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Note 6 - Revenue
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]
6. Revenue

 

Disaggregation of revenue

 

We disaggregate our revenue from contracts with customers by geography, as disclosed in Note 5 above, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Additionally, we disaggregate our revenue into areas of capability.

 

The following table sets forth the total amount of revenue by areas of capability as follows (in thousands):

 

  

Year Ended December 31,

 
  

2023

  

2022

  

2021

 

Well construction

 $533,556  $500,438  $112,126 

Well management

  979,208   778,980   713,636 

Total

 $1,512,764  $1,279,418  $825,762 

 

Contract balances

 

We perform our obligations under contracts with our customers by transferring services and products in exchange for consideration. The timing of our performance often differs from the timing of our customers’ payments, which results in the recognition of receivables and deferred revenue.

 

Unbilled receivables are initially recognized for revenue earned on completion of the performance obligation which are not yet invoiced to the customer. The amounts recognized as unbilled receivables are reclassified to trade receivable upon billing. Deferred revenue represents the Company’s obligations to transfer goods or services to customers for which the Company has received consideration, in full or part, from the customer.

 

Contract balances consisted of the following as of December 31, 2023 and  December 31, 2022 (in thousands):

 

  

December 31,

 
  

2023

  

2022

 

Trade receivable, net

 $222,591  $289,235 

Unbilled receivables (included within accounts receivable, net)

 $203,689  $139,690 

Contract assets (included within accounts receivable, net)

 $52,607   - 

Deferred revenue (included within other liabilities)

 $27,206  $51,192 

 

Contract assets include unbilled amounts resulting from sales under our long-term construction-type contracts when revenue recognized exceeds the amount billed to the customer and right to payment is conditional or subject to completing a milestone, such as a phase of the project. Contract assets are not considered a significant financing component, as they are intended to protect the customer in the event that we do not perform our obligations under the contract. Contract assets are generally classified as current, as it is very unusual for us to have contract assets with a term of greater than one year. Our contract assets are reported in a net position on a contract-by-contract basis at the end of each reporting period.

 

The Company recognized revenue of $49.8 million, $15.5 million and $15.4 million for the years ended December 31, 2023, 2022 and 2021, respectively, out of the deferred revenue balance as of the beginning of the applicable year. 

 

As of December 31, 2023, $26.0 million of our deferred revenue was classified as current and is included in “Other current liabilities” on the consolidated balance sheets, with the remainder classified as non-current and included in “Other non-current liabilities” on the consolidated balance sheets.

 

Transaction price allocated to remaining performance obligations

 

Remaining performance obligations represent firm contracts for which work has not been performed and future revenue recognition is expected. We have elected the practical expedient permitting the exclusion of disclosing remaining performance obligations for contracts that have an original expected duration of one year or less and for our long-term contracts we have a right to consideration from customers in an amount that corresponds directly with the value to the customer of the performance completed to date. With respect to our long term construction contracts, revenue allocated to remaining performance obligations is $17.7 million.