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Business Segments
 12 Months Ended
Dec. 31, 2011
Business Segments
15. Business Segments

The Company’s revenues, operating profits and identifiable assets are primarily attributable to three business segments: (i) contract drilling of oil and natural gas wells, (ii) pressure pumping services and (iii) the investment, on a non-operating working interest basis, in oil and natural gas properties. Each of these segments represents a distinct type of business. These segments have separate management teams which report to the Company’s chief operating decision maker. The results of operations in these segments are regularly reviewed by the chief operating decision maker for purposes of determining resource allocation and assessing performance. As discussed in Note 2, in January 2010, the Company exited the drilling and completion fluids services business which previously was reported as a business segment. Operating results for that business for the years ended December 31, 2010 and 2009 are presented as discontinued operations in the consolidated statements of operations. Also included in discontinued operations for the year ended December 31, 2011 and 2010 are the operating results for an electric wireline business that was acquired on October 1, 2010 and sold in January 2011.

Contract Drilling — The Company markets its contract drilling services to major and independent oil and natural gas operators. As of December 31, 2011, the Company had 328 marketable land-based drilling rigs, of which 64 were based in west Texas and southeastern New Mexico; 73 in north central and east Texas, northern Louisiana and Mississippi; 48 in the Rocky Mountain region (Colorado, Utah, Wyoming, Montana and North Dakota); 62 in south Texas and southern Louisiana; 27 in the Texas panhandle, Oklahoma and Arkansas; 34 in the Appalachian Basin and 20 in western Canada.

For the years ended December 31, 2011, 2010 and 2009, contract drilling revenue earned in Canada was $106 million, $65.7 million and $45.4 million, respectively. Additionally, long-lived assets within the contract drilling segment located in Canada totaled $69.8 million and $70.7 million as of December 31, 2011 and 2010, respectively.

Pressure Pumping — The Company provides pressure pumping services to oil and natural gas operators primarily in Texas and the Appalachian Basin. Pressure pumping services are primarily well stimulation and cementing for the completion of new wells and remedial work on existing wells. Well stimulation involves processes inside a well designed to enhance the flow of oil, natural gas, or other desired substances from the well. Cementing is the process of inserting material between the hole and the pipe to center and stabilize the pipe in the hole.

Oil and Natural Gas — The Company owns and invests in oil and natural gas assets as a non-operating working interest owner. The Company’s oil and natural gas interests are located primarily in Texas and New Mexico.

 

The following tables summarize selected financial information relating to the Company’s business segments (in thousands):

 

     Years Ended December 31,  
     2011     2010     2009  

Revenues:

       

Contract drilling

    $ 1,673,629      $ 1,085,722      $ 600,423   

Pressure pumping

      845,803        350,608        161,441   

Oil and natural gas

      50,559        30,425        21,218   
  

 

 

    

 

 

    

 

 

  

Total segment revenues

      2,569,991        1,466,755        783,082   

Elimination of intercompany revenues(a)

      (4,048 )      (3,824 )      (1,136 ) 
  

 

 

    

 

 

    

 

 

  

Total revenues

    $ 2,565,943      $ 1,462,931      $ 781,946   
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations before income taxes:

       

Contract drilling

    $ 346,083      $ 140,483      $ (11,219 ) 

Pressure pumping

      193,440        62,194        1,017   

Oil and natural gas

      23,982        12,455        950   
  

 

 

    

 

 

    

 

 

  
     563,505        215,132        (9,252 ) 

Corporate and other

      (42,903 )      (37,019 )      (35,577 ) 

Net (loss) gain on asset disposals(b)

      4,999        22,812        (3,385 ) 

Interest income

      187        1,674        381   

Interest expense

      (15,652 )      (12,772 )      (4,148 ) 

Other

      582        927        426   
  

 

 

    

 

 

    

 

 

  

Income (loss) from continuing operations before income taxes

    $ 510,718      $ 190,754      $ (51,555 ) 
  

 

 

    

 

 

    

 

 

  

Identifiable assets:

       

Contract drilling

    $ 3,252,116      $ 2,678,250      $ 2,129,567   

Pressure pumping

      748,643        533,597        213,094   

Oil and natural gas

      44,990        36,508        25,355   

Corporate and other(c)

      176,152        174,676        294,136   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 4,221,901      $ 3,423,031      $ 2,662,152   
  

 

 

    

 

 

    

 

 

  

Depreciation, depletion, amortization and impairment:

       

Contract drilling

    $ 344,312      $ 280,458      $ 248,424   

Pressure pumping

      73,279        40,724        27,589   

Oil and natural gas

      16,962        10,950        12,927   

Corporate and other

      2,726        1,361        907   
  

 

 

    

 

 

    

 

 

  

Total depreciation, depletion, amortization and impairment

    $ 437,279      $ 333,493      $ 289,847   
  

 

 

    

 

 

    

 

 

  

Capital expenditures:

       

Contract drilling

    $ 784,686      $ 655,550      $ 395,376   

Pressure pumping

      198,061        51,064        43,144   

Oil and natural gas

      22,884        23,067        7,341   

Corporate and other

      5,947        8,409        6,785   
  

 

 

    

 

 

    

 

 

  

Total capital expenditures

    $ 1,011,578      $ 738,090      $ 452,646   
  

 

 

    

 

 

    

 

 

  

 

(a) Includes contract drilling intercompany revenues related to drilling services provided to the oil and natural gas exploration and production segment.

 

(b) Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

 

(c) Corporate and other assets primarily include identifiable assets associated with assets held for sale as well as cash on hand, income taxes receivable and certain deferred federal income tax assets.