| Operating Segments |
Operating Segments
The Partnership is organized into four reportable segments based on the nature of services provided and the basis in which management makes business and operating decisions. The Partnership principally provides oilfield services in connection with on-shore drilling of oil and natural gas wells for small to large domestic independent oil and nature gas producers. The Partnership’s four segments consist of contract land and directional drilling services, completion and production services, completion and production - natural sand proppant and remote accommodation services.
The following table sets forth certain financial information with respect to the Partnership’s reportable segments:
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Completion and Production |
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Nine Months Ended September 30, 2016 |
Contract Land and Directional Drilling Services |
Completion and Production Services |
Natural Sand Proppant |
Remote Accommodation Services |
Total |
Revenue from external customers... |
$ |
17,946,458 |
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$ |
24,765,223 |
|
$ |
3,087,214 |
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$ |
23,253,092 |
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$ |
69,051,987 |
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Revenue from related parties.......... |
$ |
2,381,446 |
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$ |
74,480,265 |
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$ |
20,292,900 |
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$ |
5,412 |
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$ |
97,160,023 |
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Cost of revenue.............................. |
$ |
22,010,295 |
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$ |
75,313,984 |
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$ |
19,689,222 |
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$ |
9,993,073 |
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$ |
127,006,574 |
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Selling, general and administrative expenses............................................... |
$ |
3,353,243 |
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$ |
4,494,542 |
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$ |
1,563,293 |
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$ |
1,641,524 |
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$ |
11,052,602 |
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Earnings before interest, other expense (income), impairment, taxes and depreciation and amortization............ |
$ |
(5,035,634 |
) |
$ |
19,436,962 |
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$ |
2,127,599 |
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$ |
11,623,907 |
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$ |
28,152,834 |
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Other expense (income) ....................... |
$ |
179,639 |
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$ |
(646,899 |
) |
$ |
2,521 |
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$ |
12,944 |
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$ |
(451,795 |
) |
Interest expense.............................. |
$ |
2,272,913 |
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$ |
681,365 |
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$ |
28,908 |
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$ |
58,768 |
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$ |
3,041,954 |
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Depreciation and amortization....... |
$ |
16,243,626 |
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$ |
31,868,016 |
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$ |
3,067,195 |
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$ |
1,636,976 |
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$ |
52,815,813 |
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Impairment of long-lived assets..... |
$ |
347,547 |
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$ |
1,523,338 |
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$ |
— |
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$ |
— |
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$ |
1,870,885 |
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Income tax provision..................... |
$ |
— |
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$ |
2,835 |
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$ |
3,716 |
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$ |
2,733,145 |
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$ |
2,739,696 |
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Net (loss) income.......................... |
$ |
(24,079,359 |
) |
$ |
(13,991,693 |
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$ |
(974,741 |
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$ |
7,182,074 |
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$ |
(31,863,719 |
) |
Total expenditures for property, plant and equipment................. |
$ |
1,492,476 |
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$ |
1,667,466 |
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$ |
106,252 |
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$ |
425,838 |
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$ |
3,692,032 |
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Three Months Ended September 30, 2016 |
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Revenue from external customers... |
$ |
8,230,625 |
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$ |
2,247,499 |
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$ |
931,407 |
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$ |
8,599,555 |
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$ |
20,009,086 |
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Revenue from related parties.......... |
$ |
464,850 |
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$ |
35,682,563 |
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$ |
6,604,880 |
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$ |
4,840 |
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$ |
42,757,133 |
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Cost of revenue.............................. |
$ |
9,042,242 |
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$ |
23,914,175 |
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$ |
6,233,149 |
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$ |
3,544,410 |
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$ |
42,733,976 |
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Selling, general and administrative expenses............................................... |
$ |
786,008 |
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$ |
1,415,522 |
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$ |
222,707 |
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$ |
577,572 |
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$ |
3,001,809 |
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Earnings before interest, other expense (income), impairment, taxes and depreciation and amortization............ |
$ |
(1,132,775 |
) |
$ |
12,600,365 |
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$ |
1,080,431 |
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$ |
4,482,413 |
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$ |
17,030,434 |
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Other expense (income) ....................... |
$ |
237,211 |
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$ |
2,421 |
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$ |
