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Property and Equipment | 9 Months Ended
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Sep. 30, 2024
Property, Plant and Equipment [Abstract] |
Property and Equipment | Property and Equipment Property and equipment consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):
| September 30, 2024 |  | December 31, 2023
Equipment | $ | 8,536,173 |  |  | $ | 8,506,727 |
Oil and natural gas properties | 242,961 |  |  | 238,337 |
Buildings | 249,505 |  |  | 248,693 |
Rental equipment | 133,335 |  |  | 119,653 |
Land | 37,973 |  |  | 38,811 |
Total property and equipment | 9,199,947 |  |  | 9,152,221 |
Less accumulated depreciation, depletion, amortization and impairment | (6,104,877) |  |  | (5,811,809) |
Property and equipment, net | $ | 3,095,070 |  |  | $ | 3,340,412 |
Depreciation and depletion expense on property and equipment of approximately $220 million and $188 million was recorded in the three months ended September 30, 2024 and 2023, respectively. Depreciation and depletion expense on property and equipment of approximately $684 million and $436 million was recorded in the nine months ended September 30, 2024 and 2023, respectively. We review our long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of certain assets may not be recovered over their estimated remaining useful lives (“triggering events”). In connection with this review, assets are grouped at the lowest level at which identifiable cash flows are largely independent of other asset groupings. We estimate future cash flows over the life of the respective assets or asset groupings in our assessment of impairment. These estimates of cash flows are based on historical cyclical trends in the industry as well as our expectations regarding the continuation of these trends in the future. Provisions for asset impairment are charged against income when estimated future cash flows, on an undiscounted basis, are less than the asset’s net book value. Any provision for impairment is measured at fair value. Negative market indicators such as lower industry-wide drilling rig count forecasts, increased volatility and pricing declines in the pressure pumping market, and continued efficiency gains and technology advancements reducing operating days have led to our reduced outlook for activity. The reduction in activity forecasts, the recent decline in the market price of our common stock, and the results of the fair value determination of certain of our reporting units, were triggering events indicating that certain of our long-lived tangible and intangible assets may be impaired. We deemed it necessary to perform recoverability tests on our asset groups within our completion services reporting unit and our Latin American contract drilling asset group as of September 30, 2024. Future cash flows were estimated over the expected remaining life of the primary asset for each asset group, and we determined that, on an undiscounted basis, expected cash flows exceeded the carrying value of the asset groups. As such, no impairment was indicated for our long-lived tangible or definite-lived intangible assets. We then evaluated our fleet of drilling rigs for marketability based on the condition of inactive rigs, expenditures that would be necessary to bring them to working condition and the expected demand for drilling services by rig type. The components comprising rigs that will no longer be marketed were evaluated, and those components with continuing utility to other marketed rigs were identified for transfer to other rigs or to yards to be used as spare equipment. The remaining components of these rigs were abandoned. During the three months ended September 30, 2024, we identified 42 legacy, non-Tier-1 super-spec drilling rigs and related equipment to be abandoned. Based on the strong customer preference across the industry for Tier-1 super-spec drilling rigs, in addition to efficiency gains and technology advancements that have reduced the total number of rigs needed for the U.S. drilling market, we believe the 42 rigs that were abandoned had limited commercial opportunity. The three and nine months ended September 30, 2024 included a charge of $114 million related to this abandonment. No similar charges were incurred in the three and nine months ended September 30, 2023. Geopolitical instability, global or regional decreases in the demand of our services and products, or other unforeseen macroeconomic considerations could negatively impact the expected cash flows used in our recoverability tests on our asset groups. Such changes could result in impairment charges in the future, which could be material to our results of operations and financial statements as a whole.

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