Divestitures and Assets Held for Sale

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

The Company reviews portfolio opportunities on an ongoing basis and has engaged in various divestiture transactions over recent years. In January 2020, the Company completed the initial closing for the sale of certain oil and gas properties located in the Williston Basin for total cash proceeds of $10.4 million. The transaction had an effective date of October 1, 2019, and the final closing statement for the transaction will be completed in August 2020. During the three and six months ended June 30, 2020, the Company recognized a $0.2 million and $11.4 million net gain on sale of properties, respectively, which includes, and is subject to further, customary post-close adjustments, in its Condensed Consolidated Statements of Operations. The divested properties were included in the Company’s exploration and production segment.

Assets Held for Sale

During the fourth quarter of 2019, the Company decided to pursue an exit from the well services business (the “Well Services Exit”) and began an active program to locate buyers for certain well services inventory and equipment included within the Company’s well services business segment. The assets expected to be sold related to the Well Services Exit met the criteria for assets held for sale at December 31, 2019 and were classified as such.

During the three months ended March 31, 2020, the Company recorded an impairment charge of $14.5 million to write-off the net book value of certain well services equipment held for sale as of December 31, 2019 for which a sale was no longer probable to be completed within one year. In addition, the Company recorded an impairment charge of $1.4 million to adjust the carrying value of the remaining equipment held for sale to its estimated fair value less costs to sell. These impairment charges are included in impairment on the Company’s Condensed Consolidated Statements of Operations for the six months ended June 30, 2020. During the three months ended June 30, 2020, the Company recorded a non-cash adjustment of $1.5 million to adjust the carrying value of inventory held for sale to its net realizable value, which was included in other services expenses on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020.

During the three months ended June 30, 2020, the Company completed various sale agreements for total cash proceeds of $1.4 million for the sales of certain well services equipment related to the Well Services Exit, recognizing a net loss on sale of properties of $0.5 million. In June 2020, the Company signed a purchase and sale agreement to sell certain well services inventory and equipment for total cash proceeds of $5.5 million and classified the book value of these assets of $1.4 million as held for sale as of June 30, 2020. The final closing for the transaction is expected to be completed in August 2020. The sale of assets related to the Well Services Exit does not represent a strategic shift that will have a major effect on the Company’s operations and financial results, and therefore, is not reported as discontinued operations.

The following table presents balance sheet data related to the assets held for sale related to the Well Services Exit as of June 30, 2020:


	June 30, 2020
	(In thousands)
Inventory	$	580
Other property and equipment	67,617
Less: Accumulated depreciation and impairment	(66,817)
Total assets held for sale	$	1,380