(1,500 |
) |
$ |
4,761 |
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$ |
242,893 |
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Interest expense.............................. |
$ |
718,706 |
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$ |
163,506 |
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$ |
16,979 |
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$ |
33,558 |
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$ |
932,749 |
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Depreciation and amortization....... |
$ |
5,297,694 |
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$ |
10,284,307 |
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$ |
1,011,648 |
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$ |
554,781 |
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$ |
17,148,430 |
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Income tax provision..................... |
$ |
— |
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$ |
5,929 |
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$ |
3,716 |
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$ |
1,046,316 |
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$ |
1,055,961 |
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Net (loss) income.......................... |
$ |
(7,386,386 |
) |
$ |
2,144,202 |
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$ |
49,588 |
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$ |
2,842,997 |
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$ |
(2,349,599 |
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Total expenditures for property, plant and equipment................. |
$ |
1,069,381 |
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$ |
492,095 |
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$ |
— |
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$ |
12,706 |
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$ |
1,574,182 |
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At September 30, 2016 |
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Goodwill....................................... |
$ |
— |
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$ |
86,043,148 |
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$ |
— |
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$ |
— |
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$ |
86,043,148 |
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Intangible assets, net..................... |
$ |
— |
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$ |
23,836,496 |
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$ |
— |
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$ |
— |
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$ |
23,836,496 |
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Total Assets................................... |
$ |
103,882,141 |
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$ |
237,288,970 |
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$ |
24,568,736 |
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$ |
32,896,862 |
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$ |
398,636,709 |
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Completion and Production |
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Nine Months Ended September 30, 2015 |
Contract Land and Directional Drilling Services |
Completion and Production Services |
Natural Sand Proppant |
Remote Accommodation Services |
Total |
Revenue from external customers... |
$ |
59,405,209 |
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$ |
68,684,437 |
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$ |
14,084,823 |
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$ |
27,022,723 |
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$ |
169,197,192 |
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Revenue from related parties.......... |
$ |
3,736,497 |
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$ |
100,883,793 |
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$ |
31,373,247 |
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$ |
941,552 |
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$ |
136,935,089 |
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Cost of revenue.............................. |
$ |
48,349,736 |
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$ |
137,002,027 |
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$ |
39,172,447 |
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$ |
11,699,380 |
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$ |
236,223,590 |
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Selling, general and administrative expenses............................................... |
$ |
4,806,351 |
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$ |
5,390,546 |
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$ |
1,982,581 |
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$ |
1,863,021 |
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$ |
14,042,499 |
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Earnings before interest, other expense, impairment, taxes and depreciation and amortization....... |
$ |
9,985,619 |
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$ |
27,175,657 |
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$ |
4,303,042 |
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$ |
14,401,874 |
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$ |
55,866,192 |
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Other expense................................ |
$ |
1,180,881 |
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$ |
372,227 |
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$ |
136,353 |
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$ |
545,053 |
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$ |
2,234,514 |
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Interest expense.............................. |
$ |
2,217,494 |
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$ |
1,853,385 |
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$ |
50,887 |
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$ |
61,019 |
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$ |
4,182,785 |
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Interest income.............................. |
$ |
— |
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$ |
— |
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$ |
(98,055 |
) |
$ |
(468 |
) |
$ |
(98,523 |
) |
Depreciation and amortization....... |
$ |
18,520,703 |
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$ |
30,401,488 |
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$ |
3,151,619 |
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$ |
1,622,454 |
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$ |
53,696,264 |
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Impairment of long-lived assets..... |
$ |
2,565,800 |
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$ |
908,456 |
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$ |
1,904,981 |
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$ |
— |
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$ |
5,379,237 |
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Income tax provision..................... |
$ |
(184,523 |
) |
$ |
— |
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$ |
— |
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$ |
(2,492,984 |
) |
$ |
(2,677,507 |
) |
Net (loss) income.......................... |
$ |
(14,314,736 |
) |
$ |
(6,359,899 |
) |
$ |
(842,743 |
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$ |
14,666,800 |
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$ |
