017).
10.9	—	Form of Exit Financing Time-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed May 15, 2017.
10.10	—	Form of Performance-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed May 15, 2017).

40

10.11		Merger Agreement, dated as of November  16, 2018, by and among Forbes Energy Services LLC, as buyer, Cobra Transitory Sub LLC, as Merger Sub, Cretic Energy Services, LLC, as the Company and Catapult Energy Services Group, LLC, as the Holders Representative and Paying Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 23, 2018).
10.12		Revolving Loan Agreement, dated November  16, 2018, by and among the Company and certain of its subsidiaries, as borrowers, the lenders party thereto and Regions Bank, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed November 23, 2018).
10.13		Amendment No. 1 to Loan and Security Agreement and Pledge and Security Agreement, dated as of November  16, 2018, by and among Forbes Energy Services LLC, as borrower, Forbes Energy International, LLC, TX Energy Services, LLC, C.C. Forbes, LLC and Forbes Energy Services Ltd., as guarantors, Wilmington Trust, N.A., as agent, and certain lenders party thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed November 23, 2018).
10.14		Employment Agreement, effective November 16, 2018, by and between Joe Michetti and Forbes Energy Services LLC (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed November 23, 2018).
31.1*	—	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
31.2*	—	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
32.1*	—	Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	—	Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	—	Interactive Data Files

 _________________________

* Filed herewith.

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SIGNATURES

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

	FORBES ENERGY SERVICES LTD.
August 13, 2019	By:	/s/ JOHN E. CRISP
		John E. Crisp Chairman, Chief Executive Officer and President (Principal Executive Officer)
August 13, 2019	By:	/S/ L. MELVIN COOPER
		L. Melvin Cooper Senior Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

42

EX-31.1

EXHIBIT 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO

RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, John E. Crisp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Forbes Energy Services Ltd.;

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. The registrant’s other certifying officer and I are 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; and

5. The registrant’s other certifying officer and 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.

		/s/ John E. Crisp
		John E. Crisp
		Chairman, Chief Executive Officer and President (Principal Executive Officer)
Date:	August 13, 2019

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO

RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, L. Melvin Cooper, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Forbes Energy Services Ltd.;

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. The registrant’s other certifying officer and I are 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; and

5. The registrant’s other certifying officer and 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.

		/s/ L. Melvin Cooper
		L. Melvin Cooper
		Senior Vice President, Chief Financial Officer and Assistant Secretary
		(Principal Financial and Accounting Officer)
Date:	August 13, 2019

EX-32.1

EXHIBIT 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Forbes Energy Services Ltd. (the "Company") filed on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John E. Crisp, Chairman, Chief Executive Officer and President 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, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

		/s/ John E. Crisp
		John E. Crisp
		Chairman, Chief Executive Officer and President
Date:	August 13, 2019

EX-32.2

EXHIBIT 32.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Forbes Energy Services Ltd. (the "Company") filed on Form 10-Q for the period ended June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, L. Melvin Cooper, Senior Vice President, Chief Financial Officer and Assistant Secretary 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, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

		/s/ L. Melvin Cooper
		L. Melvin Cooper
		Senior Vice President, Chief Financial Officer and Assistant Secretary
Date:	August 13, 2019

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 13, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Forbes Energy Services Ltd.
Entity Central Index Key	0001434842
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		5,446,447

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Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 1,030	$ 8,083
Cash - restricted	73	73
Accounts receivable - trade, net	42,468	45,950
Accounts receivable - other	2,552	2,228
Prepaid expenses and other current assets	10,516	14,691
Total current assets	56,639	71,025
Property and equipment, net	138,780	148,608
Operating lease right-of-use assets	5,785	0
Intangible assets, net	13,195	13,980
Goodwill	19,700	19,700
Other assets	2,020	3,072
Total assets	236,119	256,385
Current liabilities
Accrued interest payable	9,955	17,841
Accrued interest payable	2,646	1,993
Accrued expenses	12,633	14,348
Current portion of operating lease liabilities	756	0
Current portion of long-term debt	60,273	59,321
Total current liabilities	86,263	93,503
Long-term operating lease liabilities, net of current portion	5,029	0
Long-term debt, net of current portion and debt discount	74,928	71,095
Deferred tax liability	343	357
Total liabilities	166,563	164,955
Commitments and contingencies (Note 7)
Common stock, $0.01 par value, 40,000 shares authorized, 5,446 and 5,439 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	54	54
Additional paid-in capital	150,477	149,968
Accumulated deficit	(80,975)	(58,592)
Total stockholders’ equity	69,556	91,430
Total liabilities and stockholders’ equity	$ 236,119	$ 256,385

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Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	5,446,000	5,439,000
Common stock, shares outstanding (in shares)	5,446,000	5,439,000

XML

Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues	$ 51,065	$ 41,241	$ 109,453	$ 76,832
Expenses
General and administrative	5,417	5,908	12,242	10,796
Depreciation and amortization	7,013	7,652	16,452	14,815
Total expenses	56,078	48,035	118,481	89,790
Operating loss	(5,013)	(6,794)	(9,028)	(12,958)
Other income (expense)
Interest income	1	0	4	2
Interest expense	(5,723)	(2,426)	(13,409)	(4,793)
Pre-tax loss	(10,735)	(9,220)	(22,433)	(17,749)
Income tax expense (benefit)	14	(454)	(50)	(454)
Net loss	$ (10,749)	$ (8,766)	$ (22,383)	$ (17,295)
Net loss
Basic and diluted (in USD per share)	$ (1.97)	$ (1.64)	$ (4.11)	$ (3.24)
Weighted average number of shares of common stock outstanding:
Basic and diluted (in shares)	5,446	5,336	5,444	5,336
Operating Segments
Revenues	$ 51,065	$ 41,241	$ 109,453	$ 76,832
Expenses
Direct operating costs	43,648	34,475	89,787	64,179
Operating loss	7,417	6,766	19,666	12,653
Well Servicing
Revenues	25,762	20,415	50,512	38,069
Expenses
Depreciation and amortization	2,783	2,688	4,959	5,124
Well Servicing | Operating Segments
Revenues	25,762	20,415	50,512	38,069
Expenses
Direct operating costs	20,971	17,116	38,520	31,968
Operating loss	4,791	3,299	11,992	6,101
Coiled Tubing
Revenues	13,292	6,960	33,302	12,162
Expenses
Depreciation and amortization	2,531	1,498	6,069	2,794
Coiled Tubing | Operating Segments
Revenues	13,292	6,960	33,302	12,162
Expenses
Direct operating costs	13,854	6,208	31,792	10,371
Operating loss	(562)	752	1,510	1,791
Fluid Logistics
Revenues	12,011	13,866	25,639	26,601
Expenses
Depreciation and amortization	1,699	3,466	5,424	6,897
Fluid Logistics | Operating Segments
Revenues	12,011	13,866	25,639	26,601
Expenses
Direct operating costs	8,823	11,151	19,475	21,840
Operating loss	$ 3,188	$ 2,715	$ 6,164	$ 4,761

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Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net loss	$ (22,383)	$ (17,295)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	16,452	14,815
Share-based compensation	509	498
Deferred tax benefit	(14)	(17)
Gain on disposal of assets	(2,437)	(67)
Bad debt expense	243	54
Amortization of debt discount/deferred financing costs/premium conversion	4,391	413
Interest paid in kind	4,699	1,845
Changes in operating assets and liabilities:
Accounts receivable	2,915	(5,311)
Prepaid expenses and other assets	(17)	(423)
Accounts payable - trade	(7,886)	1,393
Accounts payable - related parties	0	(11)
Accrued expenses	(1,742)	1,488
Accrued interest payable	653	(257)
Net cash used in operating activities	(4,617)	(2,875)
Cash flows from investing activities:
Proceeds from sale of property and equipment	(9,700)	(7,044)
Proceeds from sale of property and equipment	8,651	510
Net cash used in investing activities	(1,049)	(6,534)
Cash flows from financing activities:
Payments for finance leases	(2,387)	(987)
Proceeds from Revolving Loan Agreement	6,000	0
Payments on Term Loan Agreement	(5,000)	0
Payments for Bridge Loan	(4,422)	0
Proceeds from PIK Notes	4,422	0
Net cash used in financing activities	(1,387)	(987)
Net decrease in cash, cash equivalents and cash - restricted	(7,053)	(10,396)
Cash, cash equivalents and cash - restricted:
Beginning of period	8,156	35,480
End of period	$ 1,103	$ 25,084

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Condensed Consolidated Statement of Changes in Stockholders Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017		5,336
Beginning balance at Dec. 31, 2017	$ 122,934	$ 53	$ 148,866	$ (25,985)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	251		251
Net loss	(8,529)			(8,529)
Ending balance (in shares) at Mar. 31, 2018		5,336
Ending balance at Mar. 31, 2018	114,656	$ 53	149,117	(34,514)
Beginning balance (in shares) at Dec. 31, 2017		5,336
Beginning balance at Dec. 31, 2017	122,934	$ 53	148,866	(25,985)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(17,295)
Ending balance (in shares) at Jun. 30, 2018		5,336
Ending balance at Jun. 30, 2018	106,137	$ 53	149,364	(43,280)
Beginning balance (in shares) at Mar. 31, 2018		5,336
Beginning balance at Mar. 31, 2018	114,656	$ 53	149,117	(34,514)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	247		247
Net loss	(8,766)			(8,766)
Ending balance (in shares) at Jun. 30, 2018		5,336
Ending balance at Jun. 30, 2018	106,137	$ 53	149,364	(43,280)
Beginning balance (in shares) at Dec. 31, 2018		5,439
Beginning balance at Dec. 31, 2018	91,430	$ 54	149,968	(58,592)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	253		253
Net loss	(11,634)			(11,634)
Ending balance (in shares) at Mar. 31, 2019		5,446
Ending balance at Mar. 31, 2019	80,049	$ 54	150,221	(70,226)
Beginning balance (in shares) at Dec. 31, 2018		5,439
Beginning balance at Dec. 31, 2018	91,430	$ 54	149,968	(58,592)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation (shares)		7
Net loss	(22,383)
Ending balance (in shares) at Jun. 30, 2019		5,446
Ending balance at Jun. 30, 2019	69,556	$ 54	150,477	(80,975)
Beginning balance (in shares) at Mar. 31, 2019		5,446
Beginning balance at Mar. 31, 2019	80,049	$ 54	150,221	(70,226)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	256		256
Net loss	(10,749)			(10,749)
Ending balance (in shares) at Jun. 30, 2019		5,446
Ending balance at Jun. 30, 2019	$ 69,556	$ 54	$ 150,477	$ (80,975)

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Organization and Nature of Operations

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Operations

Organization and Nature of Operations

Nature of Operations

Forbes Energy Services Ltd., or FES Ltd., is an independent oilfield services contractor that provides well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include fluid hauling, fluid disposal, well maintenance, completion services, workovers and recompletions, plugging and abandonment, and tubing testing. The Company's operations are concentrated in the major onshore oil and natural gas producing regions of Texas, with an additional location in Pennsylvania. The Company believes that its broad range of services, which extends from initial drilling, through production, to eventual abandonment, is fundamental to establishing and maintaining the flow of oil and natural gas throughout the life cycle of our customers’ wells.

As used in these condensed consolidated financial statements, the “Company”, “we” and “our” mean FES Ltd. and its subsidiaries, except as otherwise indicated.

Estimates, Risks and Uncertainties

As an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas, the Company's revenue, profitability, cash flows and future rate of growth are substantially dependent on its ability to (1) maintain adequate equipment utilization, (2) maintain adequate pricing for the services it provides, and (3) maintain a trained workforce. Failure to do so could adversely affect the Company's financial position, results of operations, and cash flows.

Because the Company's revenues are generated primarily from customers who are subject to the same factors as the Company, the Company's operations are also susceptible to market volatility resulting from economic, cyclical, weather, or other factors related to such industry. The Company is subject to changes in the level of operating and capital spending in the industry, decreases in oil and natural gas prices, and/or industry perception about future oil and natural gas prices that may materially decrease demand for the Company's services, or may have an adverse effect on our financial position, results of operations and cash flows.

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Basis of Presentation

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Interim Financial Information

The unaudited condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, for interim financial reporting. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, these condensed consolidated financial statements should be read along with the annual audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments which are of normal recurring natures considered necessary for a fair representation have been made in the accompanying unaudited financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Reclassification

Certain prior year amounts have been reclassified to conform to the current year presentation with no material effect on the unaudited condensed consolidated financial statements.

Fair Values of Financial Instruments

Fair value is the price that would be received to sell an asset, or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date.

There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 - Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.

• Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The carrying amounts of cash and cash equivalents, accounts receivable-trade, accounts receivable-other, accounts payable-trade and insurance notes approximate fair value because of the short maturity of these instruments. The fair values of finance leases approximate their carrying values, based on current market rates at which the Company could borrow funds with similar maturities (Level 2 in the fair value hierarchy). The fair values of the Term Loan Agreement, Bridge Loan and the PIK Notes as of the respective dates are set forth below (in thousands):

	June 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term Loan Agreement	$	60,850	$	64,198	$	62,335	$	65,794
Bridge Loan	$	—	$	—	$	49,568	$	50,000
PIK Notes	$	54,131	$	61,919	$	—	$	—

Cash, Cash Equivalents and Cash - Restricted

The following table provides a reconciliation of cash, cash equivalents and cash - restricted reported within the consolidated balance sheets to the same such amounts shown in the consolidated statements of cash flows (in thousands).

	June 30,
	2019		2018
Cash and cash equivalents	$	1,030	$	5,383
Cash - restricted	73		19,701
Cash and cash equivalents and cash - restricted as shown in the consolidated statement of cash flows	$	1,103	$	25,084

The Company's restricted cash at June 30, 2018 included $11.0 million related to a prior restriction under the Term Loan Agreement and $8.7 million as collateral for certain outstanding letters of credit and the Company's corporate credit card program under a prior credit facility with Regions.

Revenue Recognition

Revenue is measured as consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by providing service to a customer. Amounts are billed upon completion of service and are generally due within 30 days.

The Company has its principal revenue generating activities organized into three service lines, well servicing, coiled tubing and fluid logistics. The Company's well servicing line consists primarily of maintenance, workover, completion, plugging and abandonment, and tubing testing services. The Company's coiled tubing line consists of maintenance, workover and completion services. The Company's fluid logistics line provides supporting services to the well servicing line as well as direct sales to customers for fluid management and movement. The Company generally establishes a master services agreement with each customer and provides associated services on a work order basis in increments of days, by the hour for services performed or on occasion, bid/turnkey pricing. Services provided under the well servicing, coiled tubing and the fluid logistics segments are short in duration and generally completed within 30 days.

The majority of the Company’s contracts with customers in the well servicing, coiled tubing and fluid logistics segments are short-term in nature and are recognized as “over-time” performance obligations as the services are performed. The Company applies the “as-invoiced” practical expedient as the amount of consideration the Company has a right to invoice corresponds directly with the value of the Company’s performance to date. Because of the short-term nature of the Company’s services, which generally last a few hours to multiple days, the Company does not have any contracts with a duration longer than one year that require disclosure. The Company has no material contract assets or liabilities.

The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods. The Company's significant judgments made in connection with the adoption of ASC 606 included the determination of when the Company satisfies its performance obligation to customers and the applicability of the as invoiced practical expedient.

Leases

Effective January 1, 2019, the Company adopted an accounting standard update issued by the Financial Accounting Standards Board (FASB) related to accounting for leases, which requires lessees to record assets and liabilities that arise for all leases on their balance sheet and expanded financial statement disclosures for both lessees and lessors. Previously, only capital leases were recorded on the balance sheet. This update requires lessees to recognize a lease liability equal to the present value of its lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and instead recognize lease expense for such leases generally on a straight-line basis over the lease term. Leases with a term of longer than 12 months will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted this standard on a prospective basis using the optional modified retrospective transition method. As such, the comparative financial information has not been restated and continues to be reported under the lease standard in effect during those periods. The Company also elected other practical expedients provided by the new standard, including the package of practical expedients, the hindsight practical expedient and the short-term lease recognition practical expedient in which leases with a term of 12 months or less are not recognized on the balance sheet. The adoption of this standard resulted in the recognition of approximately $6.2 million of operating lease right-of-use assets and operating lease liabilities on the balance sheet as of January 1, 2019. The adoption of this standard did not materially impact the condensed consolidated statements of operations for the three and six months ended June 30, 2019. See Note 8 for the expanded lease disclosures required by the new standard.

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Acquisition of Cretic Energy Services, LLC

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Acquisition of Cretic Energy Services, LLC

Acquisition of Cretic Energy Services, LLC

On November 16, 2018, the Company acquired 100% of the outstanding units of Cretic Energy Services, LLC (Cretic). The acquisition of Cretic was accounted for as a business combination using the acquisition method of accounting. The aggregate purchase price was $69.4 million in cash (net of $2.2 million cash acquired).

The purchase price paid in the acquisition has been preliminarily allocated to record the acquired assets and assumed liabilities based on their estimated fair value. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. Management estimated that consideration paid exceeded the fair value of the net assets acquired. The goodwill recorded was primarily attributable to synergies related to the Company’s coiled tubing business strategy that are expected to arise from the Cretic acquisition and was attributable to the Company’s coiled tubing segment.

Proforma Results from the Cretic Acquisition (unaudited)

The following unaudited consolidated pro forma information is presented as if the Cretic acquisition had occurred on January 1, 2018 (in thousands):

	Pro Forma
	Three Months Ended June 30, 2018			Six Months Ended June 30, 2018
Revenue	$	57,611		$	107,067
Net loss	$	(8,926	)	$	(19,498	)

The unaudited pro forma amounts above have been calculated after applying the Company’s accounting policies and adjusting the Cretic acquisition results to reflect the increase to interest expense and depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from January 1, 2018 and other related pro forma adjustments. The pro forma amounts do not include any potential synergies, cost savings or other expected benefits of the Cretic acquisition, and are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the Cretic acquisition had occurred as of January 1, 2018 or of future operating performance.

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Property and Equipment

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consisted of the following (in thousands):

	Estimated Life in Years	June 30, 2019			December 31, 2018
Well servicing equipment	9-15 years	$	132,358		$	128,647
Autos and trucks	5-10 years	25,375			32,132
Autos and trucks - finance lease	5-10 years	23,198			20,416
Disposal wells	5-15 years	4,159			3,977
Building and improvements	5-30 years	5,901			5,705
Furniture and fixtures	3-15 years	3,032			2,797
Land		868			868
		194,891			194,542
Accumulated depreciation (1)		(56,111		)	(45,934		)
		$	138,780		$	148,608

⁽¹⁾ Includes accumulated depreciation of finance lease assets of $6.1 million and $4.5 million at June 30, 2019 and December 31, 2018, respectively.

Depreciation expense was $6.7 million and $7.4 million for the three months ended June 30, 2019 and 2018, respectively, and $15.7 million and $14.2 million for the six months ended June 30, 2019 and 2018, respectively. Depreciation of assets held under finance leases was $1.1 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively, and $2.3 million and $1.4 million for the six months ended June 30, 2019 and 2018, respectively, and is included in depreciation and amortization expense in the accompanying condensed consolidated statements of operations.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

Goodwill totaled $19.7 million at June 30, 2019 and December 31, 2018 related to the acquisition of Cretic and is deductible for tax purposes.

Other Intangible Assets

The following table sets forth the identified other intangible assets by major asset class (in thousands):

	Useful Life (years)	Gross Carrying Value		Accumulated Amortization			Net Book Value
June 30, 2019
Customer relationships	6-15	$	11,378	$	(1,318	)	$	10,060
Trade names	10-15	3,072		(608		)	2,464
Covenants not to compete	4	1,505		(834		)	671
		$	15,955	$	(2,760	)	$	13,195
December 31, 2018
Customer relationships	6-15	$	11,378	$	(832	)	$	10,546
Trade names	10-15	3,072		(496		)	2,576
Covenants not to compete	4	1,505		(647		)	858
		$	15,955	$	(1,975	)	$	13,980

Amortization expense was $0.3 million and $0.3 million for the three months ended June 30, 2019 and 2018, respectively, and $0.8 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively.

Future amortization of these intangibles will be as follows:

2019	$	819
2020	1,637
2021	1,367
2022	1,261
2023	1,261
Thereafter	6,850
	$	13,195

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Long-Term Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt consisted of the following (in thousands):

	June 30, 2019			December 31, 2018
Term Loan Agreement of $55.0 million and $60.0 million, plus $8.9 million and $6.0 million of accrued interest paid in kind and net of debt discount of $3.0 million and $3.6 million as of June 30, 2019 and December 31, 2018, respectively	$	60,850		$	62,335
PIK Notes, including $2.4 million accretion of interest and conversion premium	54,131			—
Bridge Loan of $50.0 million, net of debt discount of $0.4 million as of December 31, 2018	—			49,568
Revolving Loan Agreement	6,000			—
Finance leases	13,258			13,319
Insurance notes	962			5,194
Total debt	135,201			130,416
Less: Current portion	(60,273		)	(59,321		)
Total long-term debt	$	74,928		$	71,095

Term Loan Agreement

On April 13, 2017, the Company entered into the Term Loan Agreement. FES LLC is the borrower, or the Borrower, under the Term Loan Agreement. The Borrower’s obligations have been guaranteed by FES Ltd. and by TES, CCF and FEI, each direct subsidiaries of the Borrower and indirect subsidiaries of FES Ltd. The Term Loan Agreement, as amended, provides for a term loan of $60.0 million, excluding paid in kind interest. Subject to certain exceptions and permitted encumbrances, the obligations under the Term Loan Agreement are secured by a first priority security interest in substantially all the assets of the Company other than accounts receivable, cash and related assets, which constitute priority collateral under the Revolving Loan Agreement (described below). The Term Loan Agreement has a stated maturity date of April 13, 2021.

Borrowings under the Term Loan Agreement bear interest at a rate equal to five percent (5%) per annum payable quarterly in cash, or the Cash Interest Rate, plus (ii) an initial paid in kind interest rate of seven percent (7%) commencing April 13, 2017 to be capitalized and added to the principal amount of the term loan or, at the election of the Borrower, paid in cash. The paid in kind interest increases by two percent (2%) twelve months after April 13, 2017 and every twelve months thereafter until maturity. Upon and after the occurrence of an event of default, the Cash Interest Rate will increase by two percentage points per annum. During the six months endedJune 30, 2019, $2.9 million of interest was paid in kind. At June 30, 2019, the paid in kind interest rate was 11%.

The Term Loan Agreement includes customary negative covenants for an asset-based term loan, including covenants limiting the ability of the Company to, among other things, (i) effect mergers and consolidations, (ii) sell assets, (iii) create or suffer to exist any lien, (iv) make certain investments, (v) incur debt and (vi) transact with affiliates. In addition, the Term Loan Agreement includes customary affirmative covenants for an asset-based term loan, including covenants regarding the delivery of financial statements, reports and notices to the Agent. The Term Loan Agreement also contains customary representations and warranties and event of default provisions for a secured term loan.

Amendment to Term Loan Agreement and Joinder

In connection with the Cretic acquisition, on November 16, 2018, the Company, as a guarantor, FES LLC, as borrower, and certain of their subsidiaries, as guarantors, entered into Amendment No. 1 to Loan and Security Agreement and Pledge and Security Agreement (the “Term Loan Amendment”) with the lenders party thereto and Wilmington Trust, National Association, as agent (the “Term Loan Agent”), pursuant to which the Term Loan Agreement, was amended to, among other things, permit (i) debt under the Revolving Loan Agreement (described below) and the liens securing the obligations thereunder, (ii) the incurrence of add-on term loans under the Term Loan Agreement in an aggregate principal amount of $10.0 million and (iii) the incurrence of one-year “last-out” bridge loans under the Term Loan Agreement in an aggregate principal amount of $50.0 million (the “Bridge Loan”).

In addition, on November 16, 2018, Cretic entered into joinder documentation pursuant to which it became a guarantor under the Term Loan Agreement and a pledgor under the Pledge and Security Agreement referred to in the Term Loan Agreement.

