Divestitures

9 Months Ended

Sep. 30, 2019

Property, Plant and Equipment Impairment or Disposal [Abstract]

Divestitures

DIVESTITURES

Oil and Natural Gas

We sold $2.2 million of non-core oil and natural gas assets, net of related expenses, during the first nine months of 2019, compared to $22.3 million during the first nine months of 2018. These proceeds reduced the net book value of our full cost pool with no gain or loss recognized.

Contract Drilling

In December 2018, we removed 41 drilling rigs and other equipment from service. We estimated the fair value of the 41 drilling rigs based on the estimated market value from third-party assessments (Level 3 fair value measurement) less cost to sell. Based on these estimates, we recorded a pre-tax non-cash write-down of approximately $147.9 million. During the first nine months of 2019, we sold four of these drilling rigs and some of the other equipment to unaffiliated third parties. The proceeds of those sales, less costs to sell, was more than the applicable $5.2 million net book value resulting in a gain of $0.5 million. The remaining drilling rigs and equipment will be marketed for sale throughout the next twelve months and remain classified as assets held for sale. The net book value of those assets is $17.3 million.