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Business Segments
 12 Months Ended
Dec. 31, 2012
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 year ended December 31, 2010 is presented as discontinued operations in the consolidated statements of operations. Also included in discontinued operations for the years 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, 2012, the Company had 314 marketable land-based drilling rigs in the continental United States, Alaska and western and northern Canada.

 

For the years ended December 31, 2012, 2011 and, 2010, contract drilling revenue earned in Canada was $79.4 million, $106 million and $65.7 million, respectively. Additionally, long-lived assets within the contract drilling segment located in Canada totaled $72.6 million and $69.8 million as of December 31, 2012 and 2011, 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,  
     2012     2011     2010  

Revenues:

       

Contract drilling

    $ 1,826,519      $ 1,673,629      $ 1,085,722   

Pressure pumping

      841,771        845,803        350,608   

Oil and natural gas

      59,930        50,559        30,425   
  

 

 

    

 

 

    

 

 

  

Total segment revenues

      2,728,220        2,569,991        1,466,755   

Elimination of intercompany revenues(a)

      (4,806 )      (4,048 )      (3,824 ) 
  

 

 

    

 

 

    

 

 

  

Total revenues

    $ 2,723,414      $ 2,565,943      $ 1,462,931   
  

 

 

    

 

 

    

 

 

  

Income from continuing operations before income taxes:

       

Contract drilling

    $ 349,393      $ 346,083      $ 140,483   

Pressure pumping

      132,795        193,440        62,194   

Oil and natural gas

      27,210        23,982        12,455   
  

 

 

    

 

 

    

 

 

  
     509,398        563,505        215,132   

Corporate and other

      (45,843 )      (42,903 )      (37,019 ) 

Net gain on asset disposals(b)

      33,806        4,999        22,812   

Interest income

      554        187        1,674   

Interest expense

      (22,750 )      (15,652 )      (12,772 ) 

Other

      508        582        927   
  

 

 

    

 

 

    

 

 

  

Income from continuing operations before income taxes

    $ 475,673      $ 510,718      $ 190,754   
  

 

 

    

 

 

    

 

 

  

Identifiable assets:

       

Contract drilling

    $ 3,538,289      $ 3,252,116      $ 2,678,250   

Pressure pumping

      784,128        748,643        533,597   

Oil and natural gas

      54,188        44,990        36,508   

Corporate and other(c)

      180,306        176,152        174,676   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 4,556,911      $ 4,221,901      $ 3,423,031   
  

 

 

    

 

 

    

 

 

  

Depreciation, depletion, amortization and impairment:

       

Contract drilling

    $ 390,316      $ 344,312      $ 280,458   

Pressure pumping

      111,062        73,279        40,724   

Oil and natural gas

      21,417        16,962        10,950   

Corporate and other

      3,819        2,726        1,361   
  

 

 

    

 

 

    

 

 

  

Total depreciation, depletion, amortization and impairment

    $ 526,614      $ 437,279      $ 333,493   
  

 

 

    

 

 

    

 

 

  

Capital expenditures:

       

Contract drilling

    $ 744,949      $ 784,686      $ 655,550   

Pressure pumping

      194,117        198,061        51,064   

Oil and natural gas

      29,888        22,884        23,067   

Corporate and other

      5,034        5,947        8,409   
  

 

 

    

 

 

    

 

 

  

Total capital expenditures

    $ 973,988      $ 1,011,578      $ 738,090   
  

 

 

    

 

 

    

 

 

  

 

(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.