Revolving Loan Agreement

In connection with the Cretic Acquisition, on November 16, 2018, the Company and certain of its subsidiaries, as borrowers, entered into a Credit Agreement (the “Revolving Loan Agreement”) with the lenders party thereto and Regions Bank, as administrative agent and collateral agent (the “Revolver Agent”). The Revolving Loan Agreement provides for $35 million of revolving loan commitments, subject to a borrowing base comprised of 85% of eligible accounts receivable, 90% of eligible investment grade accounts receivable and 100% of eligible cash, less reserves. The loans under the Revolving Loan Agreement accrue interest at a floating rate of LIBOR plus 2.50% - 3.25%, or a base rate plus 1.50% - 2.25%, with the margin based on the fixed charge coverage ratio from time to time.

The Revolving Loan Agreement is secured on a first lien basis by substantially all assets of the Company and its subsidiaries, subject to an intercreditor agreement between the Revolver Agent and the Term Loan Agent which provides that the priority collateral for the Revolving Loan Agreement consists of accounts receivable, cash and related assets, and that the other assets of the Company and its subsidiaries constitute priority collateral for the Term Loan Agreement. At June 30, 2019 we had $6.0 million borrowings outstanding, $6.1 million in letters of credit outstanding and availability of $9.9 million.

5% Subordinated Convertible PIK Notes

On March 4, 2019, the Company issued $51.8 million aggregate original principal amount of 5.00% Subordinated Convertible PIK Notes due June 30, 2020 (the “PIK Notes”). On March 4, 2019, the Company, as Issuer, and Wilmington Trust, National Association, as Trustee, entered into an Indenture governing the terms of the PIK Notes.

The PIK Notes bear interest at a rate of 5.00% per annum. Interest on the PIK Notes will be capitalized to principal semi-annually in arrears on July 1 and January 1 of each year, commencing on July 1, 2019.

The PIK Notes are the unsecured general subordinated obligations of the Company and are subordinated in right of payment to any existing and future secured or unsecured senior debt of the Company. The payment of the principal of, premium, if any, and interest on the PIK Notes will be subordinated to the prior payment in full of all of the Company’s existing and future senior indebtedness. In the event of a liquidation, dissolution, reorganization or any similar proceeding, obligations on the PIK Notes will be paid only after senior indebtedness has been paid in full. Pursuant to the Indenture, the Company is not permitted to (1) make cash payments to pay principal of, premium, if any, and interest on or any other amounts owing in respect of the PIK Notes, or (2) purchase, redeem or otherwise retire the PIK Notes for cash, if any senior indebtedness is not paid when due or any other default on senior indebtedness occurs and the maturity of such indebtedness is accelerated in accordance with its terms unless, in any case, the default has been cured or waived, and the acceleration has been rescinded or the senior indebtedness has been repaid in full.

The Indenture also provides that upon a default by the Company in the payment when due of principal of, or premium, if any, or interest on, indebtedness in the aggregate principal amount then outstanding of $5.0 million or more, or acceleration of the Company’s indebtedness so that it becomes due and payable before the date on which it would otherwise have become due and payable, and if such default is not cured or waived within 30 days after notice to the Company by the Trustee or by holders of at least 25% in aggregate principal amount of the PIK Notes then outstanding, the principal of, (and premium, if any) and accrued and unpaid interest on, the PIK Notes may be declared immediately due and payable.

The PIK Notes are redeemable in whole or from time to time in part at the Company’s option at a redemption price equal to the sum of (i) 100.0% of the principal amount of the PIK Notes to be redeemed and (ii) accrued and unpaid interest thereon to, but excluding, the redemption date, which amounts may be payable in cash or in shares of the Company’s common stock, (subject to limitations, if any, in the documentation governing the Company’s senior indebtedness). If redeemed for the Company’s common stock the holder will receive a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share. The 15% discount represents an implied conversion premium at issuance which will be settled in common stock at the date of conversion.  As such, the face value of the PIK Notes will be accreted to the settlement amount at June 30, 2020.  For the three and six months ended June 30, 2019, the Company recorded $1.8 million and $2.4 million, respectively in interest expense related to the accretion of the conversion premium.

The Indenture contains provisions permitting the Company and the trustee in certain circumstances, without the consent of the holders of the PIK Notes, and in certain other circumstances, with the consent of the holders of not less than a majority in aggregate principal amount of the PIK Notes at the time outstanding to execute supplemental indentures modifying the terms of the Indenture and the PIK Notes as described It also provided in the Indenture that, subject to certain exceptions, the holders of a majority in aggregate principal amount of the PIK Notes at the time outstanding may on behalf of the holders of all the PIK Notes waive any past default or event of default under the Indenture and its consequences.

The Indenture provides for mandatory conversion of the PIK Notes at maturity (or such earlier date as the Company shall elect to redeem the PIK Notes), or upon a Marketed Public Offering of the Company’s common stock or a Change of Control, in each case as defined in the Indenture, at a conversion rate per $100 principal amount of PIK Notes into a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share.

Fair Market Value means fair market value as determined by (A) in the case of a Marketed Public Offering, the offering price per share paid by public investors in the Marketed Public Offering, (B) in the case of a Change of Control, the value of the consideration paid per share by the acquirer in the Change of Control transaction, or (C) in the case of mandatory conversion at the Maturity Date (or such earlier date as the Company shall elect to redeem the PIK Notes), such value as shall be determined by a nationally recognized investment banking firm engaged by the Board of Directors of the Company.

The Company used the gross proceeds of $51.8 million that it received from the issuance of the PIK Notes to repay all of the outstanding principal and accrued and unpaid interest on the Bridge Loan.

Interest on the Bridge Loan prior to its repayment accrued at a rate of 14% (5% cash interest plus 9% PIK interest). The payment obligations of the Borrower under the Bridge Loan have been fully satisfied as of March 4, 2019.

The exchange of the Bridge Loan for the PIK Notes was recognized as a modification of the Term Loan as the amended Term Loan, resulting from the exchange, was not substantially different from the Term Loan. As such, the net carrying value of the Term Loan was not adjusted and a new effective interest that equates the revised cash flows of the modified Term Loan to the existing carrying value of the Term Loan was computed and applied prospectively. Costs incurred with third parties of approximately $1.6 million, related to the issuance of the PIK Notes, were recognized in interest expense for the six months endedJune 30, 2019.

Insurance Notes

The Company entered into insurance promissory notes for the payment of insurance premiums at an interest rate of 4.99% and 3.27% respectively, with an aggregate principal amount outstanding of approximately $1.0 million and $5.2 million as of June 30, 2019 and December 31, 2018, respectively. The amount outstanding could be substantially offset by the cancellation of the related insurance coverage which is classified in prepaid insurance.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Concentrations of Credit Risk

Financial instruments which subject the Company to credit risk consist primarily of cash balances maintained in excess of federal depository insurance limits and trade receivables. Insurance coverage is currently $250,000 per depositor at each financial institution, and the Company's non-interest bearing cash balances exceeded federally insured limits. The Company restricts investment of temporary cash investments to financial institutions with high credit standings.

The Company’s customer base consists primarily of multi-national and independent oil and natural gas producers. The Company does not require collateral on its trade receivables. For the six months ended June 30, 2019, the Company's largest customer, five largest customers, and ten largest customers constituted 10.0%, 33.8% and 46.5% of consolidated revenues, respectively. The loss of any one of the Company's top five customers could have a materially adverse effect on the revenues and profits of the Company. Further, the Company's trade accounts receivable are from companies within the oil and natural gas industry and as such the Company is exposed to normal industry credit risks. As of June 30, 2019, the Company's largest customer, five largest customers, and ten largest customers constituted 4.8%, 27.0% and 44.2% of accounts receivable, respectively. The Company continually evaluates its reserves for potential credit losses and establishes reserves for such losses.

Employee Benefit Plan

The Company has a 401(k) retirement plan for substantially all of its employees based on certain eligibility requirements. The Company may provide profit sharing contributions to the plan at the discretion of management. No such discretionary contributions have been made since inception of the plan.

Litigation

The Company is subject to various other claims and legal actions that arise in the ordinary course of business. The Company does not believe that any of the currently existing claims and actions, separately or in the aggregate, will have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. It is reasonably possible that cases could be resolved and result in liabilities that exceed the amounts currently reserved; however, we cannot reasonably estimate a range of loss based on the status of the cases. If one or more negative outcomes were to occur relative to these matters, the aggregate impact to the Company’s financial condition could be material.

Self-Insurance

The Company is self-insured under its Employee Group Medical Plan for the first $150 thousand per individual. The Company is self-insured with a retention for the first $250 thousand in general liability. The Company has an additional premium payable clause under its lead $10 million limit excess policy that states in the event a loss exceeds $1 million, a loss additional premium of up to 15% to 17% of paid losses in excess of $1 million will be due. The loss additional premium is payable at the time when the loss is paid and will be payable over a period agreed by insurers. The Company has accrued liabilities totaling $5.9 million and $5.2 million as of June 30, 2019 and December 31, 2018, respectively, for the projected additional premium and self-insured portion of these insurance claims as of the financial statement dates. This accrual includes claims made as well as an estimate for claims incurred but not reported by using third party data and claims history as of the financial statement dates.

Other

The Company is currently undergoing sales and use tax audits for multi-year periods. The Company believes the outcome of these audits will not have a material adverse effect on its results of operations or financial position. Because certain of these audits are in a preliminary stage, an estimate of the possible loss or range of loss cannot reasonably be made.

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Leases (Notes)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

The Company adopted a comprehensive new lease accounting standard effective January 1, 2019. The details of the significant changes to our accounting policies resulting from the adoption of the new standard are set out below. The Company adopted the standard on a prospective basis using the optional modified retrospective transition method; accordingly, the comparative information as of December 31, 2018 and for the three and six months ended June 30, 2018 has not been adjusted and continues to be reported under the previous lease standard. Under the new lease standard, assets and liabilities that arise from all leases are required to be recognized on the balance sheet for lessees. Previously, only capital leases, which are now referred to as finance leases, were recorded on the balance sheet.

Beginning January 1, 2019, for all leases with a term in excess of 12 months, the Company recognized a lease liability equal to the present value of the lease payments and a right-of-use asset representing our right to use the underlying asset for the lease term. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term, while finance leases include both an operating expense and an interest expense component. For all leases with a term of 12 months or less, the Company elected the practical expedient to not recognize lease assets and liabilities. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases including month-to-month agreements that continue in perpetuity until the lessor or the Company terminates the lease agreement.

The Company is a lessee for operating leases, primarily related to real estate, salt water disposal wells and equipment. The vast majority of our operating leases have remaining lease terms of 10 years or less, some of which include options to extend the leases, and some of which include options to terminate the leases. The Company generally does not include renewal or termination options in the assessment of leases unless extension or termination is deemed to be reasonably certain. The accounting for some leases may require significant judgment, which includes determining whether a contract contains a lease, determining the incremental borrowing rates to utilize in the net present value calculation of lease payments for lease agreements which do not provide an implicit rate, and assessing the likelihood of renewal or termination options. Salt water disposal well locations have fixed or both fixed and variable lease amounts where the variable lease payments are based on the volume of fluids injected into to the well and/or sales of products by the Company. The Company also has some lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

The Company is a lessee for finance leases related to autos and trucks and well servicing equipment. The vast majority of the Company's finance leases have remaining lease terms of three years or less, all of which include options to terminate the leases after one year and do not include options to extend the lease. For all finance leases, the Company is subject to a residual value guarantee established by the lessor and based upon the calculated net book value of the vehicle as of the date of early termination of the lease. The loans are collateralized by equipment purchased with the proceeds of such loans. For finance leases, the Company uses discount rates similar to incremental borrowing rates available for comparable equipment financing in our net present value calculation of lease payments. The Company's vehicle finance lease agreements contain lease and non-lease components, which are accounted for separately.

The following tables illustrate the financial impact of the Company's leases as of and for the three and six months ended June 30, 2019, along with other supplemental information about the Company's leases (in thousands, except years and percentages):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Components of lease expense:
Finance lease cost:
Amortization of right-of-use assets	$	1,110	$	2,324
Interest on lease liabilities	154		293
Operating lease cost:
Lease expense (1)	367		733
Short-term lease cost	647		1,306
Total lease cost	$	2,278	$	4,656

⁽¹⁾ Includes variable lease costs of $75 thousand and $150 thousand for the three and six months ended June 30, 2019, respectively.

