Goodwill and Intangible Assets
|9 Months Ended|
Sep. 30, 2021
|Goodwill and Intangible Assets Disclosure [Abstract]|
|Goodwill and Intangible Assets||Goodwill and Intangible Assets
Changes in the net carrying amount of goodwill by reporting segment (see Note 19) for the nine months ended September 30, 2021 and year ended December 31, 2020 are presented below (in thousands):
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 reporting units were less than their carrying value. Therefore, the Company performed an interim goodwill impairment test. The Company impaired goodwill associated with Stingray Pressure Pumping, Silverback Energy and WTL Oil LLC, resulting in a $55.0 million impairment charge during the first quarter of 2020. To determine fair value, the Company used a combination of the income and market approaches. The income approach estimates the fair value based on anticipated cash flows that are discounted using a weighted average cost of
capital. The market approach estimates the fair value using comparative multiples, which involves significant judgment in the selection of the appropriate peer group companies and valuation multiples. The Company did not recognize any goodwill impairment during the three or nine months ended September 30, 2021.
The Company had the following definite lived intangible assets recorded (in thousands):
Amortization expense for intangible assets was $0.2 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $0.8 million for each of the nine months ended September 30, 2021 and 2020. The original life of customer relationships is six years as of September 30, 2021 with a remaining average useful life of 1.6 years. The original life of trade names ranges from 10 to 20 years as of September 30, 2021 with a remaining average useful life of 5.6 years.
Aggregated expected amortization expense for the future periods is expected to be as follows (in thousands):Due to market conditions, the Company has temporarily shut down its crude oil hauling operations beginning in July 2021. As a result, the Company recognized impairment of trade names totaling $0.5 million, which is included in impairment of other long-lived assets on the unaudited condensed statements of comprehensive income (loss).
The entire disclosure for goodwill and intangible assets.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef