Property and Equipment

3 Months Ended

Mar. 31, 2017

Property Plant And Equipment [Abstract]

5. Property and Equipment

Property and equipment consisted of the following at March 31, 2017 and December 31, 2016 (in thousands):

	March 31,			December 31,
	2017			2016
Equipment	$	6,831,966		$	6,809,129
Oil and natural gas properties		206,262			201,568
Buildings		99,388			97,029
Land		11,757			22,270
Total property and equipment		7,149,373			7,129,996
Less accumulated depreciation, depletion and impairment		(3,820,585	)		(3,721,033	)
Property and equipment, net	$	3,328,788		$	3,408,963

The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable (a “triggering event”). Based on recent commodity prices, the Company’s results of operations for the three month period ended March 31, 2017 and management’s expectations of operating results in future periods, the Company concluded that no triggering event occurred during the three months ended March 31, 2017 with respect to its contract drilling or pressure pumping segments. Management’s expectations of future operating results were based on the assumption that activity levels in both segments will continue to increase throughout 2017 if prices for these commodities remain at or above current levels.

The Company reviews its proved oil and natural gas properties for impairment whenever a triggering event occurs, such as downward revisions in reserve estimates or decreases in expected future oil and natural gas prices. Proved properties are grouped by field, and undiscounted cash flow estimates are prepared based on the Company’s expectation of future pricing over the lives of the respective fields. These cash flow estimates are reviewed by an independent petroleum engineer. If the net book value of a field exceeds its undiscounted cash flow estimate, impairment expense is measured and recognized as the difference between net book value and fair value. The fair value estimates used in measuring impairment are based on internally developed unobservable inputs including reserve volumes and future production, pricing and operating costs (Level 3 inputs in the fair value hierarchy of fair value accounting). The expected future net cash flows are discounted using an annual rate of 10% to determine fair value. The Company reviews unproved oil and natural gas properties quarterly to assess potential impairment. The Company’s impairment assessment is made on a lease-by-lease basis and considers factors such as the Company’s intent to drill, lease terms and abandonment of an area. If an unproved property is determined to be impaired, the related property costs are expensed. Impairment expense related to proved and unproved oil and natural gas properties totaled $503,000 for the three months ended March 31, 2017 and is included in depreciation, depletion, amortization and impairment in the condensed consolidated statements of operations.