	As of
	June 30, 2019
Components of balance sheet:
Operating leases:
Operating lease right-of-use assets (non-current)	$	5,785
Current portion of operating lease liabilities	$	756
Long-term operating lease liabilities, net of current portion	$	5,029
Finance leases:
Property and equipment, net	$	17,068
Current portion of long-term debt	$	5,180
Long-term debt, net of current portion and debt discount	$	8,078

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Other supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,014	$	2,039
Operating cash flows for finance leases - interest	$	154	$	293
Financing cash flows for finance leases	$	1,219	$	2,387
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	6,150
Finance leases	$	890	$	2,326
Weighted-average remaining lease term:
Operating leases			8.5 years
Finance leases			2.6 years
Weighted-average discount rate:
Operating leases			7.50		%
Finance leases			4.19		%

The following table summarizes the maturity of the Company's operating and finance leases as of June 30, 2019 (in thousands):

	Operating Leases - Related Party			Operating Leases - Other			Finance Leases
2019	$	39		$	1,235		$	3,248
2020	58			1,060			5,474
2021	8			1,035			3,974
2022	—			872			1,266
2023	—			747			96
Thereafter	—			3,608			—
Total minimum lease payments	105			8,557			14,058
Less imputed interest	(10		)	(2,166		)	(800		)
Less short-term leases excluded from the balance sheet	—			(701		)	—
Total lease liabilities per balance sheet	$	95		$	5,690		$	13,258

The Company adopted ASU 2016-02 on January 1, 2019 as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future annual minimum lease payments and capital lease commitments as of December 31, 2018 were as follows (in thousands):

	Operating Leases - Related Party		Operating Leases - Other		Capital Leases
2019	$	30	$	2,027	$	4,559
2020	30		986		4,334
2021	8		946		3,375
2022	—		781		1,051
2023	—		386		—
Thereafter	—		1,350		—
Total	$	68	$	6,476	$	13,319

Leases

Leases

The Company adopted a comprehensive new lease accounting standard effective January 1, 2019. The details of the significant changes to our accounting policies resulting from the adoption of the new standard are set out below. The Company adopted the standard on a prospective basis using the optional modified retrospective transition method; accordingly, the comparative information as of December 31, 2018 and for the three and six months ended June 30, 2018 has not been adjusted and continues to be reported under the previous lease standard. Under the new lease standard, assets and liabilities that arise from all leases are required to be recognized on the balance sheet for lessees. Previously, only capital leases, which are now referred to as finance leases, were recorded on the balance sheet.

Beginning January 1, 2019, for all leases with a term in excess of 12 months, the Company recognized a lease liability equal to the present value of the lease payments and a right-of-use asset representing our right to use the underlying asset for the lease term. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term, while finance leases include both an operating expense and an interest expense component. For all leases with a term of 12 months or less, the Company elected the practical expedient to not recognize lease assets and liabilities. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases including month-to-month agreements that continue in perpetuity until the lessor or the Company terminates the lease agreement.

The Company is a lessee for operating leases, primarily related to real estate, salt water disposal wells and equipment. The vast majority of our operating leases have remaining lease terms of 10 years or less, some of which include options to extend the leases, and some of which include options to terminate the leases. The Company generally does not include renewal or termination options in the assessment of leases unless extension or termination is deemed to be reasonably certain. The accounting for some leases may require significant judgment, which includes determining whether a contract contains a lease, determining the incremental borrowing rates to utilize in the net present value calculation of lease payments for lease agreements which do not provide an implicit rate, and assessing the likelihood of renewal or termination options. Salt water disposal well locations have fixed or both fixed and variable lease amounts where the variable lease payments are based on the volume of fluids injected into to the well and/or sales of products by the Company. The Company also has some lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

The Company is a lessee for finance leases related to autos and trucks and well servicing equipment. The vast majority of the Company's finance leases have remaining lease terms of three years or less, all of which include options to terminate the leases after one year and do not include options to extend the lease. For all finance leases, the Company is subject to a residual value guarantee established by the lessor and based upon the calculated net book value of the vehicle as of the date of early termination of the lease. The loans are collateralized by equipment purchased with the proceeds of such loans. For finance leases, the Company uses discount rates similar to incremental borrowing rates available for comparable equipment financing in our net present value calculation of lease payments. The Company's vehicle finance lease agreements contain lease and non-lease components, which are accounted for separately.

The following tables illustrate the financial impact of the Company's leases as of and for the three and six months ended June 30, 2019, along with other supplemental information about the Company's leases (in thousands, except years and percentages):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Components of lease expense:
Finance lease cost:
Amortization of right-of-use assets	$	1,110	$	2,324
Interest on lease liabilities	154		293
Operating lease cost:
Lease expense (1)	367		733
Short-term lease cost	647		1,306
Total lease cost	$	2,278	$	4,656

⁽¹⁾ Includes variable lease costs of $75 thousand and $150 thousand for the three and six months ended June 30, 2019, respectively.

	As of
	June 30, 2019
Components of balance sheet:
Operating leases:
Operating lease right-of-use assets (non-current)	$	5,785
Current portion of operating lease liabilities	$	756
Long-term operating lease liabilities, net of current portion	$	5,029
Finance leases:
Property and equipment, net	$	17,068
Current portion of long-term debt	$	5,180
Long-term debt, net of current portion and debt discount	$	8,078

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Other supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,014	$	2,039
Operating cash flows for finance leases - interest	$	154	$	293
Financing cash flows for finance leases	$	1,219	$	2,387
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	6,150
Finance leases	$	890	$	2,326
Weighted-average remaining lease term:
Operating leases			8.5 years
Finance leases			2.6 years
Weighted-average discount rate:
Operating leases			7.50		%
Finance leases			4.19		%

The following table summarizes the maturity of the Company's operating and finance leases as of June 30, 2019 (in thousands):

	Operating Leases - Related Party			Operating Leases - Other			Finance Leases
2019	$	39		$	1,235		$	3,248
2020	58			1,060			5,474
2021	8			1,035			3,974
2022	—			872			1,266
2023	—			747			96
Thereafter	—			3,608			—
Total minimum lease payments	105			8,557			14,058
Less imputed interest	(10		)	(2,166		)	(800		)
Less short-term leases excluded from the balance sheet	—			(701		)	—
Total lease liabilities per balance sheet	$	95		$	5,690		$	13,258

The Company adopted ASU 2016-02 on January 1, 2019 as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future annual minimum lease payments and capital lease commitments as of December 31, 2018 were as follows (in thousands):

	Operating Leases - Related Party		Operating Leases - Other		Capital Leases
2019	$	30	$	2,027	$	4,559
2020	30		986		4,334
2021	8		946		3,375
2022	—		781		1,051
2023	—		386		—
Thereafter	—		1,350		—
Total	$	68	$	6,476	$	13,319

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Share-Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Management Incentive Plan

A summary of the Company's share-based compensation expense during the periods presented are as follows (in thousands):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Share based compensation expense recognized	$	256	$	509
			As of
			June 30, 2019
Unrecognized compensation cost (in thousands)			$	2,459
Remaining weighted-average service period (years)			3.00

During the six months ended June 30, 2019, the Company granted no restricted stock units to officers and employees subject to the Management Incentive Plan. Below is a summary of the unvested restricted stock units.

	Number of Shares		Weighted Average Fair Value
Unvested as of December 31, 2018	329,240		$	9.68
Granted	—		$	—
Vested	(7,200	)	$	11.00
Forfeited	—		$	—
Unvested as of June 30, 2019	322,040		$	9.99

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company incurred related party expenses, primarily related to lease rents, of $0.2 million and $0.3 million during the three months ended June 30, 2019 and 2018, respectively, and $0.5 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively.

There was no related party revenue for the three months ended June 30, 2019 and 2018 or for the six months ended June 30, 2019 and 2018.

There were no related party accounts receivable or accounts payable as of June 30, 2019 or December 31, 2018.

In addition to such related party transactions above, Lawrence “Larry” First, a director of FES Ltd., serves as the Chief Investment Officer and Managing Director of Ascribe Capital LLC, or Ascribe, and Brett G. Wyard, also a director of FES Ltd., serves as a Managing Partner of Solace Capital Partners, or Solace. Ascribe and/or one or more of its affiliates own approximately 23.6% of the outstanding common stock as of June 30, 2019, and is owed approximately $16.5 million of the aggregate principal amount of the Term Loan Agreement and approximately $27.5 million of the aggregate principle amount of the PIK Notes. Solace and/or one of its affiliates own approximately 17.4% of the outstanding common stock as of June 30, 2019, and is owed approximately $15.1 million of the aggregate principal amount of the term loan covered by the Term Loan Agreement and approximately $20.3 million of the aggregate principal amount of the PIK Notes. Moreover, an affiliate of Solace and affiliates of Ascribe are parties to certain registration rights agreement by and among the Company and certain stockholders of the Company.

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Earnings per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

Basic earnings (loss) per share, or EPS, is computed by dividing net income (loss) available to common stockholders by the weighted-average common stock outstanding during the period. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock, such as restricted stock units or the PIK Notes, were exercised and converted into common stock. Potential common stock equivalents relate to outstanding stock options and unvested restricted stock units, which are determined using the treasury stock method, and the PIK Notes, which were determined using the "if-converted" method. In applying the if-converted method, conversion is not assumed for purposes of computing diluted EPS if the effect would be antidilutive.

The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts):

	Three Months Ended June 30,
	2019			2018
Basic and diluted:
Net loss	$	(10,749	)	$	(8,766	)
Weighted-average common shares	5,446			5,336
Basic and diluted net loss per share	$	(1.97	)	$	(1.64	)

	Six Months Ended June 30,
	2019			2018
Basic and diluted:
Net loss	$	(22,383	)	$	(17,295	)
Weighted-average common shares	5,444			5,336
Basic and diluted net loss per share	$	(4.11	)	$	(3.24	)

There were 322,040 and 363,300 unvested restricted stock units that were not included in the calculation of diluted EPS for the three and six months ended June 30, 2019 and 2018, respectively, and approximately 28.3 million shares related to the potential conversion of the PIK Notes at June 30, 2019 because their effect would have been antidilutive.

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Business Segment Information

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company has three reportable segments organized based on its products and services—well servicing, coiled tubing and fluid logistics. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Upon the acquisition of Cretic, we evaluated our segment information and determined that coiled tubing represented a separate segment under our current facts. All prior year segment information has been recast to reflect the change in our segment reporting.

Well Servicing

The Company's well servicing segment utilizes a fleet of well servicing rigs, which was comprised of workover rigs and swabbing rigs and other related assets and equipment to provide the following services:(i) well maintenance, including remedial repairs and removal and replacement of downhole production equipment, (ii) well workovers, including significant downhole repairs, re-completions and re-perforations, (iii) completion and swabbing activities, (iv) plugging and abandonment services, and (v) pressure testing of oil and natural gas production tubing and scanning tubing for pitting and wall thickness using tubing testing units.

Coiled Tubing

The coiled tubing segment utilizes our fleet of coiled tubing units to provide a range of services accomplishing a wide variety of goals including horizontal completions, well bore clean-outs and maintenance, nitrogen services, thru-tubing services, formation stimulation using acid and other chemicals, and other pre- and post-hydraulic fracturing well preparation services.

Fluid Logistics

The Company's fluid logistics segment utilizes a fleet of fluid transport trucks and related assets, including specialized vacuum, high-pressure pump and tank trucks, frac tanks, water wells, salt water disposal wells and facilities, and related equipment to provide services such as transportation, storage and disposal of a variety of drilling and produced fluids used in, and generated by, oil and natural gas production. These services are required in most workover and completion projects and are routinely used in the daily operation of producing wells.

