Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

3.Revenue from Contracts with Customers

The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
(in thousands)	2022		2021
Dayrate drilling	$	32,055	$	14,261
Mobilization		1,270		522
Reimbursables		1,666		759
Total revenue	$	34,991	$	15,542

The following table provides information about receivables, contract assets and contract liabilities related to contracts with customers:

	March 31,		December 31,
(in thousands)	2022		2021
Receivables, which are included in “Accounts receivable, net”	$	24,254	$	22,167
Contract liabilities, which are included in “Accrued liabilities - deferred revenue”	$	(1,701)	$	(542)

The primary changes in contract assets and contract liabilities balances during the period are as follows:

	Three Months Ended March 31,
(in thousands)	2022		2021
Revenue recognized that was included in contract liabilities at beginning of period	$	505	$	119
Increase in contract liabilities due to cash received, excluding amounts recognized as revenue	$	(1,664)	$	(208)

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 March 31, 2022. The estimated revenue does not include amounts of variable consideration that are constrained.

	Year Ending December 31,
(in thousands)	2022		2023		2024		2025
Revenue	$	1,701	$	—	$	—	$	—

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 $1.4 million and $0.6 million on our consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively. During the three months ended March 31, 2022, contract costs increased by $2.0 million and we amortized $1.2 million of contract costs. During the three months ended March 31, 2021, contract costs increased by $0.5 million and we amortized $0.4 million of contract costs.