Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | PACIFIC DRILLING S.A. | |
Entity Central Index Key | 0001517342 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 75,198,547 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Contract drilling | $ 89,433 | $ 65,916 |
Revenue, Product and Service [Extensible List] | us-gaap:OilAndGasServiceMember | us-gaap:OilAndGasServiceMember |
Costs and expenses | ||
Operating expenses | $ 86,475 | $ 52,296 |
General and administrative expenses | 9,643 | 11,246 |
Depreciation and amortization expense | 26,931 | 58,899 |
Loss from unconsolidated subsidiaries | 1,324 | |
Total costs and expenses | 123,049 | 123,765 |
Operating loss | (33,616) | (57,849) |
Other income (expense) | ||
Interest expense | (25,127) | (24,039) |
Reorganization items | (114) | (1,003) |
Interest income | 807 | 1,972 |
Other expense | (213) | (91) |
Loss before income taxes | (58,263) | (81,010) |
Income tax expense | 2,700 | 2,969 |
Net loss | $ (60,963) | $ (83,979) |
Loss per common share, basic (in dollars per share) | $ (0.81) | $ (1.12) |
Weighted-average shares outstanding, basic | 75,184 | 75,031 |
Loss per common share, diluted (in dollars per share) | $ (0.81) | $ (1.12) |
Weighted-average shares outstanding, diluted | 75,184 | 75,031 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (60,963) | $ (83,979) |
Total comprehensive loss | $ (60,963) | $ (83,979) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Cash and cash equivalents | $ 273,957 | $ 278,620 |
Restricted cash | 6,106 | 6,089 |
Accounts receivable, net | 65,629 | 29,252 |
Materials and supplies | 45,577 | 43,933 |
Deferred costs, current | 10,979 | 16,961 |
Prepaid expenses and other current assets | 21,532 | 15,732 |
Total current assets | 423,780 | 390,587 |
Property and equipment, net | 1,816,969 | 1,842,549 |
Other assets | 26,158 | 23,423 |
Total assets | 2,266,907 | 2,256,559 |
Liabilities and shareholders' equity: | ||
Accounts payable | 24,017 | 24,223 |
Accrued expenses | 25,733 | 27,924 |
Accrued interest | 31,406 | 15,703 |
Deferred revenue, current | 5,428 | 7,567 |
Total current liabilities | 86,584 | 75,417 |
Long-term debt | 1,132,826 | 1,073,734 |
Other long-term liabilities | 38,061 | 38,577 |
Total liabilities | 1,257,471 | 1,187,728 |
Shareholders' equity: | ||
Common shares, $0.01 par value per share, 82,500 shares authorized and issued and 75,199 and 75,007 shares outstanding as of March 31, 2020 and December 31, 2019, respectively | 752 | 751 |
Additional paid-in capital | 1,654,248 | 1,652,681 |
Treasury shares, at cost | (652) | (652) |
Accumulated deficit | (644,912) | (583,949) |
Total shareholders' equity | 1,009,436 | 1,068,831 |
Total liabilities and shareholders' equity | $ 2,266,907 | $ 2,256,559 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 82,500 | 82,500 |
Common shares, shares issued | 82,500 | 82,500 |
Common shares, shares outstanding | 75,199 | 75,007 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Shares | Additional Paid-In Capital | Treasury Shares | Retained Earnings | Total |
Beginning Balance (in shares) at Dec. 31, 2018 | 75,031 | 7,469 | |||
Beginning Balance at Dec. 31, 2018 | $ 750 | $ 1,645,692 | $ (27,484) | $ 1,618,958 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares repurchased | $ (124) | (124) | |||
Shares repurchased (in shares) | (8) | 8 | |||
Share-based compensation | 865 | 865 | |||
Net loss | (83,979) | (83,979) | |||
Ending Balance (in shares) at Mar. 31, 2019 | 75,023 | 7,477 | |||
Ending Balance at Mar. 31, 2019 | $ 750 | 1,646,557 | $ (124) | (111,463) | $ 1,535,720 |
Beginning Balance (in shares) at Dec. 31, 2019 | 75,007 | 7,493 | 82,500 | ||
Beginning Balance at Dec. 31, 2019 | $ 751 | 1,652,681 | $ (652) | (583,949) | $ 1,068,831 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued under share-based compensation plan (in shares) | 192 | (192) | |||
Shares issued under share-based compensation plan | $ 1 | (280) | (279) | ||
Share-based compensation | 1,847 | 1,847 | |||
Net loss | (60,963) | $ (60,963) | |||
Ending Balance (in shares) at Mar. 31, 2020 | 75,199 | 7,301 | 82,500 | ||
Ending Balance at Mar. 31, 2020 | $ 752 | $ 1,654,248 | $ (652) | $ (644,912) | $ 1,009,436 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flow from operating activities: | ||
Net loss | $ (60,963) | $ (83,979) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 26,931 | 58,899 |
Amortization of deferred revenue | (7,021) | (570) |
Amortization of deferred costs | 11,354 | 433 |
Amortization of deferred financing costs | 108 | |
Amortization of debt premium, net | (145) | (112) |
Interest paid-in-kind | 9,237 | 8,208 |
Deferred income taxes | 587 | 2,765 |
Share-based compensation expense | 1,847 | 865 |
Loss from unconsolidated subsidiaries | 1,324 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (36,377) | (6,346) |
Materials and supplies | (1,644) | (169) |
Deferred costs | (7,259) | (1,381) |
Prepaid expenses and other assets | (7,343) | (14,165) |
Accounts payable and accrued expenses | 19,044 | 16,130 |
Deferred revenue | 4,882 | 2,013 |
Net cash used in operating activities | (46,762) | (16,085) |
Cash flow from investing activities: | ||
Capital expenditures | (5,920) | (17,613) |
Net cash used in investing activities | (5,920) | (17,613) |
Cash flow from financing activities: | ||
Payments for shares issued under share-based compensation plan | (279) | |
Proceeds from long-term debt | 50,000 | |
Payments for financing costs | (1,685) | (1,115) |
Purchases of treasury shares | (124) | |
Net cash provided by (used in) financing activities | 48,036 | (1,239) |
Net decrease in cash and cash equivalents | (4,646) | (34,937) |
Cash, cash equivalents and restricted cash, beginning of period | 284,709 | 389,075 |
Cash, cash equivalents and restricted cash, end of period | $ 280,063 | $ 354,138 |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2020 | |
Nature of Business | |
Nature of Business | Note 1 — Nature of Business Pacific Drilling S.A. and its subsidiaries (“Pacific Drilling,” the “Company,” “we,” “us” or “our”) is an international offshore drilling contractor committed to exceeding client expectations by delivering the safest, most efficient and reliable deepwater drilling services in the industry. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 2 — Significant Accounting Policies Basis of Presentation — Our accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Pursuant to such rules and regulations, these financial statements do not include all disclosures required by GAAP for complete financial statements. Our condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the presented interim periods. Such adjustments are considered to be of a normal recurring nature unless otherwise identified. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any future period. The accompanying condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes of the Company for the year ended December 31, 2019, included in our annual report on Form 10-K filed on March 12, 2020. Principles of Consolidation — Our condensed consolidated financial statements include the accounts of Pacific Drilling S.A., and consolidated subsidiaries that we control by ownership of a majority voting interest and entities that meet the criteria for variable interest entities for which we are deemed to be the primary beneficiary for accounting purposes. We eliminate all intercompany transactions and balances in consolidation. We are party to a Nigerian joint venture, Pacific International Drilling West Africa Limited (“PIDWAL”), with Derotech Offshore Services Limited (“Derotech”), a privately-held Nigerian registered limited liability company. Derotech owns 51% of PIDWAL and we own 49% of PIDWAL. Pacific Bora Ltd. (“PBL”) and Pacific Scirocco Ltd. (“PSL”), which own the Pacific Bora and the Pacific Scirocco , respectively, are owned 49.9% by our wholly-owned subsidiary, Pacific Drilling Limited (“PDL”) and 50.1% by Pacific Drillship Nigeria Limited (“PDNL”). PDNL is owned 0.1% by PDL and 99.9% by PIDWAL. Derotech will not accrue the economic benefits of its interest in PIDWAL unless and until it satisfies certain outstanding obligations to us and a certain pledge is cancelled by us. Likewise, PIDWAL will not accrue the economic benefits of its interest in PDNL unless and until it satisfies certain outstanding obligations to us and a certain pledge is cancelled by us. PIDWAL and PDNL are variable interest entities for which we are the primary beneficiary. Accordingly, we consolidate all interests of PIDWAL and PDNL in our condensed consolidated financial statements and no portion of their operating results is allocated to the noncontrolling interest. Emergence from Bankruptcy Proceedings — On November 2, 2018, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) confirmed the Company’s Modified Fourth Amended Joint Plan of Reorganization, dated October 31, 2018 (the “Plan of Reorganization”), and on November 19, 2018, the Plan of Reorganization became effective and we emerged from our Chapter 11 bankruptcy proceedings after successfully completing our reorganization pursuant to the Plan of Reorganization. We had filed the Plan of Reorganization with the Bankruptcy Court in connection with our voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, initially filed on November 12, 2017, which were jointly administered under the caption In re Pacific Drilling S.A., et al. , Case No. 17-13193 (MEW). The Company’s two subsidiaries involved in the arbitration with Samsung Heavy Industries Co. Ltd. (“SHI”) related to the Pacific Zonda (see Note 11), Pacific Drilling VIII Limited and Pacific Drilling Services, Inc. (together, the “Zonda Debtors”), filed a separate plan of reorganization that was confirmed by order of the Bankruptcy Court on January 30, 2019 (the “Zonda Plan”) and are not Debtors under the Plan of Reorganization. Pursuant to the Plan of Reorganization, we raised approximately $1.5 billion in new capital, before expenses, consisting of approximately $1.0 billion raised through the issuance of $750.0 million aggregate principal amount of our 8.375% First Lien Notes due 2023 (the “First Lien Notes”) and approximately $273.6 million aggregate principal amount of our 11.0%/12.0% Second Lien PIK Notes due 2024 (the “Second Lien PIK Notes” and, together with the First Lien Notes, the “Notes”), and $500.0 million raised through the issuance of new common shares pursuant to a private placement and a separate equity rights offering. We used a portion of the net proceeds to repay all of our pre-petition indebtedness that was not equitized pursuant to the Plan of Reorganization, to repay the post-petition debtor-in-possession financing, and to pay certain fees and expenses Upon our emergence from bankruptcy on November 19, 2018, we deconsolidated the Zonda Debtors. The Zonda Debtors remain in their Chapter 11 proceedings. During the year ended December 31, 2019, we accounted for our investment in the Zonda Debtors using the equity method of accounting. As of December 31, 2019, we discontinued applying the equity method on the Zonda Debtors. See Note 11. Related Party Transactions — We have determined that Abrams Capital Management, L.P., Avenue Capital Management II, LP., Strategic Value Partners, LLC and certain of their affiliates (the “Principal Shareholders”) meet the definition