Form 10-Q |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Independence Contract Drilling, Inc. |
(Exact name of registrant as specified in its charter) |
Delaware | 37-1653648 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
20475 State Highway 249, Suite 300 Houston, Texas | 77070 |
(Address of principal executive offices) | (Zip code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of each class | Trading symbol(s) | Name of each exchange where registered | ||
Common Stock, $0.01 par value per share | ICD | New York Stock Exchange |
Large accelerated filer | ¨ | Accelerated filer | x |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | x |
Emerging growth company | x | ||
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. x |
Part I. FINANCIAL INFORMATION | ||
Part II. OTHER INFORMATION | ||
• | a decline in or substantial volatility of crude oil and natural gas commodity prices; |
• | a sustained decrease in domestic spending by the oil and natural gas exploration and production industry; |
• | our inability to implement our business and growth strategy, including plans to upgrade and convert SCR rigs acquired in the Sidewinder Drilling LLC combination; |
• | fluctuation of our operating results and volatility of our industry; |
• | inability to maintain or increase pricing of our contract drilling services, or early termination of any term contract for which early termination compensation is not paid; |
• | our backlog of term contracts declining rapidly; |
• | the loss of any of our customers, financial distress or management changes of potential customers or failure to obtain contract renewals and additional customer contracts for our drilling services; |
• | overcapacity and competition in our industry; |
• | an increase in interest rates and deterioration in the credit markets; |
• | our inability to comply with the financial and other covenants in debt agreements that we may enter into as a result of reduced revenues and financial performance; |
• | unanticipated costs, delays and other difficulties in executing our long-term growth strategy; |
• | the loss of key management personnel; |
• | new technology that may cause our drilling methods or equipment to become less competitive; |
• | labor costs or shortages of skilled workers; |
• | the loss of or interruption in operations of one or more key vendors; |
• | the effect of operating hazards and severe weather on our rigs, facilities, business, operations and financial results, and limitations on our insurance coverage; |
• | increased regulation of drilling in unconventional formations; |
• | the incurrence of significant costs and liabilities in the future resulting from our failure to comply with new or existing environmental regulations or an accidental release of hazardous substances into the environment; and |
• | the potential failure by us to establish and maintain effective internal control over financial reporting. |
June 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 10,278 | $ | 12,247 | |||
Accounts receivable, net | 35,862 | 41,987 | |||||
Inventories | 2,443 | 2,693 | |||||
Assets held for sale | 13,796 | 19,711 | |||||
Prepaid expenses and other current assets | 3,321 | 8,930 | |||||
Total current assets | 65,700 | 85,568 | |||||
Property, plant and equipment, net | 489,074 | 496,197 | |||||
Goodwill | 1,627 | 1,627 | |||||
Other long-term assets, net | 2,212 | 1,470 | |||||
Total assets | $ | 558,613 | $ | 584,862 | |||
Liabilities and Stockholders’ Equity | |||||||
Liabilities | |||||||
Current portion of long-term debt | $ | 1,161 | $ | 587 | |||
Accounts payable | 19,606 | 16,312 | |||||
Accrued liabilities | 16,057 | 29,219 | |||||
Current portion of contingent consideration | 13,950 | — | |||||
Total current liabilities | 50,774 | 46,118 | |||||
Long-term debt | 128,654 | 130,012 | |||||
Contingent consideration | — | 15,748 | |||||
Deferred income taxes, net | 1,132 | 774 | |||||
Other long-term liabilities | 1,125 | 677 | |||||
Total liabilities | 181,685 | 193,329 | |||||
Commitments and contingencies (Note 13) | |||||||
Stockholders’ equity | |||||||
Common stock, $0.01 par value, 200,000,000 shares authorized; 77,469,233 and 77,598,806 shares issued, respectively, and 76,948,679 and 77,078,252 shares outstanding, respectively | 769 | 771 | |||||
Additional paid-in capital | 504,074 | 503,446 | |||||
Accumulated deficit | (124,869 | ) | (109,638 | ) | |||
Treasury stock, at cost, 520,554 shares | (3,046 | ) | (3,046 | ) | |||
Total stockholders’ equity | 376,928 | 391,533 | |||||
Total liabilities and stockholders’ equity | $ | 558,613 | $ | 584,862 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | $ | 52,879 | $ | 25,754 | $ | 113,237 | $ | 51,381 | |||||||
Costs and expenses | |||||||||||||||
Operating costs | 37,453 | 17,966 | 76,786 | 36,892 | |||||||||||
Selling, general and administrative | 3,008 | 3,495 | 7,553 | 6,974 | |||||||||||
Merger-related expenses | 1,287 | 443 | 2,368 | 443 | |||||||||||
Depreciation and amortization | 11,371 | 6,579 | 22,684 | 13,170 | |||||||||||
Asset impairment (insurance recoveries), net | 5,855 | — | 7,873 | (35 | ) | ||||||||||
Loss (gain) on disposition of assets, net | 18 | (333 | ) | 3,238 | (415 | ) | |||||||||
Total costs and expenses | 58,992 | 28,150 | 120,502 | 57,029 | |||||||||||
Operating loss | (6,113 | ) | (2,396 | ) | (7,265 | ) | (5,648 | ) | |||||||
Interest expense | (3,592 | ) | (938 | ) | (7,353 | ) | (1,881 | ) | |||||||
Other expense | (255 | ) | — | (255 | ) | — | |||||||||
Loss before income taxes | (9,960 | ) | (3,334 | ) | (14,873 | ) | (7,529 | ) | |||||||
Income tax expense (benefit) | 2,898 | (21 | ) | 358 | (70 | ) | |||||||||
Net loss | $ | (12,858 | ) | $ | (3,313 | ) | $ | (15,231 | ) | $ | (7,459 | ) | |||
Loss per share: | |||||||||||||||
Basic and diluted | $ | (0.17 | ) | $ | (0.09 | ) | $ | (0.20 | ) | $ | (0.20 | ) | |||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic and diluted | 75,692 | 38,253 | 75,692 | 38,188 |
Common Stock | ||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||
Balances at December 31, 2018 | 77,078,252 | $ | 771 | $ | 503,446 | $ | (109,638 | ) | $ | (3,046 | ) | $ | 391,533 | |||||||||
Common stock issuance costs | — | — | (177 | ) | — | — | (177 | ) | ||||||||||||||
Stock-based compensation | — | — | 387 | — | — | 387 | ||||||||||||||||
Net loss | — | — | — | (2,373 | ) | — | (2,373 | ) | ||||||||||||||
Balances at March 31, 2019 | 77,078,252 | $ | 771 | $ | 503,656 | $ | (112,011 | ) | $ | (3,046 | ) | $ | 389,370 | |||||||||
Restricted stock forfeiture | (129,573 | ) | (2 | ) | 2 | — | — | — | ||||||||||||||
Stock-based compensation | — | — | 416 | — | — | 416 | ||||||||||||||||
Net loss | — | — | — | (12,858 | ) | — | (12,858 | ) | ||||||||||||||
Balances at June 30, 2019 | 76,948,679 | $ | 769 | $ | 504,074 | $ | (124,869 | ) | $ | (3,046 | ) | $ | 376,928 |
Common Stock | ||||||||||||||||||||||
Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||
Balances at December 31, 2017 | 37,985,225 | $ | 380 | $ | 326,616 | $ | (89,645 | ) | $ | (1,869 | ) | $ | 235,482 | |||||||||
RSUs vested, net of shares withheld for taxes | 350,528 | 3 | (98 | ) | — | — | (95 | ) | ||||||||||||||
Purchase of treasury stock | (82,988 | ) | — | — | — | (350 | ) | (350 | ) | |||||||||||||
Stock-based compensation | — | — | 644 | — | — | 644 | ||||||||||||||||
Net loss | — | — | — | (4,146 | ) | — | (4,146 | ) | ||||||||||||||
Balances at March 31, 2018 | 38,252,765 | 383 | 327,162 | (93,791 | ) | (2,219 | ) | 231,535 | ||||||||||||||
Stock-based compensation | — | — | 718 | — | — | 718 | ||||||||||||||||
Net loss | — | — | — | (3,313 | ) | — | (3,313 | ) | ||||||||||||||
Balances at June 30, 2018 | 38,252,765 | $ | 383 | $ | 327,880 | $ | (97,104 | ) | $ | (2,219 | ) | $ | 228,940 |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (15,231 | ) | $ | (7,459 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
Depreciation and amortization | 22,684 | 13,170 | |||||
Asset impairment (insurance recoveries), net | 7,873 | (35 | ) | ||||
Stock-based compensation | 803 | 1,362 | |||||
Loss (gain) on disposition of assets, net | 3,238 | (415 | ) | ||||
Deferred income taxes | 358 | (70 | ) | ||||
Amortization of deferred financing costs | 406 | 185 | |||||
Bad debt (recovery) expense | (42 | ) | 22 | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | 6,167 | (1,668 | ) | ||||
Inventories | (61 | ) | (136 | ) | |||
Prepaid expenses and other assets | 2,751 | (951 | ) | ||||
Accounts payable and accrued liabilities | (8,953 | ) | (539 | ) | |||
Net cash provided by operating activities | 19,993 | 3,466 | |||||
Cash flows from investing activities | |||||||
Purchases of property, plant and equipment | (23,344 | ) | (13,023 | ) | |||
Proceeds from insurance claims | 1,000 | — | |||||
Proceeds from the sale of assets | 3,912 | 327 | |||||
Net cash used in investing activities | (18,432 | ) | (12,696 | ) | |||
Cash flows from financing activities | |||||||
Borrowings under ABL Credit Facility | 2,511 | — | |||||
Repayments under ABL Credit Facility | (5,077 | ) | — | ||||
Borrowings under CIT Credit Facility | — | 27,441 | |||||
Repayments under CIT Credit Facility | — | (17,200 | ) | ||||
Common stock issuance costs | (177 | ) | — | ||||
Purchase of treasury stock | — | (350 | ) | ||||
RSUs withheld for taxes | — | (95 | ) | ||||
Financing costs paid under Term Loan Facility | (5 | ) | — | ||||
Financing costs paid under ABL Credit Facility | (12 | ) | — | ||||
Financing costs paid under CIT Credit Facility | — | (215 | ) | ||||
Payments for finance and capital lease obligations | (770 | ) | (330 | ) | |||
Net cash (used in) provided by financing activities | (3,530 | ) | 9,251 | ||||
Net (decrease) increase in cash and cash equivalents | (1,969 | ) | 21 | ||||
Cash and cash equivalents | |||||||
Beginning of period | 12,247 | 2,533 | |||||
End of period | $ | 10,278 | $ | 2,554 |
Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Supplemental disclosure of cash flow information | |||||||
Cash paid during the period for interest | $ | 7,047 | $ | 1,878 | |||
Supplemental disclosure of non-cash investing and financing activities | |||||||
Change in property, plant and equipment purchases in accounts payable | $ | 591 | $ | 3,621 | |||
Additions to property, plant and equipment through capital leases | $ | 2,223 | $ | 309 | |||
Transfer of assets from held and used to held for sale | $ | (4,028 | ) | $ | — | ||
Transfer from inventory to fixed assets | $ | (311 | ) | $ | — |
1. | Nature of Operations and Recent Events |
2. | Interim Financial Information |
3. | Leases |
1) | The timing and pattern of transfer of non-lease components and lease components are the same. |
2) | The lease component, if accounted for separately, would be classified as an operating lease. |
(in thousands) | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | |||||
Operating lease expense | $ | 124 | $ | 249 | |||
Short-term lease expense | 1,234 | 2,427 | |||||
Variable lease expense | 185 | 271 | |||||
Finance lease cost: | |||||||
Amortization of right-of-use assets | $ | 314 | $ | 579 | |||
Interest expense on lease liabilities | 47 | 79 | |||||
Total finance lease expense | 361 | 658 | |||||
Total lease expenses | $ | 1,904 | $ | 3,605 |
(in thousands) | Six Months Ended June 30, 2019 | |||
Cash paid for amounts included in measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | 216 | ||
Operating cash flows from finance leases | $ | 74 | ||
Financing cash flows from finance leases | $ | 770 | ||
Right-of-use assets obtained or recorded in exchange for lease obligations: | ||||
Operating leases | $ | 955 | ||
Finance leases | $ | 2,223 |
(in thousands) | June 30, 2019 | |||
Operating leases: | ||||
Operating lease right-of-use assets | $ | 772 | ||
Accrued liabilities | $ | 421 | ||
Other long-term liabilities | 1,126 | |||
Total operating lease liabilities | $ | 1,547 | ||
Finance leases: | ||||
Property and equipment | $ | 4,313 | ||
Accumulated depreciation | (1,347 | ) | ||
Property and equipment, net | $ | 2,966 | ||
Current portion of long-term debt | $ | 1,161 | ||
Long-term debt | 1,523 | |||
Total finance lease liabilities | $ | 2,684 | ||
Weighted-average remaining lease term | ||||
Operating leases | 4.2 years | |||
Finance leases | 2.2 years | |||
Weighted-average discount rate | ||||
Operating leases | 8.17 | % | ||
Finance leases | 7.06 | % |
(in thousands) | Operating Leases | Finance Leases | |||||
2019 | $ | 315 | $ | 601 | |||
2020 | 384 | 915 | |||||
2021 | 350 | 607 | |||||
2022 | 360 | 129 | |||||
2023 | 370 | — | |||||
Thereafter | 47 | — | |||||
Total cash lease payment | 1,826 | 2,252 | |||||
Add: expected residual value | — | 679 | |||||
Less: imputed interest | (279 | ) | (247 | ) | |||
Total lease liabilities | $ | 1,547 | $ | 2,684 |
4. | Sidewinder Merger |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Intangible liabilities | $ | 3,123 | $ | 3,123 | |||
Accumulated amortization | (3,123 | ) | (2,044 | ) | |||
Intangible liabilities, net | $ | — | $ | 1,079 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Dayrate drilling | $ | 48,133 | $ | 24,447 | $ | 104,584 | $ | 48,224 | |||||||
Mobilization | 1,177 | 271 | 2,437 | 730 | |||||||||||
Reimbursables | 2,950 | 1,002 | 4,554 | 2,233 | |||||||||||
Early termination | 501 | — | 501 | — | |||||||||||
Capital modification | 62 | 34 | 72 | 194 | |||||||||||
Intangible | 46 | — | 1,079 | — | |||||||||||
Other | 10 | — | 10 | — | |||||||||||
Total revenue | $ | 52,879 | $ | 25,754 | $ | 113,237 | $ | 51,381 |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Receivables, which are included in “Accounts receivable, net” | $ | 35,670 | $ | 41,987 | |||
Contract assets | $ | — | $ | — | |||
Contract liabilities | $ | (730 | ) | $ | (1,374 | ) |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||||||||||
(in thousands) | Contract Assets | Contract Liabilities | Contract Assets | Contract Liabilities | |||||||||||
Revenue recognized that was included in contract liabilities at beginning of period | $ | — | $ | 574 | $ | — | $ | 1,305 | |||||||
Increase in contract liabilities due to cash received, excluding amounts recognized as revenue | $ | — | $ | (500 | ) | $ | — | $ | (661 | ) | |||||
Transferred to receivables from contract assets at beginning of period | $ | — | $ | — | $ | — | $ | — |
Year Ending December 31, | |||||||||||||||
(in thousands) | 2019 | 2020 | 2021 | Total | |||||||||||
Revenue | $ | 730 | $ | — | $ | — | $ | 730 |
6. | Financial Instruments and Fair Value |
Level 1 | Unadjusted quoted market prices for identical assets or liabilities in an active market; |
Level 2 | Quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets or liabilities; and |
Level 3 | Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. |
Balances at June 30, 2019 | December 31, 2018 | ||||||||||||||
(in thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Term Loan Facility | $ | 130,000 | $ | 141,496 | $ | 130,000 | $ | 131,893 | |||||||
ABL Credit Facility | $ | — | $ | — | $ | 2,566 | $ | 2,258 |
7. | Inventories |
8. | Accrued Liabilities |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Accrued salaries and other compensation | $ | 3,157 | $ | 12,379 | |||
Insurance | 2,930 | 5,464 | |||||
Deferred revenues (contract liabilities) | 730 | 1,374 | |||||
Property and other taxes | 3,224 | 3,829 | |||||
Intangible liability | — | 1,079 | |||||
Interest | 3,370 | 3,318 | |||||
Operating lease liability - current | 421 | — | |||||
Other | 2,225 | 1,776 | |||||
$ | 16,057 | $ | 29,219 |
9. | Long-term Debt |
June 30, | December 31, | |||||||
(in thousands) | 2019 | 2018 | ||||||
Term Loan Facility due October 1, 2023 | $ | 130,000 | $ | 130,000 | ||||
ABL Credit Facility due October 1, 2023 | — | 2,566 | ||||||
Finance and capital lease obligations | 2,684 | 1,235 | ||||||
132,684 | 133,801 | |||||||
Less: current portion | (1,161 | ) | (587 | ) | ||||
Less: Term Loan Facility deferred financing costs | (2,869 | ) | (3,202 | ) | ||||
Long-term debt | $ | 128,654 | $ | 130,012 |
10. | Stock-Based Compensation |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Compensation cost recognized: | |||||||||||||||
Stock options | $ | — | $ | — | $ | — | $ | — | |||||||
Restricted stock and restricted stock units | 416 | 718 | 803 | 1,362 | |||||||||||
Total stock-based compensation | $ | 416 | $ | 718 | $ | 803 | $ | 1,362 |
Six Months Ended June 30, 2019 | ||||||
Options | Weighted Average Exercise Price | |||||
Outstanding at January 1, 2019 | 669,213 | $ | 12.74 | |||
Granted | — | — | ||||
Exercised | — | — | ||||
Forfeited/expired | — | — | ||||
Outstanding at June 30, 2019 | 669,213 | $ | 12.74 | |||
Exercisable at June 30, 2019 | 669,213 | $ | 12.74 |
Six Months Ended June 30, 2019 | ||||||
Shares | Weighted Average Grant-Date Fair Value Per Share | |||||
Outstanding at January 1, 2019 | 1,385,973 | $ | 3.22 | |||
Granted | — | — | ||||
Vested | — | — | ||||
Forfeited | (129,573 | ) | 3.22 | |||
Outstanding at June 30, 2019 | 1,256,400 | $ | 3.22 |
Six Months Ended June 30, 2019 | ||||||
RSUs | Weighted Average Grant-Date Fair Value Per Share | |||||
Outstanding at January 1, 2019 | 409,607 | $ | 4.79 | |||
Granted | 564,994 | 1.94 | ||||
Vested and converted | — | — | ||||
Forfeited | — | — | ||||
Outstanding at June 30, 2019 | 974,601 | $ | 3.14 |
Six Months Ended June 30, 2019 | ||||||
RSUs | Weighted Average Grant-Date Fair Value Per Share | |||||
Outstanding at January 1, 2019 | — | $ | — | |||
Granted | 469,759 | 1.69 | ||||
Vested and converted | — | — | ||||
Forfeited | — | — | ||||
Outstanding at June 30, 2019 | 469,759 | $ | 1.69 |
11. | Stockholders’ Equity and Earnings (Loss) per Share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net loss (numerator): | $ | (12,858 | ) | $ | (3,313 | ) | $ | (15,231 | ) | $ | (7,459 | ) | |||
Loss per share: | |||||||||||||||
Basic and diluted | $ | (0.17 | ) | $ | (0.09 | ) | $ | (0.20 | ) | $ | (0.20 | ) | |||
Shares (denominator): | |||||||||||||||
Weighted average common shares outstanding - basic | 75,692 | 38,253 | 75,692 | 38,188 | |||||||||||
Weighted average common shares outstanding - diluted | 75,692 | 38,253 | 75,692 | 38,188 |
12. | Income Taxes |
13. | Commitments and Contingencies |
14. | Related Parties |
• | not being required to comply with the auditor attestation requirements related to our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
• | reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
• | exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. |
• | Safety Performance. Maintaining a strong safety record is a critical component of our business strategy. We measure safety by tracking the total recordable incident rate for our operations. In addition, we closely monitor and measure compliance with our safety policies and procedures, including “near miss” reports and job safety analysis compliance. We believe our Risk-Based HSE management system provides the required control, yet needed flexibility, to conduct all activities safely, efficiently and appropriately. |
• | Utilization. Rig utilization measures the percentage of time that our rigs are earning revenue under a contract during a particular period. We measure utilization by dividing the total number of Operating Days (defined below) for a rig by the total number of days the rig is available for operation in the applicable calendar period. A rig is available for operation commencing on the earlier of the date it spuds its initial well following construction or when it has been completed and is actively marketed. “Operating Days” represent the total number of days a rig is earning revenue under a contract, beginning when the rig spuds its initial well under the contract and ending with the completion of the rig’s demobilization. |
• | Revenue Per Day. Revenue per day measures the amount of revenue that an operating rig earns on a daily basis during a particular period. We calculate revenue per day by dividing total contract drilling revenue earned during the applicable period by the number of Operating Days in the period. Revenues attributable to costs reimbursed by customers are excluded from this measure. |
• | Operating Cost Per Day. Operating cost per day measures the operating costs incurred on a daily basis during a particular period. We calculate operating cost per day by dividing total operating costs during the applicable period by the number of Operating Days in the period. Operating costs attributable to costs reimbursed by customers and rig construction costs are excluded from this measure. |
• | Operating Efficiency and Uptime. Maintaining our rigs’ operational efficiency is a critical component of our business strategy. We measure our operating efficiency by tracking each drilling rig’s unscheduled downtime on a daily, monthly, quarterly and annual basis. |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands, except per share data) | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||
Revenues | $ | 52,879 | $ | 25,754 | $ | 113,237 | $ | 51,381 | |||||||
Costs and expenses | |||||||||||||||
Operating costs | 37,453 | 17,966 | 76,786 | 36,892 | |||||||||||
Selling, general and administrative | 3,008 | 3,495 | 7,553 | 6,974 | |||||||||||
Merger-related expenses | 1,287 | 443 | 2,368 | 443 | |||||||||||
Depreciation and amortization | 11,371 | 6,579 | 22,684 | 13,170 | |||||||||||
Asset impairment, (insurance recoveries), net | 5,855 | — | 7,873 | (35 | ) | ||||||||||
Loss (gain) on disposition of assets, net | 18 | (333 | ) | 3,238 | (415 | ) | |||||||||
Total cost and expenses | 58,992 | 28,150 | 120,502 | 57,029 | |||||||||||
Operating loss | (6,113 | ) | (2,396 | ) | (7,265 | ) | (5,648 | ) | |||||||
Interest expense | (3,592 | ) | (938 | ) | (7,353 | ) | (1,881 | ) | |||||||
Other expense | (255 | ) | — | (255 | ) | — | |||||||||
Loss before income taxes | (9,960 | ) | (3,334 | ) | (14,873 | ) | (7,529 | ) | |||||||
Income tax expense (benefit) | 2,898 | (21 | ) | 358 | (70 | ) | |||||||||
Net loss | $ | (12,858 | ) | $ | (3,313 | ) | $ | (15,231 | ) | $ | (7,459 | ) | |||
Other financial and operating data | |||||||||||||||
Number of marketed rigs (end of period) (1) | 30 | 14 | 30 | 14 | |||||||||||
Rig operating days (2) | 2,330.2 | 1,264.7 | 5,058.3 | 2,524.1 | |||||||||||
Average number of operating rigs (3) | 25.6 | 13.9 | 27.9 | 13.9 | |||||||||||
Rig utilization (4) | 83.7 | % | 99.3 | % | 89.3 | % | 99.6 | % | |||||||
Average revenue per operating day (5) | $ | 20,868 | $ | 19,411 | $ | 20,807 | $ | 19,233 | |||||||
Average cost per operating day (6) | $ | 14,155 | $ | 13,034 | $ | 13,695 | $ | 13,223 | |||||||
Average rig margin per operating day | $ | 6,713 | $ | 6,377 | $ | 7,112 | $ | 6,010 |
(1) | Number of marketed rigs as of June 30, 2019 increased by 16 rigs as compared to the number of marketed rigs as of June 30, 2018 as a result of the Sidewinder Merger. Marketed rigs exclude idle rigs that will not be reactivated until upgrades or conversions are complete. |
(2) | Rig operating days represent the number of days our rigs are earning revenue under a contract during the period, including days that standby revenues are earned. |
(3) | Average number of operating rigs is calculated by dividing the total number of rig operating days in the period by the total number of calendar days in the period. |
(4) | Rig utilization is calculated as rig operating days divided by the total number of days our drilling rigs are available during the applicable period. |
(5) | Average revenue per operating day represents total contract drilling revenues earned during the period divided by rig operating days in the period. Excluded in calculating average revenue per operating day are revenues associated with the reimbursement of (i) out-of-pocket costs paid by customers of $3.7 million and $1.2 million during the three months ended June 30, 2019 and 2018, respectively, and $6.4 million and $2.8 million during the six months ended June 30, 2019 and 2018, respectively, (ii) revenues associated with the amortization of intangible revenue acquired in the Sidewinder Merger of $46 thousand and $1.1 million during the three and six months ended June 30, 2019, respectively, and (iii) early termination revenues of $0.5 million and $0.5 million during the three and six months ended June 30, 2019, respectively. The three and six months ended June 30, 2018 did not include any intangible or early termination revenues. |
(6) | Average cost per operating day represents operating costs incurred during the period divided by rig operating days in the period. The following costs are excluded in calculating average cost per operating day: (i) out-of-pocket costs reimbursed by customers of $3.7 million and $1.2 million during the three months ended June 30, 2019 and 2018, respectively, and $6.4 million and $2.8 million during the six months ended June 30, 2019 and 2018, respectively, (ii) new crew training costs of zero and $68 thousand during the three months ended June 30, 2019 and 2018, respectively and zero and $93 thousand during the six months ended June 30, 2019 and 2018, respectively, (iii) construction overhead costs expensed due to reduced rig construction activity of $0.7 million and $0.2 million during the three months ended June 30, 2019 and 2018, respectively, and $1.0 million and $0.6 million during the six months ended June 30, 2019 and 2018, respectively, and (iv) rig de-commissioning costs associated with stacking deactivated rigs of $0.1 million and $0.1 million during the three and six months ended June 30, 2019, respectively. The three and six months ended June 30, 2018 did not include any de-commissioning costs. |
Exhibit Number | Description | |
101.CAL* | XBRL Calculation Linkbase Document | |
101.DEF* | XBRL Definition Linkbase Document | |
101.INS* | XBRL Instance Document | |
101.LAB* | XBRL Labels Linkbase Document | |
101.PRE* | XBRL Presentation Linkbase Document | |
101.SCH* | XBRL Schema Document |
* | Filed with this report |
INDEPENDENCE CONTRACT DRILLING, INC. | |||
By: | /s/ J. Anthony Gallegos, Jr. | ||
Name: | J. Anthony Gallegos, Jr. | ||
Title: | President and Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Philip A. Choyce | ||
Name: | Philip A. Choyce | ||
Title: | Executive Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer) |
By: | /s/ Michael J. Harwell | ||
Name: | Michael J. Harwell | ||
Title: | Vice President - Finance and Chief Accounting Officer (Principal Accounting Officer) |
/s/ J. Anthony Gallegos, Jr. |
J. Anthony Gallegos, Jr. |
Chief Executive Officer |
/s/ Philip A. Choyce |
Philip A. Choyce |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ J. Anthony Gallegos, Jr. |
J. Anthony Gallegos, Jr. |
Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Philip A. Choyce |
Philip A. Choyce |
Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jul. 29, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Independence Contract Drilling, Inc. | |
Entity Central Index Key | 0001537028 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 76,948,679 | |
Entity Small Business | true | |
Entity Ex Transition Period | true | |
Entity Emerging Growth | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 200,000,000 | 200,000,000 |
Shares issued (in shares) | 77,469,233 | 77,598,806 |
Shares outstanding (in shares) | 76,948,679 | 77,078,252 |
Treasury stock (in shares) | 520,554 | 520,554 |
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 |
|
Income Statement [Abstract] | ||||
Revenues | $ 52,879 | $ 25,754 | $ 113,237 | $ 51,381 |
Costs and expenses | ||||
Operating costs | 37,453 | 17,966 | 76,786 | 36,892 |
Selling, general and administrative | 3,008 | 3,495 | 7,553 | 6,974 |
Merger-related expenses | 1,287 | 443 | 2,368 | 443 |
Depreciation and amortization | 11,371 | 6,579 | 22,684 | 13,170 |
Asset impairment (insurance recoveries), net | 5,855 | 0 | 7,873 | |
Asset impairment (insurance recoveries), net | (35) | |||
Loss (gain) on disposition of assets, net | (18) | 333 | (3,238) | 415 |
Total costs and expenses | 58,992 | 28,150 | 120,502 | 57,029 |
Operating loss | (6,113) | (2,396) | (7,265) | (5,648) |
Interest expense | (3,592) | (938) | (7,353) | (1,881) |
Other expense | (255) | 0 | (255) | 0 |
Loss before income taxes | (9,960) | (3,334) | (14,873) | (7,529) |
Income tax expense (benefit) | 2,898 | (21) | 358 | (70) |
Net loss | $ (12,858) | $ (3,313) | $ (15,231) | $ (7,459) |
Loss per share: | ||||
Basic and diluted (in dollars per share) | $ (0.17) | $ (0.09) | $ (0.20) | $ (0.20) |
Weighted average number of common shares outstanding: | ||||
Basic and diluted (in shares) | 75,692 | 38,253 | 75,692 | 38,188 |
Nature of Operations and Recent Events |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Recent Events | Nature of Operations and Recent Events Except as expressly stated or the context otherwise requires, the terms “we,” “us,” “our,” “ICD,” and the “Company” refer to Independence Contract Drilling, Inc. and its subsidiary. We provide land-based contract drilling services for oil and natural gas producers targeting unconventional resource plays in the United States. We own and operate a premium fleet comprised of modern, technologically advanced drilling rigs that are specifically engineered and designed to optimize the development of our customers’ most technically demanding oil and gas properties. Our rig fleet includes 29 AC powered (“AC”) rigs and three 1500-HP ultra-modern SCR rigs. During the second quarter of 2019, we elected to cease marketing these three SCR rigs in order to convert them to meet our AC pad-optimal specifications. These rigs will be removed from our marketed fleet until their conversions are complete. We ordered long lead-time items required to complete the conversions in the fourth quarter of 2018, and the first conversion is scheduled for completion during the third quarter of 2019. In addition, we own two idle rigs, including one non-walking 1500-HP AC rig and one 1500-HP SCR, which will not be marketed or reactivated until converted to AC pad-optimal status prior to entering our fleet. These two rigs will not be scheduled for conversion until market conditions improve. We currently focus our operations on unconventional resource plays located in geographic regions that we can efficiently support from our Houston, Texas and Midland, Texas facilities in order to maximize economies of scale. Currently, our rigs are operating in the Permian Basin, the Haynesville Shale and the Eagle Ford Shale; however, our rigs have previously operated in the Mid-Continent and Eaglebine regions as well. Our business depends on the level of exploration and production activity by oil and natural gas companies operating in the United States, and in particular, the regions where we actively market our contract drilling services. The oil and natural gas exploration and production industry is historically cyclical and characterized by significant changes in the levels of exploration and development activities. Oil and natural gas prices and market expectations of potential changes in those prices significantly affect the levels of those activities. Worldwide political, regulatory, economic, and military events, as well as natural disasters have contributed to oil and natural gas price volatility historically, and are likely to continue to do so in the future. Any prolonged reduction in the overall level of exploration and development activities in the United States and the regions where we market our contract drilling services, whether resulting from changes in oil and natural gas prices or otherwise, could materially and adversely affect our business. Oil and Natural Gas Prices and Drilling Activity Oil prices declined from a high of $107.95 per barrel in the second quarter of 2014, to a low of $26.19 per barrel in the first quarter of 2016 (West Texas Intermediate - Cushing, Oklahoma (“WTI”) spot price as reported by the United States Energy Information Administration (the “EIA”). Similarly, natural gas prices (as measured at Henry Hub) declined from an average of $4.37 per MMBtu in 2014 to $2.52 per MMBtu in 2016. As a result, our industry experienced an exceptional downturn, with the U.S. land rig count falling from a high of 1,930 rigs in 2014 to a low of 404 rigs in 2016. In addition to overall rig count decline, pricing for our contract drilling services also substantially declined during this period of time. Although crude oil prices experienced a mild recovery in 2017 and 2018, reaching a high of $77.41 per barrel in the second quarter of 2018, the U.S. land rig count never recovered to its 2014 highs, only reaching 1,083 rigs the week ended December 28, 2018. Similarly, although pricing for our drilling services improved during this period, pricing never reached the rates experienced in 2014. During the fourth quarter of 2018, oil prices began to decline, reaching a low of $44.48. Although oil prices have recently recovered to the $50.00 to $60.00 range as of the end of the second quarter 2019, most of our E&P customers have decreased planned capital expenditure budgets with the goal of operating within their cash flows. These changes have resulted in softening demand for contract drilling services. Although we believe market conditions for our services have stabilized, we believe this stabilization is predicated on oil prices remaining above a $50 per barrel or higher range. If oil prices were to fall below these levels for any sustainable period, demand and pricing for our contract drilling services could decline and have a material adverse affect on our operations and financial condition. Sidewinder Merger On July 18, 2018, ICD, Patriot Saratoga Merger Sub, LLC, a wholly owned subsidiary of ICD (“Merger Sub”), Sidewinder Drilling, LLC (“Sidewinder”) and MSD Credit Opportunity Master Fund, L.P., as Members’ Representative, entered into a definitive merger agreement (the “Merger Agreement”) pursuant to which Merger Sub merged with and into Sidewinder (the “Merger”), with Sidewinder surviving the Merger and becoming a wholly owned subsidiary of the ICD. The Merger transaction was completed on October 1, 2018. Pursuant to the terms of the Merger Agreement, Sidewinder Series A members received 36,752,657 shares of ICD common stock in exchange for 100% of the outstanding Series A Common Units of Sidewinder (the “Series A Common Units”). The Merger was accounted for using the acquisition method of accounting with ICD identified as the accounting acquirer. |
Interim Financial Information |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Interim Financial Information | Interim Financial Information These unaudited consolidated financial statements include the accounts of ICD and its subsidiary, and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These financial statements should be read along with our audited financial statements for the year ended December 31, 2018, included in our Annual Report on Form 10-K for the year ended December 31, 2018. In management’s opinion, these financial statements contain all adjustments necessary to fairly present our financial position, results of operations, cash flows and changes in stockholders’ equity for all periods presented. As we had no items of other comprehensive income in any period presented, no other components of comprehensive income is presented. Interim results for the three and six months ended June 30, 2019 may not be indicative of results that will be realized for the full year ending December 31, 2019. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases, to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Under the new guidance, lessees are required to recognize (with the exception of leases with terms of 12 months or less) at the commencement date, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In July 2018, the FASB issued ASU No. 2018-11, Leases: Targeted Improvements, which provides an option to apply the guidance prospectively, and provides a practical expedient allowing lessors to combine the lease and non-lease components of revenues where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC Topic 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined components. We adopted ASU No. 2016-02 and its related amendments (collectively known as ASC 842) effective on January 1, 2019, using the effective date method. See Note 3 “Leases” for the required disclosures related to the impact of adopting this standard and a discussion of our policies related to leases. Segment and Geographical Information Our operations consist of one reportable segment because all of our drilling operations are located in the United States and have similar economic characteristics. Corporate management administers all properties as a whole rather than as discrete operating segments. Operational data is tracked by rig; however, financial performance is measured as a single enterprise and not on a rig-by-rig basis. Further, the allocation of capital resources is employed on a project-by-project basis across our entire asset base to maximize profitability without regard to individual geographic areas. Other Matters We have not elected to avail ourselves of the extended transition period available to emerging growth companies (“EGCs”) as provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards; therefore, we will be subject to new or revised accounting standards at the same time as other public companies that are not EGCs. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, as additional guidance on the measurement of credit losses on financial instruments. The new guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. In addition, the guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The new guidance is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. We are currently evaluating the impact this guidance will have on our accounts receivable. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under this new standard, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after January 1, 2017. We do not believe this new guidance will have a material impact on our consolidated financial statements. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Effective January 1, 2019, we adopted ASC 842. The most significant changes of the new standard are (1) lessees recognize a lease liability and a right-of-use (“ROU”) asset for all leases, including operating leases, with an initial term greater than 12 months on their balance sheets and (2) lessees and lessors disclose additional key information about their leasing transactions. We have elected to implement ASC 842 using the effective date method which recognizes and measures all leases that exist at the effective date, January 1, 2019, using a modified retrospective transition approach. There was no cumulative-effect adjustment required to be recorded in connection with the adoption of the new standard and the reported amount of lease expense and cash flows are substantially unchanged under ASC 842. Comparative periods are presented in accordance with ASC 840 and do not include any retrospective adjustments. As a Lessor Our daywork drilling contracts, under which the vast majority of our revenues are derived, contain both a lease component and a service component. ASU 2018-11 amended ASC 842 to, among other things, provide lessors with a practical expedient to not separate non-lease components from lease components and, instead, to account for those components as a single amount, if the non-lease components otherwise would be accounted for under Topic 606 and both of the following are met:
If the non-lease component is the predominant component of the combined amount, an entity is required to account for the combined amount in accordance with Topic 606. Otherwise, the entity must account for the combined amount as an operating lease in accordance with Topic 842. Revenues from our daywork drilling contracts meet both of the criteria above and we have determined both quantitatively and qualitatively that the service component of our daywork drilling contracts is the predominant component. Accordingly, we combine the lease and service components of our daywork drilling contracts and account for the combined amount under Topic 606. See Note 5 - Revenue from Contracts with Customers. We have multi-year operating and financing leases for corporate office space, field location facilities, land, vehicles and various other equipment used in our operations. We also have a significant number of rentals related to our drilling operations that are day-to-day or month-to-month arrangements. Our multi-year leases have remaining lease terms of greater than one year to 5 years. As a Lessee As a practical expedient, a lessee may elect not to apply the recognition requirements in ASC 842 to short-term leases. Instead a lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. We have elected to utilize this practical expedient. We have elected the package of practical expedients permitted in ASC 842. Accordingly, we accounted for our existing capital leases as finance leases under the new guidance, without reassessing whether the contracts contained a lease under ASC 842, whether classification of the capital lease would be different in accordance with ASC 842 and without reassessing any initial costs associated with the lease. As a result, we recognized on January 1, 2019 a lease liability at the carrying amount of the capital lease obligation on December 31, 2018, of $1.2 million and a ROU asset at the carrying amount of the capital lease asset of $1.3 million. Additionally, we accounted for our existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contract contains a lease under ASC 842 or (b) whether classification of the operating lease would be different in accordance with ASC 842. As a result, we recognized on January 1, 2019 a lease liability of $1.7 million, which represents the present value of the remaining lease payments discounted using our incremental borrowing rate of 8.17%, and a ROU asset of $0.9 million, which represents the lease liability of $1.7 million plus any prepaid lease payments, and less any unamortized lease incentives, totaling $0.8 million. On January 1, 2019, the vehicle leases assumed in the Sidewinder merger were amended to be consistent with our existing vehicle leases, which resulted in a change in the classification from operating leases to finance leases. On the amendment date, we recorded $0.4 million in finance lease obligations and right of use assets. The components of lease expense were as follows:
Supplemental cash flow information related to leases is as follows:
Supplemental balance sheet information related to leases is as follows:
Maturities of lease liabilities at June 30, 2019 were as follows:
As of December 31, 2018, future total obligations on our noncancellable capital and operating leases were $3.7 million in the aggregate, which consisted of the following: $1.4 million in 2019, $1.0 million in 2020, $0.5 million in 2021 and $0.8 million thereafter. |
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Leases | Leases Effective January 1, 2019, we adopted ASC 842. The most significant changes of the new standard are (1) lessees recognize a lease liability and a right-of-use (“ROU”) asset for all leases, including operating leases, with an initial term greater than 12 months on their balance sheets and (2) lessees and lessors disclose additional key information about their leasing transactions. We have elected to implement ASC 842 using the effective date method which recognizes and measures all leases that exist at the effective date, January 1, 2019, using a modified retrospective transition approach. There was no cumulative-effect adjustment required to be recorded in connection with the adoption of the new standard and the reported amount of lease expense and cash flows are substantially unchanged under ASC 842. Comparative periods are presented in accordance with ASC 840 and do not include any retrospective adjustments. As a Lessor Our daywork drilling contracts, under which the vast majority of our revenues are derived, contain both a lease component and a service component. ASU 2018-11 amended ASC 842 to, among other things, provide lessors with a practical expedient to not separate non-lease components from lease components and, instead, to account for those components as a single amount, if the non-lease components otherwise would be accounted for under Topic 606 and both of the following are met:
If the non-lease component is the predominant component of the combined amount, an entity is required to account for the combined amount in accordance with Topic 606. Otherwise, the entity must account for the combined amount as an operating lease in accordance with Topic 842. Revenues from our daywork drilling contracts meet both of the criteria above and we have determined both quantitatively and qualitatively that the service component of our daywork drilling contracts is the predominant component. Accordingly, we combine the lease and service components of our daywork drilling contracts and account for the combined amount under Topic 606. See Note 5 - Revenue from Contracts with Customers. We have multi-year operating and financing leases for corporate office space, field location facilities, land, vehicles and various other equipment used in our operations. We also have a significant number of rentals related to our drilling operations that are day-to-day or month-to-month arrangements. Our multi-year leases have remaining lease terms of greater than one year to 5 years. As a Lessee As a practical expedient, a lessee may elect not to apply the recognition requirements in ASC 842 to short-term leases. Instead a lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. We have elected to utilize this practical expedient. We have elected the package of practical expedients permitted in ASC 842. Accordingly, we accounted for our existing capital leases as finance leases under the new guidance, without reassessing whether the contracts contained a lease under ASC 842, whether classification of the capital lease would be different in accordance with ASC 842 and without reassessing any initial costs associated with the lease. As a result, we recognized on January 1, 2019 a lease liability at the carrying amount of the capital lease obligation on December 31, 2018, of $1.2 million and a ROU asset at the carrying amount of the capital lease asset of $1.3 million. Additionally, we accounted for our existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contract contains a lease under ASC 842 or (b) whether classification of the operating lease would be different in accordance with ASC 842. As a result, we recognized on January 1, 2019 a lease liability of $1.7 million, which represents the present value of the remaining lease payments discounted using our incremental borrowing rate of 8.17%, and a ROU asset of $0.9 million, which represents the lease liability of $1.7 million plus any prepaid lease payments, and less any unamortized lease incentives, totaling $0.8 million. On January 1, 2019, the vehicle leases assumed in the Sidewinder merger were amended to be consistent with our existing vehicle leases, which resulted in a change in the classification from operating leases to finance leases. On the amendment date, we recorded $0.4 million in finance lease obligations and right of use assets. The components of lease expense were as follows:
Supplemental cash flow information related to leases is as follows:
Supplemental balance sheet information related to leases is as follows:
Maturities of lease liabilities at June 30, 2019 were as follows:
As of December 31, 2018, future total obligations on our noncancellable capital and operating leases were $3.7 million in the aggregate, which consisted of the following: $1.4 million in 2019, $1.0 million in 2020, $0.5 million in 2021 and $0.8 million thereafter. |
Sidewinder Merger |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Sidewinder Merger | Sidewinder Merger We completed the merger with Sidewinder Drilling LLC on October 1, 2018, through an exchange of 100% of Sidewinder’s outstanding voting interests for 36,752,657 shares of ICD common stock, which were valued at $173.1 million at the time of closing. We also assumed $58.5 million of Sidewinder indebtedness in the transaction. During the three and six months ended June 30, 2019, we recorded $1.3 million and $2.4 million, respectively, of merger-related expenses comprised primarily of severance, professional fees and various other integration related expenses. Certain intangible liabilities were recorded in connection with the Sidewinder merger for drilling contracts in place at the closing date of the transaction that had unfavorable contract terms as compared to then current market terms for comparable drilling rigs. The intangible liabilities are amortized to operating revenues over the remaining underlying contract terms. During the three and six months ended June 30, 2019, $46.0 thousand and $1.1 million of intangible revenue was recognized as a result of this amortization and the intangible liabilities were fully amortized. The following table summarizes the components of intangible liabilities, net:
In addition, at the time of consummation of the Sidewinder Merger, Sidewinder owned 11 mechanical rigs and related equipment (the "Mechanical Rigs") located principally in the Utica and Marcellus plays. As these rigs are not consistent with ICD’s core strategy or geographic focus, ICD agreed that these rigs can be disposed of, with the Sidewinder unitholders receiving the net proceeds. As a result of this arrangement, on the closing date, we recorded $15.9 million, representing the fair value of the Mechanical Rigs less costs to sell, as assets held for sale, with an offsetting liability in contingent consideration at the closing of the transaction. Certain of these assets have been sold, and we expect to sell or liquidate substantially all of the remaining assets and pay out the related net proceeds by April 2020. |
Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customer | Revenue from Contracts with Customers The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three and six months ended June 30, 2019 and 2018:
The following table provides information about receivables, contract assets and contract liabilities related to contracts with customers:
Significant changes in contract assets and contract liabilities balances during the period are as follows:
The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2019. The estimated revenue does not include amounts of variable consideration that are constrained.
