Quarterly report pursuant to Section 13 or 15(d)

Property, Plant and Equipment

v3.20.1
Property, Plant and Equipment
 3 Months Ended
Mar. 31, 2020
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Property, Plant and Equipment  
Property, plant and equipment include the following (in thousands):
March 31, December 31,
Useful Life 2020 2019
Pressure pumping equipment
3-5 years
 $ 216,813    $ 216,627   
Drilling rigs and related equipment
3-15 years
 116,252    117,783   
Machinery and equipment
7-20 years
 184,893    190,221   
Buildings(a)
15-39 years
 45,352    47,859   
Vehicles, trucks and trailers
5-10 years
 129,700    135,724   
Coil tubing equipment
4-10 years
 27,462    29,438   
Land N/A 13,687    13,687   
Land improvements
15 years or life of lease
 10,135    10,135   
Rail improvements
10-20 years
 13,802    13,802   
Other property and equipment(b)
3-12 years
 19,054    18,880   
777,150    794,156   
Deposits on equipment and equipment in process of assembly(c)
4,964    6,627   
782,114    800,783   
Less: accumulated depreciation(d)
466,046    448,011   
Total property, plant and equipment, net $ 316,068    $ 352,772   
a. Included in Buildings at March 31, 2020 and December 31, 2019 are costs of $7.6 million and $6.7 million, respectively, related to assets under operating leases.
b. Included in Other property and equipment at each of March 31, 2020 and December 31, 2019 are costs of $6.5 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 $4.2 million and $3.5 million, respectively, at March 31, 2020 and December 31, 2019 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 three months ended March 31, 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 significant unobservable inputs (Level 3) based on an income approach. The Company did not record any impairment of other long-lived assets during the three months ended March 31, 2019.

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 statement of cash flows. For the three months ended March 31, 2020 and
2019, proceeds from the sale of equipment damaged or lost down-hole were $0.4 million and a nominal amount, respectively, and gains on sales of equipment damaged or lost down-hole were $0.4 million and a nominal amount, respectively.

Proceeds from assets sold or disposed of as well as the carrying value of the related equipment are reflected in “other, net” on the unaudited condensed consolidated statement of comprehensive (loss) income. For the three months ended March 31, 2020 and 2019, proceeds from the sale of equipment were $0.6 million and $1.4 million, respectively, and gains (losses) from the sale or disposal of equipment were $0.3 million and ($0.1) million, respectively.

Depreciation, depletion, amortization and accretion
A summary of depreciation, depletion, amortization and accretion expense is below (in thousands):

Three Months Ended March 31,
2020 2019
Depreciation expense $ 25,600    $ 28,066   
Depletion expense —    212   
Amortization expense 253    284   
Accretion expense 29    14   
Depreciation, depletion, amortization and accretion $ 25,882    $ 28,576