XML 32 R13.htm IDEA: XBRL DOCUMENT
v3.22.1

PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended
--- | ---
Mar. 31, 2022
Property, Plant and Equipment [Abstract] |
PROPERTY, PLANT AND EQUIPMENT |
NOTE 4 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of March 31, 2022 and September 30, 2021 consisted of the following:
(in thousands) | Estimated Useful Lives |  | March 31, 2022 |  | September 30, 2021
Drilling services equipment | 4 - 15 years |  | $ | 6,284,174 |  |  | $ | 6,229,011 |
Tubulars | 4 years |  | 555,968 |  |  | 573,900 |
Real estate properties | 10 - 45 years |  | 44,916 |  |  | 43,302 |
Other | 2 - 23 years |  | 420,589 |  |  | 459,741 |
Construction in progress (1) |  |  | 62,959 |  |  | 47,587 |
|  |  | 7,368,606 |  |  | 7,353,541 |
Accumulated depreciation |  |  | (4,346,271) |  |  | (4,226,254) |
Property, plant and equipment, net |  |  | $ | 3,022,335 |  |  | $ | 3,127,287 |
Assets held-for-sale |  |  | $ | 57,373 |  |  | $ | 71,453 |
(1)Included in construction in progress are costs for projects in progress to upgrade or refurbish certain rigs in our existing fleet. Additionally, we include other capital maintenance purchase orders that are open/in process. As these various projects are completed, the costs are then classified to their appropriate useful life category. Depreciation Depreciation expense in the Unaudited Condensed Consolidated Statements of Operations was $101.1 million and $104.6 million, including $2.5 million and $0.5 million in abandonments, for the three months ended March 31, 2022 and 2021, respectively. Depreciation expense in the Unaudited Condensed Consolidated Statements of Operations was $199.8 million and $209.7 million, including $3.8 million and $0.4 million in abandonments for the six months ended March 31, 2022 and 2021, respectively. Assets Held-for-Sale The following table summarizes the balance (in thousands) of our assets held-for-sale at the dates indicated below:
Balance at September 30, 2021 | $ | 71,453 |
Plus: |
Asset additions | 1,459 |
Less: |
Sale of assets held-for-sale | (15,539) |
Balance at March 31, 2022 | $ | 57,373 |
In March 2021, the Company's leadership continued the execution of the current strategy, which was initially introduced in 2019, focusing on operating various types of highly capable upgraded rigs and phasing out the older, less capable fleet. As a result, the Company has undertaken a plan to sell 71 Domestic non-super-spec rigs, all within our North America Solutions segment, the majority of which were previously decommissioned, written down and/or held as capital spares. The book values of those assets were written down to $13.5 million, which represents their fair value less estimated costs to sell, and were reclassified as held-for-sale in the second and third quarters of fiscal year 2021. During the fiscal year ended September 30, 2021, we completed the sale of a portion of the assets with a net book value of $6.5 million that were originally classified as held-for-sale during the second and third quarters of fiscal year 2021. Additionally, during the six months ended March 31, 2022, we completed the sale of a portion of the remaining assets with a net book value of $1.6 million that were originally classified as held-for-sale during the second and third quarters of fiscal year 2021. During September 2021, the Company agreed to sell eight FlexRig® land rigs with an aggregate net book value of $55.6 million to ADNOC Drilling Company P.J.S.C. ("ADNOC Drilling") for $86.5 million. Two of the eight rigs were already located in the U.A.E where ADNOC Drilling is domiciled with the remaining six rigs to be shipped from the United States. We received the $86.5 million in cash consideration in advance of delivering the rigs. As part of the sales agreement, the rigs will be delivered and commissioned in stages over a twelve-month period subject to acceptance upon successful completion of final inspection on customary terms and conditions. During the second quarter of fiscal year 2022, ADNOC Drilling accepted delivery of the two rigs located in the U.A.E. with a net book value of $4.1 million and, as a result, we recognized a gain of $1.2 million, after incurring $2.4 million of selling costs, during the three months ended March 31, 2022 and the rigs were removed from assets classified as held-for-sale as of March 31, 2022. The gain of $1.2 million is recorded in Other (Gain) Loss on Sale of Assets within our Unaudited Condensed Consolidated Statement of Operations for the three and six months ended March 31, 2022. The remaining cash proceeds received in advance of rig delivery and acceptance of $78.8 million is recorded in Accrued Liabilities within our Unaudited Condensed Consolidated Balance Sheets as of March 31, 2022. Additionally, the six remaining rigs in the United States are classified as held-for-sale in the Unaudited Condensed Consolidated Balance Sheets until each rig is delivered and accepted, at which time any related gain/loss on the sale will be recognized in the Unaudited Condensed Consolidated Statement of Operations. Estimated cost to sell related to the remaining rigs is approximately $26.6 million, including approximately $11.2 million of expenses incurred during the six months ended March 31, 2022, and approximately $15.4 million of expenses to be incurred in future periods. We paid approximately $10.6 million in cash charges related to these costs during the six months ended March 31, 2022. During the fiscal year ended September 30, 2021, we formalized a plan to sell assets related to two of our lower margin service offerings, trucking