REVENUE FROM CONTRACTS WITH CUSTOMERS

6 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

NOTE 11 REVENUE FROM CONTRACTS WITH CUSTOMERS

Contract Drilling Services Revenue

Due to the continued decline in the price of oil, our customers have reduced their drilling activity and we have received rig release notifications for rigs under term and well-to-well contracts. The releases for rigs under term contracts result in early termination compensation owed to us, while releases for rigs under well-to-well contracts given outside the notification window per the contract result in notification fees owed to us. During the three months ended March 31, 2020 and 2019, early termination revenue associated with term contracts was approximately $8.2 million and $1.2 million, respectively, and $8.3 million for both the six months ended March 31, 2020 and 2019. During the three months ended March 31, 2020 and 2019, notification fee revenue related to well-to-well contracts was approximately $2.2 million and $0.3 million, respectively, and $2.1 million and $0.3 million for the six months ended March 31, 2020 and 2019, respectively. Subsequent to March 31, 2020, we have received additional rig release notifications, which will result in additional early termination and notification fee revenue. Refer to Note 18—Subsequent Events.

As a result of the depressed market conditions and negative outlook for the near term, certain of our customers have opted to renegotiate existing drilling contracts. During the three months ended March 31, 2020, we agreed to certain price concessions on some of our existing drilling contracts; however, the total impact on current and future periods is not significant.

Contract Costs

We had capitalized fulfillment costs of $9.9 million and $13.9 million as of March 31, 2020 and September 30, 2019, respectively.

Remaining Performance Obligations

The total aggregate transaction price allocated to the unsatisfied performance obligations, commonly referred to as backlog, as of March 31, 2020 was approximately $837.6 million, of which approximately $413.1 million is expected to be recognized during the remainder of fiscal year 2020, approximately $312.1 million during fiscal year 2021, and approximately $112.4 million in fiscal year 2022 and thereafter. These amounts do not include anticipated contract renewals. Additionally, contracts that currently contain month-to-month terms are represented in our backlog as one month of unsatisfied performance obligations. Our contracts are subject to cancellation or modification at the election of the customer; however, due to the level of capital deployed by our customers on underlying projects, we have not been materially adversely affected by contract cancellations or modifications in the past. We do not have material long-term contracts related to our H&P Technologies segment.

Contract Assets and Liabilities

The following tables summarize the balances of our contract assets and liabilities:



(in thousands)	March 31, 2020		September 30, 2019
Contract assets	$	2,270	$	2,151



(in thousands)	March 31, 2020
Contract liabilities balance at September 30, 2019	$	23,354
Payment received/accrued and deferred	13,594
Revenue recognized during the period	(24,050		)
Contract liabilities balance at March 31, 2020	$	12,898