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Business Segments
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Business Segments

16. Business Segments

At December 31, 2018, the Company had three reportable business segments: (i) contract drilling of oil and natural gas wells, (ii) pressure pumping services and (iii) directional drilling services.  Each of these segments represents a distinct type of business and has a separate management team that reports 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, 2018, the Company had 252 marketed land-based drilling rigs in the continental United States and western Canada.  

For the years ended December 31, 2018, 2017 and, 2016, contract drilling revenue earned in Canada was $9.3 million, $13.7 million and $15.6 million, respectively.  Additionally, long-lived assets within the contract drilling segment located in Canada totaled $26.2 million and $52.0 million as of December 31, 2018 and 2017, respectively.  

Pressure Pumping — The Company provides pressure pumping services to oil and natural gas operators primarily in Texas and the Mid-Continent and Appalachian regions.  Substantially all of the revenue in the pressure pumping segment is from well stimulation services (such as hydraulic fracturing) 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.  The Company also provides cementing services through its pressure pumping segment.  Cementing is the process of inserting material between the wall of the well bore and the casing to support and stabilize the casing.

Directional Drilling — The Company provides a comprehensive suite of directional drilling services in most major producing onshore oil and gas basins in the United States. Substantially all of the revenue in the directional drilling segment is from directional drilling, downhole performance motors and measurement-while-drilling services, which are sold as a bundle.

Major Customer — During 2018 and 2017, no single customer accounted for more than 10% of the Company’s consolidated operating revenues.  During 2016, one customer accounted for approximately $124 million or 14% of the Company’s consolidated operating revenues.  These revenues in 2016 were earned in both the Company’s contract drilling and pressure pumping businesses.  

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

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2017

 

 

2016

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

1,432,012

 

 

$

1,041,492

 

 

$

544,196

 

Pressure pumping

 

 

1,573,396

 

 

 

1,200,311

 

 

 

354,070

 

Directional drilling

 

 

209,275

 

 

 

45,580

 

 

 

 

Other operations (1)

 

 

131,028

 

 

 

76,781

 

 

 

18,299

 

Elimination of intercompany revenues (2)

 

 

(18,714

)

 

 

(7,480

)

 

 

(699

)

Total revenues

 

$

3,326,997

 

 

$

2,356,684

 

 

$

915,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

(33,115

)

 

$

(171,897

)

 

$

(235,858

)

Pressure pumping

 

 

(77,328

)

 

 

21,028

 

 

 

(176,628

)

Directional drilling

 

 

(117,497

)

 

 

(21

)

 

 

 

Other operations

 

 

(18,221

)

 

 

(20,813

)

 

 

(3,391

)

Corporate

 

 

(93,585

)

 

 

(152,792

)

 

 

(54,672

)

Other operating income, net (3)

 

 

17,569

 

 

 

31,957

 

 

 

14,323

 

Interest income

 

 

5,597

 

 

 

1,866

 

 

 

327

 

Interest expense

 

 

(51,578

)

 

 

(37,472

)

 

 

(40,366

)

Other

 

 

750

 

 

 

343

 

 

 

69

 

Loss before income taxes

 

$

(367,408

)

 

$

(327,801

)

 

$

(496,196

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Identifiable assets:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

3,817,638

 

 

$

3,931,994

 

 

$

3,032,819

 

Pressure pumping

 

 

921,237

 

 

 

1,209,424

 

 

 

653,630

 

Directional drilling

 

 

239,341

 

 

 

301,275

 

 

 

 

Other operations

 

 

177,374

 

 

 

172,094

 

 

 

48,885

 

Corporate (4)

 

 

314,276

 

 

 

144,069

 

 

 

36,957

 

Total assets

 

$

5,469,866

 

 

$

5,758,856

 

 

$

3,772,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion, amortization and impairment:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

571,607

 

 

$

538,891

 

 

$

467,974

 

Pressure pumping

 

 

250,010

 

 

 

198,006

 

 

 

184,872

 

Directional drilling

 

 

45,317

 

 

 

9,347

 

 

 

 

Other operations

 

 

41,512

 

 

 

29,402

 

 

 

10,114

 

Corporate

 

 

7,872

 

 

 

7,695

 

 

 

5,474

 

Total depreciation, depletion, amortization and impairment

 

$

916,318

 

 

$

783,341

 

 

$

668,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

$

394,595

 

 

$

354,425

 

 

$

72,508

 

Pressure pumping

 

 

173,848

 

 

 

171,436

 

 

 

39,584

 

Directional drilling

 

 

35,929

 

 

 

7,795

 

 

 

 

Other operations

 

 

34,660

 

 

 

31,547

 

 

 

6,116

 

Corporate

 

 

2,426

 

 

 

1,884

 

 

 

1,591

 

Total capital expenditures

 

$

641,458

 

 

$

567,087

 

 

$

119,799

 

 

(1)

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

(2)

In 2018 and 2017, intercompany revenues consists of contract drilling and revenues from other operations for services provided to contract drilling, pressure pumping and within other operations. In 2016, intercompany revenues consists of contract drilling and revenues within other operations.

(3)

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-related expenses and settlements, net of insurance reimbursements and certain research and development expenses.

(4)

Corporate assets primarily include cash on hand and certain property and equipment.