UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~______________________________________________________________________________________________________________________________________________~~


Form 10-Q

~~______________________________________________________________________________________________________________________________________________~~

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended~~September 30, 2017~~ March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-32693

~~______________________________________________________________________________________________________________________________________________~~

~~Basic Energy Services, Inc.~~BASIC ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

~~______________________________________________________________________________________________________________________________________________~~


Delaware		54-2091194
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~Delaware~~		~~54-2091194~~
~~(State or other jurisdiction of~~ ~~incorporation or organization)~~	~~(I.R.S. Employer~~ ~~Identification No.)~~

801 Cherry Street, Suite 2100, Fort Worth, Texas	76102
(Address of principal executive offices)		(Zip code)

(817) 334-4100

(Registrant’s telephone number, including area code)

~~______________________________________________________________________________________________________________________________________________~~

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	BASX*	The OTCQX Best Market*

* Until December 2, 2019, Basic Energy Services, Inc.’s common stock traded on the New York Stock Exchange under the symbol “BAS”. On December 3, 2019, Basic Energy Service, Inc.’s common stock began trading on the OTCQX® Best Market tier of the OTC Markets Group Inc. Deregistration under Section 12(b) of the Act became effective on March 16, 2020.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ~~Yes ☒~~Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer			☐	Accelerated filer	☐
~~Accelerated~~Non-accelerated filer			☒	Smaller reporting company	☒

~~Non-accelerated filer~~	~~☐ (Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)~~. Yes~~.Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ~~Yes ☒ No ☐~~ Yes☒No☐

There were ~~26,028,149~~24,899,932 shares of the registrant’s common stock outstanding as of ~~November 3, 2017.~~ May 14, 2021.

BASIC ENERGY SERVICES, INC.

Index to Form 10-Q



Part I. FINANCIAL INFORMATION		41
Item 1. Financial Statements (Unaudited)		41
~~Consolidated Balance Sheets as of September 30, 2017 (Unaudited) and December 31, 2016~~		4
Condensed Consolidated Statements of Operations ~~for the three and nine months ended September 30, 2017 and 2016~~ (Unaudited)	51
Condensed Consolidated ~~Statements of Stockholders’ Equity for the nine months ended September 30, 2017~~Balance Sheets (Unaudited)		62
Condensed Consolidated Statements of Cash Flows ~~for the nine months ended September 30, 2017 and 2016~~ (Unaudited)		73
Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited)		4
Notes to ~~the~~ Unaudited Condensed Consolidated Financial Statements		85
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1914
~~Management’s Overview~~		19
~~Segment Overview~~	20
~~Operating Cost Overview~~	23
~~Critical Accounting Policies and Estimates~~	23
~~Results of Operations~~	23
~~Liquidity and Capital Resources~~	26
~~Other Matters~~	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2720
Item 4. Controls and Procedures		2721
Part II. OTHER INFORMATION		2721
Item 1. Legal Proceedings		2721
Item 1A. Risk Factors		2721
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 5. Other Information		21
Item 6. Exhibits		2822
Signatures		2824

CAUTIONARY STATEMENT

REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are subject to risks and uncertainties. These statements may relate to, but are not limited to, information or assumptions about us, our capital and other expenditures, dividends, financing plans, capital structure, cash flows, pending legal or regulatory proceedings and claims, future economic performance, operating income, costs savings and management's plans, strategies, goals and objectives for future operations and goals. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this quarterly report, and in our most recent Annual Report on Form 10-K and other factors, most of which are beyond our control.

The words “believe,” ~~“may,”~~ “estimate,” ~~“continue,~~“expect,” “anticipate,” “project,” “intend,” “plan,” ~~“expect,~~“seek,” ~~“indicate”~~“could,” “should,” “may,” “potential” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this quarterly report are forward-looking statements. Although we believe that the forward-looking statements contained in this quarterly report are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this quarterly report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Important factors that may affect our expectations, estimates or projections include:

a•our dependency on domestic oil and natural gas industry spending;

•local and global impacts of the COVID-19 pandemic;

•the sustained decline in, or substantial volatility of, oil orand natural gas prices, and any related changes in expenditures by our customers;

~~the effects of future acquisitions on our business;~~

~~changes in customer requirements in markets or industries we serve;~~

~~competition within our industry;~~

~~general economic and market conditions;~~

•our access to current or future financing ~~arrangements;~~arrangements, including ability to raise funds in the capital market or from other financing sources;

•substantial doubt about our ability to continue as a going concern, including our ability to reduce operating, administrative, and capital expenditures;

•our ability to satisfy our liquidity needs, including our ability to generate sufficient liquidity or cash flow or to obtain sufficient financing to fund our operations or otherwise meet our obligations as they come due in the future;

•our dependence on collections from our customers to provide our operating cash flows;

•competition within our industry;

•energy efficiency and technology trends;

•potential future asset impairments;

•our ability to fund our capital expenditure requirements;

•our borrowing capacity, covenant compliance under instruments governing any of our existing or future indebtedness and cash flows;

•a potential future downgrade of our credit rating;

•operating hazards, including cyber-security and other risks incidental to our services;

•environmental and other governmental regulations;

•our ability to successfully execute, manage and integrate acquisitions;

•the impact of Ascribe's voting control of the Company;

•our dependency on several significant customers;

•the effects of future acquisitions or dispositions on our business;

•uncertainties about our ability to successfully execute our business and financial plans and strategies;

•our ability to replace or add workers at economic rates; ~~and~~

•~~environmental~~the impact of regulations over climate change, hydraulic fracturing, and other ~~governmental regulations.~~environmental regulations;

•changes in regulatory, geopolitical, social, economic, tax or monetary policies and other factors resulting from the transition to the Biden administration and Democratic control of Congress;

•the limitations on net operating loss carryforwards following the March 2020 ownership change;

•negative impacts of the delisting of our common stock from the New York Stock Exchange; and

•other risks associated with the current trading price and potential dilution of our common stock.

Our forward-looking statements speak only as of the date of this quarterly report. Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

This quarterly report includes market share data, industry data and forecasts that we obtained from internal company surveys (including estimates based on our knowledge and experience in the industry in which we operate), market research, consultant surveys, publicly available information, industry publications and surveys. These sources include Baker Hughes Incorporated, the Association of Energy Service Companies, and the Energy Information Administration of the U.S. Department of Energy. Industry surveys and publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe such information is accurate and reliable, we have not independently verified any of the data from third-party sources cited or used for our management’s industry estimates, nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our position relative to our competitors or as to market share refer to the most recent available data.

PART I — FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS (Unaudited)

Basic Energy Services, Inc.

Condensed Consolidated ~~Balance Sheets~~ Statements of Operations

~~(in thousands, except share data)~~

(Unaudited)

September 30,
2017 December 31,
2016
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 43,168
$ 98,875
Restricted cash 47,680
2,429
Trade accounts receivable, net of allowance of $1,907 and $0, respectively 168,220
108,655
Accounts receivable - related parties 22
31
Income tax receivable 3,010
1,271
Inventories 35,255
35,691
Prepaid expenses 24,470
15,575
Other current assets 5,224
2,003
Total current assets 327,049
264,530
Property and equipment, net 516,371
488,848
Deferred debt costs, net of amortization 2,038
—
Intangible assets, net of amortization 3,280
3,458
Other assets 12,407
11,324
Total assets $ 861,145
$ 768,160
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 89,550
$ 47,959
Accrued expenses 62,076
51,329
Current portion of long-term debt, net 50,849
38,468
Other current liabilities 3,626
2,065
Total current liabilities 206,101
139,821
Long-term debt, net 269,330
184,752
Deferred tax liabilities 389
—
Other long-term liabilities 30,753
29,179
Commitments and contingencies

Stockholders' equity:
Preferred stock; $0.01 par value; 5,000,000 shares authorized; none designated or issued at September 30, 2017 and December 31, 2016 —
—
Common stock; $0.01 par value; 80,000,000 shares authorized; 26,096,370 shares issued and 26,028,149 shares outstanding at September 30, 2017; 26,095,431 shares issued and 25,998,844 shares outstanding at December 31, 2016 261
261
Additional paid-in capital 433,181
417,624
Accumulated deficit (76,413 ) —
Treasury stock, at cost, 68,221 and 96,587 shares at September 30, 2017 and December 31, 2016, respectively (2,457 ) (3,477 )
Total stockholders' equity 354,572
414,408
Total liabilities and stockholders' equity $ 861,145
$ 768,160


	Three Months Ended March 31,
(dollars in thousands, except per share amounts)	2021		2020




Revenues	$	94,347	$	128,403

Costs of services, excluding depreciation and amortization	77,171		102,175
Selling, general and administrative	18,054		26,232
Depreciation and amortization	10,797		14,765
Impairments and other charges	7,258		99,694
Acquisition related costs	0		11,684
Gain on disposal of assets	(1,993)		(37)
Total operating expenses	111,287		254,513

Operating loss	(16,940)		(126,110)

Interest expense, net	(12,024)		(10,557)

Loss on derivative	(4,798)		(3,552)
Loss from continuing operations before income taxes	(33,762)		(140,219)
Income tax benefit	(287)		(3,790)
Loss from continuing operations	(33,475)		(136,429)
Loss from discontinued operations	(3,797)		(8,452)
Net loss	$	(37,272)	$	(144,881)

Loss from continuing operations per share, basic and diluted	$	(1.35)	$	(5.48)
Loss from discontinued operations per share, basic and diluted	$	(0.15)	$	(0.34)
Net loss per share, basic and diluted	$	(1.50)	$	(5.82)

See accompanying notes tounaudited condensed consolidated financial statements.

Basic Energy Services, Inc.

Condensed Consolidated ~~Statements of Operations~~Balance Sheets

(Unaudited)

~~(in thousands, except per share amounts)~~


(dollars in thousands, except share data)	March 31, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	4,889	$	1,902
Restricted cash	15,513		8,083
Trade accounts receivable, net of allowance of $1,805 and $3,053, respectively	53,846		60,351


Inventories	8,546		8,716
Assets held for sale	7,344		4,383
Prepaid expenses and other current assets	11,925		12,010

Total current assets	102,063		95,445
Property and equipment, net of accumulated depreciation of $179,801 and $172,296, respectively	197,766		210,563
Operating lease right-of-use assets	8,896		9,614
Intangible assets, net of accumulated amortization of $1,222 and $1,099, respectively	6,055		6,178



Other assets, net	16,319		27,273
Total assets	$	331,099	$	349,073
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	68,463	$	64,944
Accrued expenses	67,327		55,264
Current portion of insurance reserves	24,181		22,587

Current portion of finance lease liabilities	6,839		7,520

Current portion of operating lease liabilities	1,800		1,936
Other current liabilities	2,058		8,371
Total current liabilities	170,668		160,622
Long-term debt, net	327,572		317,763
Insurance reserves	19,478		19,636
Asset retirement obligations	10,157		9,697
Operating lease liabilities	8,195		8,488
Other long-term liabilities	12,881		13,499


Total liabilities	548,951		529,705
Series A Participating Preferred Stock; $0.01 par value; 5,000,000 authorized and 118,805 outstanding	22,000		22,000
Stockholders' deficit:
Common stock; $0.01 par value; 198,805,000 shares authorized; 27,912,059 shares issued and 24,899,932 shares outstanding	279		279
Additional paid-in capital	493,819		493,767
Retained deficit	(728,616)		(691,344)
Treasury stock, at cost, 3,012,127 shares	(5,334)		(5,334)
Total stockholders' deficit	(239,852)		(202,632)
Total liabilities and stockholders' deficit	$	331,099	$	349,073

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Successor) (Predecessor) (Successor) (Predecessor)
Revenues:
Completion and remedial services $ 123,650
$ 49,425
$ 311,466
$ 125,348
Water logistics

52,333
47,178
153,279
142,919
Well servicing 54,629
43,160
156,302
118,891
Contract drilling 2,848
1,847
7,728
4,812
Total revenues 233,460
141,610
628,775
391,970
Expenses:

Completion and remedial services 84,481
40,292
232,932
107,941
Water logistics

41,281
39,268
124,399
119,053
Well servicing 43,219
35,028
125,931
101,345
Contract drilling 2,547
1,683
6,818
4,612
General and administrative, including stock-based compensation of $5,891 and $2,238 in the three months ended September 30, 2017 and 2016 and $16,615 and $7,355 for the nine months ended September 30, 2017 and 2016, respectively 39,235
30,065
109,478
86,706
Restructuring costs —
10,470
—
10,470
Depreciation and amortization 29,478
53,142
80,846
164,141
Goodwill impairment —
646
—
646
(Gain) loss on disposal of assets 26
(128 ) (664 ) 133
Total expenses 240,267
210,466
679,740
595,047
Operating loss (6,807 ) (68,856 ) (50,965 ) (203,077 )
Other income (expense):

Interest expense (8,892 ) (23,953 ) (27,181 ) (67,188 )
Interest income 5
14
23
23
Bargain purchase gain on acquisition —
662
—
662
Other income 109
37
344
378
Loss before income taxes (15,585 ) (92,096 ) (77,779 ) (269,202 )
Income tax benefit (expense) 1,740
(1 ) 1,366
3,883
Net loss $ (13,845 ) $ (92,097 ) $ (76,413 ) $ (265,319 )
Loss per share of common stock:
Basic $ (0.53 ) $ (2.16 ) $ (2.94 ) $ (6.32 )
Diluted $ (0.53 ) $ (2.16 ) $ (2.94 ) $ (6.32 )

See accompanying notes tounaudited condensed consolidated financial statements.

Basic Energy Services, Inc.

Condensed Consolidated Statements of ~~Stockholders’ Equity~~Cash Flows

~~(in thousands, except share data)~~(Unaudited)


	Three Months Ended March 31,
(in thousands)	2021		2020

Cash flows from operating activities:
Net loss	$	(37,272)	$	(144,881)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization	10,797		14,765
Goodwill and other long-lived asset impairments	7,277		97,115
Loss on derivative	4,798		3,552
Inventory write-downs	0		4,846
Accretion of asset retirement obligations	468		467
Provision for expected credit losses, net of recoveries	(576)		1,567
Amortization of debt discounts and debt issuance costs	2,273		1,108

Stock-based compensation	52		1,336
Loss (gain) on disposal of assets	(2,544)		2,619
Deferred income taxes	(262)		(3,674)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	7,081		17,473
Inventories	170		700
Prepaid expenses and other assets	166		(1,800)

Accounts payable	3,432		(5,839)

Accrued expenses	12,277		9,702
Other liabilities	(464)		(1,770)
Net cash provided by (used in) operating activities	7,673		(2,714)
Cash flows from investing activities:
Capital expenditures	(331)		(5,595)
Proceeds from sale of assets	5,460		40,274

Payments to acquire business, net of cash acquired	0		(59,350)
Net cash provided by (used in) investing activities	5,129		(24,671)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	0		23,000
Repayments of long-term debt	(2,385)		(8,999)
Repurchases of common stock	0		(6)

Payments of debt issuance costs	0		(225)
Other financing activities	0		(1,525)
Net cash provided by (used in) financing activities	(2,385)		12,245
Net increase (decrease) in cash, cash equivalents and restricted cash	10,417		(15,140)
Cash, cash equivalents and restricted cash - beginning of period	9,985		36,217
Cash, cash equivalents and restricted cash - end of period	$	20,402	$	21,077
Supplemental cash flow information and non-cash investing and financing activities:
Interest paid	$	1,570	$	1,229
Income taxes paid, net of refunds	(5)		(119)
Fair value of long-term debt issued to settle derivative obligation	9,500		0

Operating lease liabilities incurred from obtaining right-of-use assets	719		1,007
Finance lease liabilities incurred from obtaining right-of-use assets	0		498
Capital expenditures included in accounts payable	(87)		(1,594)
Issuance of Series A Participating Preferred Stock	0		22,000
Recognition of derivative liability	0		9,713

Additional Total
Common Stock Paid-In Treasury Accumulated Stockholders'
Shares Amount Capital Stock Deficit Equity
Balance - December 31, 2016 26,095,431
$ 261
$ 417,624
$ (3,477 ) $ —
$ 414,408
Issuance of stock 939
—
��
—
—
—
Amortization of share-based compensation —
—
16,615
—
—
16,615
Treasury stock, net —
—
(1,058 ) 1,020
—
(38 )
Net loss —
—
—
—
(76,413 ) (76,413 )
Balance - September 30, 2017 (unaudited) 26,096,370
$ 261
$ 433,181
$ (2,457 ) $ (76,413 ) $ 354,572

See accompanying notes tounaudited condensed consolidated financial statements.

Basic Energy Services, Inc.

