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Business Segments
 12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Business Segments

15. Business Segments

The Company’s revenues, operating profits and identifiable assets are primarily attributable to two business segments: (i) contract drilling of oil and natural gas wells and (ii) pressure pumping services. 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.  

Contract Drilling — The Company markets its contract drilling services to major and independent oil and natural gas operators.  As of December 31, 2016, the Company had 202 marketed land-based drilling rigs in the continental United States and western Canada.  

For the years ended December 31, 2016, 2015 and, 2014, contract drilling revenue earned in Canada was $15.6 million, $37.5 million and $87.5 million, respectively.  Additionally, long-lived assets within the contract drilling segment located in Canada totaled $44.0 million and $53.4 million as of December 31, 2016 and 2015, respectively.  

Pressure Pumping — The Company provides pressure pumping services to oil and natural gas operators primarily in Texas and the Appalachian region.  Pressure pumping services are primarily well stimulation services (such as hydraulic fracturing) and cementing services 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.  

Major Customer — During 2016, one customer accounted for approximately $124 million or 14% of the Company’s consolidated operating revenues.  During 2015, one customer accounted for approximately $244 million or 13% of the Company’s consolidated operating revenues.  These revenues were earned in both the Company’s contract drilling and pressure pumping businesses.  During 2014, no single customer accounted for more than 10% of the Company’s consolidated operating revenue.  

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

 

 

 

Years Ended December 31,

 

 

 

2016

 

 

2015

 

 

2014

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

544,196

 

 

$

1,155,565

 

 

$

1,843,707

 

Pressure pumping

 

 

354,070

 

 

 

712,454

 

 

 

1,294,569

 

Other operations(a)

 

 

18,299

 

 

 

24,931

 

 

 

50,196

 

Elimination of intercompany revenues(b)

 

 

(699

)

 

 

(1,673

)

 

 

(6,181

)

Total revenues

 

$

915,866

 

 

$

1,891,277

 

 

$

3,182,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

(235,858

)

 

$

(78,970

)

 

$

241,851

 

Pressure pumping

 

 

(176,628

)

 

 

(254,998

)

 

 

89,081

 

Other operations

 

 

(3,391

)

 

 

(14,269

)

 

 

(6,738

)

Corporate

 

 

(54,672

)

 

 

(57,088

)

 

 

(56,849

)

Other operating income (expense), net (c)

 

 

14,323

 

 

 

(1,647

)

 

 

15,781

 

Interest income

 

 

327

 

 

 

964

 

 

 

979

 

Interest expense

 

 

(40,366

)

 

 

(36,475

)

 

 

(29,825

)

Other

 

 

69

 

 

 

34

 

 

 

3

 

Income (loss) before income taxes

 

$

(496,196

)

 

$

(442,449

)

 

$

254,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Identifiable assets:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

3,032,819

 

 

$

3,457,044

 

 

$

4,000,576

 

Pressure pumping

 

 

653,630

 

 

 

813,704

 

 

 

1,186,010

 

Other operations

 

 

48,885

 

 

 

38,726

 

 

 

51,313

 

Corporate(d)

 

 

69,272

 

 

 

220,010

 

 

 

153,013

 

Total assets

 

$

3,804,606

 

 

$

4,529,484

 

 

$

5,390,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion, amortization and impairment:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

467,974

 

 

$

618,434

 

 

$

524,023

 

Pressure pumping

 

 

184,872

 

 

 

214,552

 

 

 

147,595

 

Other operations

 

 

10,114

 

 

 

26,301

 

 

 

42,576

 

Corporate

 

 

5,474

 

 

 

5,472

 

 

 

4,536

 

Total depreciation, depletion, amortization and impairment

 

$

668,434

 

 

$

864,759

 

 

$

718,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

72,508

 

 

$

527,054

 

 

$

771,593

 

Pressure pumping

 

 

39,584

 

 

 

197,577

 

 

 

241,359

 

Other operations

 

 

6,116

 

 

 

16,625

 

 

 

36,683

 

Corporate

 

 

1,591

 

 

 

2,520

 

 

 

2,706

 

Total capital expenditures

 

$

119,799

 

 

$

743,776

 

 

$

1,052,341

 

 

(a)

Other operations includes the Company’s pipe handling components and related technology business, the oil and natural gas working interests and the Middle East/North Africa business.

(b)

Consists of contract drilling and, in 2016, intercompany revenues between the pipe handling component manufacturer and the pipe handling component service provider, and in 2014, pressure pumping intercompany revenues for services provided to the oil and natural gas exploration and production segment.

(c)

Other operating income (expense), net includes 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. This caption also includes expenses related to certain legal settlements net of insurance reimbursements.

(d)

Corporate assets primarily include cash on hand, income tax receivables and certain deferred tax assets.