The following table sets forth certain financial information with respect to the Company’s reportable segments (in thousands):

	Well Servicing		Coiled Tubing			Fluid Logistics		Total
Three Months Ended June 30, 2019
Operating revenues	$	25,762	$	13,292		$	12,011	$	51,065
Direct operating costs	20,971		13,854			8,823		43,648
Segment profits	$	4,791	$	(562	)	$	3,188	$	7,417
Depreciation and amortization	$	2,783	$	2,531		$	1,699	$	7,013
Capital expenditures (1)	$	2,724	$	2,851		$	1,370	$	6,945
Three Months Ended June 30, 2018
Operating revenues	$	20,415	$	6,960		$	13,866	$	41,241
Direct operating costs	17,116		6,208			11,151		34,475
Segment profits	$	3,299	$	752		$	2,715	$	6,766
Depreciation and amortization	$	2,688	$	1,498		$	3,466	$	7,652
Capital expenditures (1)	$	2,016	$	2,304		$	1,500	$	5,820
(1) Capital expenditures listed above include all cash and non-cash additions to property and equipment, including finance leases and fixed assets recorded in accounts payable at year-end.

	Three Months Ended June 30,
	2019			2018
Reconciliation of Operating Loss As Reported:
Segment profits	$	7,417		$	6,766
Less:
General and administrative expense	5,417			5,908
Depreciation and amortization	7,013			7,652
Operating loss	(5,013		)	(6,794		)
Other income (expenses), net	(5,722		)	(2,426		)
Pre-tax loss	$	(10,735	)	$	(9,220	)

	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Six Months Ended June 30, 2019
Operating revenues	$	50,512	$	33,302	$	25,639	$	109,453
Direct operating costs	38,520		31,792		19,475		89,787
Segment profits	$	11,992	$	1,510	$	6,164	$	19,666
Depreciation and amortization	$	4,959	$	6,069	$	5,424	$	16,452
Capital expenditures (1)	$	5,167	$	5,149	$	1,710	$	12,026
Total assets	$	75,829	$	102,190	$	50,909	$	228,928
Long lived assets	$	57,078	$	80,320	$	39,292	$	176,690
Six Months Ended June 30, 2018
Operating revenues	$	38,069	$	12,162	$	26,601	$	76,832
Direct operating costs	31,968		10,371		21,840		64,179
Segment profits	$	6,101	$	1,791	$	4,761	$	12,653
Depreciation and amortization	$	5,124	$	2,794	$	6,897	$	14,815
Capital expenditures (1)	$	2,945	$	5,518	$	2,494	$	10,957
Total assets	$	134,527	$	22,848	$	30,354	$	187,729
Long lived assets	$	65,920	$	17,228	$	41,618	$	124,766
(1) Capital expenditures listed above include all cash and non-cash additions to property and equipment, including finance leases and fixed assets recorded in accounts payable at year-end.

	Six Months Ended June 30,
	2019			2018
Reconciliation of Operating Loss As Reported:
Segment profits	$	19,666		$	12,653
Less:
General and administrative expense	12,242			10,796
Depreciation and amortization	16,452			14,815
Operating loss	(9,028		)	(12,958		)
Other income (expenses), net	(13,405		)	(4,791		)
Pre-tax loss	$	(22,433	)	$	(17,749	)
	June 30, 2019			December 31, 2018
Reconciliation of Total Assets As Reported:
Total reportable segments	$	228,928		$	243,199
Parent	7,191			13,186
Total assets	$	236,119		$	256,385

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Revenue

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The following tables show revenue disaggregated by primary geographical markets and major service lines (in thousands):

	Three months ended June 30, 2019
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	18,292	$	4,300	$	6,035	$	28,627
East Texas (1)	1,897		—		811		2,708
Central Texas	—		—		2,976		2,976
West Texas	5,573		8,992		2,189		16,754
Total	$	25,762	$	13,292	$	12,011	$	51,065
	Three months ended June 30, 2018
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	11,081	$	3,799	$	6,669	$	21,549
East Texas (1)	1,097		—		577		1,674
Central Texas	—		—		3,461		3,461
West Texas	8,237		3,161		3,159		14,557
Total	$	20,415	$	6,960	$	13,866	$	41,241
(1) Includes revenues from the Company's operations in Pennsylvania.

	Six months ended June 30, 2019
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	36,469	$	9,001	$	12,207	$	57,677
East Texas (1)	2,751		—		1,646		4,397
Central Texas	—		—		6,072		6,072
West Texas	11,292		24,301		5,714		41,307
Total	$	50,512	$	33,302	$	25,639	$	109,453
	Six months ended June 30, 2018
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	23,893	$	7,642	$	13,297	$	44,832
East Texas (1)	1,749		—		1,155		2,904
Central Texas	—		—		6,465		6,465
West Texas	12,427		4,520		5,684		22,631
Total	$	38,069	$	12,162	$	26,601	$	76,832
(1) Includes revenues from the Company's operations in Pennsylvania.

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2019

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Six Months Ended June 30,
	2019		2018
Cash paid for
Interest	$	2,197	$	136
Income tax	$	—	$	—
Supplemental schedule of non-cash investing and financing activities
Change in accounts payable related to capital expenditures	$	—	$	2,201
Exchange of Bridge Loan for PIK Notes	$	47,346	$	—
Finance leases on equipment	$	2,326	$	1,712

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASU 2016-13, which introduces a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. The amendments in ASU 2016-13 are effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment", or ASU 2017-04, which addresses concerns over the cost and complexity of the two-step goodwill impairment test by removing the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. ASU 2017-04 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The guidance is effective for all entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Interim Financial Information

Interim Financial Information

The unaudited condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, for interim financial reporting. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, these condensed consolidated financial statements should be read along with the annual audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments which are of normal recurring natures considered necessary for a fair representation have been made in the accompanying unaudited financial statements.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Fair value is the price that would be received to sell an asset, or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date.

There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 - Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.

• Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The carrying amounts of cash and cash equivalents, accounts receivable-trade, accounts receivable-other, accounts payable-trade and insurance notes approximate fair value because of the short maturity of these instruments. The fair values of finance leases approximate their carrying values, based on current market rates at which the Company could borrow funds with similar maturities (Level 2 in the fair value hierarchy).

Cash, Cash Equivalents and Cash - Restricted

Cash, Cash Equivalents and Cash - Restricted

The following table provides a reconciliation of cash, cash equivalents and cash - restricted reported within the consolidated balance sheets to the same such amounts shown in the consolidated statements of cash flows (in thousands).

	June 30,
	2019		2018
Cash and cash equivalents	$	1,030	$	5,383
Cash - restricted	73		19,701
Cash and cash equivalents and cash - restricted as shown in the consolidated statement of cash flows	$	1,103	$	25,084

The Company's restricted cash at June 30, 2018 included $11.0 million related to a prior restriction under the Term Loan Agreement and $8.7 million as collateral for certain outstanding letters of credit and the Company's corporate credit card program under a prior credit facility with Regions.

Revenue Recognition

Revenue Recognition

Revenue is measured as consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by providing service to a customer. Amounts are billed upon completion of service and are generally due within 30 days.

The Company has its principal revenue generating activities organized into three service lines, well servicing, coiled tubing and fluid logistics. The Company's well servicing line consists primarily of maintenance, workover, completion, plugging and abandonment, and tubing testing services. The Company's coiled tubing line consists of maintenance, workover and completion services. The Company's fluid logistics line provides supporting services to the well servicing line as well as direct sales to customers for fluid management and movement. The Company generally establishes a master services agreement with each customer and provides associated services on a work order basis in increments of days, by the hour for services performed or on occasion, bid/turnkey pricing. Services provided under the well servicing, coiled tubing and the fluid logistics segments are short in duration and generally completed within 30 days.

The majority of the Company’s contracts with customers in the well servicing, coiled tubing and fluid logistics segments are short-term in nature and are recognized as “over-time” performance obligations as the services are performed. The Company applies the “as-invoiced” practical expedient as the amount of consideration the Company has a right to invoice corresponds directly with the value of the Company’s performance to date. Because of the short-term nature of the Company’s services, which generally last a few hours to multiple days, the Company does not have any contracts with a duration longer than one year that require disclosure. The Company has no material contract assets or liabilities.

The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods. The Company's significant judgments made in connection with the adoption of ASC 606 included the determination of when the Company satisfies its performance obligation to customers and the applicability of the as invoiced practical expedient.

Leases

Leases

Effective January 1, 2019, the Company adopted an accounting standard update issued by the Financial Accounting Standards Board (FASB) related to accounting for leases, which requires lessees to record assets and liabilities that arise for all leases on their balance sheet and expanded financial statement disclosures for both lessees and lessors. Previously, only capital leases were recorded on the balance sheet. This update requires lessees to recognize a lease liability equal to the present value of its lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and instead recognize lease expense for such leases generally on a straight-line basis over the lease term. Leases with a term of longer than 12 months will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted this standard on a prospective basis using the optional modified retrospective transition method. As such, the comparative financial information has not been restated and continues to be reported under the lease standard in effect during those periods. The Company also elected other practical expedients provided by the new standard, including the package of practical expedients, the hindsight practical expedient and the short-term lease recognition practical expedient in which leases with a term of 12 months or less are not recognized on the balance sheet. The adoption of this standard resulted in the recognition of approximately $6.2 million of operating lease right-of-use assets and operating lease liabilities on the balance sheet as of January 1, 2019. The adoption of this standard did not materially impact the condensed consolidated statements of operations for the three and six months ended June 30, 2019. See Note 8 for the expanded lease disclosures required by the new standard.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASU 2016-13, which introduces a new impairment model for financial instruments that is based on expected credit losses rather than incurred credit losses. The new impairment model applies to most financial assets, including trade accounts receivable. The amendments in ASU 2016-13 are effective for interim and annual reporting periods beginning after December 15, 2019 with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment", or ASU 2017-04, which addresses concerns over the cost and complexity of the two-step goodwill impairment test by removing the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. ASU 2017-04 will be effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The guidance is effective for all entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

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Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of the Carrying Amounts and Estimated Fair Values of Financial Instruments

The fair values of the Term Loan Agreement, Bridge Loan and the PIK Notes as of the respective dates are set forth below (in thousands):

	June 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term Loan Agreement	$	60,850	$	64,198	$	62,335	$	65,794
Bridge Loan	$	—	$	—	$	49,568	$	50,000
PIK Notes	$	54,131	$	61,919	$	—	$	—

Reconciliation of Cash, Cash Equivalents and Cash - Restricted

The following table provides a reconciliation of cash, cash equivalents and cash - restricted reported within the consolidated balance sheets to the same such amounts shown in the consolidated statements of cash flows (in thousands).

	June 30,
	2019		2018
Cash and cash equivalents	$	1,030	$	5,383
Cash - restricted	73		19,701
Cash and cash equivalents and cash - restricted as shown in the consolidated statement of cash flows	$	1,103	$	25,084

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Acquisition of Cretic Energy Services, LLC (Tables)

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Pro Forma Information

The following unaudited consolidated pro forma information is presented as if the Cretic acquisition had occurred on January 1, 2018 (in thousands):

	Pro Forma
	Three Months Ended June 30, 2018			Six Months Ended June 30, 2018
Revenue	$	57,611		$	107,067
Net loss	$	(8,926	)	$	(19,498	)

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consisted of the following (in thousands):

	Estimated Life in Years	June 30, 2019			December 31, 2018
Well servicing equipment	9-15 years	$	132,358		$	128,647
Autos and trucks	5-10 years	25,375			32,132
Autos and trucks - finance lease	5-10 years	23,198			20,416
Disposal wells	5-15 years	4,159			3,977
Building and improvements	5-30 years	5,901			5,705
Furniture and fixtures	3-15 years	3,032			2,797
Land		868			868
		194,891			194,542
Accumulated depreciation (1)		(56,111		)	(45,934		)
		$	138,780		$	148,608

⁽¹⁾ Includes accumulated depreciation of finance lease assets of $6.1 million and $4.5 million at June 30, 2019 and December 31, 2018, respectively.