of related parties under GAAP. As of both March 31, 2020 and December 31, 2019, the Principal Shareholders held, in the aggregate, $59.8 million of our Second Lien PIK Notes. Recently Adopted Accounting Standards Measurement of Credit Losses on Financial Instruments — On June 16, 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which introduces a new model for recognizing credit losses based on an estimate of expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings. In April 2019, the FASB issued codification improvements to Topic 326 to clarify all expected recoveries should be included in the estimate of the allowance for credit losses. We adopted the standard effective January 1, 2020 with no material effect on our consolidated statements of financial position, operations or cash flows or related disclosures. See Note 9. Recently Issued Accounting Standards Simplifications to Income Tax Accounting — On December 18, 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which removes certain exceptions for investments, intra-period allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. This update is effective for annual and interim periods beginning after January 1, 2021. We are currently evaluating the effect the standard may have on our consolidated financial statements and related disclosures. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment | |
Property and Equipment | Note 3 — Property and Equipment Property and equipment consists of the following: March 31, December 31, 2020 2019 (in thousands) Drillships and related equipment $ 1,963,562 $ 1,962,211 Other property and equipment 259 259 Property and equipment, cost 1,963,821 1,962,470 Accumulated depreciation (146,852) (119,921) Property and equipment, net $ 1,816,969 $ 1,842,549 During the first quarter of 2020, the COVID-19 pandemic has weakened demand for oil, and after the Organization of the Petroleum Exporting Countries (“OPEC”) and a group of oil producing nations led by Russia failed on March 6, 2020 to agree on oil production cuts, Saudi Arabia announced that it would cut oil prices and increase production, leading to a sharp further decline in oil trading prices. Since mid-March, we have seen significant cuts in the current year’s capital expenditure budgets for many exploration and production companies as a result of the COVID-19 pandemic coupled with a severe oversupply of oil. We expect a significant reduction in exploration drilling in the near term as well as deferral of major development programs until 2021 or later. The excess supply of high-specification drillships is expected to grow into 2021 as more rigs are stacked due to the current market dynamics. As a result, we tested for impairment based on impairment indicators identified in the period. We performed a recoverability test and determined that the estimated undiscounted cash flows of our drillships significantly exceeded their carrying amounts. As a result, no impairment loss was recorded. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Debt | Note 4 — Debt Debt, net of debt premium (discount) consists of the following: March 31, December 31, 2020 2019 (in thousands) Revolving Credit Facility $ 50,000 $ — First Lien Notes 748,029 747,910 Second Lien PIK Notes 334,797 325,824 Total long-term debt $ 1,132,826 $ 1,073,734 First Lien Notes On September 26, 2018, Pacific Drilling First Lien Escrow Issuer Limited (the “First Lien Escrow Issuer”), a private company limited by shares incorporated in the British Virgin Islands and wholly owned subsidiary of the Company, entered into an indenture (the “First Lien Notes Indenture”) with Wilmington Trust, National Association, as trustee (the “Trustee”) and collateral agent, relating to the issuance by the First Lien Escrow Issuer of the First Lien Notes. Upon the Company’s emergence from its Chapter 11 proceedings on November 19, 2018, the First Lien Escrow Issuer merged into the Company and the Company assumed all obligations of the First Lien Escrow Issuer under the First Lien Notes Indenture. The First Lien Notes accrue interest at a rate of 8.375% per annum, payable semi-annually in arrears on April 1 and October 1 of each year beginning on April 1, 2019. The First Lien Notes will mature on October 1, 2023, unless earlier redeemed or repurchased. The First Lien Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by all of the Company’s subsidiaries other than the Zonda Debtors, certain immaterial subsidiaries and PIDWAL. If the Zonda Debtors are successful in their appeal of the Tribunal’s award, they will guarantee and provide collateral for the First Lien Notes, Second Lien PIK Notes and the Revolving Credit Facility upon their emergence from bankruptcy pursuant to the terms of the Zonda Plan and agreements governing such debt. If the Zonda Debtors are unsuccessful in the appeal, the Company expects that the Zonda Debtors will be liquidated in accordance with the terms of the Zonda Plan and the Zonda Debtors would not provide collateral for or guarantee the First Lien Notes, Second Lien PIK Notes or the Revolving Credit Facility. See Note 11 for further discussion. The First Lien Notes are secured by first-priority liens on substantially all assets of the Company and the guarantors (other than certain excluded property), including (i) vessels, (ii) books and records, (iii) certain deposit accounts and the amounts contained therein, (iv) assignments of proceeds of hull and machinery and loss of hire insurance, (v) assignments of earnings from drilling contracts, and (vi) equity interests owned by the Company and the guarantors, in each case, subject to certain exceptions, including that such first-priority liens will be subject to payment priority in favor of lenders under the Revolving Credit Facility. The First Lien Notes Indenture contains covenants limiting the ability of the Company, and any subsidiary to, among other things, (i) incur or guarantee additional indebtedness and issue preferred stock, (ii) pay dividends on or redeem or repurchase capital stock, make certain investments, make certain payments on or with respect to subordinated and junior debt (including making cash interest or principal payments on the Second Lien PIK Notes (as defined below)), (iii) create or incur certain liens, (iv) impose restrictions on the ability of restricted subsidiaries to pay dividends, (v) merge or consolidate with other entities, (vi) enter into certain transactions with affiliates, (vii) impair the security interests in the collateral for the First Lien Notes, and (viii) engage in certain lines of business. These covenants are subject to a number of important exceptions and qualifications and certain of them will be suspended with respect to the First Lien Notes in the event that the First Lien Notes obtain an investment grade rating. The Company may be required to offer to purchase the First Lien Notes at 101.0% percent of the principal amount thereof, plus accrued and unpaid interest, upon the occurrence of a Change of Control (as defined in the First Lien Notes Indenture), and at 100.0% of the principal amount, plus accrued and unpaid interest, under certain other circumstances. In addition, the Company will be required to offer to purchase First Lien Notes at 100.0% of the principal amount thereof, plus accrued and unpaid interest, with any cash proceeds from a settlement or award in connection with the arbitration relating to the Pacific Zonda with such offer to be for an aggregate principal amount of First Lien Notes equal to the lesser of (x) 50.0% of such cash proceeds and (y) $75.0 million. At any time prior to October 1, 2020, (i) the Company may redeem the First Lien Notes, in whole or in part, at a redemption price equal to 100.0% of the principal amount thereof, plus a “make-whole” premium, (ii) the Company may redeem up to 35.0% of the original principal amount of the First Lien Notes with proceeds from certain equity offerings at a redemption price equal to 108.375% of the principal amount thereof, and (iii) not more than once in any twelve-month period, the Company may redeem up to 10.0% of the original principal amount of the First Lien Notes at a redemption price equal to 103.0% of the principal amount thereof, in each case plus accrued and unpaid interest. At any time on or after October 1, 2020, the Company may redeem the First Lien Notes, in whole or in part, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest, during the twelve-month period beginning on October 1 of the years indicated: 2020 – 104.188%; 2021 – 102.094%; 2022 and thereafter – 100.0%. The First Lien Notes Indenture contains customary events of default, including, among other things, (i) failure to make required payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain other indebtedness; (iv) certain events of bankruptcy and insolvency; and (v) failure to pay certain judgments. An event of default under the First Lien Notes Indenture will allow either the Trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding First Lien Notes to accelerate, or in certain cases will automatically cause the acceleration of, the amounts due under the First Lien Notes. Intercreditor Agreement The relationship between holders of First Lien Notes and lenders under the Revolving Credit Facility (and any future first lien debt), on the one hand, and Second Lien PIK Notes (and any future junior lien debt), on the other hand, is governed by an intercreditor agreement. Pursuant to the intercreditor agreement, the liens securing first lien debt are effectively senior in priority to the liens securing junior lien debt. The relationship between lenders under the Revolving Credit Facility and the holders of the First Lien Notes is governed (and any future first lien debt would be governed) by a collateral agency agreement. Such agreement allows for payment priority in favor of lenders under of the Revolving Credit Facility. Second Lien PIK Notes On September 26, 2018, Pacific Drilling Second Lien Escrow Issuer Limited (the “Second Lien Escrow Issuer”), a private company limited by shares incorporated in the British Virgin Islands and wholly owned subsidiary of the Company, entered into an indenture (the “Second Lien PIK Notes Indenture”) with the Trustee, as trustee and junior lien collateral agent, relating to the issuance by the Second Lien Escrow Issuer of approximately $273.6 million aggregate principal amount of Second Lien PIK Notes. Approximately $23.6 million aggregate principal amount was issued as a commitment fee to an ad hoc group of holders of our pre-petition notes for their agreement to backstop the issuance of the Second Lien PIK Notes. Upon the Company’s emergence from its Chapter 11 proceedings on November 19, 2018, the Second Lien Escrow Issuer merged into the Company and the Company assumed all obligations of the Second Lien Escrow Issuer under the Second Lien PIK Notes Indenture. For each interest period, interest is payable, at the option of the Company, (i) entirely in cash (“Cash Interest”), (ii) entirely through the issuance of additional Second Lien PIK Notes having the same terms and conditions as the Second Lien PIK Notes issued in the Second Lien PIK Notes Offering in a principal amount equal to the amount of interest then due and payable or by increasing the then outstanding aggregate principal amount of Second Lien PIK Notes (“PIK Interest”) or (iii) 50% as Cash Interest and 50% as PIK Interest. If the Company elects to pay interest for an interest period entirely in the form of Cash Interest, interest will accrue at a rate of 11.0% per annum for such interest period. If the Company elects to pay interest for an interest period entirely in the form of PIK Interest, interest will accrue at a rate of 12.0% per annum for such interest period. If the Company elects to pay 50% in Cash Interest and 50% in PIK Interest for an interest period, (i) interest in respect of the Cash Interest portion will accrue at 11.0% and (ii) interest in respect of the PIK Interest portion will accrue at 12.0% for such interest period. Interest on the Second Lien PIK Notes is payable semi-annually in arrears on April 1 and October 1 of each year beginning on April 1, 2019. The Second Lien PIK Notes will mature on April 1, 2024, unless earlier redeemed or repurchased. As of March 31, 2020, the Company has made the following payments in the form of PIK Interest: Payment Date PIK Interest (in thousands) April 1, 2019 $ 16,873 October 1, 2019 17,429 The Second Lien PIK Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by all of the Company’s subsidiaries that guarantee the Company’s First Lien Notes and are secured by second-priority liens on all of the assets of the Company and the guarantors that also serve as collateral for the Company’s First Lien Notes. The Second Lien PIK Notes Indenture contains covenants limiting the ability of the Company, and any subsidiary to, among other things, (i) incur or guarantee additional indebtedness and issue preferred stock, (ii) pay dividends on or redeem or repurchase capital stock, make certain investments, make certain payments on or with respect to subordinated and junior debt, (iii) create or incur certain liens, (iv) impose restrictions on the ability of restricted subsidiaries to pay dividends, (v) merge or consolidate with other entities, (vi) enter into certain transactions with affiliates, (vii) impair the security interests in the collateral for the Second Lien PIK Notes, and (viii) engage in certain lines of business. These covenants are subject to a number of important exceptions and qualifications and certain of them will be suspended with respect to the Second Lien PIK Notes in the event that the Second Lien PIK Notes obtain an investment grade rating. The Company may be required to offer to purchase the Second Lien PIK Notes at 101.0% percent of the principal amount thereof, plus accrued and unpaid interest, upon the occurrence of a Change of Control (as defined in the Second Lien PIK Notes Indenture) (a “Change of Control Offer”), and at 100.0% of the principal amount, plus accrued and unpaid interest, under certain other circumstances. In addition, the Company will be required to offer to purchase Second Lien PIK Notes at 100.0% of the principal amount thereof, plus accrued and unpaid interest, with the cash proceeds, if any, from a settlement or award in connection with the arbitration with SHI related to the Pacific Zonda , with such offer to be for an aggregate principal amount of the Second Lien PIK Notes equal to the lesser of (x) 50.0% of such cash proceeds and (y) $75.0 million, provided, that if the Company is required to offer to purchase the First Lien Notes with such cash proceeds, the Company shall only be required to offer to purchase the Second Lien PIK Notes with the portion thereof that has been declined by the holders of First Lien Notes. At any time on or after April 1, 2020, the Company may redeem the Second Lien PIK Notes, in whole or in part, at the following redemption prices (expressed as a percentage of principal amount), plus any accrued and unpaid interest, during the six-month period beginning on the dates indicated below: Date Price April 1, 2020 October 1, 2020 April 1, 2021 October 1, 2021 April 1, 2022 and thereafter At any time after a Change of Control occurs, the Company may redeem all, but not less than all, of the Second Lien PIK Notes at the following redemption prices (expressed as a percentage of principal amount), plus any accrued and unpaid interest, during the six-month period beginning on the dates indicated below: Date Price April 1, 2020 October 1, 2020 April 1, 2021 October 1, 2021 April 1, 2022 and thereafter If the Company exercises this Change of Control redemption right, it may elect not to make the Change of Control Offer described above. The Second Lien PIK Notes Indenture contains customary events of default, including, among other things, (i) failure to make required payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain other indebtedness; (iv) certain events of bankruptcy and insolvency; and (v) failure to pay certain judgments. An event of default under the Second Lien PIK Notes Indenture will allow either the Trustee or the holders of at least 25.0% in aggregate principal amount of the then-outstanding Second Lien PIK Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under the Second Lien PIK Notes. Revolving Credit Facility On February 7, 2020, the Company, as borrower, Angelo, Gordon Energy Servicer, LLC (“Angelo Gordon”), as administrative agent and the lenders party thereto, entered into a revolving credit agreement that provides a $50.0 million first lien superpriority revolving credit facility (the “Revolving Credit Facility”). As of March 31, 2020, the full available amount of $50.0 million was drawn on the facility. All borrowings under the Revolving Credit Facility were incurred at the Company level. The Revolving Credit Facility will mature on April 1, 2023. New borrowings may be limited if, at the time of such borrowing, the ratio of (i) the sum of (a) eligible