Quarterly report pursuant to Section 13 or 15(d)

Property, Plant and Equipment

v3.21.2
Property, Plant and Equipment
 9 Months Ended
Sep. 30, 2021
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Property, Plant and Equipment     
Property, plant and equipment include the following (in thousands):
September 30, December 31,
Useful Life 2021 2020
Pressure pumping equipment
3-5 years
 $ 220,023  $ 217,945 
Drilling rigs and related equipment
3-15 years
 112,223  113,146 
Machinery and equipment
7-20 years
 168,631  172,272 
Buildings(a)
15-39 years
 45,937  48,776 
Vehicles, trucks and trailers
5-10 years
 104,717  111,911 
Coil tubing equipment
4-10 years
 7,591  8,541 
Land N/A 13,417  13,417 
Land improvements
15 years or life of lease
 10,133  10,133 
Rail improvements
10-20 years
 13,793  13,793 
Other property and equipment(b)
3-12 years
 18,253  18,640 
714,718  728,574 
Deposits on equipment and equipment in process of assembly(c)
3,857  3,191 
718,575  731,765 
Less: accumulated depreciation(d)
524,097  480,503 
Total property, plant and equipment, net $ 194,478  $ 251,262 
a.    Included in Buildings at each of September 30, 2021 and December 31, 2020 are costs of $7.6 million related to assets under operating leases.
b.    Included in Other property and equipment at each of September 30, 2021 and December 31, 2020 are costs of $6.0 million related to assets under operating leases.
c.    Deposits on equipment and equipment in process of assembly represents deposits placed with vendors for equipment that is in the process of assembly and purchased equipment that is being outfitted for its intended use. The equipment is not yet placed in service.
d.    Includes accumulated depreciation of $6.3 million and $5.0 million at September 30, 2021 and December 31, 2020, respectively, related to assets under operating leases.

Impairment
Oil prices declined significantly in March 2020 as a result of geopolitical events that increased the supply of oil in the market as well as effects of the COVID-19 pandemic. As a result, the Company determined that it was more likely than not that the fair value of certain of its oilfield services assets were less than their carrying value. Therefore, the Company performed an interim impairment test. As a result of the test, the Company recorded the following impairments to its fixed assets during the first quarter of 2020 (in thousands):
Water transfer equipment $ 4,203 
Crude oil hauling equipment 3,275 
Coil tubing equipment 2,160 
Flowback equipment 1,514 
Rental equipment 1,308 
Other equipment 437 
Total impairment of other long-lived assets $ 12,897 

The Company measured the fair values of these assets using direct and indirect observable inputs (Level 2) based on a market approach. The Company did not record any impairment of other long-lived assets during the three and nine months ended September 30, 2021.

Disposals
Proceeds from customers for horizontal and directional drilling services equipment damaged or lost down-hole are reflected in revenue with the carrying value of the related equipment charged to cost of service revenues and are reported as cash inflows from investing activities in the unaudited condensed consolidated statement of cash flows. For the nine months ended September 30, 2020, proceeds and gains from the sale of equipment damaged or lost down-hole were a nominal amount and $0.7 million, respectively. The Company did not have any proceeds or gains from the sale of
equipment damaged or lost down-hole during the three and nine months ended September 30, 2021 and three months ended September 30, 2020.

Proceeds from assets sold or disposed of as well as the carrying value of the related equipment are reflected in “other income (expense), net” on the unaudited condensed consolidated statement of comprehensive loss. For the three and nine months ended September 30, 2021 and 2020, proceeds from the sale of equipment were $4.9 million, $9.5 million, $2.7 million and $4.9 million, respectively, and gains (losses) from the sale or disposal of equipment were $3.0 million, $4.6 million, ($0.6) million and $0.2 million, respectively.

Depreciation, depletion, amortization and accretion
A summary of depreciation, depletion, amortization and accretion expense is below (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Depreciation expense $ 18,179  $ 22,305  $ 58,625  $ 71,645 
Depletion expense 684  545  1,069  638 
Amortization expense 249  253  756  761 
Accretion expense 36  29  109  86 
Depreciation, depletion, amortization and accretion $ 19,148  $ 23,132  $ 60,559  $ 73,130