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets

The following table sets forth the identified other intangible assets by major asset class (in thousands):

	Useful Life (years)	Gross Carrying Value		Accumulated Amortization			Net Book Value
June 30, 2019
Customer relationships	6-15	$	11,378	$	(1,318	)	$	10,060
Trade names	10-15	3,072		(608		)	2,464
Covenants not to compete	4	1,505		(834		)	671
		$	15,955	$	(2,760	)	$	13,195
December 31, 2018
Customer relationships	6-15	$	11,378	$	(832	)	$	10,546
Trade names	10-15	3,072		(496		)	2,576
Covenants not to compete	4	1,505		(647		)	858
		$	15,955	$	(1,975	)	$	13,980

Future Amortization Expense

Future amortization of these intangibles will be as follows:

2019	$	819
2020	1,637
2021	1,367
2022	1,261
2023	1,261
Thereafter	6,850
	$	13,195

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of Long Term Debt

Long-term debt consisted of the following (in thousands):

	June 30, 2019			December 31, 2018
Term Loan Agreement of $55.0 million and $60.0 million, plus $8.9 million and $6.0 million of accrued interest paid in kind and net of debt discount of $3.0 million and $3.6 million as of June 30, 2019 and December 31, 2018, respectively	$	60,850		$	62,335
PIK Notes, including $2.4 million accretion of interest and conversion premium	54,131			—
Bridge Loan of $50.0 million, net of debt discount of $0.4 million as of December 31, 2018	—			49,568
Revolving Loan Agreement	6,000			—
Finance leases	13,258			13,319
Insurance notes	962			5,194
Total debt	135,201			130,416
Less: Current portion	(60,273		)	(59,321		)
Total long-term debt	$	74,928		$	71,095

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Lease Information

The following tables illustrate the financial impact of the Company's leases as of and for the three and six months ended June 30, 2019, along with other supplemental information about the Company's leases (in thousands, except years and percentages):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Components of lease expense:
Finance lease cost:
Amortization of right-of-use assets	$	1,110	$	2,324
Interest on lease liabilities	154		293
Operating lease cost:
Lease expense (1)	367		733
Short-term lease cost	647		1,306
Total lease cost	$	2,278	$	4,656

⁽¹⁾ Includes variable lease costs of $75 thousand and $150 thousand for the three and six months ended June 30, 2019, respectively.

	As of
	June 30, 2019
Components of balance sheet:
Operating leases:
Operating lease right-of-use assets (non-current)	$	5,785
Current portion of operating lease liabilities	$	756
Long-term operating lease liabilities, net of current portion	$	5,029
Finance leases:
Property and equipment, net	$	17,068
Current portion of long-term debt	$	5,180
Long-term debt, net of current portion and debt discount	$	8,078

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Other supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,014	$	2,039
Operating cash flows for finance leases - interest	$	154	$	293
Financing cash flows for finance leases	$	1,219	$	2,387
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	6,150
Finance leases	$	890	$	2,326
Weighted-average remaining lease term:
Operating leases			8.5 years
Finance leases			2.6 years
Weighted-average discount rate:
Operating leases			7.50		%
Finance leases			4.19		%

Maturity of Finance Leases

The following table summarizes the maturity of the Company's operating and finance leases as of June 30, 2019 (in thousands):

	Operating Leases - Related Party			Operating Leases - Other			Finance Leases
2019	$	39		$	1,235		$	3,248
2020	58			1,060			5,474
2021	8			1,035			3,974
2022	—			872			1,266
2023	—			747			96
Thereafter	—			3,608			—
Total minimum lease payments	105			8,557			14,058
Less imputed interest	(10		)	(2,166		)	(800		)
Less short-term leases excluded from the balance sheet	—			(701		)	—
Total lease liabilities per balance sheet	$	95		$	5,690		$	13,258

Maturity of Operating Leases

The following table summarizes the maturity of the Company's operating and finance leases as of June 30, 2019 (in thousands):

	Operating Leases - Related Party			Operating Leases - Other			Finance Leases
2019	$	39		$	1,235		$	3,248
2020	58			1,060			5,474
2021	8			1,035			3,974
2022	—			872			1,266
2023	—			747			96
Thereafter	—			3,608			—
Total minimum lease payments	105			8,557			14,058
Less imputed interest	(10		)	(2,166		)	(800		)
Less short-term leases excluded from the balance sheet	—			(701		)	—
Total lease liabilities per balance sheet	$	95		$	5,690		$	13,258

Maturity of Leases under ASC 840

Future annual minimum lease payments and capital lease commitments as of December 31, 2018 were as follows (in thousands):

	Operating Leases - Related Party		Operating Leases - Other		Capital Leases
2019	$	30	$	2,027	$	4,559
2020	30		986		4,334
2021	8		946		3,375
2022	—		781		1,051
2023	—		386		—
Thereafter	—		1,350		—
Total	$	68	$	6,476	$	13,319

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements

A summary of the Company's share-based compensation expense during the periods presented are as follows (in thousands):

	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Share based compensation expense recognized	$	256	$	509
			As of
			June 30, 2019
Unrecognized compensation cost (in thousands)			$	2,459
Remaining weighted-average service period (years)			3.00

Schedule of Nonvested Restricted Stock Units Activity

During the six months ended June 30, 2019, the Company granted no restricted stock units to officers and employees subject to the Management Incentive Plan. Below is a summary of the unvested restricted stock units.

	Number of Shares		Weighted Average Fair Value
Unvested as of December 31, 2018	329,240		$	9.68
Granted	—		$	—
Vested	(7,200	)	$	11.00
Forfeited	—		$	—
Unvested as of June 30, 2019	322,040		$	9.99

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts):

	Three Months Ended June 30,
	2019			2018
Basic and diluted:
Net loss	$	(10,749	)	$	(8,766	)
Weighted-average common shares	5,446			5,336
Basic and diluted net loss per share	$	(1.97	)	$	(1.64	)

	Six Months Ended June 30,
	2019			2018
Basic and diluted:
Net loss	$	(22,383	)	$	(17,295	)
Weighted-average common shares	5,444			5,336
Basic and diluted net loss per share	$	(4.11	)	$	(3.24	)

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Condensed Financial Statements

The following table sets forth certain financial information with respect to the Company’s reportable segments (in thousands):

	Well Servicing		Coiled Tubing			Fluid Logistics		Total
Three Months Ended June 30, 2019
Operating revenues	$	25,762	$	13,292		$	12,011	$	51,065
Direct operating costs	20,971		13,854			8,823		43,648
Segment profits	$	4,791	$	(562	)	$	3,188	$	7,417
Depreciation and amortization	$	2,783	$	2,531		$	1,699	$	7,013
Capital expenditures (1)	$	2,724	$	2,851		$	1,370	$	6,945
Three Months Ended June 30, 2018
Operating revenues	$	20,415	$	6,960		$	13,866	$	41,241
Direct operating costs	17,116		6,208			11,151		34,475
Segment profits	$	3,299	$	752		$	2,715	$	6,766
Depreciation and amortization	$	2,688	$	1,498		$	3,466	$	7,652
Capital expenditures (1)	$	2,016	$	2,304		$	1,500	$	5,820
(1) Capital expenditures listed above include all cash and non-cash additions to property and equipment, including finance leases and fixed assets recorded in accounts payable at year-end.

	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Six Months Ended June 30, 2019
Operating revenues	$	50,512	$	33,302	$	25,639	$	109,453
Direct operating costs	38,520		31,792		19,475		89,787
Segment profits	$	11,992	$	1,510	$	6,164	$	19,666
Depreciation and amortization	$	4,959	$	6,069	$	5,424	$	16,452
Capital expenditures (1)	$	5,167	$	5,149	$	1,710	$	12,026
Total assets	$	75,829	$	102,190	$	50,909	$	228,928
Long lived assets	$	57,078	$	80,320	$	39,292	$	176,690
Six Months Ended June 30, 2018
Operating revenues	$	38,069	$	12,162	$	26,601	$	76,832
Direct operating costs	31,968		10,371		21,840		64,179
Segment profits	$	6,101	$	1,791	$	4,761	$	12,653
Depreciation and amortization	$	5,124	$	2,794	$	6,897	$	14,815
Capital expenditures (1)	$	2,945	$	5,518	$	2,494	$	10,957
Total assets	$	134,527	$	22,848	$	30,354	$	187,729
Long lived assets	$	65,920	$	17,228	$	41,618	$	124,766
(1) Capital expenditures listed above include all cash and non-cash additions to property and equipment, including finance leases and fixed assets recorded in accounts payable at year-end.

Financial Information with Respect to Reportable Segments

	Three Months Ended June 30,
	2019			2018
Reconciliation of Operating Loss As Reported:
Segment profits	$	7,417		$	6,766
Less:
General and administrative expense	5,417			5,908
Depreciation and amortization	7,013			7,652
Operating loss	(5,013		)	(6,794		)
Other income (expenses), net	(5,722		)	(2,426		)
Pre-tax loss	$	(10,735	)	$	(9,220	)

	Six Months Ended June 30,
	2019			2018
Reconciliation of Operating Loss As Reported:
Segment profits	$	19,666		$	12,653
Less:
General and administrative expense	12,242			10,796
Depreciation and amortization	16,452			14,815
Operating loss	(9,028		)	(12,958		)
Other income (expenses), net	(13,405		)	(4,791		)
Pre-tax loss	$	(22,433	)	$	(17,749	)
	June 30, 2019			December 31, 2018
Reconciliation of Total Assets As Reported:
Total reportable segments	$	228,928		$	243,199
Parent	7,191			13,186
Total assets	$	236,119		$	256,385

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Revenue (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables show revenue disaggregated by primary geographical markets and major service lines (in thousands):

	Three months ended June 30, 2019
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	18,292	$	4,300	$	6,035	$	28,627
East Texas (1)	1,897		—		811		2,708
Central Texas	—		—		2,976		2,976
West Texas	5,573		8,992		2,189		16,754
Total	$	25,762	$	13,292	$	12,011	$	51,065
	Three months ended June 30, 2018
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	11,081	$	3,799	$	6,669	$	21,549
East Texas (1)	1,097		—		577		1,674
Central Texas	—		—		3,461		3,461
West Texas	8,237		3,161		3,159		14,557
Total	$	20,415	$	6,960	$	13,866	$	41,241
(1) Includes revenues from the Company's operations in Pennsylvania.

	Six months ended June 30, 2019
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	36,469	$	9,001	$	12,207	$	57,677
East Texas (1)	2,751		—		1,646		4,397
Central Texas	—		—		6,072		6,072
West Texas	11,292		24,301		5,714		41,307
Total	$	50,512	$	33,302	$	25,639	$	109,453
	Six months ended June 30, 2018
	Well Servicing		Coiled Tubing		Fluid Logistics		Total
Primary Geographical Markets
South Texas	$	23,893	$	7,642	$	13,297	$	44,832
East Texas (1)	1,749		—		1,155		2,904
Central Texas	—		—		6,465		6,465
West Texas	12,427		4,520		5,684		22,631
Total	$	38,069	$	12,162	$	26,601	$	76,832
(1) Includes revenues from the Company's operations in Pennsylvania.

