Property and Equipment

9 Months Ended

Sep. 30, 2012

4. Property and Equipment

Property and equipment consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):


	September 30, 2012			December 31, 2011
Equipment	$	5,228,179		$	4,730,925
Oil and natural gas properties		151,074			131,812
Buildings		62,894			64,090
Land		10,266			11,467

		5,452,413			4,938,294

Less accumulated depreciation and depletion		(1,929,509	)		(1,771,028	)

Property and equipment, net	$	3,522,904		$	3,167,266

During the nine months ended September 30, 2012 and 2011, in connection with its ongoing planning process, the Company evaluated its then-current fleet of marketable drilling rigs and identified 36 and 22 rigs, respectively, that it determined would no longer be marketed as rigs. The components comprising these rigs were evaluated, and those components with continuing utility to the Company’s other marketed rigs were transferred to other rigs or yards to be used as spare equipment. The remaining components of these rigs were impaired and estimated to have no salvage value. During the nine months ended September 30, 2012, the Company also evaluated its fleet of marketable pressure pumping equipment and identified approximately 37,000 horsepower of pressure pumping equipment that will be retired. The identified pressure pumping equipment was impaired and estimated to have no salvage value. The net book value of the impaired assets of $12.5 million in 2012 and $4.3 million in 2011 was expensed in the Company’s consolidated statements of operations as an impairment charge.

On April 23, 2012, the Company sold its flowback operations to a subsidiary of TETRA Technologies, Inc. in a cash transaction. The sale price was $42.5 million, and the Company recognized a gain of approximately $22.6 million in the second quarter of 2012 as a result of this transaction.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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