Condensed Consolidated Statements of ~~Cash Flows~~Stockholders’ Deficit

(Unaudited)

~~(in thousands)~~


	Common Stock			Additional Paid-in Capital			Treasury		Retained Deficit			Total Stockholders' Deficit
(in thousands)	Shares	Amount						Shares			Amount
Balance at December 31, 2020	27,912	$	279		$	493,767		3,012	$	(5,334)		$	(691,344)	$	(202,632)

Amortization of stock-based compensation	—	—			52			—	—			—		52


Net loss	—	—			—			—	—			(37,272)		(37,272)
Balance at March 31, 2021	27,912	$	279		$	493,819		3,012	$	(5,334)		$	(728,616)	$	(239,852)













	Common Stock			Additional Paid-in Capital			Treasury		Retained Deficit			Total Stockholders' Deficit
	Shares	Amount						Shares			Amount
Balance at December 31, 2019	27,912	$	279		$	472,594		3,008	$	(8,581)		$	(423,169)	$	41,123

Amortization of stock-based compensation	—	—			1,336			—	—			—		1,336
Purchase of treasury stock	—	—			(3,263)			(73)	3,256			—		(7)
Acquisition related capital contribution	—	—			22,904			—	—			—		22,904
Net loss	—	—			—			—	—			(144,881)		(144,881)
Balance at March 31, 2020	27,912	$	279		$	493,571		2,935	$	(5,325)		$	(568,050)	$	(79,525)

Nine Months Ended September 30,
2017 2016
(Successor) (Predecessor)
Cash flows from operating activities:
Net loss $ (76,413 ) $ (265,319 )
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 80,846
164,141
Goodwill impairment —
646
Bargain purchase gain on acquisition —
(662 )
Accretion on asset retirement obligation 119
109
Change in allowance for doubtful accounts 1,907
(690 )
Amortization of deferred financing costs 14
6,085
Amortization of debt discounts 5,649
(209 )
Non-cash compensation 16,615
7,355
(Gain) loss on disposal of assets (664 ) 133
Deferred income taxes 389
(4,403 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable (61,463 ) 7,038
Inventories 437
3,274
Income tax receivable (1,740 ) 555
Prepaid expenses and other current assets (9,446 ) 1,245
Other assets (1,083 ) (837 )
Accounts payable 32,865
(13,962 )
Other liabilities 3,046
(4,770 )
Accrued expenses 10,747
28,466
Net cash provided by (used in) operating activities 1,825
(71,805 )
Cash flows from investing activities:
Purchase of property and equipment (48,295 ) (22,907 )
Proceeds from sale of assets 7,834
2,781
Net cash used in investing activities (40,461 ) (20,126 )
Cash flows from financing activities:
Payments of debt (33,649 ) (37,962 )
Proceeds from debt 64,000
165,000
Change in restricted cash (45,251 ) (28,677 )
Shares added to treasury stock as a result of net share settlements due to vesting of restricted stock

(38 ) (640 )
Deferred loan costs and other financing activities (2,133 ) (18,184 )
Net cash (used in) provided by financing activities (17,071 ) 79,537
Net decrease in cash and equivalents (55,707 ) (12,394 )
Cash and cash equivalents - beginning of period 98,875
46,732
Cash and cash equivalents - end of period $ 43,168
$ 34,338

See accompanying notes tounaudited condensed consolidated financial statements.

BASIC ENERGY SERVICES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30, 2017 (unaudited)~~

1. Basis of Presentation and ~~Nature~~Current Environment

Description of ~~Operations~~Business

~~Basis of Presentation~~

~~The accompanying unaudited consolidated financial statements of~~ Basic Energy Services, Inc. and subsidiaries (“Basic”, the “Company”, “we”, “us” or “our”) provides wellsite services essential to maintaining production from the ~~“Company”)~~oil and gas wells within its operating areas. The Company's operations are managed regionally and are concentrated in major United States onshore oil-producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota, Colorado, and Montana. Our operations are focused in prolific basins that have historically exhibited strong drilling and production economics in recent years as well as natural gas-focused shale plays characterized by prolific reserves. Specifically, the Company has a significant presence in the Permian Basin, Bakken, Los Angeles and San Joaquin Basins, Eagle Ford, Haynesville and Powder River Basin.

Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) ~~for interim financial reporting. Accordingly, they do not include all~~and pursuant to the rules and regulations of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q in accordance with GAAP and financial statement requirements promulgated by the U.S. Securities and Exchange Commission (“SEC”)~~. The notes to the~~ for interim financial reporting. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements ~~(unaudited)~~ should be read in conjunction with ~~the notes to the~~our audited consolidated financial statements ~~contained~~included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~ 2020.

In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature considered necessary for a fair presentation of the results of operations, financial position and cash flows of the Company and its subsidiaries for the periods presented and are not indicative of the results that may be expected for a full year. The Company's financial statements have been prepared on a consolidated basis and all intercompany accounts and transactions have been eliminated.

Current Environment, Liquidity and Going Concern

Demand for services offered by our industry is a function of our customers’ willingness and ability to make operating and capital expenditures to explore for, develop and produce hydrocarbons in the United States. Our customers’ expenditures are affected by both current and expected levels of commodity prices. Industry conditions during 2021 continue to be influenced by factors that impacted the supply and demand of the global oil markets in 2020, primarily the outbreak of the novel coronavirus ("COVID-19") and the resulting lower demand for oil. The increased price of West Texas Intermediate oil ("WTI") in the first quarter of 2021 increased our customers' activity levels; however, we continue to maintain discipline to only offer our services into the market at profitable job margins, which we began to realize in the second half of the first quarter. This trend has continued into the second quarter. Our first quarter results were also negatively impacted by the severe winter storm that affected our Texas operating locations in February 2021.

As a result of weak energy sector conditions that began in 2020 and the resulting lower demand for our services, our customer pricing, our operating results, our working capital and our operating cash flows have been negatively impacted. During the last half of 2020, we had difficulty paying for our contractual obligations as they came due, and we continue to have this difficulty in 2021.

Management has taken several steps to generate additional liquidity, including reducing operating and administrative costs, employee headcount reductions, closing operating locations, implementing employee furloughs, other cost reduction measures, and the suspension of growth capital expenditures. The decline in customers’ demand for our services has had a material adverse impact on the financial condition of the Company, resulting in recurring losses from operations, a net capital deficiency, and liquidity constraints that raise substantial doubt about the Company's ability to continue as a going concern within one year after the May 17, 2021 issuance date of these financial statements. Other steps that we may or are implementing to attempt to alleviate this substantial doubt include additional sales of non-strategic assets, obtaining waivers of debt covenant requirements from our lenders, restructuring or refinancing our debt agreements, or obtaining equity financing. In addition, we had a significant contractual obligation to pay cash or issue additional 10.75% senior secured notes due 2023 (the "Senior Notes") to our largest shareholder, Ascribe III Investments LLC ("Ascribe"), resulting from our acquisition of CJWS. On March 31, 2021, the Company negotiated a settlement of this obligation with Ascribe in exchange for issuing additional Senior Notes to Ascribe with an aggregate par value of $47.5 million.

On April 15, 2021, the Company announced it elected to utilize the 30-day grace period under the terms of the

indenture governing its Senior Notes with respect to a $16.3 million interest payment (the "Senior Notes Interest Payment") due that day. The Company believed it was in the best interests of all stakeholders to use the grace period to continue its ongoing discussions with its debtholders regarding strategic alternatives to improve the Company’s long-term capital structure.

The Company also announced it had entered into a Forbearance Agreement (the "ABL Forbearance Agreement") on April 14, 2021 with a majority of the lenders under its revolving credit facility who agreed to forbear from exercising remedies in respect of certain events of default thereunder, including the failure to pay interest on the Senior Notes, until April 28, 2021 (subject to certain early termination events) (the "ABL Forbearance Period").

On April 28, 2021, the Company entered into the Limited Consent and First Amendment to the ABL Forbearance Agreement (the “ABL Forbearance Amendment”) with a majority of its lenders under its revolving credit facility who agreed to extend the ABL Forbearance Period to May 15, 2021 and consent to the incurrence of the New Term Loan Facility (as defined below), if the Company completed certain asset sales, amended the indenture governing its Senior Notes to allow for the incurrence of the New Term Loan Facility and, obtained a forbearance for certain of its other indebtedness, as applicable. The Company satisfied these conditions and on May 3, 2021, the Company entered into a Super Priority Credit Agreement (the “Super Priority Credit Agreement”), among the Company, as borrower, the lenders party thereto and Cantor Fitzgerald Securities, as administrative agent and collateral agent.

The Super Priority Credit Agreement provides for a super priority loan facility consisting of term loans in a principal amount of $10.0 million (the “New Term Loan Facility”). The proceeds of the New Term Loan Facility will be used for working capital and other general corporate purposes and the payment of fees and expenses in connection with the New Term Loan Facility and the other agreements entered into in connection with the New Term Loan Facility. The New Term Loan Facility originally matured on May 15, 2021; provided that such date could be extended for up to thirty days with the prior written consent of lenders holding 66 2/3% of the aggregate outstanding amount of the term loans. At the Company’s election, loans outstanding under the New Term Loan Facility accrue interest at an annualized interest rate of either a base rate plus 10.00% or LIBOR plus 11.00%. The Company may prepay the New Term Loan Facility at any time if the Company simultaneously prepays the aggregate outstanding principal amount of its Senior Notes and Senior Secured Promissory Note, plus accrued and unpaid interest. On May 10, 2021, the Lenders under the New Term Loan Facility extended the maturity date of the facility to May 23, 2021 and corresponding adjustments to certain interim milestones therein.

On May 3, 2021, the Company and Ascribe entered into a consent letter (the “Ascribe Consent Letter”) pursuant to which Ascribe agreed to forbear from exercising any rights or remedies they may have in respect of the Company's failure to pay interest on the notes described therein from. On May 14, 2021, the Company entered into an amendment to the Ascribe Consent Letter to extend the forbearance period to May 23, 2021.

On May 14, 2021, the Company entered into the (i) Second Amendment to the ABL Forbearance Agreement with a majority of its lenders under its revolving credit facility who agreed to extend the ABL Forbearance Period to May 23, 2021 and to make corresponding adjustments to certain interim milestones therein, and (ii) the Forbearance Agreement with the requisite number of lenders under the New Term Loan Facility who agreed to forbear from exercising remedies in respect of certain events of default thereunder, including the failure to pay interest on the Senior Notes following the expiration of the applicable grace period, until May 23, 2021 (subject to certain early termination events). In addition, on May 14, 2021, the holders of approximately $316.4 million in aggregate principal amount, or 91.06%, of the $347.5 million issued and outstanding Senior Notes, subject to certain conditions precedent and continuing conditions, agreed that during the Forbearance Period ending on May 23, 2021 (subject to certain early termination events) they would not enforce, or otherwise take any action to direct enforcement of, any of the rights and remedies available to the Holders, the Trustee of the Collateral Agent, under the Indenture for the Senior Notes, or otherwise, including, without limitation, any action to accelerate the Senior Notes with respect to the Senior Notes Interest Payment.

We are in continuing discussions with the holders of the Company’s Senior Notes and other indebtedness regarding strategic alternatives including financings, refinancings, amendments, waivers, forbearances, asset sales, debt issuances, and exchanges of debt, a combination of the foregoing, or other out-of-court or in-court bankruptcy restructurings of our debt and other transactions to address our capital structure.

more such actions will be successful, whether the Company will be able to effect a refinancing of its Senior Notes or the effects the failure to take action may have on the Company’s business, its ability to achieve its operational and strategic goals or its ability to finance its business or refinance or restructure its indebtedness. A failure to address the Company’s level of corporate leverage in the near-term will have a material adverse effect on the Company’s business, prospects, results of operations, liquidity and financial condition, and its ability to service its corporate debt as it becomes due.

Management has prepared these condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles applicable to a going concern, which contemplates that assets will be realized and liabilities will be discharged in the normal course of business as they become due. These condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported revenues and expenses and balance sheet classifications that would be necessary if the Company was unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material and adverse to the financial results of the Company.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to the current period presentation. These reclassifications do not impact net loss and do not reflect a material change to the information previously presented in ~~the accompanying unaudited~~our condensed consolidated financial statements.

~~Emergence~~Standards Adopted in 2021

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” ("ASU 2019-12"). ASU 2019-12 intends to simplify various aspects related to accounting for income taxes and removes certain exceptions to the general principles in the standard. Additionally, the ASU clarifies and amends existing guidance to improve consistent application of its requirements. The amendments of ASU 2019-12 were adopted as of January 1, 2021, and the impact of the adoption was not material.

Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)” ("ASU 2020-04"), which provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The amendments are effective for all entities as of March 12, 2020, through December 31, 2022. We are currently evaluating the impacts of the provisions of ASU 2020-04 on our consolidated financial statements.

2. Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the amounts shown in the condensed consolidated statements of cash flows:



(in thousands)	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	4,889	$	1,902
Restricted cash	15,513		8,083
Total cash, cash equivalents and restricted cash	$	20,402	$	9,985

The Company’s restricted cash consisted of net advances made to the administrative agent under our asset-based revolving credit facility. See Note 4. Indebtedness and Borrowing Facility, for further discussion of the credit facility. The Company’s restricted cash is classified as current assets in the condensed consolidated balance sheets.

3. Discontinued Operations

During the third and fourth quarters of 2019, the Company's management decided to divest all of its contract drilling rigs, and a majority of pressure pumping equipment and related ancillary equipment. The majority of the real estate and equipment was sold during late 2019 and the first quarter of 2020, with the remaining, primarily real estate assets classified as assets held for sale. The Company is pursuing additional transactions to divest the remainder of these non-strategic assets during 2021.

The operating results of the pressure pumping operations and contract drilling operations, which were historically included in the Completions & Remedial Services and Other Services segments, have been reclassified

as discontinued operations in the Condensed Consolidated Statement of Operations for the three month periods ended March 31, 2021 and 2020, and are detailed in the table below:


	Three Months Ended March 31,
(in thousands)	2021		2020





Revenues	$	0	$	95

Costs of services	1,393		1,520
Selling, general and administrative	113		1,938

Asset impairment	2,842		2,333
Loss (gain) on disposal of assets	(551)		2,656
Total operating expenses	3,797		8,447

Operating loss	(3,797)		(8,352)

Interest expense	0		(100)


Loss from discontinued operations	$	(3,797)	$	(8,452)

Interest expense in discontinued operations is related to interest expense on finance lease assets that operated in the discontinued Completions & Remedial Services and Other Services segments. Impairment expense was recorded during the three month periods ended March 31, 2021 and 2020, associated with certain non-strategic assets with carrying values that were in excess of current estimated selling price.

During 2020 and 2021, a substantial majority of the assets related to these discontinued operations, were disposed. The remaining assets and liabilities related to the divested operations are included in the consolidated balance sheets as follows:


(in thousands)	March 31, 2021		December 31, 2020
Assets held for sale


Property and equipment, net	$	3,194	$	1,523
Total assets held for sale	$	3,194	$	1,523
Other long term assets
Real estate held for sale	$	0	$	4,802
Liabilities related to assets held for sale
Operating lease liabilities	$	422	$	508

Total liabilities related to assets held for sale	$	422	$	508

Consolidated statements of cash flow information related to these discontinued operations are detailed in the table below:


	Three Months Ended March 31,
(in thousands)	2021		2020
Cash Flows from Discontinued Operations
Net cash provided (used) by operating activities	$	(1,506)	$	(3,467)
Net cash provided by investing activities	$	0	$	39,021

Proceeds from ~~Chapter 11~~the sale of assets related to discontinued operations totaled $39.0 million for the first quarter of 2020.

4. Indebtedness and Borrowing Facility

Long-term debt consisted of the following:


(in thousands)	March 31, 2021		December 31, 2020
10.75% Senior Notes due 2023	$	347,500	$	300,000
Senior Secured Promissory Note	15,000		15,000
Second Lien Delayed Draw Promissory Note	15,000		15,000
Finance lease liabilities	14,601		16,986
Total principal amount	392,101		346,986
Less unamortized discount and debt issuance costs	(57,690)		(21,703)
Total debt	334,411		325,283
Less current portion of finance leases	(6,839)		(7,520)
Total long-term debt	$	327,572	$	317,763

Issuance of Senior Notes to Settle Make-Whole Reimbursement

On March 31, 2021, the Company negotiated a settlement of the contractual make-whole obligation to its controlling shareholder in exchange for issuing additional Senior Notes to this shareholder with an aggregate par value of $47.5 million. The Company's make-whole obligation related to the acquisition of CJWS was accounted for as a derivative instrument until this settlement. The Senior Notes were issued at a fair value of $9.5 million based on the market pricing of our Senior Notes on March 31, 2021, and resulted in a discount of $38.0 million on these Senior Notes that will be accreted over the remaining term of the notes through 2023. We recorded a corresponding loss of $4.8 million on this derivative instrument for the first quarter of 2021.

For further discussion of the Senior Notes, including events occurring subsequent to March 31, 2021, see Note 1. "Basis of Presentation and Current Environment."

ABL Credit Facility

On October 2, 2018, the Company entered into an asset-based lending credit agreement that expires on October 2, 2023. The credit agreement will expire on July 3, 2023, if the Senior Notes have not been redeemed by that time. The credit agreement included a revolving credit facility (the “ABL Credit Facility”) with a maximum aggregate principal amount of $75.0 million at December 31, 2020.

The amount of borrowings available under the ABL Credit Facility are limited to a borrowing base capacity, which is based on eligible accounts receivable and eligible pledged cash, which the Company can advance to the administrative agent as necessary. The ABL Credit Facility includes a sublimit for letters of credit of up to $50.0 million.

Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable rate, plus, at the Company’s option, either a base rate or a LIBOR rate. The applicable rate in a fiscal quarter is determined by the average daily availability as a percentage of the borrowing base during the previous fiscal quarter.

If the availability under the ABL Credit Facility falls below $9.4 million, then certain covenants including a consolidated fixed charge coverage ratio and cash dominion provisions will spring into effect. To avoid triggering certain of the consolidated fixed charge coverage ratios and cash dominion covenants which spring into effect under certain minimum availability covenant requirements defined in the ABL Credit Facility, we had $15.5 million of our available cash balance advanced to the administrative agent as of March 31, 2021.

