PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Jun. 30, 2025

Property, Plant and Equipment [Abstract]

NOTE 4 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of June 30, 2025 and September 30, 2024 consisted of the following:


(in thousands)	Estimated Useful Lives	June 30, 2025		September 30, 2024
Drilling services equipment	2 - 15 years	$	8,095,850	$	6,671,975
Tubulars	4 years	605,423		552,773
Real estate properties	10 - 45 years	8,223		48,617
Other	2 - 23 years	612,104		460,857
Construction in progress1		203,822		106,183
		9,525,422		7,840,405
Accumulated depreciation		(5,117,266)		(4,824,128)
Property, plant and equipment, net		$	4,408,156	$	3,016,277

Assets held-for-sale		$	14,238	$	—

(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 advances for 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.

KCA Deutag Acquisition

Refer to Note 3—Business Combination for additional information regarding the property, plant and equipment acquired in connection with the Acquisition.

Depreciation

Depreciation expense during the three months ended June 30, 2025 and 2024 was $160.8 million and $96.2 million, including abandonments of $0.1 million during each respective period. Depreciation expense during the nine months ended June 30, 2025 and 2024 was $405.1 million and $291.5 million, including abandonments of $2.0 million and $3.2 million, respectively. These expenses are recorded within Depreciation and amortization on our Unaudited Condensed Consolidated Statements of Operations.

In November 2022, a fire at a wellsite caused substantial damage to one of our super-spec rigs within our North America Solutions segment. The major components were destroyed beyond repair and considered a total loss, and, as a result, these assets were written off and the rig was removed from our available rig count. At the time of the loss, the rig was fully insured under replacement cost insurance. During the nine months ended June 30, 2024, we recognized a gain on involuntary conversion of the rig of $5.5 million which represents the insurance proceeds received in excess of the carrying value of the rig and therefore was recognized as a gain within operating income during the nine months ended June 30, 2024.

Assets Held-for-Sale

During the three months ended June 30, 2025, we committed to a plan to sell a significant portion of our real estate portfolio, including a shopping center comprised of approximately 371,000 leasable square feet with a net book value of $11.0 million. Separately, within the same period, we identified 16 land rigs within our International Solutions operating segment that met the asset held-for-sale criteria with an aggregate remaining net book value of $3.2 million. As a result, a combined total of $14.2 million in real estate and land rig assets were reclassified from Property, plant and equipment to Assets held-for-sale on our Unaudited Condensed Consolidated Balance Sheets during the period.

During the nine months ended June 30, 2025, we identified a domestic drilling rig that met the asset held-for-sale criteria. The rig's net book value of $1.7 million was written down to its estimated scrap value of $0.2 million, resulting in a non-cash impairment charge of $1.5 million in our North America Solutions segment during the nine months ended June 30, 2025.

Gain on Reimbursement of Drilling Equipment

We recognized a gain of $6.8 million and $26.1 million during the three and nine months ended June 30, 2025 as compared to a gain of $9.7 million and $24.7 million during the three and nine months ended June 30, 2024, respectively, related to customer reimbursement for the current 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.