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Note 6 - Revenue
 3 Months Ended
Mar. 31, 2024
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 “Business segment reporting,” 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 main areas of capabilities.

 

The following table sets forth the total amount of revenue by main area of capabilities as follows (in thousands):

 

   

Three Months Ended March 31,

  
   

2024

    

2023

  

Well construction

   $ 120,030     $ 128,265  

Well management

     263,459       211,014  

Total

   $ 383,489     $ 339,279  

 

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 customer’s payment, which results in the recognition of unbilled 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 March 31, 2024, and December 31, 2023 (in thousands):

 

   

March 31,

    

December 31,

  
   

2024

    

2023

  

Trade receivable, net

   $ 295,083     $ 222,591  

Unbilled receivables (included within accounts receivable, net)

   $ 136,417     $ 203,689  

Contract assets (included within accounts receivable, net)

   $ 16,620     $ 52,607  

Deferred revenue (included within other liabilities)

   $ 28,016     $ 27,206  

 

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 $5.9 million and $25.2 million for the three months ended  March 31, 2024 and 2023, respectively, out of the deferred revenue balance as of the beginning of the applicable year.

 

As of March 31, 2024, $26.6 million of our deferred revenue was classified as current and is included in “Other current liabilities” on the condensed consolidated balance sheets, with the remainder classified as non-current and included in “Other non-current liabilities” on the condensed 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 $10.9 million.