As of March 31, 2021, the Company had 0 borrowings and $35.6 million of letters of credit outstanding under the ABL Credit Facility. As of March 31, 2021, we had $11.2 million of availability under the ABL Credit Facility, but we are restricted from borrowing this amount because of restrictions regarding the minimum availability covenant noted above.

The ABL Credit Facility has a covenant whereby the Company would be in default if the report of its independent registered public accounting firm on the Company’s annual financial statements included a going concern qualification or like exemption. On March 31, 2021, the Company obtained a waiver under the ABL Credit Facility with respect to any such default arising with respect to the 2020 audited financial statements and also agreed to reduce the maximum aggregate principal amount of the ABL Credit Facility from $75.0 million to $60.0 million. As a result, the Company was in compliance with the covenants under the ABL Credit Agreement at March 31, 2021.

For further discussion of the ABL Credit Facility, including events occurring subsequent to March 31, 2021, see Note 1. "Basis of Presentation and Current Environment."

The Company was also in compliance with the debt covenants under its other debt agreements as of March 31, 2021.

5.Revenues

The following table sets forth certain financial information with respect to the Company’s disaggregation of revenues by geographic location and segment:


	Reportable Segments

(in thousands)	Well Servicing		Water Logistics		Completion & Remedial Services		Total
Three Months Ended March 31, 2021


Central U.S.	$	24,742	$	17,276	$	7,732	$	49,750
Western U.S.	30,114		11,299		4,203		45,616
Eliminations	(49)		(761)		(209)		(1,019)
Total	$	54,807	$	27,814	$	11,726	$	94,347


(in thousands)	Well Servicing		Water Logistics		Completion & Remedial Services		Total		Discontinued Operations
Three Months Ended March 31, 2020


Central U.S.	$	40,019	$	38,416	$	13,183	$	91,618	$	95
Western U.S.	19,662		8,206		13,595		41,463		0
Eliminations	(1,540)		(2,241)		(897)		(4,678)		0
Total	$	58,141	$	44,381	$	25,881	$	128,403	$	95

The Company had $4.6 million and $2.1 million of contract assets and 0 contract liabilities at March 31, 2021 and December 31, 2020, respectively.

6. Impairments and Other Charges

The following table summarizes our impairments and other charges:


	Three Months Ended March 31, 2021
(in thousands)	2021		2020
Long lived asset impairments	$	4,435	$	84,217
Transaction costs	2,589		0
Field restructuring	234		66
Goodwill impairments	0		10,565
Inventory write-downs	0		4,846







	$	7,258	$	99,694

Long-lived asset impairments - In the first quarter of 2021, we incurred $4.4 million of impairments for certain real estate held for sale, which was subsequently sold in May 2021. In March 2020, the reduction in demand for our services resulted in a long-lived asset impairment of $84.2 million related to property and equipment in our Well Servicing segment.

Transaction costs - In connection with liability management, we incurred $2.6 million of legal and professional consulting costs during the first quarter of 2021.

Field restructuring costs - In the first quarter of 2021, we incurred $0.2 million of costs associated with yard closures in connection with our field restructuring initiative. We incurred $0.1 million in the first quarter of 2020 related to yard closures.

Goodwill impairments - On March 31, 2020, due to the reduction in demand for our services, we determined that the fair value of the Well Servicing reporting unit was less than its carrying value, which resulted in a goodwill impairment of $10.6 million for this reporting unit.

Inventory write-downs - In connection with the ~~Company’s emergence from its bankruptcy cases (the "Chapter 11 Cases"), on December 23, 2016 (the "Effective Date"),~~downturn in our business in the ~~Company applied the provisions~~first quarter of fresh start accounting, pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, to its consolidated financial statements. We elected to apply fresh start accounting effective December 31, 2016, to coincide with the timing2020, we recorded a $4.8 million write-down of certain parts inventory in our ~~normal December accounting period close.~~Well Servicing segment.

7. Income Taxes

The ~~implementation~~Company provides a valuation allowance when it is more likely than not that some portion of the First Amended Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors (as confirmed, the "Prepackaged Plan") and the application of fresh start accounting materially changed the carrying amounts and classifications reported in our consolidated financial statements and resulted in the Company becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements for periods prior to December 31, 2016deferred tax assets will not be ~~comparable~~realized. Management assesses the available positive and negative evidence to ~~our consolidated financial statements~~estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this

evaluation, as of ~~December~~March 31, ~~2016~~2021, a valuation allowance continues to be recorded on the net deferred tax assets for all federal and state tax jurisdictions.

8. Commitments and Contingencies

Litigation

FASB ASC 450 - "Contingencies" (“ASC 450”) governs the Company’s disclosure and recognition of loss contingencies, including pending claims, lawsuits, disputes with third parties, investigations and other actions that are incurred in the operation of our business. ASC 450 uses the following defined terms to describe the likelihood of a future loss: probable – the future event or ~~for periods subsequent~~events are likely to ~~December 31, 2016.~~

~~References to “Successor” or “Successor Company” refer to~~occur, remote – the ~~Company on or after December 31, 2016, after giving effect to the implementation~~chance of the ~~Prepackaged Plan~~future event or events is slight, and reasonably possible – the chance of the future event or events occurring is more than remote but less than likely. ASC 450 also contains certain requirements with respect to how we accrue for and disclose information concerning our loss contingencies. We accrue for a loss contingency when we conclude that the likelihood of a loss is probable and the application of fresh start accounting. References to “Predecessor” or “Predecessor Company” refer to the Company prior to December 31, 2016. Additionally, references to periods on or after December 31, 2016 refer to the Successor and references to periods prior to December 31, 2016 refer to the Predecessor.

~~Liquidity and Capital Resources~~

As of September 30, 2017, our primary capital resources were utilization of capital leases and borrowings under our $100.0 million accounts receivable securitization facility (the “New ABL Facility”). As of September 30, 2017, we had $64.0 million in borrowings under the New ABL Facility. At September 30, 2017, we had unrestricted cash and cash equivalents of $43.2 million compared to $98.9 million as of December 31, 2016. An additional amount of ~~$47.7 million~~the loss can be reasonably estimated. When the reasonable estimate of the loss is ~~classified as restricted cash. We have utilized,~~within a range of amounts, and ~~expect to utilize~~no amount in the ~~future, bank~~range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional information, but the loss we incur may be significantly greater than or less than the amount we have accrued. We disclose loss contingencies if there is at least a reasonable possibility that a material loss has been incurred. No accrual or disclosure is required for losses that are remote.

Arlisa Ann Carr, Individually and ~~capital lease financing~~as Representative of the Estate of Dexture Carr, Deceased v. Dewan Tyrel Mosley and ~~sales~~C&J Well Services, Inc.: On or around October 2, 2018, Arlisa Carr filed a lawsuit against CJWS in the 115th District Court of ~~equity to obtain capital resources. When appropriate, we will consider public or private debt and equity offerings and non-recourse transactions to meet our liquidity needs.~~

~~On October 27, 2017, the Company entered into Amendment No. 1 (“Amendment No. 1”) to the New ABL Facility. Among~~Upshur County, Texas (Cause No.630-18), which alleged, among other things, ~~Amendment No. 1 (i) increased~~that CJWS was negligent with respect to an automobile accident in March 2018. MS. Carr was seeking monetary relief of more than $1 million. CJWS denied these allegations and the case was set for trial in May 2021. Immediately before the commencement of the trial we settled this matter for $2.5 million, which resulted in a $1.4 million charge to earnings in the first quarter of 2021.

We believe that costs associated with other litigation matters, individually or in the aggregate, commitments under the Credit Agreement from $100 million to $120 million, (ii) appointed CIT Bank, N.A. to serve as syndication agent and (iii) added new lenders and amended the commitment schedule to the Credit Agreement.

~~Nature of Operations~~

Basic provides a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, water logistics, well servicing and contract drilling. These services are primarily provided using Basic’s fleet of equipment. Basic’s operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, North Dakota, Wyoming, Arkansas, Kansas, Louisiana, California, the Rocky Mountains and Appalachia.

~~Principles of Consolidation~~

The accompanying consolidated financial statements include the accounts of Basic and its wholly owned subsidiaries. Basic has no variable interest in any non-consolidated organization, entity, partnership or contract. All intercompany transactions and balances have been eliminated.

~~Accounting Estimates and Assumptions~~

Preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, and expenses. Critical accounting estimates are those in which significant judgment is used, and the impact of any changes in estimates wouldwill not have a ~~significant~~material adverse effect on our consolidated financial statements. ~~Actual results~~

Sales and ~~outcomes may vary~~Use Tax Audits

The Company is subject to sales and use tax audits as a normal course of its business. The Company is currently subject to sales and use tax audits conducted by the Texas State Comptroller’s office for audit periods from ~~management's estimates~~2010 through 2016. Based on the Company's analysis, the potential liability associated with these audits, including costs to be incurred in defending and ~~assumptions. Examples of critical accounting estimates and assumptions include:~~settling these audits, range from $6.0 million up to $31.0 million. This range could potentially change in future periods as the appeal process progresses.

•~~Assets lives used to determine depreciation and amortization of property and equipment and intangible assets;~~

•~~Fair value of property and equipment and intangible assets;~~

•~~Allowance for doubtful accounts;~~

•~~Litigation and self-insured risk reserves;~~

•~~Stock-based compensation; and~~

•~~Potential outcome of income tax events that have been recognized on our consolidated financial statements or returns.~~

~~2. Property and Equipment~~

~~Property and equipment consisted of the following (in thousands):~~

September 30, 2017 December 31, 2016
Land $ 20,876
$ 21,010
Buildings and improvements 39,899
39,588
Well service units and equipment 109,568
96,365
Frac equipment/test tanks 109,375
75,506
Pumping equipment 112,638
85,247
Water logistics equipment 75,253
57,359
Disposal facilities 51,256
47,507
Contract drilling equipment 11,064
12,257
Rental equipment 33,966
32,582
Light vehicles 19,835
12,722
Software 727
641
Other 4,122
3,885
Construction equipment 1,818
1,485
Brine and fresh water stations 2,697
2,694
593,094
488,848
Less accumulated depreciation and amortization 76,723
—
Property and equipment, net $ 516,371
$ 488,848

Basic is obligated under various capital leases for certain vehicles and equipment that expire at various dates during the next five years. The gross amount of property and equipment and related accumulated amortization recorded under capital leases and included above consists of the following (in thousands):

September 30, 2017 December 31, 2016
Pumping equipment $ 55,778
$ 12,806
Water logistics equipment 36,967
29,372
Light vehicles 12,484
5,729
Contract drilling equipment 783
999
Well service units and equipment 63
—
Construction equipment 28
28
106,103
48,934
Less accumulated amortization 11,985
—
Property and equipment under capital lease, net $ 94,118
$ 48,934

Amortization of assets held under capital leases is included in depreciation and amortization expense in the consolidated statements of operations. Amortization amounts consisted of the following (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Successor) (Predecessor) (Successor) (Predecessor)
Lease amortization expense $ 5,657
$ 8,618
$ 13,245
$ 27,420

~~3. Intangible Assets~~

~~Basic had trade names of $3.4 million as of each of September 30, 2017 and December 31, 2016. Trade names have a 15-year life and are tested for impairment when triggering events are identified.~~

~~Basic’s intangible assets were as follows (in thousands):~~

September 30, 2017 December 31, 2016
Trade names $ 3,410
$ 3,410
Other intangible assets 48
48
$ 3,458
$ 3,458
Less accumulated amortization 178
—
Intangible assets subject to amortization, net $ 3,280
$ 3,458

~~Amortization expense of intangible assets for the three and six months ended September 30, 2017 and 2016 was as follows (in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Successor) (Predecessor) (Successor) (Predecessor)
Intangible amortization expense $ 59
$ 2,227
$ 178
$ 6,455

~~4. Long-Term Debt and Interest Expense~~

~~Long-term debt consisted of the following (in thousands):~~

September 30, 2017 December 31, 2016
Credit facilities:
Term Loan $ 162,938
$ 164,175
New ABL Facility 64,000
—
Capital leases and other notes 106,674
78,046
Unamortized discounts, premiums, and deferred debt costs (13,433 ) (19,001 )
Total principal amount of debt instruments, net 320,179
223,220
Less current portion 50,849
38,468
Long-term debt $ 269,330
$ 184,752

~~Debt Discounts~~9. Net Loss Per Share

The following ~~discounts on debt represent~~table sets forth the ~~unamortized discount~~computation of basic and diluted loss per share:


	Three Months Ended March 31,
(in thousands, except share and per share data)	2021		2020


Numerator (both basic and diluted):
Loss from continuing operations	$	(33,475)	$	(136,429)
Loss from discontinued operations, net of tax	(3,797)		(8,452)
Net loss available to common stockholders	$	(37,272)	$	(144,881)
Denominator:
Weighted-average shares used for basic and diluted earnings per share (a)	24,900		24,914

Loss from continuing operations per share, basic and diluted:	$	(1.35)	$	(5.48)
Loss from discontinued operations per share, basic and diluted:	(0.15)		(0.34)
Net loss per share, basic and diluted:	$	(1.50)	$	(5.82)

(a) The Company has issued potentially dilutive instruments. However, the Company did not include these instruments in its calculation of diluted loss per share, because to include them would be anti-dilutive.

The following table sets forth weighted average shares outstanding of potentially dilutive instruments:


	Three Months Ended March 31,
(in thousands)	2021	2020

Series A Preferred stock	118,805	28,722
Warrants	2,067	2,067
Unvested restricted stock units	159	420
Stock options	194	227
Total	121,225	31,436

10. Fair Value Measurements

Nonrecurring Fair Value Measurements

Certain assets and liabilities are not measured at fair value ~~of our Amended and Restated Term Loan Credit Agreement (the "Term Loan Agreement") and the short-term and long-term portions of the fair value discount of capital leases (in thousands):~~

September 30, 2017 December 31, 2016
Unamortized discount on Term Loan $ 9,758
$ 11,401
Unamortized discount on Capital Leases - short-term 1,657
1,600
Unamortized discount on Capital Leases - long-term 1,936
6,000
Unamortized deferred debt costs 82
—
$ 13,433
$ 19,001

On September 29, 2017, Basic terminated its $75 million credit facility and entered into the New ABL Facility pursuant to (i) a Receivables Transfer Agreement (the “Transfer Agreement”) entered into by and among Basic Energy Services, L.P. (“BES LP”), as the initial originator and Basic Energy Receivables, LLC (the “SPE”), as the transferee and (ii) the Credit Agreement.

~~Under the Transfer Agreement, BES LP will sell or contribute,~~ on an ongoing basis, ~~its~~but are subject to fair value measurements only in certain circumstances. For further discussion of these measurements, see Note 6. "Impairments and Other Charges." and Note 4. " Indebtedness and Borrowing Facility.”

The following table summarizes our fair value measurements made on a nonrecurring basis as of various dates during 2021. Please note that these amounts represent the carrying amounts and fair values at the time of each measurement.


(in thousands)	Date of Measurement	Hierarchy Level	Carrying Amount		Fair Value
Real estate held for sale	March 31, 2021	3	$	12,107	$	4,830
Senior Notes	March 31, 2021	2	$	9,500	$	9,500

The fair value of the real estate was based on a purchase and sale agreement entered into in April 2021. The fair value of the Senior Notes was based on their trading price as of March 31, 2021.

Fair Values of Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, accounts payable, and ~~related security and interests in the proceeds thereof (the “Transferred Receivables”)~~other current liabilities approximate their carrying amounts due to the ~~SPE. The SPE will finance a portion~~short maturities of its purchase of the accounts receivable through borrowings, on a revolving basis, of up to $100 million (with the ability to request an increase in the size of the New ABL Facility by $50 million) under the Credit Agreement, and such borrowings will be secured by the accounts receivable. The SPE will finance its purchase of the remaining portion of the accounts receivable by issuing subordinated promissory notes to BES LP and/or by contributing the remaining portion of the accounts receivables in exchange for equity in the SPE in the amount of the purchase price of the receivable not paid in cash. BES LP will be responsible for the servicing, administration and collection of the accounts receivable, with all collections going into lockbox accounts. The Company has provided a customary guaranty of performance to the administrative agent with respect to certain obligations of BES LP and any successor servicer under the New ABL Facility. In connection with entering into the New ABL Facility, on September 29, 2017, the Company amended the Term Loan Agreement to permit, among other things, (i) the acquisition of the Transferred Receivables by the SPE pursuant to the Transfer Agreement, free and clear of the liens under the Term Loan Agreement and (ii) the transactions contemplated under each of the Transfer Agreement and Credit Agreement. The Company consolidates the foregoing entities, and all intercompany activity is eliminated upon consolidation.

On October 27, 2017, the Company entered into Amendment No. 1. Among other things, Amendment No. 1 (i) increased the aggregate commitments under the Credit Agreement from $100 million to $120 million, (ii) appointed CIT Bank, N.A. to serve as syndication agent and (iii) added new lenders and amended the commitment schedule to the Credit Agreement.