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2019

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

	Six Months Ended June 30,
	2019		2018
Cash paid for
Interest	$	2,197	$	136
Income tax	$	—	$	—
Supplemental schedule of non-cash investing and financing activities
Change in accounts payable related to capital expenditures	$	—	$	2,201
Exchange of Bridge Loan for PIK Notes	$	47,346	$	—
Finance leases on equipment	$	2,326	$	1,712

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Basis of Presentation - Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
New First Lien Term Loan Facility (Exit Facility) | Term Loan Agreement | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt agreements	$ 60,850	$ 62,335
New First Lien Term Loan Facility (Exit Facility) | Term Loan Agreement | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt agreements	64,198	65,794
Bridge Loan | 9% Senior Notes | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt agreements	0	49,568
Bridge Loan | 9% Senior Notes | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt agreements	0	50,000
PIK Notes | Subordinated Convertible PIK Notes | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt agreements	54,131	0
PIK Notes | Subordinated Convertible PIK Notes | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt agreements	$ 61,919	$ 0

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Basis of Presentation - Cash, Cash Equivalents and Cash - Restricted (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 1,030	$ 8,083	$ 5,383
Cash - restricted	73	73	19,701
Cash and cash equivalents and cash - restricted as shown in the consolidated statement of cash flows	$ 1,103	$ 8,156	25,084	$ 35,480
Line of Credit | New First Lien Term Loan Facility (Exit Facility)
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash			11,000
Letter of Credit | New Regions Letter of Credit Facility
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash			$ 8,700

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Basis of Presentation - Narrative (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) segment	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Billing period for service invoices	30 days
Number of reportable segments | segment	3
Duration of customer contract, maximum	1 year
Operating lease right-of-use assets	$ 5,785		$ 0
Operating lease liabilities	$ 5,690
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets		$ 6,200
Operating lease liabilities		$ 6,200

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Acquisition of Cretic Energy Services, LLC (Details) - Cretic Energy Services, LLC $ in Millions	Nov. 16, 2018 USD ($)
Business Acquisition [Line Items]
Outstanding units of Cretic acquired (percent)	100.00%
Acquisition purchase price	$ 69.4
Cash acquired from acquisition	$ 2.2

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Acquisition of Cretic Energy Services, LLC - Pro Forma Information (Details) - Cretic Energy Services, LLC - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018
Business Acquisition [Line Items]
Revenue	$ 57,611	$ 107,067
Net loss	$ (8,926)	$ (19,498)

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Property and Equipment (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Summary of Property and equipment
Property and equipment, gross	$ 194,891	$ 194,542
Accumulated depreciation (1)	(56,111)	(45,934)
Property and equipment, net	138,780	148,608
Well servicing equipment
Summary of Property and equipment
Property and equipment, gross	$ 132,358	128,647
Well servicing equipment | Maximum
Summary of Property and equipment
Property and equipment, estimated life	15 years
Well servicing equipment | Minimum
Summary of Property and equipment
Property and equipment, estimated life	9 years
Well servicing equipment - finance lease | Maximum
Summary of Property and equipment
Property and equipment, estimated life	15 years
Well servicing equipment - finance lease | Minimum
Summary of Property and equipment
Property and equipment, estimated life	9 years
Autos and trucks
Summary of Property and equipment
Property and equipment, gross	$ 25,375	32,132
Autos and trucks | Maximum
Summary of Property and equipment
Property and equipment, estimated life	10 years
Autos and trucks | Minimum
Summary of Property and equipment
Property and equipment, estimated life	5 years
Autos and trucks - finance lease
Summary of Property and equipment
Property and equipment, gross	$ 23,198	20,416
Autos and trucks - finance lease | Maximum
Summary of Property and equipment
Property and equipment, estimated life	10 years
Autos and trucks - finance lease | Minimum
Summary of Property and equipment
Property and equipment, estimated life	5 years
Disposal wells
Summary of Property and equipment
Property and equipment, gross	$ 4,159	3,977
Disposal wells | Maximum
Summary of Property and equipment
Property and equipment, estimated life	15 years
Disposal wells | Minimum
Summary of Property and equipment
Property and equipment, estimated life	5 years
Building and improvements
Summary of Property and equipment
Property and equipment, gross	$ 5,901	5,705
Building and improvements | Maximum
Summary of Property and equipment
Property and equipment, estimated life	30 years
Building and improvements | Minimum
Summary of Property and equipment
Property and equipment, estimated life	5 years
Furniture and fixtures
Summary of Property and equipment
Property and equipment, gross	$ 3,032	2,797
Furniture and fixtures | Maximum
Summary of Property and equipment
Property and equipment, estimated life	15 years
Furniture and fixtures | Minimum
Summary of Property and equipment
Property and equipment, estimated life	3 years
Land
Summary of Property and equipment
Property and equipment, gross	$ 868	$ 868

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Property and Equipment - Depreciation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Accumulated depreciation	$ 56,111		$ 56,111		$ 45,934
Depreciation expense	6,700	$ 7,400	15,700	$ 14,200
Finance leased assets
Property, Plant and Equipment [Line Items]
Accumulated depreciation	6,100		6,100		$ 4,500
Depreciation expense	$ 1,100	$ 700	$ 2,300	$ 1,400

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Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 19,700		$ 19,700		$ 19,700
Amortization expenses	$ 300	$ 300	$ 800	$ 600

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Goodwill and Other Intangible Assets - Major Asset Class (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Intangible Assets
Gross Carrying Value	$ 15,955	$ 15,955
Accumulated Amortization	(2,760)	(1,975)
Net Book Value	13,195	13,980
Customer relationships
Intangible Assets
Gross Carrying Value	11,378	11,378
Accumulated Amortization	(1,318)	(832)
Net Book Value	10,060	10,546
Trade names
Intangible Assets
Gross Carrying Value	3,072	3,072
Accumulated Amortization	(608)	(496)
Net Book Value	$ 2,464	$ 2,576
Covenants not to compete
Intangible Assets
Useful Life (years)	4 years	4 years
Gross Carrying Value	$ 1,505	$ 1,505
Accumulated Amortization	(834)	(647)
Net Book Value	$ 671	$ 858
Minimum | Customer relationships
Intangible Assets
Useful Life (years)	6 years	6 years
Minimum | Trade names
Intangible Assets
Useful Life (years)	10 years	10 years
Maximum | Customer relationships
Intangible Assets
Useful Life (years)	15 years	15 years
Maximum | Trade names
Intangible Assets
Useful Life (years)	15 years	15 years

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Goodwill and Other Intangible Assets - Finite-lived Intangible Assets, Future Amortization (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
2019	$ 819
2020	1,637
2021	1,367
2022	1,261
2023	1,261
Thereafter	6,850
Net Book Value	$ 13,195	$ 13,980

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Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Total debt	$ 135,201	$ 130,416
Less: Current portion	(60,273)	(59,321)
Total long-term debt	74,928	71,095
Finance leases
Debt Instrument [Line Items]
Total debt	13,258	13,319
Finance leases | Term Loan Agreement of $55.0 million and $60.0 million, plus $8.9 million and $6.0 million of accrued interest paid in kind and net of debt discount of $3.0 million and $3.6 million as of June 30, 2019 and December 31, 2018, respectively
Debt Instrument [Line Items]
Total debt	60,850	62,335
Accrued interest paid in kind	8,900	6,000
Deferred financing costs	3,000	3,600
PIK Notes | Subordinated Convertible PIK Notes
Debt Instrument [Line Items]
Total debt	54,131	0
Accretion of premium	2,400
Bridge Loan | 9% Senior Notes
Debt Instrument [Line Items]
Total debt	0	49,568
Unamortized discount		400
Term Loan Agreement of $55.0 million and $60.0 million, plus $8.9 million and $6.0 million of accrued interest paid in kind and net of debt discount of $3.0 million and $3.6 million as of June 30, 2019 and December 31, 2018, respectively | Revolving Loan Agreement
Debt Instrument [Line Items]
Total debt	6,000	0
Insurance notes
Debt Instrument [Line Items]
Total debt	$ 962	$ 5,194

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Long-Term Debt - Narrative (Details) - USD ($)			3 Months Ended	6 Months Ended
	Mar. 04, 2019	Nov. 16, 2018	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Mar. 03, 2019	Dec. 31, 2018	Apr. 13, 2018	Dec. 31, 2017	Apr. 13, 2017
Debt Instrument [Line Items]
Debt instrument, PIK interest rate (percent)			11.00%	11.00%
Interest paid in kind				$ 4,699,000	$ 1,845,000
Debt and capital lease obligations			$ 135,201,000	135,201,000			$ 130,416,000
New First Lien Term Loan Facility (Exit Facility)
Debt Instrument [Line Items]
Debt and capital lease obligations			13,258,000	13,258,000			13,319,000
Senior notes | 9% Senior Notes
Debt Instrument [Line Items]
Debt and capital lease obligations			0	$ 0			49,568,000
PIK Notes | Subordinated Convertible PIK Notes
Debt Instrument [Line Items]
Debt instrument, face amount	$ 51,800,000.0
Debt instrument, stated interest rate	5.00%
Debt Instrument, Uncured Payment Default Amount to Trigger Acceleration of Debt Due Date	$ 5,000,000.0
Debt Instrument, Period to Waive or Cure Debt Default				30 days
Debt Holders Who Must Approve Waiver or Cure Debt Default, Percent				25.00%
Debt Instrument, Redemption Price, Percentage				100.00%
PIK Convertible Note, Conversion Rate, Discount Per Share	15.00%
Accretion recorded as interest expense			1,800,000	$ 2,400,000
Proceeds from Issuance of Debt	$ 51,800,000
Debt issuance costs recognized in interest expense	$ 1,600,000
Debt and capital lease obligations			54,131,000	54,131,000			0
Insurance notes
Debt Instrument [Line Items]
Debt and capital lease obligations			962,000	962,000			$ 5,194,000
Insurance notes | Insurance Notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate							3.27%		4.99%
Line of Credit | New First Lien Term Loan Facility (Exit Facility)
Debt Instrument [Line Items]
Maximum borrowing capacity										$ 60,000,000.0
Debt instrument, cash interest rate (percent)										5.00%
Debt instrument, PIK interest rate (percent)								2.00%		7.00%
Interest paid in kind				2,900,000
Debt and capital lease obligations			60,850,000	60,850,000			$ 62,335,000
Cretic Energy Services, LLC | Senior notes | 9% Senior Notes
Debt Instrument [Line Items]
Debt instrument, cash interest rate (percent)						5.00%
Debt instrument, PIK interest rate (percent)						9.00%
Debt Instrument, Term		1 year
Debt instrument, face amount		$ 50,000,000.0
Debt instrument, stated interest rate						14.00%
Cretic Energy Services, LLC | Line of Credit | Amendment to New First Lien Term Loan Facility (Exit Facility)
Debt Instrument [Line Items]
Maximum borrowing capacity		10,000,000.0
Cretic Energy Services, LLC | Revolving Credit Facility | Revolving Loan Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 35,000,000
Borrowing Base Rate Percentage Of Eligible Accounts		85.00%
Borrowing Base Rate Percentage of Eligible Investment Grade Accounts Receivable		90.00%
Borrowing Base Rate Percentage of Eligible Cash. Less Reserves		100.00%
Letters of Credit Outstanding, Amount			6,100,000	6,100,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 9,900,000	$ 9,900,000
London Interbank Offered Rate (LIBOR) | Cretic Energy Services, LLC | Revolving Credit Facility | Minimum | Revolving Loan Agreement
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		2.50%
London Interbank Offered Rate (LIBOR) | Cretic Energy Services, LLC | Revolving Credit Facility | Maximum | Revolving Loan Agreement
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		3.25%
Base Rate | Cretic Energy Services, LLC | Revolving Credit Facility | Minimum | Revolving Loan Agreement
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.50%
Base Rate | Cretic Energy Services, LLC | Revolving Credit Facility | Maximum | Revolving Loan Agreement
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		2.25%

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Commitments and Contingencies (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Gain Contingencies [Line Items]
Limit excess policy	$ 10,000,000
Threshold amount for additional premium payable percentage	1,000,000
Auto Liability and General Liability Insurances
Gain Contingencies [Line Items]
Self insurance basic coverage	250,000
Employee Group Medical Plan
Gain Contingencies [Line Items]
Self insurance basic coverage	150,000
Self insurance reserve	$ 5,900,000	$ 5,200,000
Minimum
Gain Contingencies [Line Items]
Percentage of claims paid over threshold	15.00%
Maximum
Gain Contingencies [Line Items]
Percentage of claims paid over threshold	17.00%
Customer concentration risk | Consolidated revenues | Largest customer
Concentration Risk [Line Items]
Concentration risk, percentage	10.00%
Customer concentration risk | Consolidated revenues | Five largest customers
Concentration Risk [Line Items]
Concentration risk, percentage	33.80%
Customer concentration risk | Consolidated revenues | Ten largest customers
Concentration Risk [Line Items]
Concentration risk, percentage	46.50%
Customer concentration risk | Accounts receivable | Largest customer
Concentration Risk [Line Items]
Concentration risk, percentage	4.80%
Customer concentration risk | Accounts receivable | Five largest customers
Concentration Risk [Line Items]
Concentration risk, percentage	27.00%
Customer concentration risk | Accounts receivable | Ten largest customers
Concentration Risk [Line Items]
Concentration risk, percentage	44.20%

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Leases (Details)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Remaining term of operating lease	10 years
Remaining term of finance lease	3 years
Finance lease, period before option to terminate	1 year