The amounts presented in the table above consist only of fixed consideration related to fees for rig mobilizations and demobilizations, if applicable, which are allocated to the drilling services performance obligation as such performance obligation is satisfied. We have elected the exemption from disclosure of remaining performance obligations for variable consideration. Therefore, dayrate revenue to be earned on a rate scale associated with drilling conditions and level of service provided for each fractional-hour time increment over the contract term and other variable consideration such as penalties and reimbursable revenues, have been excluded from the disclosure. Contract Costs We capitalize costs incurred to fulfill our contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy our performance obligations under the contract and (iii) are expected to be recovered through revenue generated under the contract. These costs, which principally relate to rig mobilization costs at the commencement of a new contract, are deferred as a current or noncurrent asset (depending on the length of the contract term), and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Such contract costs, recorded as “Prepaid expenses and other current assets”, amounted to $1.0 million and $1.1 million on our consolidated balance sheets at June 30, 2019 and December 31, 2018, respectively. During the three and six months ended June 30, 2019, contract costs increased by $0.9 million and $1.5 million, respectively, and we amortized $0.9 million and $1.6 million of contract costs. |
Financial Instruments and Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Fair Value | Financial Instruments and Fair Value Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The carrying value of certain of our assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities approximates their fair value due to the short-term nature of such instruments. The fair value of our long-term debt is determined by Level 3 measurements based on quoted market prices and terms for similar instruments, where available, and on the amount of future cash flows associated with the debt, discounted using our current borrowing rate for comparable debt instruments (the Income Method). Based on our evaluation of the risk free rate, the market yield and credit spreads on comparable company publicly traded debt issues, we used an annualized discount rate, including a credit valuation allowance, of 7.1%. The following table summarizes the carrying value and fair value of our long-term debt as of June 30, 2019 and December 31, 2018.
The fair value of our assets held for sale is determined using Level 3 measurements. Fair value measurements are applied with respect to our non-financial assets and liabilities measured on a non-recurring basis, which would consist of measurements primarily of long-lived assets. |
Inventories |
6 Months Ended |
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Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories All of our inventory as of June 30, 2019 and December 31, 2018 consisted of supplies held for use in our drilling operations. |
Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following:
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Long-term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Our long-term debt consisted of the following:
Credit Facilities In conjunction with the closing of the Sidewinder Merger on October 1, 2018, we entered into a term loan Credit Agreement (the “Term Loan Credit Agreement”) for an initial term loan in an aggregate principal amount of $130.0 million, (the “Term Loan Facility”) and (b) a delayed draw term loan facility in an aggregate principal amount of up to $15.0 million (the “DDTL Facility”, and together with the Term Loan Facility, the “Term Facilities”). The Term Facilities have a maturity date of October 1, 2023, at which time all outstanding principal under the Term Facilities and other obligations become due and payable in full. At our election, interest under the Term Loan Facility is determined by reference at our option to either (i) a “base rate” equal to the higher of (a) the federal funds effective rate plus 0.05%, (b) the London Interbank Offered Rate with an interest period of one month (“LIBOR”), plus 1.0%, and (c) the rate of interest as publicly quoted from time to time by the Wall Street Journal as the “prime rate” in the United States; plus an applicable margin of 6.5%, or (ii) a “LIBOR rate” equal to LIBOR with an interest period of one month, plus an applicable margin of 7.5%. The Term Loan Credit Agreement contains financial covenants, including a liquidity covenant of $10.0 million and a springing fixed charge coverage ratio covenant of 1.00 to 1.00 that is tested when availability under the ABL Credit Facility (defined below) and the DDTL Facility is below $5.0 million at any time that a DDTL Facility loan is outstanding. The Term Loan Credit Agreement also contains other customary affirmative and negative covenants, including limitations on indebtedness, liens, fundamental changes, asset dispositions, restricted payments, investments and transactions with affiliates. The Term Loan Credit Agreement also provides for customary events of default, including breaches of material covenants, defaults under the ABL Credit Facility or other material agreements for indebtedness, and a change of control. The obligations under the Term Loan Credit Agreement are secured by a first priority lien on collateral (the “Term Priority Collateral”) other than accounts receivable, deposit accounts and other related collateral pledged as first priority collateral (“Priority Collateral”) under the ABL Credit Facility (defined below) and a second priority lien on such Priority Collateral, and are unconditionally guaranteed by all of our current and future direct and indirect subsidiaries. MSD PCOF Partners IV, LLC (an affiliate of MSD Partners, L.P. "MSD Partners") is the lender of our $130.0 million Term Loan Facility. MSD Partners, together with its affiliate, MSD Capital, L.P. (“MSD Capital”) own approximately 30% of the outstanding shares of the Company’s common stock. Additionally, in connection with the closing of the Sidewinder Merger on October 1, 2018, we entered into a $40.0 million revolving Credit Agreement (the “ABL Credit Facility”), including availability for letters of credit in an aggregate amount at any time outstanding not to exceed $7.5 million. Availability under the ABL Credit Facility is subject to a borrowing base calculated based on 85% of the net amount of our eligible accounts receivable, minus reserves. The ABL Credit Facility has a maturity date of the earlier of October 1, 2023 or the maturity date of the Term Loan Credit Agreement. At our election, interest under the ABL Credit Facility is determined by reference at our option to either (i) a “base rate” equal to the higher of (a) the federal funds effective rate plus 0.05%, (b) LIBOR with an interest period of one month, plus 1.0%, and (c) the prime rate of Wells Fargo, plus in each case, an applicable base rate margin ranging from 1.0% to 1.5% based on quarterly availability, or (ii) a revolving loan rate equal to LIBOR for the applicable interest period plus an applicable LIBOR margin ranging from 2.0% to 2.5% based on quarterly availability. We also pay, on a quarterly basis, a commitment fee of 0.375% (or 0.25% at any time when revolver usage is greater than 50% of the maximum credit) per annum on the unused portion of the ABL Credit Facility commitment. The ABL Credit Facility contains a springing fixed charge coverage ratio covenant of 1.00 to 1.00 that is tested when availability is less than 10% of the maximum credit. The ABL Credit Facility also contains other customary affirmative and negative covenants, including limitations on indebtedness, liens, fundamental changes, asset dispositions, restricted payments, investments and transactions with affiliates. The ABL Credit Facility also provides for customary events of default, including breaches of material covenants, defaults under the Term Loan Agreement or other material agreements for indebtedness, and a change of control. We are in compliance with our covenants as of June 30, 2019. The obligations under the ABL Credit Facility are secured by a first priority lien on Priority Collateral, which includes all accounts receivable and deposit accounts, and a second priority lien on the Term Priority Collateral, and are unconditionally guaranteed by all of our current and future direct and indirect subsidiaries. As of June 30, 2019, the weighted-average interest rate on our borrowings was 10.09%. At June 30, 2019, the borrowing base under our ABL Credit Facility was $24.2 million, and we had $21.7 million of availability remaining of our $40.0 million commitment on that date. Subsequent to June 30, 2019, we received notification from our insurance carrier that our collateral requirement supported by a letter of credit from our ABL Credit Facility decreased from $2.5 million to $0.4 million. Pro forma for the new collateral requirement, availability under our ABL Credit Facility at June 30, 2019 would have been $23.8 million. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Prior to June 2019, we issued common stock-based awards to employees and non-employee directors under our 2012 Long-Term Incentive Plan adopted in March 2012 (the “2012 Plan”). In June 2019, we adopted the 2019 Omnibus Incentive Plan (the “2019 Plan”) providing for common stock-based awards to employees and non-employee directors. The 2019 Plan permits the granting of various types of awards, including stock options, restricted stock and restricted stock unit awards, and up to 5,500,000 shares were authorized for issuance. Restricted stock and restricted stock units may be granted for no consideration other than prior and future services. The purchase price per share for stock options may not be less than the market price of the underlying stock on the date of grant. As of June 30, 2019, approximately 3,995,488 shares were available for future awards under the 2019 Plan. In connection with the adoption of the 2019 Plan, no further awards will be made under the 2012 Plan. In the first quarter of 2017, we adopted ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The FASB issued this accounting standard in an effort to simplify the accounting for employee share-based payments and improve the usefulness of the information provided to users of financial statements. Our policy is to account for forfeitures of share-based compensation awards as they occur. A summary of compensation cost recognized for stock-based payment arrangements is as follows:
No stock-based compensation was capitalized in connection with rig construction activity during the three and six months ended June 30, 2019 or 2018. Stock Options We use the Black-Scholes option pricing model to estimate the fair value of stock options granted to employees and non-employee directors. The fair value of the options is amortized to compensation expense on a straight-line basis over the requisite service periods of the stock awards, which are generally the vesting periods. There were no stock options granted during the six months ended June 30, 2019 or 2018. A summary of stock option activity and related information for the six months ended June 30, 2019 is as follows:
The number of options vested at June 30, 2019 was 669,213 with a weighted average remaining contractual life of 2.8 years and a weighted average exercise price of $12.74 per share. There were no unvested options or unrecognized compensation cost related to outstanding stock options at June 30, 2019. Time-based Restricted Stock and Restricted Stock Units We have granted time-based restricted stock and restricted stock units to key employees under the 2012 Plan and 2019 Plan. Time-based Restricted Stock Time-based restricted stock awards consist of grants of our common stock that vest ratably over three to five years. We recognize compensation expense on a straight-line basis over the vesting period. The fair value of restricted stock awards is determined based on the estimated fair market value of our shares on the grant date. As of June 30, 2019, there was $3.6 million in unrecognized compensation cost related to unvested restricted stock awards. This cost is expected to recognized over a weighted-average period of 2.3 years. A summary of the status of our time-based restricted stock awards and of changes in our time-based restricted stock awards outstanding for the six months ended June 30, 2019 is as follows:
Time-based Restricted Stock Units We have granted three-year time vested restricted stock unit awards where each unit represents the right to receive, at the end of a vesting period, one share of ICD common stock with no exercise price. The fair value of time-based restricted stock unit awards is determined based on the estimated fair market value of our shares on the grant date. As of June 30, 2019, there was $2.5 million of total unrecognized compensation cost related to unvested time-based restricted stock unit awards. This cost is expected to be recognized over a weighted-average period of 1.2 years. A summary of the status of our time-based restricted stock unit awards and of changes in our time-based restricted stock unit awards outstanding for the six months ended June 30, 2019 is as follows:
Performance-Based and Market-Based Restricted Stock Units We have granted three-year performance-based and market-based restricted stock unit awards, where each unit represents the right to receive, at the end of a vesting period, up to two shares of ICD common stock with no exercise price. Exercisability of the market-based restricted stock unit awards is based on our total shareholder return ("TSR") as measured against the TSR of a defined peer group and vesting of the performance-based restricted stock unit awards is based on our cumulative return on invested capital ("ROIC") as measured against ROIC performance goals determined by the compensation committee of our Board of Directors. We used a Monte Carlo simulation model to value the TSR market-based restricted stock unit awards. The fair value of the performance-based restricted stock unit awards is based on the market price of our common stock on the date of grant. During the restriction period, the performance-based and market-based restricted stock unit awards may not be transferred or encumbered, and the recipient does not receive dividend equivalents or have voting rights until the units vest. As of June 30, 2019, there was unrecognized compensation cost related to unvested performance-based or market-based restricted stock unit awards totaling $0.8 million. This cost is expected to be recognized over a weighted-average period of 1.4 years. The assumptions used to value our TSR market-based restricted stock unit awards granted during the six months ended June 30, 2019 were a risk-free interest rate of 1.86%, an expected volatility of 58.2% and an expected dividend yield of 0.0%. Based on the Monte Carlo simulation, these restricted stock unit awards were valued at $1.45. A summary of the status of our performance-based and market-based restricted stock unit awards and of changes in our restricted stock unit awards outstanding for the six months ended June 30, 2019 is as follows:
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Stockholders’ Equity and Earnings (Loss) per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity and Earnings (Loss) per Share | Stockholders’ Equity and Earnings (Loss) per Share As of June 30, 2019, we had a total of 76,948,679 shares of common stock, $0.01 par value, outstanding. We also had 520,554 shares held as treasury stock. Total authorized common stock is 200,000,000 shares. Basic earnings (loss) per common share (“EPS”) are computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. A reconciliation of the numerators and denominators of the basic and diluted losses per share computations is as follows:
For all periods presented, the computation of diluted loss per share excludes the effect of certain outstanding stock options and RSUs because their inclusion would be anti-dilutive. The number of options that were excluded from diluted loss per share were 669,213 during the three and six months ended June 30, 2019 and 682,950 during the three and six months ended June 30, 2018. The number of RSUs, which are not participating securities, that were excluded from our basic and diluted loss per share because they are anti-dilutive, were 1,444,360 for the three and six months ended June 30, 2019 and 1,226,173 for the three and six months ended June 30, 2018. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate was (29.1)% and (2.4)% for the three and six months ended June 30, 2019, and 0.6% and 0.9% for the three and six months ended June 30, 2018. Taxes in both periods relate to Louisiana state income tax and Texas margin tax. For federal income tax purposes, we have applied a valuation allowance against any potential deferred tax asset which would have ordinarily resulted. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments As of June 30, 2019, we had outstanding purchase commitments to a number of suppliers totaling $10.5 million, net of deposits previously made, related primarily to the operation and upgrade of drilling rigs. All of these commitments relate to equipment and services currently scheduled for delivery in 2019. Contingencies We may be the subject of lawsuits and claims arising in the ordinary course of business from time to time. Management cannot predict the ultimate outcome of such lawsuits and claims. While lawsuits and claims are asserted for amounts that may be material should an unfavorable outcome be the result, management does not currently expect that the outcome of any of these known legal proceedings or claims will have a material adverse effect on our financial position or results of operations. |
Related Parties |
6 Months Ended |
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Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties In conjunction with the closing of the Sidewinder Merger on October 1, 2018, we entered into the Term Loan Credit Agreement for an initial term loan in an aggregate principal amount of $130.0 million and a delayed draw term loan facility in an aggregate principal amount of up to $15.0 million. MSD PCOF Partners IV, LLC (an affiliate of MSD Partners) is the lender of our $130.0 million Term Loan Facility. MSD Partners, together with MSD Capital, own approximately 30% of the outstanding shares of the Company’s common stock as of June 30, 2019. We made interest payments on the Term Loan Facility totaling $3.3 million and $6.6 million for the three and six months ended June 30, 2019, respectively. |
Interim Financial Information (Policies) |
6 Months Ended | ||||||||||||
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Jun. 30, 2019 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Basis of Accounting | These unaudited consolidated financial statements include the accounts of ICD and its subsidiary, and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These financial statements should be read along with our audited financial statements for the year ended December 31, 2018, included in our Annual Report on Form 10-K for the year ended December 31, 2018. In management’s opinion, these financial statements contain all adjustments necessary to fairly present our financial position, results of operations, cash flows and changes in stockholders’ equity for all periods presented. As we had no items of other comprehensive income in any period presented, no other components of comprehensive income is presented. Interim results for the three and six months ended June 30, 2019 may not be indicative of results that will be realized for the full year ending December 31, 2019. |
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Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases, to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Under the new guidance, lessees are required to recognize (with the exception of leases with terms of 12 months or less) at the commencement date, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In July 2018, the FASB issued ASU No. 2018-11, Leases: Targeted Improvements, which provides an option to apply the guidance prospectively, and provides a practical expedient allowing lessors to combine the lease and non-lease components of revenues where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC Topic 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined components. We adopted ASU No. 2016-02 and its related amendments (collectively known as ASC 842) effective on January 1, 2019, using the effective date method. See Note 3 “Leases” for the required disclosures related to the impact of adopting this standard and a discussion of our policies related to leases. |
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Segment and Geographical Information | Segment and Geographical Information Our operations consist of one reportable segment because all of our drilling operations are located in the United States and have similar economic characteristics. Corporate management administers all properties as a whole rather than as discrete operating segments. Operational data is tracked by rig; however, financial performance is measured as a single enterprise and not on a rig-by-rig basis. Further, the allocation of capital resources is employed on a project-by-project basis across our entire asset base to maximize profitability without regard to individual geographic areas. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, as additional guidance on the measurement of credit losses on financial instruments. The new guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. In addition, the guidance amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The new guidance is effective for public companies for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after December 15, 2018. We are currently evaluating the impact this guidance will have on our accounts receivable. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under this new standard, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. This guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for interim and annual periods beginning after January 1, 2017. We do not believe this new guidance will have a material impact on our consolidated financial statements. |
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Fair Value Measurement | Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The carrying value of certain of our assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities approximates their fair value due to the short-term nature of such instruments. |
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, cost | The components of lease expense were as follows:
Supplemental cash flow information related to leases is as follows:
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Assets and liabilities, lessee | Supplemental balance sheet information related to leases is as follows:
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Maturity of operating lease liability | Maturities of lease liabilities at June 30, 2019 were as follows:
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Maturity of finance lease liability | Maturities of lease liabilities at June 30, 2019 were as follows:
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Sidewinder Merger (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the components of intangible liabilities, net:
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Revenue from Contracts with Customers (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three and six months ended June 30, 2019 and 2018:
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Summary of Contract with Customer, Asset and Liability | Significant changes in contract assets and contract liabilities balances during the period are as follows:
The following table provides information about receivables, contract assets and contract liabilities related to contracts with customers:
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2019. The estimated revenue does not include amounts of variable consideration that are constrained.
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Financial Instruments and Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of liabilities | The following table summarizes the carrying value and fair value of our long-term debt as of June 30, 2019 and December 31, 2018.
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Accrued Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following:
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Long-term Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Our long-term debt consisted of the following:
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Stock-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Compensation Cost | A summary of compensation cost recognized for stock-based payment arrangements is as follows:
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Summary of Stock Option Activity and Related Information | A summary of stock option activity and related information for the six months ended June 30, 2019 is as follows:
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Schedule of Restricted Stock Activity | A summary of the status of our time-based restricted stock awards and of changes in our time-based restricted stock awards outstanding for the six months ended June 30, 2019 is as follows:
A summary of the status of our performance-based and market-based restricted stock unit awards and of changes in our restricted stock unit awards outstanding for the six months ended June 30, 2019 is as follows:
A summary of the status of our time-based restricted stock unit awards and of changes in our time-based restricted stock unit awards outstanding for the six months ended June 30, 2019 is as follows:
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Stockholders’ Equity and Earnings (Loss) per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Numerators and Denominators of Basic and Diluted (Loss) Earnings Per Share | A reconciliation of the numerators and denominators of the basic and diluted losses per share computations is as follows:
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Nature of Operations and Recent Events - Announcement Of Merger (Details) |
Oct. 01, 2018
shares
|
---|---|
Business Acquisition [Line Items] | |
Voting interests acquired (in shares) | 36,752,657 |
Voting interests acquired | 100.00% |
Sidewinder Drilling, Inc. | |
Business Acquisition [Line Items] | |
Voting interests acquired (in shares) | 36,752,657 |
Voting interests acquired | 100.00% |
Interim Financial Information - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019
segment
| |
Accounting Policies [Abstract] | |
Reportable segments | 1 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jan. 01, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Leases [Abstract] | |||
Finance lease liabilities | $ 1,200 | $ 2,684 | |
Finance lease, right-of-use asset | 1,300 | 2,966 | |
Operating lease liabilities | $ 1,700 | 1,547 | |
Discount rate | 8.17% | ||
Operating lease right-of-use assets | $ 900 | 772 | |
Unamortized lease incentive | 800 | ||
Right-of-use asset obtained in exchange for finance lease liability | $ 400 | $ 2,223 | |
Future total obligations on noncancellable capital and operating leases | $ 3,700 | ||
2019 | 1,400 | ||
2020 | 1,000 | ||
2021 | 500 | ||
Thereafter | $ 800 |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jan. 01, 2019 |
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Leases [Abstract] | |||
Operating lease expense | $ 124 | $ 249 | |
Short-term lease expense | 1,234 | 2,427 | |
Variable lease expense | 185 | 271 | |
Finance lease cost: | |||
Amortization of right-of-use assets | 314 | 579 | |
Interest expense on lease liabilities | 47 | 79 | |
Total finance lease expense | 361 | 658 | |
Total lease expenses | $ 1,904 | 3,605 | |
Cash paid for amounts included in measurement of lease liabilities: | |||
Operating cash flows from operating leases | 216 | ||
Operating cash flows from finance leases | 74 | ||
Financing cash flows from finance leases | 770 | ||
Right-of-use assets obtained or recorded in exchange for lease obligations: | |||
Operating leases | 955 | ||
Finance leases | $ 400 | $ 2,223 |
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Operating leases: | |||
Operating lease right-of-use assets | $ 772 | $ 900 | |
Accrued liabilities | 421 | $ 0 | |
Other long-term liabilities | 1,126 | ||
Total operating lease liabilities | 1,547 | 1,700 | |
Finance leases: | |||
Property and equipment | 4,313 | ||
Accumulated depreciation | (1,347) | ||
Property and equipment, net | 2,966 | 1,300 | |
Current portion of long-term debt | 1,161 | ||
Long-term debt | 1,523 | ||
Total finance lease liabilities | $ 2,684 | $ 1,200 | |
Weighted-average remaining lease term | |||
Operating leases | 4 years 2 months 12 days | ||
Finance leases | 2 years 2 months 12 days | ||
Weighted-average discount rate | |||
Operating leases | 8.17% | ||
Finance leases | 7.06% |
Leases - Lease Maturities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jan. 01, 2019 |
---|---|---|
Operating Leases | ||
2019 | $ 315 | |
2020 | 384 | |
2021 | 350 | |
2022 | 360 | |
2023 | 370 | |
Thereafter | 47 | |
Total cash lease payment | 1,826 | |
Less: imputed interest | (279) | |
Total lease liabilities | 1,547 | $ 1,700 |
Finance Leases | ||
2019 | 601 | |
2020 | 915 | |
2021 | 607 | |
2022 | 129 | |
2023 | 0 | |
Thereafter | 0 | |
Total cash lease payment | 2,252 | |
Add: expected residual value | 679 | |
Less: imputed interest | (247) | |
Total lease liabilities | $ 2,684 | $ 1,200 |
Sidewinder Merger (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2018
USD ($)
drilling_rig
shares
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
Business Acquisition [Line Items] | |||||
Voting interests acquired | 100.00% | ||||
Voting interests acquired (in shares) | shares | 36,752,657 | ||||
Value of voting interests acquired | $ 173,100 | ||||
Indebtedness assumed | $ 58,500 | ||||
Merger-related expenses | $ 1,287 | $ 443 | $ 2,368 | $ 443 | |
Revenues | 52,879 | 25,754 | 113,237 | 51,381 | |
Intangible | |||||
Business Acquisition [Line Items] | |||||
Revenues | $ 46 | $ 0 | $ 1,079 | $ 0 | |
Rigs, Mechanical | Sidewinder Drilling, Inc. | |||||
Business Acquisition [Line Items] | |||||
Number of rigs | drilling_rig | 11 | ||||
Sidewinder Drilling, Inc. | |||||
Business Acquisition [Line Items] | |||||
Voting interests acquired | 100.00% | ||||
Voting interests acquired (in shares) | shares | 36,752,657 | ||||
Contingent consideration | $ 15,900 |
Sidewinder Merger Table (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Business Combinations [Abstract] | ||
Intangible liabilities | $ 3,123 | $ 3,123 |
Accumulated amortization | (3,123) | (2,044) |
Intangible liabilities, net | $ 0 | $ 1,079 |
Revenue From Contracts with Customers - Disaggregation of Revenues (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] | ||||
Revenues | $ 52,879 | $ 25,754 | $ 113,237 | $ 51,381 |
Dayrate drilling | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 48,133 | 24,447 | 104,584 | 48,224 |
Mobilization | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,177 | 271 | 2,437 | 730 |
Reimbursables | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,950 | 1,002 | 4,554 | 2,233 |
Early termination | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 501 | 0 | 501 | 0 |
Capital modification | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 62 | 34 | 72 | 194 |
Intangible | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 46 | 0 | 1,079 | 0 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 10 | $ 0 | $ 10 | $ 0 |
Revenue from Contracts with Customers - Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Receivables, which are included in “Accounts receivable, net” | $ 35,670 | $ 41,987 |
Contract assets | 0 | 0 |
Contract liabilities | $ (730) | $ (1,374) |
Revenue from Contracts with Customers - Assets and Liabilities Rollforward (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that was included in contract liabilities at beginning of period | $ 574 | $ 1,305 |
Increase in contract liabilities due to cash received, excluding amounts recognized as revenue | (500) | (661) |
Transferred to receivables from contract assets at beginning of period | $ 0 | $ 0 |
Revenue from Contracts with Customers Revenue from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Revenue from Contract with Customer [Abstract] | |||
Capitalized contract cost, current | $ 1.0 | $ 1.0 | $ 1.1 |
Capitalized contract cost, increase | 0.9 | 1.5 | |
Amortization of contract costs | $ 0.9 | $ 1.6 |
Financial Instruments and Fair Value (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
---|---|---|
Term Loan Facility | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 130,000 | $ 130,000 |
Term Loan Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 141,496 | 131,893 |
ABL Credit Facility | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 0 | 2,566 |
ABL Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 0 | $ 2,258 |
Discount rate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, measurement input | 0.071 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued salaries and other compensation | $ 3,157 | $ 12,379 |
Insurance | 2,930 | 5,464 |
Deferred revenues (contract liabilities) | 730 | 1,374 |
Property and other taxes | 3,224 | 3,829 |
Intangible liability | 0 | 1,079 |
Interest | 3,370 | 3,318 |
Operating lease liability - current | 421 | 0 |
Other | 2,225 | 1,776 |
Accrued liabilities | $ 16,057 | $ 29,219 |
Long-term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt, including current portion | $ 132,684 | $ 133,801 |
Less: current portion | (1,161) | (587) |
Less: Term Loan Facility deferred financing costs | (2,869) | (3,202) |
Long-term debt | 128,654 | 130,012 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Long-term debt, including current portion | 2,684 | 1,235 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, including current portion | 130,000 | 130,000 |
ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, including current portion | $ 0 | $ 2,566 |
Stock-Based Compensation - Compensation Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 416 | $ 718 | $ 803 | $ 1,362 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 0 | 0 | 0 | 0 |
Restricted stock and restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 416 | $ 718 | $ 803 | $ 1,362 |
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Options | ||
Options, beginning balance (in shares) | 669,213 | |
Options, granted (in shares) | 0 | 0 |
Options, exercised (in shares) | 0 | |
Options, forfeited/expired (in shares) | 0 | |
Options, ending balance (in shares) | 669,213.000 | |
Options, exercisable (in shares) | 669,213 | |
Weighted Average Exercise Price | ||
Weighted average exercise price, beginning balance (in dollars per share) | $ 12.74 | |
Weighted average exercise price, granted (in dollars per share) | 0.00 | |
Weighted average exercise price, exercised (in dollars per share) | 0.00 | |
Weighted average exercise price, forfeited/expired (in dollars per share) | 0.00 | |
Weighted average exercise price, ending balance (in dollars per share) | 12.74 | |
Weighted-average exercise price, exercisable (in dollars per share) | $ 12.74 |
Stockholders’ Equity and Earnings (Loss) per Share - Basic and Diluted Computation (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 |
|
Net loss (numerator): | ||||||
Net loss | $ (12,858) | $ (2,373) | $ (3,313) | $ (4,146) | $ (15,231) | $ (7,459) |
Loss per share: | ||||||
Basic and diluted (in dollars per share) | $ (0.17) | $ (0.09) | $ (0.20) | $ (0.20) | ||
Shares (denominator): | ||||||
Weighted average common shares outstanding - basic (in shares) | 75,692 | 38,253 | 75,692 | 38,188 | ||
Weighted average common shares outstanding - diluted (in shares) | 75,692 | 38,253 | 75,692 | 38,188 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | (29.10%) | 0.60% | (2.40%) | 0.90% |
Commitments and Contingencies (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding purchase commitments | $ 10.5 |
Related Parties (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Oct. 01, 2018 |
|
Ownership percentage | 30.00% | 30.00% | |
Term Loan Facility | |||
Face amount | $ 130,000,000.0 | ||
Interest payments | $ 3,300,000 | $ 6,600,000 | |
Delayed Draw Term Loan | |||
Face amount | $ 15,000,000.0 |
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