accounts receivable and (b) unrestricted cash to (ii) total commitments is less than 1.3 to 1 or if the effective availability period has not been extended beyond August 7, 2021 pursuant to a scheduled redetermination by the administrative agent. The Company’s obligations under the Revolving Credit Facility are guaranteed by all of the subsidiaries that guaranty the Company’s First Lien Notes and Second Lien PIK Notes. The Revolving Credit Facility is secured by a sole first-priority lien on the Company’s and the guarantors’ accounts receivable and a shared first-priority lien (with holders of the First Lien Notes), on all assets serving as collateral under such First Lien Notes, with a superpriority right to repayment ahead of other first lien holders in an enforcement action. Borrowings under the Revolving Credit Facility are used to finance working capital and capital expenditure needs of the Company and its subsidiaries. Borrowings under the Revolving Credit Facility bear interest at a LIBO rate determined by reference to the then effective three-month LIBO rate, with a 1.5% floor, adjusted for statutory reserve requirements, plus an applicable percentage of 7.5%, payable quarterly. The Company pays a quarterly commitment fee at a 1.5% annual rate for unused commitments. The Company may voluntarily prepay amounts outstanding under the Revolving Credit Facility, in whole or in part, without premium or penalty (except as described below) in minimum amounts of $5.0 million. The Company will be required to pay a “prepayment premium” in connection with prepayments resulting in commitment reductions or commitment termination and termination of the Revolving Credit Facility equal to a percentage of the principal amount of such commitments reduced or terminated (the “Yield Maintenance Amount”): · During the first 12 months following the closing date – 2.0%; and · During months 13-24 following the closing date – 1.0%. The Company will be required to prepay amounts borrowed under the Revolving Credit Facility with any net proceeds from asset sales or insurance proceeds, and permanently reduce commitments in a corresponding amount, in the event the Vessel Fleet Value is less than $500.0 million. The “Vessel Fleet Value” means, at any time of determination, the lesser of (a) the net book value of the vessels described as Collateral Vessels under the Revolving Credit Facility at such time or (b) the fair market value of the vessels described as Collateral Vessels under the Revolving Credit Facility pursuant to the most recent appraisal (using the lowest value in the range if a range is provided in such appraisal). The Revolving Credit Facility contains covenants substantially similar to those set forth in the indenture governing the First Lien Notes except that certain provisions related to (i) the ability to make restricted payments and permitted investments, (ii) the permitted application of net proceeds from asset sales and (iii) the ability to incur additional indebtedness are subject to additional restrictions if the Vessel Fleet Value is less than $500.0 million. In addition, the Revolving Credit Facility contains customary events of default, including among other things, (i) failure to make required payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain other indebtedness; (iv) the occurrence of a Change of Control; (v) certain events of bankruptcy and insolvency; and (vi) failure to pay certain judgments. Upon an event of default, the lenders party to the Revolving Credit Facility are entitled, subject to certain limitations, to declare any obligations of the Company or its subsidiaries to the lenders immediately due and payable and to take all actions permitted to be taken by a secured creditor. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 5 — Earnings per Share The following reflects the income and the share data used in the basic and diluted earnings per share (“EPS”) computations: Three Months Ended March 31, 2020 2019 (in thousands, except per share information) Numerator: Net loss, basic and diluted $ (60,963) $ (83,979) Denominator: Weighted-average shares outstanding, basic 75,184 75,031 Weighted-average shares outstanding, diluted 75,184 75,031 Loss per share: Basic $ (0.81) $ (1.12) Diluted $ (0.81) $ (1.12) The following table presents the share effects of share-based compensation awards that were excluded from our computations of diluted EPS, as their effect would have been anti-dilutive for the periods presented: Three Months Ended March 31, 2020 2019 (in thousands) Share-based compensation awards 6,925 822 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | Note 6 — Income Taxes We recognize tax benefits from an uncertain tax position only if it is more likely than not that the position will be sustained upon examination by taxing authorities based on the technical merits of the position. The amount recognized is the largest benefit that we believe has greater than a 50% likelihood of being realized upon settlement. As of March 31, 2020 and December 31, 2019, we had $43.5 million and $43.5 million, respectively, of unrecognized tax benefits which were included in other long-term liabilities on our condensed consolidated balance sheets and would favorably impact our consolidated effective tax rate if realized. To the extent we have income tax receivable balances available to utilize against amounts payable for unrecognized tax benefits, we have presented such receivable balances as a reduction to other long-term liabilities on our condensed consolidated balance sheets. As of March 31, 2020 and December 31, 2019 we have no accrued interest and penalties related to uncertain tax positions on our balance sheets as such payments would not be required by law. |