and casing running assets, which contributed approximately 2.8 percent to our consolidated revenues during fiscal year 2021, all within our North America Solutions segment. The combined net book values of these assets of $23.2 million were written down to their combined fair value less estimated cost to sell of $8.8 million, and were reclassified as held-for-sale during the fourth quarter of fiscal year 2021. During the six months ended March 31, 2022, we closed on the sale of these assets in two separate transactions. The sale of our trucking assets was completed on November 3, 2021 while the sale of our casing running assets was completed on November 15, 2021 for total consideration less costs to sell of $6.0 million, in addition to the possibility of future earnout revenue, resulting in a loss of $3.4 million. Losses related to the sale of these assets are recorded in Other (Gain) Loss on Sale of Assets within our Unaudited Condensed Consolidated Statements of Operations. During the first quarter of fiscal year 2022, we identified two partial rig substructures that met the asset held-for-sale criteria and were reclassified as assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. The combined net book value of the rig substructures of $2.0 million were written down to their estimated scrap value of $0.1 million, resulting in a non-cash impairment charge of $1.9 million within our North America Solutions segment and recorded in the Unaudited Condensed Consolidated Statement of Operations for the six months ended March 31, 2022. During the three months ended March 31, 2022, we completed the sale of a portion of the assets with a net book value of approximately $0.1 million, resulting in no gain or loss as a result of the sale. During the first quarter of fiscal year 2022, we identified two international FlexRig® drilling rigs located in Colombia that met the asset held-for-sale criteria and were reclassified as assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets. In conjunction with establishing a plan to sell the two international FlexRig® drilling rigs, we recognized a non-cash impairment charge of $2.5 million within our International Solutions segment and recorded in the Unaudited Condensed Consolidated Statement of Operations during the six months ended March 31, 2022, as the rigs aggregate net book value of $3.4 million exceeded the fair value of the rigs less estimated cost to sell of $0.9 million. During the three months ended March 31, 2022, we completed the sale of the two international FlexRig® drilling rigs for total consideration of $0.9 million, resulting in no gain or loss as a result of the sale. The significant assumptions utilized in the valuation of assets held-for-sale were based on our intended method of disposal, historical sales of similar assets, and market quotes and are classified as Level 2 and Level 3 inputs by ASC Topic 820, Fair Value Measurement and Disclosures. Although we believe the assumptions used in our analysis are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and our resulting conclusion. (Gain)/Loss on Sale of Assets We had a gain of $6.4 million and $11.7 million, during the three and six months ended March 31, 2022, respectively, and $3.8 million and $5.9 million, during the three and six months ended March 31, 2021, respectively, related to customer reimbursement for the replacement value of lost or damaged drill pipe. Gains related to these asset sales are recorded in Gains on Reimbursement of Drilling Equipment within our Unaudited Condensed Consolidated Statements of Operations. During the three and six months ended March 31, 2022, we had a (gain) loss of $(0.7) million and $0.3 million, respectively, related to the sale of rig equipment and other capital assets. During the first quarter of fiscal year 2022, we closed on the sale of our trucking and casing running assets resulting in a loss of $3.4 million, as mentioned above. During the second quarter of fiscal year 2022, ADNOC Drilling accepted delivery of two rigs resulting in a gain of $1.2 million, as mentioned above. The (gain) loss related to the sale of these assets are recorded in Other (Gain) Loss on Sale of Assets within our Unaudited Condensed Consolidated Statements of Operations. During the three and six months ended March 31, 2021, we had a loss of $22.3 million and $12.1 million, respectively, related to sale of rig equipment and other capital assets. During the first quarter of fiscal year 2021, we completed the sale of an offshore platform rig within our Offshore Gulf of Mexico operating segment resulting in a gain of $9.2 million. During the second quarter of fiscal year 2021, we sold excess drilling equipment and spares, which resulted in a net loss of $23.0 million. The (gain) loss related to these asset sales were recorded in Other (Gain) Loss on Sale of Assets within our Unaudited Condensed Consolidated Statements of Operations.

X
- References No definition available. + Details
Name: | us-gaap_PropertyPlantAndEquipmentAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 958 -SubTopic 360 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=120429125&loc=d3e99893-112916 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 958 -SubTopic 360 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=120429125&loc=SL120174063-112916 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 958 -SubTopic 360 -Section 50 -Paragraph 1 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120429125&loc=d3e99779-112916 + Details
Name: | us-gaap_PropertyPlantAndEquipmentDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration