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Property and Equipment
3 Months Ended
Mar. 31, 2017
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]
Property and Equipment
Capital Expenditures—Our capital expenditures were $27.6 million and $5.5 million, during the three months ended March 31, 2017 and 2016, respectively, which includes $0.1 million and $0.2 million, respectively, of capitalized interest costs incurred. Capital expenditures during 2017 primarily related to the acquisition of 20 well servicing rigs, upgrades to drilling rigs and other new drilling equipment. Capital expenditures during 2016 consisted primarily of routine expenditures to maintain our drilling and production services fleets.
At March 31, 2017, capital expenditures incurred for property and equipment not yet placed in service was $29.6 million, primarily related to 15 well servicing rigs and upgrades to drilling rigs not yet completed. At December 31, 2016, property and equipment not yet placed in service was $9.0 million, primarily related to new drilling equipment that was ordered in 2014 and required a long lead-time for delivery, which will either be used to construct new drilling rigs or as spare equipment for our AC rig fleet, as well as deposits for the 20 well servicing rigs delivered in the first quarter of 2017 and four new wireline units that are on order to be delivered in the second quarter of 2017.
Assets Held for SaleAs of March 31, 2017, our condensed consolidated balance sheet reflects assets held for sale of $11.4 million, which primarily represents the fair value of three domestic mechanical drilling rigs, three domestic SCR drilling rigs, certain drilling equipment, 13 wireline units, and certain coiled tubing equipment.
ImpairmentsWe evaluate for potential impairment of long-lived assets when indicators of impairment are present, which may include, among other things, significant adverse changes in industry trends (including revenue rates, utilization rates, oil and natural gas market prices, and industry rig counts). Beginning in late 2014, oil prices declined significantly resulting in a downturn in our industry that persisted through 2016, affecting both drilling and production services. Despite the recent modest recovery in commodity prices, we continue to monitor all indicators of potential impairments in accordance with ASC Topic 360, Property, Plant and Equipment, and concluded there are no triggers present that require impairment testing as of March 31, 2017.
In performing an impairment evaluation, we estimate the future undiscounted net cash flows from the use and eventual disposition of the assets grouped at the lowest level that cash flows can be identified. For our Production Services Segment, we perform an impairment evaluation and estimate future undiscounted cash flows for the individual reporting units (well servicing, wireline and coiled tubing). For our Drilling Services Segment, we perform an impairment evaluation and estimate future undiscounted cash flows for individual domestic drilling rig assets and for our Colombian drilling rig assets as a group. If the sum of the estimated future undiscounted net cash flows is less than the carrying amount of the asset group, then we determine the fair value of the asset group. The amount of an impairment charge is measured as the difference between the carrying amount and the fair value of the assets. The assumptions used in the impairment evaluation are inherently uncertain and require management judgment.