Revenue from Contracts with Cli
Revenue from Contracts with Clients | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contracts with Clients | |
Revenue from Contracts with Clients | Note 7 — Revenue from Contracts with Clients Contract Assets and Liabilities The following table provides information about trade receivables, contract assets and contract liabilities: March 31, December 31, 2020 2019 (in thousands) Trade receivables, net $ 65,178 $ 28,926 Current contract assets 4,829 — Current contract liabilities (deferred revenue) 5,428 7,567 Significant changes in contract assets and contract liabilities for the three months ended March 31, 2020 are as follows: Contract Assets Contract Liabilities (in thousands) Balance at December 31, 2019 $ — $ 7,567 Decrease due to amortization of deferred revenue — (7,021) Increase due to billings related to mobilization revenue and capital upgrades — 5,019 Increase due to demobilization revenue recognized 4,966 — Transfers between balances (137) (137) Balance at March 31, 2020 $ 4,829 $ 5,428 Future Amortization of Contract Liabilities The following table reflects revenue expected to be recognized in the future related to unsatisfied performance obligations as of March 31, 2020: Remaining nine months For the years ending December 31, 2020 2021 2022 2023 and thereafter Total (in thousands) Amortization of contract liabilities $ 5,577 $ — $ — $ — $ 5,577 The expected timing for recognition of such revenue is based on the estimated start date and duration of each respective contract as of March 31, 2020. The actual timing of recognition of such amounts may vary due to factors outside of our control. We have applied the optional exemption in Topic 606 and have not disclosed the variable consideration related to our estimated future dayrate revenue. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 8 — Leases Our leasing activities primarily consist of Three Months Ended March 31, 2020 2019 (in thousands) Lease Expense Operating lease cost $ 10,813 $ 598 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 366 360 Right-of-use assets obtained in exchange for lease obligations: Operating leases — 6,935 March 31, 2020 March 31, 2019 Weighted Average Remaining Lease Term (in years) Operating leases 4.5 5.5 Weighted Average Discount Rate Operating leases Future minimum lease payments for our leases as of March 31, 2020 and a reconciliation to lease liabilities recorded on our condensed consolidated balance sheet are as follows: Operating Leases Years Ending December 31, (in thousands) 2020 (excluding three months ended March 31, 2020) $ 1,106 2021 1,499 2022 1,525 2023 1,552 2024 1,179 Total future minimum lease payments 6,861 Less imputed interest (1,102) Total $ 5,759 Reported as of March 31, 2020 Accrued expenses $ 1,061 Other long-term liabilities 4,698 Total lease liabilities $ 5,759 |
Credit Losses
Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Credit Losses | |
Credit Losses | Note 9 — Credit Losses Effective January 1, 2020, we recognize an allowance for credit losses that results in the underlying accounts receivable reflecting the net amount expected to be collected. The allowance is measured and recorded upon the initial recognition of the accounts receivable based on its amortized cost that we do not expect to collect over the contractual life. We use short-term creditworthiness data of our clients from credit rating agencies to measure expected credit losses on accounts receivable on a collective basis when similar risk characteristics exist. If we determine that the accounts receivable from a client does not share risk characteristics with others, we evaluate the asset for expected credit losses on an individual basis and do not include it in a collective evaluation. To estimate the allowance for credit losses, we apply the aging method based on our historical credit loss experience adjusted for any applicable current conditions and reasonable and supportable forecasts of future economic conditions. We considered the impact of the COVID-19 pandemic and lower oil prices on our current estimate of credit losses as of March 31, 2020. As of January 1, 2020 and March 31, 2020, the allowance for credit losses related to our accounts receivable and contract assets was nil and nil respectively, and there were no corresponding activities for the three months ended March 31, 2020. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 — Fair Value Measurements We estimated fair value by using appropriate valuation methodologies and information available to management as of March 31, 2020 and December 31, 2019. Considerable judgment is required in developing these estimates, and accordingly, estimated values may differ from actual results. The estimated fair value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximated their carrying value due to their short-term nature. It is not practicable to estimate the fair value of the Revolving Credit Facility. The following table presents the carrying value and estimated fair value of our cash and cash equivalents and debt: March 31, 2020 December 31, 2019 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value (in thousands) Cash and cash equivalents $ 273,957 $ 273,957 $ 278,620 $ 278,620 First Lien Notes 748,029 217,500 747,910 682,500 Second Lien PIK Notes 334,797 32,639 325,824 183,949 Our cash equivalents are primarily invested in money market instruments with original maturities of three months or less. We estimate the fair values of our debt using quoted market prices to the extent available and significant other observable inputs, which represent Level 