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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$ 1,110	$ 2,324
Interest on lease liabilities	154	293
Operating lease cost	367	733
Short-term lease cost	647	1,306
Total lease cost	2,278	4,656
Variable lease cost	$ 75	$ 150

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Leases - Components of Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Operating leases:
Operating lease right-of-use assets (non-current)	$ 5,785	$ 0
Current portion of operating lease liabilities	756	0
Long-term operating lease liabilities, net of current portion	5,029	$ 0
Finance leases:
Property and equipment, net	17,068
Current portion of long-term debt	5,180
Long-term debt, net of current portion and debt discount	$ 8,078

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Leases - Other Supplemental Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$ 1,014	$ 2,039
Operating cash flows for finance leases - interest	154	293
Financing cash flows for finance leases	1,219	2,387	$ 987
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases	0	6,150
Finance leases	$ 890	$ 2,326
Weighted-average remaining lease term:
Operating leases	8 years 6 months	8 years 6 months
Finance leases	2 years 7 months	2 years 7 months
Weighted-average discount rate for operating leases (percent)	7.50%	7.50%
Weighted-average discount rate for finance leases (percent)	4.19%	4.19%

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Leases - Lease Maturities (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2019	$ 1,235
2020	1,060
2021	1,035
2022	872
2023	747
Thereafter	3,608
Total minimum lease payments	8,557
Less imputed interest	(2,166)
Less short-term leases excluded from the balance sheet	(701)
Total lease liabilities per balance sheet	5,690
Finance Lease, Liability, Payment, Due [Abstract]
2019	3,248
2020	5,474
2021	3,974
2022	1,266
2023	96
Thereafter	0
Total minimum lease payments	14,058
Less imputed interest	(800)
Total lease liabilities per balance sheet	13,258
Related Party [Member]
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2019	39
2020	58
2021	8
2022	0
2023	0
Thereafter	0
Total minimum lease payments	105
Less imputed interest	(10)
Total lease liabilities per balance sheet	$ 95

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Leases - Maturity of Leases under ASC 840 (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Capital Leases
2019	$ 4,559
2020	4,334
2021	3,375
2022	1,051
2023	0
Thereafter	0
Total	13,319
Related Party [Member]
Operating Leased Assets [Line Items]
2019	30
2020	30
2021	8
2022	0
2023	0
Thereafter	0
Total	68
Other Party [Member]
Operating Leased Assets [Line Items]
2019	2,027
2020	986
2021	946
2022	781
2023	386
Thereafter	1,350
Total	$ 6,476

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Share-Based Compensation - Schedule of Compensation Cost for Share-based Payment Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement [Abstract]
Share based compensation expense recognized	$ 256	$ 509	$ 498
Unrecognized compensation cost	$ 2,459	$ 2,459
Remaining weighted-average service period (years)		3 years

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Share-Based Compensation - Schedule of Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - $ / shares	6 Months Ended	9 Months Ended
	Jun. 30, 2019	Dec. 31, 2017
Number of Shares
Unvested beginning balance (in shares)	329,240
Granted (in shares)	0	0
Vested (in shares)	(7,200)
Forfeited (in shares)	0
Unvested ending balance (in shares)	322,040
Weighted Average Fair Value
Unvested beginning balance (in dollars per share)	$ 9.68
Granted (in dollars per share)	0.00
Vested (in dollars per share)	11.00
Forfeited (in dollars per share)	0.00
Unvested ending balance (in dollars per share)	$ 9.99

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Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Related party expenses, primarily related to leases and rents	$ 200,000	$ 300,000	$ 500,000	$ 600,000
Related party revenue			0	$ 0
Related party payables	0		0		$ 0
Related party accounts receivable	$ 0		$ 0		$ 0
Ascribe
Related Party Transaction [Line Items]
Percent of common stock outstanding	23.60%		23.60%
Ascribe | Line of Credit | New First Lien Term Loan Facility (Exit Facility)
Related Party Transaction [Line Items]
Debt due to related party	$ 16,500,000		$ 16,500,000
Solace
Related Party Transaction [Line Items]
Percent of common stock outstanding	17.40%		17.40%
Solace | Line of Credit | New First Lien Term Loan Facility (Exit Facility)
Related Party Transaction [Line Items]
Debt due to related party	$ 15,100,000		$ 15,100,000
Medium-term Notes | Ascribe | Rights Offering Notes
Related Party Transaction [Line Items]
Debt due to related party	27,500,000		27,500,000
Medium-term Notes | Solace | Rights Offering Notes
Related Party Transaction [Line Items]
Debt due to related party	$ 20,300,000		$ 20,300,000

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Earnings per Share - Computation of Basic and Diluted Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Basic and diluted:
Net income (loss)	$ (10,749)	$ (11,634)	$ (8,766)	$ (8,529)	$ (22,383)	$ (17,295)
Weighted-average common shares (in shares)	5,446		5,336		5,444	5,336
Basic and diluted net loss per share (in USD per share)	$ (1.97)		$ (1.64)		$ (4.11)	$ (3.24)
Retained Earnings [Member]
Basic and diluted:
Net income (loss)	$ (10,749)	$ (11,634)	$ (8,766)	$ (8,529)

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Earnings per Share - Narrative (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Restricted Stock
Class of Stock [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	322,040	322,040	363,300	363,300
Conversion of PIK Notes
Class of Stock [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)			28,300,000

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Business Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) segment	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			3
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	$ 51,065	$ 41,241	$ 109,453	$ 76,832
Operating loss	(5,013)	(6,794)	(9,028)	(12,958)
Depreciation and amortization	7,013	7,652	16,452	14,815
Total assets	236,119		236,119		$ 256,385
Reconciliation of the Company's Operating Loss As Reported:
Operating loss	(5,013)	(6,794)	(9,028)	(12,958)
General and administrative expense	5,417	5,908	12,242	10,796
Depreciation and amortization	7,013	7,652	16,452	14,815
Other expense, net	(5,722)	(2,426)	(13,405)	(4,791)
Pre-tax loss	(10,735)	(9,220)	(22,433)	(17,749)
Reconciliation of the Company's Assets As Reported:
Assets	236,119		236,119		256,385
Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	51,065	41,241	109,453	76,832
Direct operating costs	43,648	34,475	89,787	64,179
Operating loss	7,417	6,766	19,666	12,653
Total assets	228,928	187,729	228,928	187,729	243,199
Long-lived assets	176,690	124,766	176,690	124,766
Reconciliation of the Company's Operating Loss As Reported:
Operating loss	7,417	6,766	19,666	12,653
Reconciliation of the Company's Assets As Reported:
Assets	228,928	187,729	228,928	187,729	243,199
Elimination of internal transactions
Segment Reporting Information, Operating Income (Loss) [Abstract]
Capital expenditures	6,945	5,820	12,026	10,957
Parent
Segment Reporting Information, Operating Income (Loss) [Abstract]
Total assets	7,191		7,191		13,186
Reconciliation of the Company's Assets As Reported:
Assets	7,191		7,191		$ 13,186
Well Servicing
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	25,762	20,415	50,512	38,069
Depreciation and amortization	2,783	2,688	4,959	5,124
Reconciliation of the Company's Operating Loss As Reported:
Depreciation and amortization	2,783	2,688	4,959	5,124
Well Servicing | Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	25,762	20,415	50,512	38,069
Direct operating costs	20,971	17,116	38,520	31,968
Operating loss	4,791	3,299	11,992	6,101
Total assets	75,829	134,527	75,829	134,527
Long-lived assets	57,078	65,920	57,078	65,920
Reconciliation of the Company's Operating Loss As Reported:
Operating loss	4,791	3,299	11,992	6,101
Reconciliation of the Company's Assets As Reported:
Assets	75,829	134,527	75,829	134,527
Well Servicing | Elimination of internal transactions
Segment Reporting Information, Operating Income (Loss) [Abstract]
Capital expenditures	2,724	2,016	5,167	2,945
Coiled Tubing
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	13,292	6,960	33,302	12,162
Depreciation and amortization	2,531	1,498	6,069	2,794
Reconciliation of the Company's Operating Loss As Reported:
Depreciation and amortization	2,531	1,498	6,069	2,794
Coiled Tubing | Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	13,292	6,960	33,302	12,162
Direct operating costs	13,854	6,208	31,792	10,371
Operating loss	(562)	752	1,510	1,791
Total assets	102,190	22,848	102,190	22,848
Long-lived assets	80,320	17,228	80,320	17,228
Reconciliation of the Company's Operating Loss As Reported:
Operating loss	(562)	752	1,510	1,791
Reconciliation of the Company's Assets As Reported:
Assets	102,190	22,848	102,190	22,848
Coiled Tubing | Elimination of internal transactions
Segment Reporting Information, Operating Income (Loss) [Abstract]
Capital expenditures	2,851	2,304	5,149	5,518
Fluid Logistics
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	12,011	13,866	25,639	26,601
Depreciation and amortization	1,699	3,466	5,424	6,897
Reconciliation of the Company's Operating Loss As Reported:
Depreciation and amortization	1,699	3,466	5,424	6,897
Fluid Logistics | Operating Segments
Segment Reporting Information, Operating Income (Loss) [Abstract]
Operating revenues	12,011	13,866	25,639	26,601
Direct operating costs	8,823	11,151	19,475	21,840
Operating loss	3,188	2,715	6,164	4,761
Total assets	50,909	30,354	50,909	30,354
Long-lived assets	39,292	41,618	39,292	41,618
Reconciliation of the Company's Operating Loss As Reported:
Operating loss	3,188	2,715	6,164	4,761
Reconciliation of the Company's Assets As Reported:
Assets	50,909	30,354	50,909	30,354
Fluid Logistics | Elimination of internal transactions
Segment Reporting Information, Operating Income (Loss) [Abstract]
Capital expenditures	$ 1,370	$ 1,500	$ 1,710	$ 2,494

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 51,065	$ 41,241	$ 109,453	$ 76,832
South Texas
Disaggregation of Revenue [Line Items]
Revenue	28,627	21,549	57,677	44,832
East Texas
Disaggregation of Revenue [Line Items]
Revenue	2,708	1,674	4,397	2,904
Central Texas
Disaggregation of Revenue [Line Items]
Revenue	2,976	3,461	6,072	6,465
West Texas
Disaggregation of Revenue [Line Items]
Revenue	16,754	14,557	41,307	22,631
Well Servicing
Disaggregation of Revenue [Line Items]
Revenue	25,762	20,415	50,512	38,069
Well Servicing | South Texas
Disaggregation of Revenue [Line Items]
Revenue	18,292	11,081	36,469	23,893
Well Servicing | East Texas
Disaggregation of Revenue [Line Items]
Revenue	1,897	1,097	2,751	1,749
Well Servicing | Central Texas
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Well Servicing | West Texas
Disaggregation of Revenue [Line Items]
Revenue	5,573	8,237	11,292	12,427
Coiled Tubing
Disaggregation of Revenue [Line Items]
Revenue	13,292	6,960	33,302	12,162
Coiled Tubing | South Texas
Disaggregation of Revenue [Line Items]
Revenue	4,300	3,799	9,001	7,642
Coiled Tubing | East Texas
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Coiled Tubing | Central Texas
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Coiled Tubing | West Texas
Disaggregation of Revenue [Line Items]
Revenue	8,992	3,161	24,301	4,520
Fluid Logistics
Disaggregation of Revenue [Line Items]
Revenue	12,011	13,866	25,639	26,601
Fluid Logistics | South Texas
Disaggregation of Revenue [Line Items]
Revenue	6,035	6,669	12,207	13,297
Fluid Logistics | East Texas
Disaggregation of Revenue [Line Items]
Revenue	811	577	1,646	1,155
Fluid Logistics | Central Texas
Disaggregation of Revenue [Line Items]
Revenue	2,976	3,461	6,072	6,465
Fluid Logistics | West Texas
Disaggregation of Revenue [Line Items]
Revenue	$ 2,189	$ 3,159	$ 5,714	$ 5,684

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash paid for
Interest	$ 2,197	$ 136
Income tax	0	0
Supplemental schedule of non-cash investing and financing activities
Change in accounts payable related to capital expenditures	0	2,201
Exchange of Bridge Loan for PIK Notes	47,346	0
Change in accounts payable related to capital expenditures	$ 2,326	$ 1,712