Impairment of Fixed and Long-lived Assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Impairment of Fixed and Long-lived Assets

The Company recorded impairment charges of fixed and intangible assets as follows (in thousands):


	Three months ended March 31,
	2021		2020
Property and equipment, net	$	—	$	30,178
Operating lease right-of-use assets	—		7,434
Other Intangibles:
Patents and technology	—		9,902
Customer relationships	—		9,165
Intangible assets in progress	—		596
Trademarks and brand names	—		179
Total other intangibles	—		19,842

Total impairment of fixed, long-lived and intangible assets	$	—	$	57,454

During the first quarter of 2020, the price of crude oil declined by over 50%, trading below $25 per barrel, causing a significant disruption across the energy industry, which began to negatively impact the Company’s results of operations. The decline of results of operations were driven by market factors, including an oversupply of oil, insufficient storage and demand destruction resulting from the reaction to COVID-19. Based on these factors, the Company concluded that a triggering event occurred and, accordingly, an interim quantitative impairment test was performed as of March 31, 2020.

Using the income approach, the fair value of the reporting unit was determined based on the present value of future cash flows. The Company utilized internal forecast trends and potential growth rates to estimate future cash flows of the asset group. Based on the results of the quantitative assessment, the Company concluded the carrying value of the asset group exceeded its fair value as of March 31, 2020, and an impairment loss of $57.5 million was recorded as a result of the adverse effect of the COVID-19 pandemic, estimated effect on the economy, and the related negative impact on oil and natural gas prices on projections of future cash flows. Prior to the impairment, the Company recognized amortization expense for finite-lived intangible assets acquired of $0.5 million for the three months ended March 31, 2020.

The Company noted no triggering events during the first quarter of 2021.