(6,850,578 |
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Total expenditures for property, plant and equipment................. |
$ |
11,771,273 |
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$ |
10,149,859 |
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$ |
171,202 |
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$ |
2,382,572 |
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$ |
24,474,906 |
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Three Months Ended September 30, 2015 |
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Revenue from external customers... |
$ |
17,221,443 |
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$ |
17,113,530 |
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$ |
710,978 |
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$ |
9,105,171 |
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$ |
44,151,122 |
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Revenue from related parties.......... |
$ |
1,300,158 |
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$ |
30,953,556 |
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$ |
9,788,692 |
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$ |
2,965 |
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$ |
42,045,371 |
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Cost of revenue.............................. |
$ |
14,982,203 |
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$ |
43,160,496 |
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$ |
8,437,663 |
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$ |
3,779,866 |
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$ |
70,360,228 |
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Selling, general and administrative expenses............................................... |
$ |
1,334,542 |
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$ |
1,615,725 |
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$ |
455,535 |
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$ |
786,116 |
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$ |
4,191,918 |
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Earnings before interest, other expense, impairment, taxes and depreciation and amortization....... |
$ |
2,204,856 |
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$ |
3,290,865 |
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$ |
1,606,472 |
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$ |
4,542,154 |
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$ |
11,644,347 |
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Other expense................................ |
$ |
1,424 |
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$ |
101,082 |
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$ |
(19,784 |
) |
$ |
59,307 |
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$ |
142,029 |
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Interest expense.............................. |
$ |
874,936 |
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$ |
500,960 |
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$ |
1,769 |
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$ |
(1,210 |
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$ |
1,376,455 |
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Interest income.............................. |
$ |
— |
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$ |
— |
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$ |
(290 |
) |
$ |
9 |
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$ |
(281 |
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Depreciation and amortization....... |
$ |
6,122,697 |
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$ |
10,271,765 |
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$ |
1,041,058 |
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$ |
523,912 |
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$ |
17,959,432 |
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Impairment of long-lived assets..... |
$ |
— |
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$ |
908,456 |
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$ |
— |
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$ |
— |
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$ |
908,456 |
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Income tax provision..................... |
$ |
(210,495 |
) |
$ |
— |
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$ |
— |
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$ |
(4,040,148 |
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$ |
(4,250,643 |
) |
Net (loss) income.......................... |
$ |
(4,583,706 |
) |
$ |
(8,491,398 |
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$ |
583,719 |
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$ |
8,000,284 |
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$ |
(4,491,101 |
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Total expenditures for property, plant and equipment................. |
$ |
1,301,219 |
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$ |
2,010,275 |
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$ |
45,624 |
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$ |
543,741 |
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$ |
3,900,859 |
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At September 30, 2015 |
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Goodwill....................................... |
$ |
— |
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$ |
86,131,395 |
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$ |
— |
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$ |
— |
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$ |
86,131,395 |
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Intangible assets, net..................... |
$ |
— |
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$ |
32,905,579 |
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$ |
— |
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$ |
— |
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$ |
32,905,579 |
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Total Assets................................... |
$ |
136,285,219 |
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$ |
286,576,048 |
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$ |
35,008,151 |
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$ |
36,085,070 |
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$ |
493,954,488 |
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The contract land and directional drilling services segment provides vertical, horizontal and directional drilling services. The completion and production services segment provides hydraulic fracturing, pressure control flowback and equipment rental services. The completion and production – natural sand proppant segment sells, distributes and is capable of producing sand for use in hydraulic fracturing. The remote accommodation services segment provides housing, kitchen and dining, and recreational service facilities for oilfield workers that are located in remote areas away from readily available lodging. The contract land and directional drilling services segment primarily services the Permian Basin in West Texas. The completion and production – services segment primarily services in the Utica Shale of Eastern Ohio and Marcellus Shale in Pennsylvania. The completion and production – natural sand proppant segment primarily services the Utica Shale and Montney Shale in British Columbia and Alberta, Canada. The remote accommodation services segment primarily services Canada.
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