Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

16. Commitments and Contingencies

From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. Although the Company cannot predict the outcomes of any such legal proceedings, management believes that the resolution of pending legal actions will not have a material adverse effect on the Company's financial condition, results of operations or liquidity as the Company believes it is adequately indemnified and insured.

The Company experiences contractual disputes with its clients from time to time regarding the payment of invoices or other matters. While the Company seeks to minimize these disputes and maintain good relations with its clients, the Company has in the past, and may in the future, experience disputes that could affect its revenues and results of operations in any period.

The Company has non-cancelable operating leases for office and shop space in Midland, Plano, Denison, Houston, Denver, Oklahoma City and Calgary, Alberta.

The following table summarizes payments due in specific periods related to the Company's contractual obligations with initial terms exceeding one year as of December 31, 2015.

	Payments Due by Period (in 000's)
	Total		Within 1 Year		2 - 3 Years		4 - 5 Years		After 5 Years
Operating lease obligations (office space)	$	11,271	$	1,704	$	2,660	$	1,899	$	5,008

Some of the Company's operating leases contain predetermined fixed increases of the minimum rental rate during the initial lease term. For these leases, the Company recognizes the related expense on a straight-line basis and records deferred rent as the difference between the amount charged to expense and the rent paid. Rental expense under the Company's operating leases with initial terms exceeding one year was $1,691,000 for the year ended December 31, 2015, $242,000 for the three months ended December 31, 2014, and $965,000 and $900,000 for the years ended September 30, 2014 and 2013, respectively.

As of December 31, 2015, the Company had unused letters of credit of approximately $1,767,000. The Company's letters of credit of $1,767,000 are associated with the Company's existing insurance coverage.

Also as of December 31, 2015, the Company had unused letters of credit of approximately $233,000. The Company's letters of credit are associated with the Company's self-insured retention on workers' compensation claims. Effective in fiscal 2012, the Company was no longer self-insured for workers' compensation claims after October 1, 2011. The unused letters of credit of $233,000 are associated with workers' compensation claims outstanding prior to October 1, 2011.