~~As of September 30, 2017, Basic had $45.2 million of letters of credit outstanding secured by restricted cash borrowed under the New ABL Facility. Basic had borrowings under the New ABL Facility of~~ ~~$64.0 million~~ ~~as of September 30, 2017, giving Basic $30.9 million of available borrowing capacity under the New ABL Facility.~~

~~Basic’s interest expense consisted of the following (in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Successor) (Predecessor) (Successor) (Predecessor)
Cash payments for interest $ 7,611
$ 5,899
$ 16,919
$ 38,459
Commitment and other fees paid —
1,008
187
2,280
Amortization of debt issuance costs and discounts 1,850
1,528
5,731
5,876
Change in accrued interest 57
15,493
4,934
20,503
Capitalized interest (660 ) —
(660 ) —
Other 34
25
70
70
$ 8,892
$ 23,953
$ 27,181
$ 67,188

~~5. Fair Value Measurements~~these instruments.

The following is a summary of the carrying amounts and estimated fair values of ~~our financial instruments as of September 30, 2017~~the Company's long-term debt and ~~December 31, 2016:~~make-whole derivative instrument:

Fair Value September 30, 2017 December 31, 2016
Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value
(In thousands)
Term Loan 3 $ 153,180
$ 157,016
$ 152,838
$ 152,838


		March 31, 2021				December 31, 2020
(in thousands, except hierarchy level)	Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Fair Value of Debt
10.75% Senior Notes due 2023	2	$	299,813	$	69,500	$	289,359	$	44,992
Senior Secured Promissory Note	3	$	9,776	$	2,715	$	9,184	$	2,103
Second Lien Delayed Draw Promissory Note	3	$	15,000	$	15,000	$	15,000	$	15,000
Fair Value of Derivative Instrument
Make-Whole	3	$	0	$	0	$	4,847	$	4,847

The fair ~~value~~values of the ~~Term Loan Agreement is~~Senior Notes are based ~~upon our discounted cash flows model using a third-party discount rate.~~on their trading and bid/ask prices. The ~~carrying amount~~fair values of ~~our New ABL Facility approximates~~the Senior Secured Promissory Note as of March 31, 2021 are estimated considering its security as compared to the Senior Notes as well as the difference between the stated interest rate of this promissory note and market rates. The fair ~~value due to~~values of the Second Lien Promissory Note approximate its ~~variable-rate characteristics.~~

~~The~~ carrying amounts after considering the sufficiency of cash and cash equivalents, trade accounts receivable, accounts receivable-related parties, capital leases, accounts payable and accrued expenses approximate fair value due to the short maturities of these instruments.

~~6. Commitments and Contingencies~~

~~Environmental~~

~~Basic is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection~~its security. The underlying of the ~~environment. Basic cannot predict~~make-whole derivative instrument was the future impact of such standards and requirements, which are subject to change and can have retroactive effectiveness. Basic continues to monitor the status of these laws and regulations. Management believes that the likelihood of any of these items resulting in a material adverse impact to Basic’s financial position, liquidity, capital resources or future results of operations is remote.

Currently, Basic has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to bring Basic into total compliance with the laws and regulations. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions which may be required, the determination of Basic’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

~~Litigation~~

From time to time, Basic is a party to litigation or other legal proceedings that Basic considers to be a part of the ordinary course of business. Basic is not currently involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity.

~~Self-Insured Risk Accruals~~

Basic is self-insured up to retention limits as it relates to workers’ compensation, general liability claims, and medical and dental coverage of its employees. Basic generally maintains no physical property damage coverage on its workover rig fleet, with the exception of certain of its 24-hour workover rigs and newly manufactured rigs. Basic has deductibles per occurrence for workers’ compensation, general liability claims, automobile liability and medical coverage of $5.0 million, $1.0 million, $1.0 million, and $400,000, respectively. Basic maintains accruals in the accompanying consolidated balance sheets related to self-insurance retentions based upon third-party data and claims history.

At September 30, 2017 and December 31, 2016, self-insured risk accruals totaled approximately $32.5 million and $35.0 million, respectively, and are included in accrued expenses and other long-term liabilities.

~~7. Stockholders’ Equity~~

~~Common Stock~~

In February 2017, Basic granted certain members of management 801,322 performance-based restricted stock units and 320,532 performance-based stock option awards, which each vest over a three-year period. In August 2017, Basic granted certain members of management 6,476 stock options, 16,190 restricted stock units, 6,476 performance-based stock options and 16,190 performance-based restricted stock units.

~~Treasury Stock~~

Basic has acquired treasury shares through net share settlements for payment of payroll taxes upon the vesting of certain restricted stock units and awards. Basic acquired a total of 1,032 shares of common stock through net share settlements during the first nine months of 2017 and issued 29,398 shares from treasury stock for accelerated vestings and stock grants in the first nine months of 2017 (Successor). Basic acquired 220,391 shares of common stock through net share settlements during the first nine months of 2016 (Predecessor).

~~Stock Offering~~

In August 2017, Basic commenced an at-the-market public offering (the "ATM Program"), under which it could have sold shares of its common stock having an aggregate value of up to $50 million. Basic terminated the ATM Program on September 30, 2017.

~~8. Incentive Plan~~

~~The following table reflects compensation activity related to the management incentive plan for the nine-month period ending September 30, 2017 (dollar amounts in thousands):~~

Compensation expense for three months ended September 30, 2017 Compensation expense for nine months ended September 30, 2017 Unrecognized compensation expense Weighted average remaining life Fair value of share based awards vested

Restricted stock $ 4,880
$ 13,708
$ 36,744
1.9 $ 101
Restricted stock options $ 1,011
$ 2,907
$ 9,320
9.3 $ —

During the three and nine months ended September 30, 2017 and 2016, there was no excess tax benefit related to equity incentive compensation. Awards granted prior to the Effective Date were subsequently cancelled. All outstanding awards at September 30, 2017 were granted after the Effective Date as part of the Prepackaged Plan or during the current nine-month period, and relate to the Company's newly issued shares of common stock.

~~Stock Option Awards~~

~~The~~ fair value of ~~each stock option is estimated~~our Senior Notes. Therefore, the fair value of this derivative was based on the ~~date~~trading price of ~~grant using the Black-Scholes-Merton option-pricing model. Stock options granted under the Company's management incentive plan expire ten years from the date they are granted, and vest over a~~ ~~three-year service period.~~our Senior Notes.

~~The following table reflects changes during the nine-month period and a summary of stock options outstanding at September 30, 2017:~~

Weighted
Average
Weighted Remaining Aggregate
Number of Average Contractual Intrinsic
Options Exercise Term Value
Granted Price (Years) (000's)
Non-statutory stock options:
Outstanding, beginning of period 323,770
$ 36.55

Options granted 333,484
41.80

Options forfeited (2,158 ) 36.55

Options exercised —
—

Outstanding, end of period 655,096
$ 39.22
9.3 $ —
Exercisable, end of period 1,080
$ 36.55
9.2 $ —
Vested or expected to vest, end of period 655,096
$ 39.22
9.3 $ —

~~There were no stock options exercised during the nine months ended September 30, 2017 and 2016.~~

~~Restricted Stock Unit Awards~~

~~A summary of the status of Basic’s non-vested restricted stock units at September 30, 2017 and changes during the~~ ~~nine~~ ~~months ended September 30, 2017 is presented in the following table:~~

Weighted Average
Number of Grant Date Fair
Non-vested Units Shares Value Per Share
Non-vested at beginning of period 539,606
$ 36.55
Granted during period 860,402
41.37
Vested during period (2,698 ) 36.55
Forfeited during period (2,698 ) 36.55
Non-vested at end of period 1,394,612
$ 39.53

~~Restricted Stock Awards~~

On May 25, 2017, Basic’s Board of Directors (the "Board") approved grants of restricted stock awards to non-employee members of the Board. The number of restricted shares granted was 26,700. These grants are subject to vesting over a ten-month period and are subject to accelerated vesting under certain circumstances.

~~PhantomStock Awards~~

On March 15, 2017, the Board approved grants of phantom restricted stock awards to certain key employees. The number of phantom shares issued was 42,820. These grants remain subject to vesting annually in one-third increments over a two-year period, with the first portion vested on March 15, 2017, and are subject to accelerated vesting in certain circumstances.

On June 1, 2017 the Board approved grants of phantom restricted stock awards to certain key employees. The number of phantom shares issued was 79,440. Basic granted an additional 7,580 phantom shares during the third quarter of 2017. These grants remain subject to vesting annually in one-third increments over a three-year period, with the first portion vesting on March 15, 2018, and are subject to accelerated vesting in certain circumstances.

~~9. Related Party Transactions~~

~~Basic had receivables from employees of approximately $22,000 and $31,000 as of September 30, 2017 and December 31, 2016, respectively.~~

~~10. Earnings Per Share~~

~~The following table sets forth the computation of unaudited basic and diluted loss per share (in thousands, except share data):~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

(Unaudited) (Unaudited)

(Successor) (Predecessor) (Successor) (Predecessor)
Numerator (both basic and diluted):

Net loss $ (13,845 ) $ (92,097 ) $ (76,413 ) $ (265,319 )
Denominator:
Denominator for basic loss per share 26,001,062
42,689,773
26,000,326
41,957,755
Denominator for diluted loss per share 26,001,062
42,689,773
26,000,326
41,957,755
Basic loss per common share: $ (0.53 ) $ (2.16 ) $ (2.94 ) $ (6.32 )
Diluted loss per common share: $ (0.53 ) $ (2.16 ) $ (2.94 ) $ (6.32 )

Stock options and warrants of 2,721,720 were excluded from the computation of diluted loss per share for the three and nine months ended September 30, 2017 because the effect would have been anti-dilutive. Unvested restricted shares of 26,700 and 12,421 were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2017, respectively, because the effect would have been anti-dilutive. Unvested restricted stock awards of 1,371,098 and 826,597 were excluded from the computation of diluted loss per share for the three and nine months ended September 30, 2016, as the effect would have been anti-dilutive.

11. Business Segment Information

The Company’s reportable business segments are Well Servicing, Water Logistics, and Completion & Remedial Services. Costs related to other business activities, primarily corporate headquarters functions, are disclosed separately from the 3 operating segments as "Corporate and Other." Corporate expenses include general corporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs.

The Company evaluates segment performance on revenue less cost of services. Products are transferred between segments and geographical areas on a basis intended to reflect as nearly as possible the market value of

the products. The following table sets forth certain financial information with respect to ~~Basic’s~~the Company’s reportable ~~segments (in thousands):~~ segments:

Completion
and Remedial Water Well Contract Corporate
Services Logistics Servicing Drilling and Other Total
Three Months Ended September 30, 2017 (Unaudited) (Successor)
Operating revenues $ 123,650
52,333
54,629
2,848
—
$ 233,460
Direct operating costs (84,481 ) (41,281 ) (43,219 ) (2,547 ) —
(171,528 )
Segment profits $ 39,169
11,052
11,410
301
—
$ 61,932
Depreciation and amortization $ 13,860
7,703
5,319
495
2,101
$ 29,478
Capital expenditures (excluding acquisitions) $ 11,285
10,055
6,884
12
672
$ 28,908
Three Months Ended September 30, 2016 (Unaudited) (Predecessor)
Operating revenues $ 49,425
47,178
43,160
1,847
—
$ 141,610
Direct operating costs (40,292 ) (39,268 ) (35,028 ) (1,683 ) —
(116,271 )
Segment profits $ 9,133
7,910
8,132
164
—
$ 25,339
Depreciation and amortization $ 18,383
15,584
13,491
3,109
2,575
$ 53,142
Capital expenditures (excluding acquisitions) $ 3,178
8,244
2,622
69
182
$ 14,295
Nine Months Ended September 30, 2017 (Unaudited) (Successor)
Operating revenues $ 311,466
153,279
156,302
7,728
—
$ 628,775
Direct operating costs (232,932 ) (124,399 ) (125,931 ) (6,818 ) —
(490,080 )
Segment profits $ 78,534
28,880
30,371
910
—
$ 138,695
Depreciation and amortization $ 38,013
21,127
14,589
1,357
5,760
$ 80,846
Capital expenditures (excluding acquisitions) $ 69,342
26,392
20,377
30
1,920
$ 118,061
Identifiable assets $ 263,407
135,338
107,511
8,643
346,246
$ 861,145
Nine Months Ended September 30, 2016 (Unaudited) (Predecessor)
Operating revenues $ 125,348
142,919
118,891
4,812
—
$ 391,970
Direct operating costs (107,941 ) (119,053 ) (101,345 ) (4,612 ) —
(332,951 )
Segment profits $ 17,407
23,866
17,546
200
—
$ 59,019
Depreciation and amortization $ 56,782
48,133
41,669
9,603
7,954
$ 164,141
Capital expenditures (excluding acquisitions) $ 4,689
14,422
6,076
182
2,689
$ 28,058
Identifiable assets $ 308,989
216,202
200,451
43,566
233,840
$ 1,003,048


(in thousands)	Well Servicing		Water Logistics		Completion & Remedial Services		Corporate and Other		Continuing Operations Total		Discontinued Operations
Three Months Ended March 31, 2021
Revenues	$	54,807	$	27,814	$	11,726	$	0	$	94,347	$	0
Costs of services	44,124		24,287		8,760		0		77,171		1,393
Segment profits	10,683		3,527		2,966		0		17,176		(1,393)
Depreciation and amortization	1,973		5,327		2,422		1,075		10,797		0
Capital expenditures	0		197		134		0		331		0
Total assets	$	37,708	$	97,041	$	53,591	$	139,565	$	327,905	$	3,194
Three Months Ended March 31, 2020
Revenues	$	58,141	$	44,381	$	25,881	$	0	$	128,403	$	95
Costs of services	48,434		33,105		20,636		0		102,175		1,520
Segment profits	9,707		11,276		5,245		0		26,228		(1,425)
Depreciation and amortization	2,455		6,681		4,070		1,559		14,765		0
Capital expenditures	2,070		2,770		729		26		5,595		0
Total assets	$	47,032	$	134,893	$	80,290	$	219,159	$	481,374	$	10,346

The following table reconciles the segment profits reported above to the ~~operating~~ loss from continuing operations before income taxes as reported in the condensed consolidated statements of ~~operations (in thousands):~~operations:


	Three Months Ended March 31,
(in thousands)	2021		2020
Segment profits	$	17,176	$	26,228
Selling, general and administrative	(18,054)		(26,232)
Depreciation and amortization	(10,797)		(14,765)
Gain on disposal of assets	1,993		37
Impairments and other charges	(7,258)		(99,694)
Acquisition related costs	0		(11,684)
Interest expense, net	(12,024)		(10,557)
Loss on derivative	(4,798)		(3,552)


Loss from continuing operations before income taxes	$	(33,762)	$	(140,219)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Successor) (Predecessor) (Successor) (Predecessor)
Segment profits $ 61,932
$ 25,339
$ 138,695
$ 59,019
General and administrative expenses (39,235 ) (30,065 ) (109,478 ) (86,706 )
Restructuring costs —
(10,470 ) —
(10,470 )
Depreciation and amortization (29,478 ) (53,142 ) (80,846 ) (164,141 )
Gain (loss) on disposal of assets (26 ) 128
664
(133 )
Goodwill impairment —
(646 ) —
(646 )
Operating loss $ (6,807 ) $ (68,856 ) $ (50,965 ) $ (203,077 )

12. ~~Supplemental Schedule~~Subsequent Events

In April 2021, we entered into a purchase and sale agreement for the sale of ~~Cash Flow Information~~

certain non-core assets for a purchase price of $6.6 million, not including the assumption of certain capital leases and an earn-out payment of up to $1.0 million payable one year after closing. The ~~following table reflects non-cash financing and investing activity~~closing date is expected to occur during the ~~following periods:~~second quarter of 2021.

Nine Months Ended September 30,
2017 2016
(In thousands)
Capital leases and notes issued for equipment $ 61,040
$ 5,151
Asset retirement obligation additions (retirements) (30 ) (21 )
Change in accrued property and equipment 8,726
—

~~Basic paid no income taxes during~~In May 2021, the ~~nine months ended September 30, 2017 and 2016. Basic paid interest~~Company completed a sale-leaseback transaction related to certain real property in California. The purchase price for the property consisted of $10.5 million, subject to a holdback of approximately ~~$16.9~~$2.6 million ~~and $38.5 million during~~for certain improvements to be constructed at the ~~nine months ended September 30, 2017 and 2016, respectively.~~

~~13.Recent Accounting Pronouncements~~

~~ASU 2014-09 - “Revenue from Contracts with Customers (Topic 606)"~~ ~~represents~~property. We entered into a ~~comprehensive revenue recognition standard to supersede existing revenue recognition guidance and align GAAP more closely with International Financial Reporting Standards (IFRS).~~

~~The core principle~~simultaneous lease of the ~~new guidance is that a company should recognize revenue to match the delivery~~property for an initial term of goods or services to customers to the consideration the company expects to be entitled in exchange for those goods or services. The standard creates a five step model that requires companies to exercise judgment when considering the terms of a contract and all relevant facts and circumstances. The standard allows for two transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented subject to certain practical expedients, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, and which includes additional disclosures regarding the change in accounting principle in the current period. We plan to adopt the standard using the full retrospective method to restate each prior period presented.three years.

The standard will be effective for Basic beginning January 1, 2018. In preparation to adopt the standard, we are performing a detailed review of key contracts with customers which are representative of our revenue streams. While we are still in the process of performing the review and analysis of our contracts to support our assessments, the substantial majority of our services are performed at a point in time, revenue is recognized at the time of performance, and this is expected remain unchanged. We do not incur significant contract costs.

~~In February 2016, the FASB issued ASU 2016-02 - “Leases (Topic 842).~~” The purpose of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for Basic in annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Basic has begun a project to identify all operating leases greater than one year and implementing new leasing software to track operating and capital leases. Basic expects to recognize additional right-of-use assets and liabilities related to operating leases with terms longer than one year.

~~In August 2016, the FASB issued ASU 2016-15-"Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments."~~ ~~This standard is effective for Basic for fiscal years beginning after December 15, 2017. The~~

amendments in this update are intended to clarify cash flow treatment of certain cash flows with the objective of reducing diversity in practice. Basic intends to adopt this standard as of January 1, 2018, and does not expect significant changes to the cash flow statement as a result.

~~In November 2016 the FASB issued ASU 2016-18- "Statement of Cash Flows (Topic 230): Restricted Cash,"~~ which clarifies the treatment of cash inflows into and cash payments from restricted cash. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of this ASU should be applied using a retrospective transition method and are effective for reporting periods beginning after December 15, 2017. Basic intends to adopt this standard as of January 1, 2018, and does not expect significant changes to the cash flow statement as a result.

ITEM 2. 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis ("MD&A") of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q, as well as with our Annual Report on Form 10-K for the year ended December 31, 2020. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, or beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Unless otherwise specified, all comparisons made are to the corresponding period of 2020.

Management’s Overview

Basic Energy Services, Inc. and subsidiaries (“Basic”, the “Company”, “we”, “us” or “our”) provides wellsite services essential to maintaining production from the oil and gas wells within its operating areas. The Company's operations are managed regionally and are concentrated in major United States onshore oil-producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota, Colorado, and Montana. Our operations are focused in prolific basins that have historically exhibited strong drilling and production economics in recent years as well as natural gas-focused shale plays characterized by prolific reserves. Specifically, the Company has a significant presence in the Permian Basin, Bakken, Los Angeles and San Joaquin Basins, Eagle Ford, Haynesville and Powder River Basin. Our results of operations include the results of C&J Well Services, Inc. ("CJWS") since the acquisition on March 9, 2020.

Summary Financial Results

•Total revenue for the first quarter of 2021 was $94.3 million, which represented a decrease of $34.1 million from the first quarter of 2020.

•Net loss from continuing operations for the first quarter 2021 was $33.5 million, compared to $136.4 million in the first quarter of 2020.

•Adjusted EBITDA(1) for the first quarter of 2021 was $0.6 million, which represented a decrease from adjusted EBITDA of $1.3 million in the first quarter of 2020. See later in this MD&A for our reconciliation of net loss to adjusted EBITDA.

(1)Adjusted EBITDA is not a measure determined in accordance with GAAP. See "Supplemental Non-GAAP Financial Measure - Adjusted EBITDA" below for further explanation and reconciliation to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Current Environment, Liquidity, and Going Concern

a significant contractual obligation to pay cash or issue additional 10.75% senior secured notes due 2023 (the "Senior Notes") to our largest shareholder, Ascribe III Investments LLC ("Ascribe"), resulting from our acquisition of CJWS. On March 31, 2021, the Company negotiated a settlement of this obligation with Ascribe in exchange for issuing additional Senior Notes to Ascribe with an aggregate par value of $47.5 million.

On April 15, 2021, the Company announced it elected to utilize the 30-day grace period under the terms of the indenture governing its Senior Notes with respect to a $16.3 million interest payment (the "Senior Notes Interest Payment") due that day. The Company believed it was in the best interests of all stakeholders to use the grace period to continue its ongoing discussions with its debtholders regarding strategic alternatives to improve the Company’s long-term capital structure.

We provide a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, well servicing, water logistics and contract drilling. Our emergence from bankruptcy, and various market fluctuations, may make our revenues, expenses and income not directly comparable between periods.

~~Our total hydraulic horsepower (“hhp”) increased to 523,000 at~~are in continuing discussions with the ~~end~~holders of the ~~third~~Company’s Senior Notes and other indebtedness regarding strategic alternatives including financings, refinancings, amendments, waivers, forbearances, asset sales, debt issuances, and exchanges of debt, a combination of the foregoing, or other out-of-court or in-court bankruptcy restructurings of our debt and other transactions to address our capital structure.

If the Company is unable to effectuate a successful debt restructuring, the Company expects that it will continue to experience adverse pressures on its relationships with counterparties who are critical to its business, its ability to access the capital markets, its ability to execute on its operational and strategic goals and its business, prospects, results of operations and liquidity generally. There can be no assurance as to when or whether, or on what terms the Company will implement any action as a result of these strategic initiatives, whether the implementation of one or more such actions will be successful, whether the Company will be able to effect a refinancing of its Senior Notes or the effects the failure to take action may have on the Company’s business, its ability to achieve its operational and strategic goals or its ability to finance its business or refinance or restructure its indebtedness. A failure to address the Company’s level of corporate leverage in the near-term will have a material adverse effect on the Company’s business, prospects, results of operations, liquidity and financial condition, and its ability to service its corporate debt as it becomes due.

Results of Operations

Revenues

Consolidated revenues decreased by 27% to $94.3 million in the first quarter of ~~2017 compared~~2021 from $128.4 million in 2020, despite reflecting the full quarter impact of the CJWS acquisition. This decrease, particularly in our Water Logistics and Completion & Remedial Services segments, was primarily due to ~~444,000~~decreased demand for our services, and was further impacted by the February 2021 severe winter storm in Texas. Our reportable segment revenues consisted of the following:


	Three Months Ended March 31,
	2021			2020
(dollars in thousands)	Revenues		% of Total Revenues	Revenues		% of Total Revenues
Well Servicing	$	54,807	58%	$	58,141	45%
Water Logistics	27,814		30%	44,381		35%
Completion & Remedial Services	11,726		12%	25,881		20%
Revenues from continuing operations	$	94,347	100%	$	128,403	100%

Well Servicing Segment: The following table includes certain operating statistics related to our Well Servicing segment for the ~~third~~first quarter of ~~2016. Weighted~~2021 and 2020, respectively.


Well Servicing	Weighted Average Number of Rigs	Rig hours	Rig Utilization Rate	Revenue Per Rig Hour	Segment Profits %

2021	514	127,700	35%	$429	19%





2020	396	139,100	49%	$397	17%

Well Servicing revenues decreased by 6% to $54.8 million in the first quarter of 2021 from $58.1 million in 2020. Rig hours decreased by 8%, due to decreased customer activity levels in 2021 and the February 2021 severe winter storm in Texas. These decreases were partially offset by the full quarter impact in 2021 of the CJWS acquisition. Revenue per rig hour increased 8% in the first quarter of 2021 due to the full quarter impact of the CJWS acquisition. Our weighted average ~~horsepower~~number of rigs increased in 2021 due to ~~520,000~~the full quarter impact in 2021 of the CJWS acquisition.

Water Logistics Segment: The following table includes certain operating statistics related to our Water Logistics segment for the ~~third~~first quarter of ~~2017 from 444,000~~2021 and 2020, respectively.


Water Logistics	Pipeline Volumes (in bbls)	Trucking Volumes (in bbls)	Weighted Average Number of Fluid Service Trucks	Truck Hours	Segment Profits %
2021	3,395,000	3,133,000	1,170	252,500	13%





2020	3,620,000	5,825,000	908	374,300	25%

Water Logistics revenue decreased by 37% to $27.8 million in the ~~third~~first quarter of ~~2016.~~2021 from $44.4 million in 2020. Our trucking volumes decreased 46% in the first quarter of 2021 due to decreased customer activity levels in 2021 and the February 2021 severe winter storm in Texas. These decreases were partially offset by the full quarter impact in 2021 of the CJWS acquisition. Our pipeline disposal volumes decreased 6% in the first quarter of 2021 due to decreased customer activity levels in 2021. Our weighted average number of water logistics trucks increased in 2021 due to the full quarter impact in 2021 of the CJWS acquisition.

Completion & Remedial Segment: Completion & Remedial Services revenues decreased by 55% to ~~947~~$11.7 million in the ~~third~~first quarter of ~~2017~~2021 from ~~962~~$25.9 million in 2020 due to decreased customer drilling and completion activity levels in 2021 and the February 2021 severe winter storm in Texas. These decreases were partially offset by the full quarter impact in 2021 of the CJWS acquisition.

Costs of Services

Consolidated costs of services, decreased by 24% to $77.2 million during the first quarter of 2021 from $102.2 million in 2020.

Well Servicing Segment: Costs of services for the Well Servicing segment decreased by 9% to $44.1 million in the ~~third~~first quarter of ~~2016. Our weighted average number of well servicing rigs remained constant at 421 during the third quarter of 2017 compared~~2021 from $48.4 million in 2020, due to ~~the third quarter of 2016.~~

~~Our operating revenues from each of our segments, and their relative percentages of our total revenues, consisted of the following (dollars in millions):~~

Nine Months Ended September 30, 2017
2017 2016
(Successor) (Predecessor)
Revenues:
Completion and remedial services $ 311.5
50 % $ 125.3
32 %
Water logistics

$ 153.3
24 % $ 142.9
36 %
Well servicing $ 156.3
25 % $ 118.9
31 %
Contract drilling $ 7.7
1 % $ 4.8
1 %
Total revenues $ 628.8
100 % $ 392.0
100 %

During the fourth quarter of 2015, oil prices declined to levels below $50 per barrel (WTI Cushing) and dropped to levels below $30 in early 2016 before rebounding in late 2016. During 2017, oil prices gradually improved with pricing in the low-$50 range by the end of the third quarter. As a result of the overall increase in pricing, our customers’reduced activity levels and ~~utilization of our equipment have gradually improved. General improvement~~employee headcount. These decreases were partially offset by the full quarter impact in customer confidence has caused the North American onshore drilling rig count to slowly rise, resulting in an increase in completion-related activity during the first nine months of 2017. Additionally, production related activities, such as well servicing and water logistics, have seen increases in utilization as customers have enhanced their maintenance and workover budgets in 2017.

As a result of gradual improvements in oil pricing and high concentration of equipment and activity, utilization and pricing for our services have remained competitive in our oil-based operating areas. Natural gas prices have been depressed for a prolonged period and utilization and pricing for our services in our natural gas-based operating areas have remained challenged.

~~We believe that the most important performance measures for our business segments are as follows:~~

~~Completion and Remedial Services~~ ~~— segment profits as a percent of revenues;~~

~~Well Servicing~~ ~~— rig hours, rig utilization rate, revenue per rig hour, profits per rig hour and segment profits as a percent of revenues;~~

~~Water Logistics —~~ ~~trucking hours, revenue per truck, segment profits per truck and segment profits as a percent of revenues; and~~

~~Contract Drilling~~ ~~— rig operating days, revenue per drilling day, profits per drilling day and segment profits as a percent of revenues.~~

Segment profits are computed as segment operating revenues less direct operating costs. These measurements provide important information to us about the activity and profitability of our lines of business. For a detailed analysis of these indicators for the Company, see “Segment Overview” below.

~~Selected Acquisitionsand Divestitures~~

~~During the year ended December 31, 2016 and through the first nine months of 2017, we did not enter into or complete any business acquisitions or divestitures.~~

~~Segment Overview~~

~~Completion and Remedial Services~~

During the first nine months of 2017, our completion and remedial services segment represented approximately 50% of our revenues. Revenues from our completion and remedial services segment are generally derived from a variety of services designed to complete and stimulate new oil and natural gas production or place cement slurry within the wellbores. Our completion and remedial services segment includes pumping services, rental and fishing tool operations, coiled tubing services, nitrogen services, snubbing and other services.

Our pumping services provide both large and mid-sized fracturing services in selected markets, including vertical and horizontal wellbores. Cementing and acidizing services also are included in our pumping services operations. Our total hydraulic horsepower capacity for our pumping operations was 523,000 at September 30, 2017 and 444,000 at September 30, 2016, respectively. Weighted average horsepower increased to 520,000 for the third quarter of 2017 from 444,000 in the third quarter of 2016.

In this segment, we derive our revenues on a project-by-project basis in a competitive bidding process. Our bids are based on the amount and type of equipment and personnel required, with the materials consumed billed separately. During the extended period of decreased spending by oil and gas companies in 2015 and 2016, we discounted our rates to remain competitive, which caused lower segment profits. As activity has improved in the first nine months of 2017, we have regained pricing increases and higher utilization of equipment.

~~The following is an analysis of our completion and remedial services segment for each~~2021 of the ~~quarters in 2016, the full year ended December 31, 2016 and the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017 (dollars in thousands):~~

Segment
Revenues Profits %
2016: (Predecessor)
First Quarter $ 39,696
12 %
Second Quarter $ 36,228
9 %
Third Quarter $ 49,424
18 %
Fourth Quarter $ 59,219
14 %
Full Year $ 184,567
14 %
2017: (Successor)
First Quarter $ 80,431
16 %
Second Quarter $ 107,385
24 %
Third Quarter $ 123,650
32 %

The increase in completion and remedial services revenue to $123.7 million in the third quarter of 2017 from $107.4 million in the second quarter of 2017 resulted primarily from the addition of new equipment and higher prices in our coil tubing and fracing operations.CJWS acquisition. Segment profits as a percentage of ~~revenue~~segment revenues increased to ~~32%~~19% in the ~~third~~first quarter of ~~2017~~2021 from ~~24%~~17% in ~~second~~2020 due to our cost saving initiatives and the full quarter impact of the CJWS acquisition.

Water Logistics Segment: Costs of services for the Water Logistics segment decreased by 27% to $24.3 million in the first quarter of ~~2017 on~~2021 from $33.1 million in 2020 due to reduced activity levels and employee headcount. Segment profits as a percentage of segment revenues decreased to 13% in the ~~incremental~~first quarter of 2021 from 25% in 2020 due to decreased pricing for our services in 2021 and severe weather in the first quarter of 2021 leading to a decline in disposal volumes. Additionally, the segment profits for this segment in the first quarter of 2021 were negatively impacted by a $1.4 million charge to earnings related to the settlement of an automobile insurance claim.

Completion & Remedial Segment: Costs of services for the Completion & Remedial Services segment decreased by 58% to $8.8 million in the first quarter of 2021 from $20.6 million in 2020 due to reduced activity levels and employee headcount. Segment profits as a percentage of segment revenues increased to 25% in the first quarter of 2021 from 20% in 2020 due to our cost saving initiatives and increased mix of higher margin work in the first quarter of 2021.

Selling, General and Administrative

Consolidated selling, general and administrative expenses decreased by $8.1 million or 31% to $18.1 million in the first quarter of 2021 from $26.2 million in 2020. This decrease was due to lower employee headcount and the effect of ~~higher revenues and improved pricing and utilization of~~ our ~~equipment.~~

~~Water Logistics~~

~~During~~cost reduction initiatives that began in 2020. Stock-based compensation expense was $0.1 million in the first ~~nine months~~quarter of ~~2017,~~2021 compared to $1.3 million in 2020.

Depreciation and Amortization

Consolidated depreciation and amortization decreased by $4.0 million, or 27%, to $10.8 million in the first quarter of 2021 from $14.8 million in 2020. This decrease was due to impairments of long-lived assets in 2020 and decreased capital spending in 2021. Capital expenditures in the first quarter of 2021 were $0.3 million compared to $5.6 million in 2020. We also acquired $0.5 million of finance leases in the first quarter of 2020 compared to zero in 2021.

Impairments and Other Charges

The following table summarizes our ~~water logistics segment represented approximately 24%~~impairments and other charges:


	Three Months Ended March 31, 2021
(in thousands)	2021		2020
Long lived asset impairments	$	4,435	$	84,217
Transaction costs	2,589		—
Field restructuring	234		66
Goodwill impairments	—		10,565
Inventory write-downs	—		4,846







	$	7,258	$	99,694

Long-lived asset impairments - In the first quarter of 2021, we incurred $4.4 million of impairments for certain real estate held for sale, which was subsequently sold in May 2021. In March 2020, the reduction in demand for our ~~revenues. Revenues~~services resulted in a long-lived asset impairment of $84.2 million related to property and equipment in our ~~water logistics segment are earned~~Well Servicing segment.

Transaction costs - In connection with liability management, we incurred $2.6 million of legal and professional consulting costs during the first quarter of 2021.

Field restructuring costs - In the first quarter of 2021, we incurred $0.2 million of costs associated with yard

closures in connection with our field restructuring initiative. We incurred $0.1 million in the first quarter of 2020 related to yard closures.

Inventory write-downs - In connection with the downturn in our business in the first quarter of 2020, we recorded a $4.8 million write-down of certain parts inventory in our Well Servicing segment.

Acquisition Related Costs

Acquisition related costs in the first quarter of 2020 was $11.7 million due to legal and professional costs associated with the CJWS acquisition as well as severance costs paid to CJWS employees pursuant to the purchase agreement.

(Gain) Loss on Disposal of Assets

In the first quarter of 2021, we received proceeds of $5.5 million from the sale ~~transportation, treatment, recycling, storage,~~of non-strategic property and ~~disposal of fluids~~equipment used in our continuing operations and recognized a $2.0 million net gain on the ~~drilling, production~~sale of these assets. In the first quarter of 2020, we received proceeds of $1.3 million from the sale of non-strategic property and ~~maintenance~~equipment used in our continuing operations and recognized a small net gain on the sale of ~~oil~~these assets.

Loss on Derivative

On March 31, 2021, the Company negotiated a settlement of a contractual make-whole obligation to its controlling shareholder in exchange for issuing additional Senior Notes to this shareholder with an aggregate par value of $47.5 million. The Company's make-whole obligation was related to the acquisition of CJWS and natural gas wells. Revenues also include well site construction and maintenance services. The water logistics segment has a base level of business consisting of transporting and disposing of salt water producedwas accounted for as a ~~by-product~~derivative instrument until this settlement. The Senior Notes were issued at a fair value of $9.5 million based on the market pricing of our Senior Notes on March 31, 2021. The difference between the fair value of the ~~production~~Senior Notes and the fair value of ~~oil and natural gas. These services are necessary~~the derivative instrument resulted in a $4.8 million loss on this derivative instrument for ~~our customers and usually have a stable demand, but produce lower relative segment profits than other parts~~the first quarter of ~~our water logistics segment. Water logistics for completion and workover projects require fresh or brine water for making drilling mud, circulating fluids or frac fluids used during a job, and all~~2021.

Interest Expense, net

The Company’s interest expense consisted of ~~these fluids require storage tanks and hauling and disposal. Because we can provide a full complement of fluid sales, trucking, storage and disposal required on most drilling and workover projects,~~ the ~~add-on services associated with drilling and workover activity generally enable us~~following:


	Three Months Ended March 31,
(in thousands)	2021		2020

Cash payments for interest	$	1,570	$	1,229
Change in accrued interest	8,096		8,220

Amortization of debt discounts and issuance costs	2,273		1,108

Interest income	—		(62)

Other	85		62
Interest expense, net	$	12,024	$	10,557

Consolidated net interest expense increased to generate higher segment profits. The higher segment profits for these add-on services are due to the relatively small incremental labor costs associated with providing these services in addition to our base water logistics segment. Revenues from our water treatment and recycling services include the treatment, recycling and disposal of wastewater, including frac water and flowback, to reuse this water$12.0 million in the ~~completion and production processes. Revenues from our well site construction services are derived primarily from preparing and maintaining~~

well locations, access roads to well locations, and installing small diameter gathering lines and pipelines, constructing foundations to support drilling rigs and providing maintenance services for oil and natural gas facilities. We price water logistics by the job, by the hour, or by the quantities sold, disposed of or hauled.

The following is an analysis of our water logistics operations for each of the quarters in 2016, the full year ended December 31, 2016 and the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017 (dollars in thousands):

Weighted Segment
Average Revenue Profits Per
Number of Per Water Water
Water Logistics Trucking Logistics Logistics Segment
Trucks Hours Truck Truck Profits %
2016: (Predecessor)
First Quarter 985
521,500
$ 51
$ 10
18 %
Second Quarter 976
474,400
$ 47
$ 7
15 %
Third Quarter 962
499,900
$ 49
$ 8
17 %
Fourth Quarter 944
503,200
$ 52
$ 7
13 %
Full Year 966
1,999,000
$ 199
$ 31
16 %
2017: (Successor)

First Quarter 935
484,300
$ 54
$ 9
17 %
Second Quarter 943
473,500
$ 54
$ 10
18 %
Third Quarter 947
483,300
$ 55
$ 12
21 %

~~Revenue per water logistics truck increased to $55,000 in the third~~first quarter of ~~2017 compared to $54,000~~2021 from $10.6 million in second quarter of 2017 on increased levels of disposal well utilization and construction services revenues. Segment profit percentage increased to 21% in the third quarter of 2017 from 18% in the second quarter of 2017 primarily due to the incremental effect of higher revenues and rate increases.

~~Well Servicing~~

During the first nine months of 2017, our well servicing segment represented 25% of our revenues. Revenue in our well servicing segment is derived from maintenance, workover, completion, manufacturing, and plugging and abandonment services. We provide maintenance-related services as part of the normal, periodic upkeep of producing oil and natural gas wells. Maintenance-related services represent a relatively consistent component of our business. Workover and completion services generate more revenue per hour than maintenance work due to the use of auxiliary equipment, but demand for workover and completion services fluctuates more with the overall activity level in the industry. We also have a rig manufacturing and servicing facility that builds new workover rigs, performs large-scale refurbishments of used workover rigs and provides maintenance services on previously manufactured rigs.

We charge our well servicing rig customers for services on an hourly basis at rates that are determined by the type of service and equipment required, market conditions in the region in which the rig operates, the ancillary equipment provided on the rig and the necessary personnel. Depending on the type of job, we may also charge by the project or by the day. We measure the activity levels of our well servicing rigs on a weekly basis by calculating a rig utilization rate based on a 55-hour work week per rig. Our fleet remained constant in 2016 and 2017 at a weighted average number of 421 rigs.

The following is an analysis of our well servicing operations for each of the quarters in 2016, the full year ended December 31, 2016 and the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017 (dollars in thousands):

Weighted
Average Rig Revenue
Number Utilization Per Rig Profits Per
of Rigs Rig hours Rate Hour Rig hour Profits %
2016: (Predecessor)
First Quarter 421
108,400
36 % $ 321
$ 44
11 %
Second Quarter 421
113,700
38 % $ 308
$ 44
14 %
Third Quarter 421
136,600
45 % $ 313
$ 60
19 %
Fourth Quarter 421
146,200
49 % $ 300
$ 43
14 %
Full Year 421
504,900
42 % $ 310
$ 47
14 %
2017: (Successor)

First Quarter 421
157,600
52 % $ 307
$ 49
16 %
Second Quarter 421
162,300
54 % $ 321
$ 69
21 %
Third Quarter 421
165,200
55 % $ 329
$ 69
21 %

Rig utilization was 55% in the third quarter of 2017, up from 54% in the second quarter of 2017. The higher utilization rate in the third quarter of 2017 resulted from an increase in well servicing hours caused by increases in customer demand and activity in selected basins offset by significant weather, including Hurricane Harvey. Our segment profit percentage remained constant at 21% for the third quarter of 2017 compared to the second quarter of 2017, on consistent levels of utilization and pricing.

~~Contract Drilling~~

During the first nine months of 2017, our contract drilling segment represented approximately 1% of our revenues. Revenues from our contract drilling segment are derived primarily from the drilling of new wells.

Within this segment, we charge our drilling rig customers a “daywork” daily rate, or “footage” at an established rate per number of feet drilled. We measure the activity level of our drilling rigs on a weekly basis by calculating a rig utilization rate based on a seven-day work week per rig. Our contract drilling rig fleet had a weighted average of 11 rigs during the third quarter of 2017.

The following is an analysis of our contract drilling segment for each of the quarters in 2016, the full year ended December 31, 2016 and the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017 (dollars in thousands):

Weighted
Average Rig
Number of Operating Revenue Per Profits Per Segment
Rigs Days Drilling Day Drilling Day Profits %
2016: (Predecessor)
First Quarter 12
91
$ 16.5
$ (0.6 ) (4 )%
Second Quarter 12
91
$ 16.1
$ 1.0
6 %
Third Quarter 12
92
$ 20.1
$ 1.8
9 %
Fourth Quarter 12
139
$ 17.5
$ 0.8
(2 )%
Full Year 12
413
$ 17.5
$ 0.8
2 %
2017: (Successor)
First Quarter 12
135
$ 20.5
$ 2.6
13 %
Second Quarter 11
91
$ 23.3
$ 2.8
12 %
Third Quarter 11
92
$ 31.0
$ 3.3
11 %

~~Revenue per drilling day increased to $31,000 in the third quarter of 2017 compared to $23,300 in the second quarter of 2017.~~2020. The increase in ~~revenue per drilling day~~net interest expense in the third quarter of 2017 was due to an increase in rig trucking revenues and utilization. Segment profit percentage decreased to 11% in the third quarter of 2017 compared to segment profit of 12% in the second quarter of 2017.

~~Operating Cost Overview~~

Our operating costs are comprised primarily of labor, including workers’ compensation and health insurance, repair and maintenance, fuel and insurance. The majority of our employees are paid on an hourly basis. We also incur costs to employ personnel to sell and supervise our services and perform maintenance on our fleet. These costs, however, are not directly tied to our level of business activity. Repair and maintenance is performed by our crews, company maintenance personnel and outside service providers. Compensation for our administrative personnel in local operating yards and in our corporate office is accounted for as general and administrative expenses. Insurance is generally a fixed cost regardless of utilization and relates to the number of rigs, trucks and other equipment in our fleet, employee payroll and safety record.

~~Critical Accounting Policies and Estimates~~

Our unaudited consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of our significant accounting policies is included in Note 1. ~~Basis of Presentation and Nature of Operations~~ ~~of the Financial Statements and Supplementary Data in our most recent Annual Report on Form 10-K.~~

~~Results of Operations~~

The following is a comparison of our results of operations for the three and nine months ended September 30, 2017 compared to the three and nine months ended September 30, 2016. The implementation of the First Amended Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors and the application of fresh start accounting materially changed the carrying amounts and classifications reported in our consolidated financial statements and resulted in the Company becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements for periods prior to December 31, 2016 will not be comparable to our consolidated financial statements as of December 31, 2016 or for periods subsequent to December 31, 2016. For additional segment-related information and trends, please read “Segment Overview” above.

~~Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016~~

~~Revenues.~~ ~~Revenues increased by 65% to $233.5 million during the third quarter of 2017 from $141.6 million during the same period in 2016. This increase~~2021 was primarily due to increased ~~demand for our services by our customers, particularly completion~~accretion of debt discounts and remedial services, compared to the same period in 2016, when our customers were working with reduced capital budgets. After a prolonged period of lower oil prices, our customers have gradually increased their capital and operating spending levels.

Completion and remedial services revenues increased by 150% to $123.7 million during the third quarter of 2017 compared to $49.4 million in the same period in 2016. The increase in revenue between these periods was primarily due to improved demand for completion related activities and slightly improved pricing for our services, particularly in our pumping services and coil tubing lines of business. Total hydraulic horsepower increased to 523,000 at September 30, 2017 from 444,000 at September 30, 2016 primarily due to the acquisition of 74,000 HHP and two newbuild coiled tubing units which came online during the third quarter of 2017. Weighted average horsepower increased to 520,000 for the third quarter of 2017 from 444,000 in the third quarter of 2016.

Water logistics revenues increased by 11% to $52.3 million during the third quarter of 2017 compared to $47.2 million in the same period in 2016. Our revenue per water logistics truck increased 12% to $55,000 in the third quarter of 2017 compared to $49,000 in the same period in 2016 mainly due to increases in trucking activity, disposal utilization and pricing. Our weighted average number of water logistics trucks decreased to 947 during the third quarter of 2017 compared to 962 in the same period in 2016.

Well servicing revenues increased by 27% to $54.6 million during the third quarter of 2017 compared to $43.2 million during the same period in 2016. The increase was driven by an increase in utilization of our equipment, primarily due to increases in customer demand. Our weighted average number of well servicing rigs remained constant at 421 during the third quarter of 2017 and 2016. Utilization increased to 55% in the third quarter of 2017, compared to 45% in the comparable quarter of 2016. Revenue per rig hour in the third quarter of 2017 was $329, increasing from $313 in the comparable quarter of 2016 due to rate increases to customers.

Contract drilling revenues increased by 54% to $2.8 million during the third quarter of 2017 compared to $1.8 million in the same period in 2016. The number of rig operating days remained constant at 92 in the third quarter of 2017 and 2016. The increase in revenue was due to an increase in drilling activity and rig trucking activity in the Permian Basin.

~~from $116.3 million in the same period in 2016, primarily due to increases in activity and corresponding increases in employee headcount and wages to adapt to current activity levels.~~

Direct operating expenses for the completion and remedial services segment increased by 110% to $84.5 million during the third quarter of 2017 compared to $40.3 million for the same period in 2016 due primarily to increased activity levels overall, especially in our pumping and coil tubing services. Segment profits increased to 32% of revenues during the third quarter of 2017 compared to 18% for the same period in 2016, due to the improved utilization of equipment, price increases and incremental margins from a higher revenue base.

Direct operating expenses for the water logistics segment increased by 5% to $41.3 million during the third quarter of 2017 compared to $39.3 million for the same period in 2016, mainly due to activity levels improving in 2017. Segment profits were 21% of revenues during the third quarter of 2017 compared to 17% for the same period in 2016, due to an increase in incremental margins from a higher revenue base.

Direct operating expenses for the well servicing segment increased by 23% to $43.2 million during the third quarter of 2017 compared to $35.0 million for the same period in 2016. The increase in direct operating expenses corresponds to increased workover and plugging activity levels. Segment profits increased to 21% of revenues during the third quarter of 2017 compared to 19% of revenues during the third quarter of 2016 due to improved utilization of our equipment, price increases and incremental margins from a higher revenue base.

Direct operating expenses for the contract drilling segment increased 51% to $2.5 million during the third quarter of 2017 compared to $1.7 million for the same period in 2016, due to increased pricing and rig moving activity. Segment profits increased to 11% of revenues during the third quarter of 2017 from a segment profit of 9% during the third quarter of 2016 due to an increase in pricing.

~~General and Administrative Expenses.~~ General and administrative expenses increased by 31% to $39.2 million during the third quarter of 2017 from $30.1 million for the same period in 2016. The increase was partially due to stock-based compensationinterest expense which was $5.9 million and $2.2 million during the third quarters of 2017 and 2016, respectively. In addition, during the third quarter of 2017 legal and professional fees related to due diligence on corporate development activities totaled $3.7 million.

~~Depreciation and AmortizationExpenses.~~ Depreciation and amortization expenses were $29.5 million during the third quarter of 2017 compared to $53.1 million for the same period in 2016. The decrease in depreciation and amortization expense is due to the revaluation of our asset base as of December 31, 2016 as part of the adoption of the fresh start accounting associated with ~~our emergence from bankruptcy.~~debt issued during 2020.

~~Interest Expense.~~ Interest expense decreased to $8.9 million during the third quarter of 2017 compared to $24.0 million during the third quarter of 2016. The decrease in interest expense is primarily due to the cancellation of our unsecured notes as part of our emergence from bankruptcy.

Income Tax ~~Benefit.~~ ~~There was an income~~Benefit

Income tax benefit of $1.7 million during the third quarter of 2017 compared to an income tax benefit of $1,000 for the same period in 2016. The $1.7 million tax benefit in 2017 resulted from the Company’s decision to accelerate unused alternative minimum tax credit carryforwards in accordance with the 2015 Protecting Americans from Tax Hikes (PATH) Act, resulting in expected tax refunds of $1.7 million. Excluding the impact of the valuation allowance, our effective tax rate during the third quarter of 2017 and 2016 was approximately 36%.

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Revenues.~~ Revenues increased by 60% to $628.8 million during the nine months ended September 30, 2017 from $392.0 million during the same period in 2016. This increase was primarily due to increased demand for our services by our customers, particularly completion and remedial services, compared to the same period in 2016, when our customers were working with reduced capital budgets and ramping down projects. After the prolonged period of lower oil prices, our customers have gradually begun to increase capital budgets.

Completion and remedial services revenues increased by 148% to $311.5 million during the nine months ended September 30, 2017 compared to $125.3 million in the same period in 2016. The increase in revenue between these periods was primarily due to improved demand for completion related activities and slightly improved pricing for our services, particularly in our pumping services and coil tubing lines of business. Total hydraulic horsepower increased to 523,000 at September 30, 2017 from 444,000 at September 30, 2016 due to the acquisition of 74,000 HHP and two newbuild coiled tubing units which came online during the third quarter of 2017. Weighted average horsepower increased to 520,000 as of September 30, 2017 compared to 444,000 as of September 30, 2016.

Water logistics revenues increased by 7% to $153.3 million during the nine months ended September 30, 2017 compared to $142.9 million during the same period in 2016. Our revenue per water logistics truck increased 11% to $163,000 in the nine months ended September 30, 2017 compared to $147,000 in the same period in 2016 mainly due to increases in trucking

activity, disposal utilization and pricing. Our weighted average number of water logistics trucks decreased to 942 during the nine months ended September 30, 2017 compared to 974 in the same period in 2016.

Well servicing revenues increased by 31% to $156.3 million during the nine months ended September 30, 2017 compared to $118.9 million during the same period in 2016. The increase was driven by an increase in utilization of our equipment, primarily due to increases in customer demand. Our weighted average number of well servicing rigs remained constant at 421 during the nine months ended September 30, 2017 and 2016. Utilization was 54% in the nine months ended September 30, 2017, compared to 40% in the comparable quarter of 2016. Revenue per rig hour in the nine months ended September 30, 2017 increased to $319, from $314 in the comparable period of 2016.

Contract drilling revenues increased by 61% to $7.7 million during the nine months ended September 30, 2017 compared to $4.8 million in the same period in 2016. The number of rig operating days increased 16% to $318 in the nine months ended September 30, 2017 compared to $274 in the nine months ended September 30, 2016. The increase in revenue and rig operating days was due to an increase in drilling activity in the Permian Basin.

~~Direct Operating Expenses.~~ Direct operating expenses, which primarily consist of labor, including workers’ compensation and health insurance, repair and maintenance, fuel and insurance, increased to $490.1 million during the nine months ended September 30, 2017 from $333.0 million in the same period in 2016, primarily due to increases in activity and corresponding increases in employee headcount and wages to adapt to current activity levels.

Direct operating expenses for the completion and remedial services segment increased by 116% to $232.9 million during the nine months ended September 30, 2017 compared to $107.9 million for the same period in 2016 due primarily to increased activity levels overall, especially in our pumping and coil tubing services. Segment profits increased to 25% of revenues during the nine months ended September 30, 2017 compared to 14% for the same period in 2016, due to the improved utilization price increases, and incremental margins from a higher revenue base.

Direct operating expenses for the water logistics segment increased by 4% to $124.4 million during the nine months ended September 30, 2017 compared to $119.1 million for the same period in 2016, mainly due to activity levels improving in 2017. Segment profits were 19% of revenues during the nine months ended September 30, 2017 compared to 17% for the same period in 2016, due to higher levels of disposal utilization and pricing.

Direct operating expenses for the well servicing segment increased by 24% to $125.9 million during the nine months ended September 30, 2017 compared to $101.3 million for the same period in 2016. The increase in direct operating expenses corresponds to increased workover and plugging activity levels. Segment profits increased to 19% of revenues during the nine months ended September 30, 2017 compared to 15% of revenues during the same period in 2016 due to improved utilization of our equipment, price increases and incremental margins from a higher revenue base.

Direct operating expenses for the contract drilling segment increased 48% to $6.8 million during the nine months ended September 30, 2017 compared to $4.6 million for the same period in 2016, due to increased activity and rig operating days. Segment profits increased to 12% of revenues during the nine months ended September 30, 2017 from a segment profit of 4% during the nine months ended September 30, 2016 due to an increase in drilling projects in 2017.

~~General and Administrative Expenses.~~ General and administrative expenses increased by 26% to $109.5 million during the nine months ended September 30, 2017 from $86.7 million for the same period in 2016. The increase was partially due to increased stock-based compensation expense which was $16.6 million and $7.4 million during the nine months ended September 30, 2017 and 2016, respectively. In addition, during the nine-month period of 2017, legal and professional fees related to due diligence on corporate development activities totaled $3.7 million, and professional fees related to implementation of fresh start accounting totaled $668,000.

~~Depreciation and AmortizationExpenses.~~ Depreciation and amortization expenses were $80.8 million during the nine months ended September 30, 2017 compared to $164.1 million for the same period in 2016. The decrease in depreciation and amortization expense is due to the revaluation of our asset base as of December 31, 2016 as part of the adoption of the fresh start accounting associated with our emergence from bankruptcy.

~~Interest Expense.~~ Interest expense decreased to $27.2 million during the nine months ended September 30, 2017 compared to $67.2 million during the nine months ended September 30, 2016. The decrease in interest expense is primarily due to the cancellation of our unsecured notes as part of our emergence from bankruptcy.

~~Income Tax Benefit.~~ There was a net income tax benefit of $1.4 million during the nine months ended September 30, 2017 compared to an income tax benefit of $3.9 million for the same period in 2016. Of the $1.4 million net tax benefit for the nine-month period, $1.7 million of tax benefit in 2017 resulted from the Company’s decision to accelerate unused alternative minimum tax credit carryforwards in accordance with the 2015 Protecting Americans from Tax Hikes (PATH) Act, resulting in expected refunds of $1.7 million, partially offset by tax expense in the first quarter of ~~2017. Excluding~~2021, was $0.3 million compared to $3.8 million in 2020. In the ~~impact~~first quarter of 2020, the income tax benefit related to deferred tax liabilities acquired with the acquisition of CJWS which provided a source of future taxable income and allowed the Company to recognize a tax benefit on a portion of the Company's deferred tax assets.

The effective tax rates for the first quarters of 2021 and 2020, were 0.9% and 2.7%, respectively. The Company provides a valuation allowance ~~our effective tax rate during each~~when it is more likely than not that some portion of the ~~nine months ended September 30, 2017~~deferred tax assets will not be realized. As of March 31, 2021, a valuation allowance continues to be recorded on the net deferred tax assets for all federal and ~~2016 was approximately 36%.~~ state tax jurisdictions.

Discontinued Operations

In 2019, we decided to divest of substantially all of our contract drilling rigs, pressure pumping equipment and related ancillary equipment. Substantially all the assets were divested in 2020 and the Company is in the process of selling the remainder of these assets. For further discussion of financial results for discontinued operations, see

Note 3, "Discontinued Operations" in the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Supplemental Non-GAAP Financial Measures - Adjusted EBITDA

Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. However, the Company believes Adjusted EBITDA is a useful supplemental financial measure used by management and directors and by external users of its financial statements, such as investors, to assess:

• The financial performance of its assets without regard to financing methods, capital structure or historical cost basis;

• The ability of its assets to generate cash sufficient to pay interest on its indebtedness; and

• Its operating performance and return on invested capital as compared to those of other companies in the oilfield services industry.

Adjusted EBITDA has limitations as an analytical tool and should not be considered an alternative to net income or loss, operating income or loss, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect net income or loss and operating income or loss, and these measures may vary among other companies.

The following table presents a reconciliation of net income or loss from continuing operations to Adjusted EBITDA:


	Quarter ended March 31,
(in thousands)	2021		2020
Net loss from continuing operations	$	(33,475)	$	(136,429)
Income tax benefit	(287)		(3,790)
Interest expense, net	12,024		10,557
Depreciation and amortization	10,797		14,765
Gain on disposal of assets	(1,993)		(37)
Loss on derivative	4,798		3,552
Long lived asset impairments	4,435		84,217
Acquisition related costs	—		11,684
Transaction costs	2,589		—
Significant insurance claim	1,380		—
Field restructuring	234		66
Goodwill impairments	—		10,565

Stock-based compensation	52		1,336

Inventory write-downs	—		4,846


Adjusted EBITDA	$	554	$	1,332

Liquidity and Capital Resources

~~As of September 30, 2017,~~Historically, our primary capital resources ~~were utilization of capital leases~~have been our cash and ~~borrowings~~cash equivalents, cash flows from our operations, availability under our ~~$100.0 million accounts receivable securitization facility (the “New~~ ABL ~~Facility”),~~Credit Facility, additional secured indebtedness, proceeds from the sale of non-strategic assets, and ~~from net cash provided by operations. As~~the ability to enter into finance leases. At March 31, 2021, our sources of ~~September 30, 2017, we had unrestricted~~liquidity included our cash and cash equivalents of ~~$43.2~~$4.9 million, ~~compared~~the potential sale of additional non-strategic assets, and potential additional secured indebtedness.

As of March 31, 2021, the Company had no borrowings and $35.6 million of letters of credit outstanding under the ABL Credit Facility. As of March 31, 2021, we had $11.2 million of availability under the ABL Credit Facility, but we are subject to ~~$98.9 million as~~borrowing restrictions. For further discussion of ~~December 31, 2016. An additional amount of $47.7 million is classified as restricted cash to collateralize insurance reserves. We have utilized,~~our ABL Credit Facility, see Note 4, "Indebtedness and ~~expect to utilize~~Borrowing Facility" in the ~~future, bank~~notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

In April 2021, we entered into a purchase and sale agreement for the sale of certain non-core assets for a purchase price of $6.6 million, not including the assumption of certain capital leases and an earn-out payment of up to $1.0 million payable one year after closing. The closing date is expected to occur during the second quarter of 2021. In May 2021, we completed a sale-leaseback transaction related to certain real property in California. The

purchase price for the property consisted of $10.5 million, subject to a holdback of approximately $2.6 million for certain improvements to be constructed at the property. We entered into a simultaneous lease ~~financing~~of the property for an initial term of three years.

See Note 1. "Basis of Presentation and ~~sales~~Current Environment" to the condensed consolidated financial statements included in this quarterly report for further discussion of ~~equity~~the Company's efforts to ~~obtain~~improve its liquidity and long-term capital ~~resources. When appropriate, we will consider public or private debt~~structure.

Cash Flow Summary

The Statement of Cash Flows for the periods presented includes cash flows from continuing and ~~equity offerings and non-recourse transactions to meet our liquidity needs.~~discontinued operations.

~~Net~~ Cash ~~Used in~~Flows from Operating Activities

~~Cash~~Net cash provided by operating activities was ~~$1.8~~$7.7 million ~~for~~in the ~~nine months ended September 30, 2017, an increase~~first quarter of 2021, compared to net cash used in operating activities of ~~$71.8~~$2.7 million in 2020. The $10.4 million increase was primarily due to improved working capital management in 2021 and transaction costs incurred during 2020 associated with our acquisition of CJWS.

Cash Flows from Investing Activities

Net cash provided by investing activities in the first quarter of 2021 was $5.1 million compared to net cash used in investing activities of $24.7 million in 2020. This change was partially due to a $5.3 million decrease in capital expenditures in 2021. Our cash provided by investing activities in 2021 was due to proceeds from the sale of non-strategic assets. Our cash used in investing activities in 2020 was due to cash paid to purchase CJWS, which was partially offset by proceeds from the sale of assets related to our discontinued operations.

Cash Flows from Financing Activities

Net cash used in financing activities was $2.4 million during the ~~same period in 2016. Operating cash flow provided in the~~ first ~~nine months~~quarter of ~~2017 improved~~2021, compared to net cash ~~used~~provided by financing activities of $12.2 million in ~~the same period in 2016~~2020. This change was partially due to ~~stronger operating results~~a $6.6 million decrease in payments on our finance leases in 2021. Our cash provided by financing activities in 2020 was primarily due to net proceeds of $22.8 million received from the issuance of the Senior Secured Promissory Note and ~~working capital levels.~~

~~Our liquidity, including our ability to meet our ongoing operational obligations, is dependent upon, among other things, our ability to maintain adequate cash on hand and generate cash flow~~borrowings from ~~operations. Maintaining adequate liquidity depends upon industry conditions and financial, competitive, and other factors beyond our control. In~~ the ~~event that cash on hand and cash flow from operations is not sufficient to meet our liquidity needs, we may have limited access to additional financing.~~

~~Capital Expenditures~~ABL Credit Facility.

Cash Requirements

Contractual Commitments and Obligations: On March 31, 2021, the Company negotiated a settlement of a contractual make-whole obligation to its controlling shareholder in exchange for issuing additional Senior Notes to this shareholder with an aggregate par value of $47.5 million. As of March 31, 2021, there were no other significant changes to our contractual obligations outside the ordinary course of business since December 31, 2020. Please refer to our annual report on Form 10-K for the year ended December 31, 2020, for additional information regarding our contractual obligations. See Note 1. "Basis of Presentation and Current Environment" to the condensed consolidated financial statements included in this quarterly report for a discussion of the Company's efforts subsequent to March 31, 2021, to improve its liquidity and long-term capital structure, which have included additional contractual obligations.

Capital Expenditures: The nature of our capital expenditures ~~during the first nine months~~consists of ~~2017 were $57.0 million compared~~a base level of investment required to ~~$22.9 million in the same period of 2016. Cash~~support our current operations and amounts related to growth and company initiatives. Our capital expenditures for 2021 represented the ~~nine months ended September 30, 2017 were $48.3 million, with an additional $8.7 million of accrued capital expenditures.~~amount necessary to support our current operations. We added $61.0 million of leased assets through our capital lease program and other financing arrangements during the first nine months of 2017 compared to $5.2 million of leased asset additions in the same period in 2016.

~~We currently have planned~~estimate capital expenditures ~~for the full year of 2017 of under $135.0~~in 2021 will range from $10 million ~~including capital leases of $70.0 million. We do not budget acquisitions in the normal course of business, and we regularly engage in discussions related~~ to ~~potential acquisitions related to the oilfield services industry.~~

~~Capital Resources and Financing~~

~~Our current primary capital resources are cash flow from our operations, our New ABL Facility, the ability to enter into capital leases, and a cash balance of $43.2~~$20 million, ~~at September 30, 2017. We had $64.0 million of borrowings under the New ABL Facility as of September 30, 2017, of~~ which $45.2 million of cash is held in restricted cash as collateral for letters of credit, giving us approximately $30.9 million of available borrowing capacity subject to covenant constraints under our New ABL Facility. In 2017, we financed activities in excess of cash flow from operations primarily through the use of cash, capital leases and other financing arrangements. Our Amended and Restated Term Loan Agreement (the "Term Loan Agreement") had $162.9 million aggregate outstanding principal amount of loans as of September 30, 2017.

On April 13, 2017, the Company filed a universal shelf registration statement on Form S-3 covering up to $1 billion of securities. In August 2017, Basic commenced an at-the-market public offering (the "ATM Program"), under which it could have sold shares of its common stock having an aggregate value of $50 million. Basic terminated the ATM Program on September 30, 2017.

~~Contractual Obligations~~

We have significant contractual obligations in the future that will require capital resources. Our primary contractual obligations are (1) our capital leases, (2) our operating leases, (3) our asset retirement obligations, and (4) our other long-term liabilities. The following table outlines our contractual obligations as of September 30, 2017 (in thousands):

Obligations Due in
Periods Ended September 30,
Contractual Obligations Total 2017 2018 to 2019 2020 to 2021 Thereafter
Term Loan Agreement $ 162,938
$ 413
$ 3,300
$ 159,225
$ —
New ABL Facility 64,000
—
—
64,000
—
Capital leases and other financing arrangements 106,674
12,419
76,910
17,249
96
Operating leases 18,741
1,510
8,926
6,407
1,898
Asset retirement obligation 2,524
548
498
533
945
Total $ 354,877
$ 14,890
$ 89,634
$ 247,414
$ 2,939

Interest on long-term debt relates to our future contractual interest obligations under the Term Loan Agreement, the New ABL Facility and our capital leases. Our capital leases relate primarily to light-duty and heavy-duty vehicles and trailers. Our operating leases relate primarily to real estate. Our asset retirement obligation relates to disposal wells.

~~Our ability to access additional sources of financing~~ will be ~~dependent on~~used to support our ~~operating cash flows and demand for our services, which could be negatively impacted due to the extreme volatility of commodity prices.~~operations.

Other Matters

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

~~Net Operating Losses~~

As of September 30, 2017, Basic had approximately $669.5 million of net operating loss carryforwards ("NOL"), for federal income tax purposes, which begin to expire in 2031 and $250.4 million of NOLs for state income tax purposes which begin to expire in 2017.

Basic provides a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. As of September 30, 2017, a valuation allowance of $228.3 million was recorded against the Company's net deferred tax assets for all jurisdictions that are not expected to be realized.

Recent Accounting Pronouncements

~~The Company's consideration~~See Note 1. "Basis of ~~recent accounting pronouncements is included in Note 13.~~ ~~Recent Accounting Pronouncements~~Presentation and Current Environment" to the condensed consolidated financial statements included in this quarterly report.

~~Impact of Inflation on Operations~~

~~Management is of the opinion that inflation has not had a significant impact on our business.~~

ITEM 3. 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~As of September 30, 2017, we had no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, 2016.~~ Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

~~Based on their evaluation~~As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this ~~report,~~Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures ~~(as defined in Rules 13a-15(e) and 15d-15(e) under~~were effective as of March 31, 2021, at the Exchange Act) are effective to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and effective to ensure that information required to be disclosed in such reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.reasonable assurance level.

Changes in Internal Control Over Financial Reporting

During the most recent fiscal quarter, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We may make changes in our internal control procedures from time to time in the future.

PART II — OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

~~From time to time, we are~~For a ~~party to litigation or other~~description of our legal proceedings, ~~that we consider~~see Note 8. “Commitments and Contingencies” to ~~be a part of~~ the ~~ordinary course of business. We are not currently involved~~condensed consolidated financial statements included in any legal proceedings that we consider probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on our financial condition, results of operations or liquidity.this quarterly report, which is incorporated by reference herein.

ITEM 1A. RISK FACTORS

~~For information regarding risks that may affect~~During the quarter ended March 31, 2021, there have been no material changes in our ~~business, see the~~ risk factors ~~included~~disclosed in Part I, Item 1A. Risk Factors in our ~~most recent~~ Annual Report on Form 10-K ~~under~~for the ~~heading “Risk Factors.”~~year ended December 31, 2020.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Neither we, nor any affiliated purchaser, purchased any of our equity securities during the quarter ended March 31, 2021.

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. EXHIBITS


Exhibit
No.		Description

~~Exhibit~~2.1*
~~No.~~	~~Description~~

2.1*	~~First Amended Joint Prepackaged Chapter 11 Plan~~Purchase Agreement, dated as of March 9, 2020, by and among the Company, Ascribe III Investments LLC, Basic Energy Services, Inc., NexTier holding Co. and ~~its Affiliated Debtors, dated December 7, 2016~~C&J Well Services, Inc. (Incorporated by reference to Exhibit ~~2.1~~2.3 to the Company’s ~~Current~~Annual Report on Form ~~8-K (SEC File No. 001-32693), filed on December 12, 2016)~~
2.2*	Findings of Fact, Conclusions of Law, and Order Approving the Debtors’ Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors, dated December 9, 2016 (Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K10-K (SEC File No. 001-32693) filed on ~~December 12, 2016)~~March 13, 2020).
3.1*		Second Amended and Restated Certificate of Incorporation of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016).
3.2*		Second Amended and Restated Bylaws of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016).
10.13.3		~~Credit~~Certificate of Designations (Incorporated by reference to Exhibit 3.1 to Company’s Current Report on Form 8-K (SEC File No. 001-32693) filed on March 11, 2020).
4.1*		Specimen Stock Certificate representing Common Stock of the Company (Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form 8-A12B (SEC File No. 001-32693), filed on December 23, 2016).
4.2*		Warrant Agreement between Basic, as issuer, and ~~Security~~American Stock Transfer & Trust Company, LLC, as warrant agent, dated as of December 23, 2016. (Incorporated by reference to Exhibit 4.1 to Form 8-A12G (SEC File No. 001-32693) filed on December 23, 2016).
4.3*		Registration Rights Agreement, dated as of ~~September 29, 2017,~~December 23, 2016, between Basic and certain stockholders (Incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016).
4.4*		Indenture, dated as of October 2, 2018, by and among Basic Energy ~~Receivables,~~Services, Inc., the subsidiary guarantors party thereto and UMB Bank, N.A., as trustee and collateral agent (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693) filed on October 9, 2018).
4.5*		Form of 10.75% Senior Secured Note due 2023 (included as Exhibit A in Exhibit 4.4).
4.6*		First Supplemental Indenture, dated as of August 22, 2019, by and among Agua Libre Midstream LLC, ~~as borrower,~~Agua Libre Holdco LLC, Agua Libre Asset Co LLC, Basic Energy Services, ~~L.P.~~Inc., the subsidiary guarantors party thereto and UMB Bank, N.A., as ~~initial servicer,~~trustee and collateral agent (Incorporated by reference to Exhibit 4.6 to the ~~Company,~~Company’s Quarterly Report on Form 10-Q (SEC File No. 001-32693) filed on November 1, 2019).
4.7*		Second Supplemental Indenture, dated as ~~performance guarantor,~~of April 1, 2020, by and among C&J Well Services, Inc., KVS Transportation, Inc, Indigo Injection #3, LLC, Basic Energy Services, Inc., the subsidiary guarantors party thereto and UMB Bank, N.A., as trustee and collateral agent (Incorporated by reference to Exhibit 4.7 to the Company’s Quarterly Report on Form 10-Q (SEC File No. 001-32693) filed on August 7, 2020).
4.8*		Third Supplemental Indenture, dated as of May 3, 2021 by and among Basic Energy Services, Inc., the guarantors party thereto and UMB Bank, N.A. as trustee and collateral agent (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-32693) filed on May 4, 2021).
10.1*		Super Priority Credit Agreement, dated as of May 3, 2021, by and among Basic Energy Services, Inc., the lenders party thereto, and ~~UBS AG, Stamford Branch,~~Cantor Fitzgerald Securities, as administrative agent and collateral agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-32693) filed on ~~October 2, 2017)~~May 4, 2021).
10.2*		~~Receivables Transfer~~Limited Consent and First Amendment to the Forbearance Agreement, dated as of ~~September 29, 2017,~~April 28, 2021 by and among Basic Energy Services, ~~L.P.,~~certain of the Company’s subsidiaries, Bank of America, N.A. as ~~initial originator~~administrative agent and ~~Basic Energy Receivables, LLC, as transferee~~the Credit Agreement Forbearing Parties (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (SEC File No. 001-32693) filed on ~~October 2, 2017)~~May 4, 2021).
10.3*		~~Amendment No. 1~~Consent Letter, dated as of ~~September 29, 2017 to the Amended~~May 3, 2021, by and ~~Restated Term Loan Credit Agreement dated December 23, 2016,~~ among ~~the Company, as borrower, each lender from time to time party thereto~~Basic Energy Services, Inc. and ~~U.S. Bank National Association, as administrative agent~~Ascribe III Investments LLC (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (SEC File No. 001-32693) filed on ~~October 2, 2017)~~May 4, 2021).
10.4*		Employment Agreement of Adam Hurley, effective as of July 19, 2018, and amended as of January 1, 2019 and as of April 27, 2021.
~~31.1#~~10.5#		Forbearance Agreement, dated as of May 14, 2021, by and among Basic Energy Services, Inc., the subsidiary guarantors party thereto and the Supporting Holders.
10.6#		Forbearance Agreement, dated as of May 14, 2021, by and among Basic Energy Services, Inc., the subsidiary guarantors party thereto, the lenders party thereto and Cantor Fitzgerald Securities, as administrative agent and collateral agent.
10.7#		Second Amendment to the Forbearance Agreement, dated as of May 14, 2021, by and among Basic Energy Services, Inc., the subsidiary guarantors party thereto and Bank of America, N.A. as administrative agent.
10.8#		Amendment to Consent Letter, dated as of May 14, 2021, by and among Basic Energy Services, Inc. and Ascribe III Investments LLC.
31.1#		Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange ~~Act~~Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act.
31.2#		Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange ~~Act~~Act.
32.1##		Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.


32.2##						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
101.CAL#						XBRL Calculation Linkbase Document
101.DEF#						XBRL Definition Linkbase Document
101.INS#						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.LAB#						XBRL Labels Linkbase Document
101.PRE#						XBRL Presentation Linkbase Document
101.SCH#						XBRL Schema Document

*Incorporated by reference

#Filed with this report

##Furnished with this report

†Management contract or compensatory plan or arrangement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





BASIC ENERGY SERVICES, INC.

By:			/s/ ~~T.M. "Roe" Patterson~~Keith L. Schilling
Name:			~~T. M. “Roe” Patterson~~Keith L. Schilling
Title:			President, Chief Executive Officer and
			Director (Principal Executive Officer)

By:			/s/ ~~Alan Krenek~~Adam L. Hurley
Name:			~~Alan Krenek~~Adam L. Hurley
Title:			~~Senior~~Executive Vice President, Chief Financial Officer, ~~Treasurer~~
			Treasurer and Secretary (Principal Financial Officer)

~~By:~~			~~/s/ John Cody Bissett~~
~~Name:~~			~~John Cody Bissett~~
~~Title:~~			~~Vice President, Controller and Chief Accounting Officer~~
			~~(Principal Accounting Officer)~~

Date: ~~November 6, 2017~~

May 17, 2021



	September 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	43,168		$	98,875
Restricted cash	47,680			2,429
Trade accounts receivable, net of allowance of $1,907 and $0, respectively	168,220			108,655
Accounts receivable - related parties	22			31
Income tax receivable	3,010			1,271
Inventories	35,255			35,691
Prepaid expenses	24,470			15,575
Other current assets	5,224			2,003
Total current assets	327,049			264,530
Property and equipment, net	516,371			488,848
Deferred debt costs, net of amortization	2,038			—
Intangible assets, net of amortization	3,280			3,458
Other assets	12,407			11,324
Total assets	$	861,145		$	768,160
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	89,550		$	47,959
Accrued expenses	62,076			51,329
Current portion of long-term debt, net	50,849			38,468
Other current liabilities	3,626			2,065
Total current liabilities	206,101			139,821
Long-term debt, net	269,330			184,752
Deferred tax liabilities	389			—
Other long-term liabilities	30,753			29,179
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.01 par value; 5,000,000 shares authorized; none designated or issued at September 30, 2017 and December 31, 2016	—			—
Common stock; $0.01 par value; 80,000,000 shares authorized; 26,096,370 shares issued and 26,028,149 shares outstanding at September 30, 2017; 26,095,431 shares issued and 25,998,844 shares outstanding at December 31, 2016	261			261
Additional paid-in capital	433,181			417,624
Accumulated deficit	(76,413		)	—
Treasury stock, at cost, 68,221 and 96,587 shares at September 30, 2017 and December 31, 2016, respectively	(2,457		)	(3,477		)
Total stockholders' equity	354,572			414,408
Total liabilities and stockholders' equity	$	861,145		$	768,160



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(Successor)			(Predecessor)			(Successor)			(Predecessor)
Revenues:
Completion and remedial services	$	123,650		$	49,425		$	311,466		$	125,348
Water logistics	52,333			47,178			153,279			142,919
Well servicing	54,629			43,160			156,302			118,891
Contract drilling	2,848			1,847			7,728			4,812
Total revenues	233,460			141,610			628,775			391,970
Expenses:
Completion and remedial services	84,481			40,292			232,932			107,941
Water logistics	41,281			39,268			124,399			119,053
Well servicing	43,219			35,028			125,931			101,345
Contract drilling	2,547			1,683			6,818			4,612
General and administrative, including stock-based compensation of $5,891 and $2,238 in the three months ended September 30, 2017 and 2016 and $16,615 and $7,355 for the nine months ended September 30, 2017 and 2016, respectively	39,235			30,065			109,478			86,706
Restructuring costs	—			10,470			—			10,470
Depreciation and amortization	29,478			53,142			80,846			164,141
Goodwill impairment	—			646			—			646
(Gain) loss on disposal of assets	26			(128		)	(664		)	133
Total expenses	240,267			210,466			679,740			595,047
Operating loss	(6,807		)	(68,856		)	(50,965		)	(203,077		)
Other income (expense):
Interest expense	(8,892		)	(23,953		)	(27,181		)	(67,188		)
Interest income	5			14			23			23
Bargain purchase gain on acquisition	—			662			—			662
Other income	109			37			344			378
Loss before income taxes	(15,585		)	(92,096		)	(77,779		)	(269,202		)
Income tax benefit (expense)	1,740			(1		)	1,366			3,883
Net loss	$	(13,845	)	$	(92,097	)	$	(76,413	)	$	(265,319	)
Loss per share of common stock:
Basic	$	(0.53	)	$	(2.16	)	$	(2.94	)	$	(6.32	)
Diluted	$	(0.53	)	$	(2.16	)	$	(2.94	)	$	(6.32	)



				Additional									Total
	Common Stock			Paid-In			Treasury			Accumulated			Stockholders'
	Shares	Amount		Capital			Stock			Deficit			Equity
Balance - December 31, 2016	26,095,431	$	261	$	417,624		$	(3,477	)	$	—		$	414,408
Issuance of stock	939	—		��			—			—			—
Amortization of share-based compensation	—	—		16,615			—			—			16,615
Treasury stock, net	—	—		(1,058		)	1,020			—			(38		)
Net loss	—	—		—			—			(76,413		)	(76,413		)
Balance - September 30, 2017 (unaudited)	26,096,370	$	261	$	433,181		$	(2,457	)	$	(76,413	)	$	354,572



	September 30, 2017		December 31, 2016
Land	$	20,876	$	21,010
Buildings and improvements	39,899		39,588
Well service units and equipment	109,568		96,365
Frac equipment/test tanks	109,375		75,506
Pumping equipment	112,638		85,247
Water logistics equipment	75,253		57,359
Disposal facilities	51,256		47,507
Contract drilling equipment	11,064		12,257
Rental equipment	33,966		32,582
Light vehicles	19,835		12,722
Software	727		641
Other	4,122		3,885
Construction equipment	1,818		1,485
Brine and fresh water stations	2,697		2,694
	593,094		488,848
Less accumulated depreciation and amortization	76,723		—
Property and equipment, net	$	516,371	$	488,848



	September 30, 2017		December 31, 2016
Trade names	$	3,410	$	3,410
Other intangible assets	48		48
	$	3,458	$	3,458
Less accumulated amortization	178		—
Intangible assets subject to amortization, net	$	3,280	$	3,458



	September 30, 2017			December 31, 2016
Credit facilities:
Term Loan	$	162,938		$	164,175
New ABL Facility	64,000			—
Capital leases and other notes	106,674			78,046
Unamortized discounts, premiums, and deferred debt costs	(13,433		)	(19,001		)
Total principal amount of debt instruments, net	320,179			223,220
Less current portion	50,849			38,468
Long-term debt	$	269,330		$	184,752



	September 30, 2017		December 31, 2016
Unamortized discount on Term Loan	$	9,758	$	11,401
Unamortized discount on Capital Leases - short-term	1,657		1,600
Unamortized discount on Capital Leases - long-term	1,936		6,000
Unamortized deferred debt costs	82		—
	$	13,433	$	19,001



	Compensation expense for three months ended September 30, 2017		Compensation expense for nine months ended September 30, 2017		Unrecognized compensation expense		Weighted average remaining life	Fair value of share based awards vested

Restricted stock	$	4,880	$	13,708	$	36,744	1.9	$	101
Restricted stock options	$	1,011	$	2,907	$	9,320	9.3	$	—



					Weighted
					Average
			Weighted		Remaining	Aggregate
	Number of		Average		Contractual	Intrinsic
	Options		Exercise		Term	Value
	Granted		Price		(Years)	(000's)
Non-statutory stock options:
Outstanding, beginning of period	323,770		$	36.55
Options granted	333,484		41.80
Options forfeited	(2,158	)	36.55
Options exercised	—		—
Outstanding, end of period	655,096		$	39.22	9.3	$	—
Exercisable, end of period	1,080		$	36.55	9.2	$	—
Vested or expected to vest, end of period	655,096		$	39.22	9.3	$	—



			Weighted Average
	Number of		Grant Date Fair
Non-vested Units	Shares		Value Per Share
Non-vested at beginning of period	539,606		$	36.55
Granted during period	860,402		41.37
Vested during period	(2,698	)	36.55
Forfeited during period	(2,698	)	36.55
Non-vested at end of period	1,394,612		$	39.53



	Completion
	and Remedial			Water		Well		Contract		Corporate
	Services			Logistics		Servicing		Drilling		and Other	Total
Three Months Ended September 30, 2017 (Unaudited)	(Successor)
Operating revenues	$	123,650		52,333		54,629		2,848		—	$	233,460
Direct operating costs	(84,481		)	(41,281	)	(43,219	)	(2,547	)	—	(171,528		)
Segment profits	$	39,169		11,052		11,410		301		—	$	61,932
Depreciation and amortization	$	13,860		7,703		5,319		495		2,101	$	29,478
Capital expenditures (excluding acquisitions)	$	11,285		10,055		6,884		12		672	$	28,908
Three Months Ended September 30, 2016 (Unaudited)	(Predecessor)
Operating revenues	$	49,425		47,178		43,160		1,847		—	$	141,610
Direct operating costs	(40,292		)	(39,268	)	(35,028	)	(1,683	)	—	(116,271		)
Segment profits	$	9,133		7,910		8,132		164		—	$	25,339
Depreciation and amortization	$	18,383		15,584		13,491		3,109		2,575	$	53,142
Capital expenditures (excluding acquisitions)	$	3,178		8,244		2,622		69		182	$	14,295
Nine Months Ended September 30, 2017 (Unaudited)	(Successor)
Operating revenues	$	311,466		153,279		156,302		7,728		—	$	628,775
Direct operating costs	(232,932		)	(124,399	)	(125,931	)	(6,818	)	—	(490,080		)
Segment profits	$	78,534		28,880		30,371		910		—	$	138,695
Depreciation and amortization	$	38,013		21,127		14,589		1,357		5,760	$	80,846
Capital expenditures (excluding acquisitions)	$	69,342		26,392		20,377		30		1,920	$	118,061
Identifiable assets	$	263,407		135,338		107,511		8,643		346,246	$	861,145
Nine Months Ended September 30, 2016 (Unaudited)	(Predecessor)
Operating revenues	$	125,348		142,919		118,891		4,812		—	$	391,970
Direct operating costs	(107,941		)	(119,053	)	(101,345	)	(4,612	)	—	(332,951		)
Segment profits	$	17,407		23,866		17,546		200		—	$	59,019
Depreciation and amortization	$	56,782		48,133		41,669		9,603		7,954	$	164,141
Capital expenditures (excluding acquisitions)	$	4,689		14,422		6,076		182		2,689	$	28,058
Identifiable assets	$	308,989		216,202		200,451		43,566		233,840	$	1,003,048



	Nine Months Ended September 30, 2017
	2017				2016
	(Successor)				(Predecessor)
Revenues:
Completion and remedial services	$	311.5	50	%	$	125.3	32	%
Water logistics	$	153.3	24	%	$	142.9	36	%
Well servicing	$	156.3	25	%	$	118.9	31	%
Contract drilling	$	7.7	1	%	$	4.8	1	%
Total revenues	$	628.8	100	%	$	392.0	100	%



			Segment
	Revenues		Profits %
2016: (Predecessor)
First Quarter	$	39,696	12	%
Second Quarter	$	36,228	9	%
Third Quarter	$	49,424	18	%
Fourth Quarter	$	59,219	14	%
Full Year	$	184,567	14	%
2017: (Successor)
First Quarter	$	80,431	16	%
Second Quarter	$	107,385	24	%
Third Quarter	$	123,650	32	%



	Weighted
	Average		Rig		Revenue
	Number		Utilization		Per Rig		Profits Per
	of Rigs	Rig hours	Rate		Hour		Rig hour		Profits %
2016: (Predecessor)
First Quarter	421	108,400	36	%	$	321	$	44	11	%
Second Quarter	421	113,700	38	%	$	308	$	44	14	%
Third Quarter	421	136,600	45	%	$	313	$	60	19	%
Fourth Quarter	421	146,200	49	%	$	300	$	43	14	%
Full Year	421	504,900	42	%	$	310	$	47	14	%
2017: (Successor)
First Quarter	421	157,600	52	%	$	307	$	49	16	%
Second Quarter	421	162,300	54	%	$	321	$	69	21	%
Third Quarter	421	165,200	55	%	$	329	$	69	21	%



	Obligations Due in
	Periods Ended September 30,
Contractual Obligations	Total		2017		2018 to 2019		2020 to 2021		Thereafter
Term Loan Agreement	$	162,938	$	413	$	3,300	$	159,225	$	—
New ABL Facility	64,000		—		—		64,000		—
Capital leases and other financing arrangements	106,674		12,419		76,910		17,249		96
Operating leases	18,741		1,510		8,926		6,407		1,898
Asset retirement obligation	2,524		548		498		533		945
Total	$	354,877	$	14,890	$	89,634	$	247,414	$	2,939