Discontinued Operations

6 Months Ended

Jun. 30, 2021

Discontinued Operations [Abstract]

Discontinued Operations

(20) Discontinued Operations

On December 10, 2019, Pumpco Energy Services, Inc (“Pumpco”) completed its existing hydraulic fracturing field operations and was determined to discontinue, wind down and exit its hydraulic fracturing operations. The financial results of Pumpco’s operations have historically been included in the Predecessor’s North America segment. The Successor continued to sell Pumpco’s fixed assets as of June 30, 2021.

During the second quarter of 2021, we signed a Letter of Intent (“LOI”) with Select Energy Services, Inc. (“Select”) to sell all of the issued and outstanding equity of Complete Energy Services, Inc. (“Complete”) which would also include Superior Well Services (“SPW”) flowback and well testing businesses, including the associated assets, liabilities and working capital. The financial results of Complete and SPW operations have historically been included in our Onshore Completion and Workover Services segment. Discontinuing Complete and SPW is aligned with our overall strategic objective to divest assets and service lines that do not compete for investment in the current market environment. Net proceeds from the sale of Complete and any remaining assets from SPW will be used to fund current operations, reinvest in other of the Company’s service lines, or return capital to investors. In connection with these pending dispositions, during the second quarter of 2021, we recognized a reduction in value of assets related to Complete for approximately $12.4 million. We expect to complete the sale of the remaining assets of SPW within the next 12 months.

The following tables summarizes the components of our discontinued operations, net of tax (in thousands):

		Successor	Predecessor
		Three Months Ended June 30, 2021	Three Months Ended June 30, 2020
Revenues	$	45,114	$	32,485
Cost of services		35,459		36,450
Depreciation, depletion, amortization and accretion		18,581		8,034
General and administrative expenses		3,623		3,505
Reduction in value of assets		12,430		3,003
Loss from operations		(24,979)		(18,507)
Other income (expense)		(53)		8
Loss from discontinued operations before tax		(25,032)		(18,499)
Income tax benefit (expense)		5,632		(915)
Loss from discontinued operations, net of income tax	$	(19,400)	$	(19,414)

	Successor		Predecessor
	For the Period February 3, 2021 through June 30, 2021		For the Period January 1, 2021 through February 2, 2021		Six Months Ended June 30, 2020
Revenues	$	68,366	$	10,719	$	119,996
Cost of services		55,481		10,398		116,081
Depreciation, depletion, amortization and accretion		31,356		2,141		17,206
General and administrative expenses		6,218		1,119		17,475
Reduction in value of assets		12,430		-		49,361
Loss from operations		(37,119)		(2,939)		(80,127)
Other income (expense)		(50)		2,485		15
Loss from discontinued operations before tax		(37,169)		(454)		(80,112)
Income tax benefit (expense)		8,363		102		12,024
Loss from discontinued operations, net of income tax	$	(28,806)	$	(352)	$	(68,088)

The following summarizes the assets and liabilities related to assets held for sale (in thousands):

	Successor		Predecessor
	June 30, 2021		December 31, 2020
Current assets:
Accounts receivable, net	$	35,853	$	25,448
Prepaid expenses		5,154		4,881
Other current assets		7,443		12,076
Total current assets		48,450		42,405
Property, plant and equipment, net		106,425		179,380
Operating lease ROU assets		13,549		16,958
Other assets		1,770		3,361
Total assets held for sale	$	170,194	$	242,104
Current liabilities:
Accounts payable	$	6,075	$	2,830
Accrued expenses		11,391		11,153
Total current liabilities		17,466		13,983
Operating lease liabilities		13,562		21,987
Decommissioning liabilities		4,156		8,311
Other liabilities		546		2,095
Total liabilities	$	35,730	$	46,376

Significant operating non-cash items relating to assets held for sale and cash flows from investing activities were as follows (in thousands):

	Successor		Predecessor
	For the Period February 3, 2021 through June 30, 2021		For the Period January 1, 2021 through February 2, 2021		Six Months Ended June 30, 2020
Cash flows from discontinued operating activities:
Reduction in value of assets	$	12,430	$	-	$	49,361
Gain on sale of assets		(5,118)		(43)
Depreciation, depletion, amortization and accretion		31,356		2,142		17,206
Cash flows from discontinued investing activities:
Proceeds from sales of assets		10,867		486		-