2 fair value measurements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 — Commitments and Contingencies Liquidity — Based on our cash flow forecast, we expect to generate aggregate negative cash flows for 2020 and 2021. We have no scheduled payments of principal on our outstanding debt until 2023. As of March 31, 2020, our cash and cash equivalents were $274.0 million, and we believe that our sources of cash will provide sufficient liquidity over at least the next 12 months to fund our cash needs. As a result of the pandemic, oversupply of oil and resulting lower oil prices, our future projections for operating cash flows have been significantly adversely affected. In addition, incremental capital at a reasonable cost is difficult to obtain for companies in our industry and may continue to be difficult to obtain. Our debt agreements limit our ability to incur additional debt. Our other permitted indebtedness capacity includes the ability to incur up to $50.0 million with respect to a capital lease facility and to incur up to $50.0 million through the use of our general indebtedness basket, which may be secured. Absent a significant improvement in market conditions, we would likely need our lenders and noteholders to agree to modifications to the terms of our long-term debt and we may need to obtain additional capital, if available, for our capital structure to be sustainable in the long term. Accordingly, we are evaluating longer term alternative strategic solutions to fund our business. Commitments — As of March 31, 2020, we had no material commitments. Bank Guarantee — As of March 31, 2020, we were contingently liable under a certain bank guarantee totaling approximately $5.4 million issued as security in the normal course of our business. Contingencies — It is to be expected that we will routinely be involved in litigation and disputes arising in the ordinary course of our business. In January 2013, the Zonda Debtors entered into, and/or guaranteed a construction contract with SHI for the construction of the Pacific Zonda , with a purchase price of approximately $517.5 million and original delivery date of March 31, 2015 (the “Construction Contract”). On October 29, 2015, the Zonda Debtors exercised their right to rescind the Construction Contract due to SHI’s failure to timely deliver the drillship in accordance with the contractual specifications. The carrying value of the newbuild at the date of rescission was $315.7 million, consisting of (i) advance payments in the aggregate of $181.1 million paid by the Zonda Debtors to SHI, (ii) purchased equipment, (iii) internally capitalized construction costs and (iv) capitalized interest. SHI rejected the rescission, and on November 25, 2015, formally commenced an arbitration proceeding against the Zonda Debtors in London under the Arbitration Act 1996 before a tribunal of three arbitrators (as specified in the Construction Contract) (the “Tribunal”). SHI claims that the Zonda Debtors wrongfully rejected their tendered delivery of the drillship and seeks the final installment of the purchase price under the Construction Contract. On November 30, 2015, the Zonda Debtors made demand under the third-party refund guarantee accompanying the Construction Contract for the amount of the advance payments made under the Construction Contract, plus interest. Any payment under the refund guarantee is suspended until an award in the Zonda Debtors’ favor under the arbitration is obtained. In addition to seeking repayment of the advance payments made under the Construction Contract, the Zonda Debtors made a counterclaim for the return of their purchased equipment, or the value of such equipment, and damages for wasted expenditures. The Zonda Debtors owned $75.0 million in purchased equipment for the Pacific Zonda , a majority of which remained on board the Pacific Zonda . An evidentiary hearing was held in London before the Tribunal from February 5 through March 2, 2018. Written closing submissions and short replies to such submissions were filed with the Tribunal in May 2018. Oral closing submissions were heard by the Tribunal in early August 2018. As part of our “first day” relief in the Chapter 11 proceedings, the Bankruptcy Court granted us a modification of the automatic stay provisions of the Bankruptcy Code to allow us to proceed with this arbitration. In our bankruptcy proceedings, SHI has asserted claims against the Zonda Debtors, secured by the Pacific Zonda , for approximately $387.4 million, for the remaining unpaid purchase price, interest and costs. On November 19, 2018, the Company and certain of its subsidiaries other than the Zonda Debtors emerged from bankruptcy after successfully completing their reorganization pursuant to the plan of reorganization. The Zonda Debtors filed the Zonda Plan which was confirmed by order of the Bankruptcy Court on January 30, 2019 and are not Debtors under the Plan of Reorganization. On the date the Zonda Plan was confirmed, the Zonda Debtors had $4.6 million in cash and no other material assets after accounting for post-petition administrative expenses (other than the value of their claims against SHI) for SHI to recover against on account of its claims. On January 15, 2020, the Tribunal awarded SHI approximately $320 million with respect to its claims against the Zonda Debtors. The award does not include approximately $100 million in interest and costs sought by SHI, on which the Tribunal reserved making a decision to a later date. On February 11, 2020, the Zonda Debtors filed an application with the High Court in London seeking permission to appeal the Tribunal’s award. There can be no assurance that the Zonda Debtors will receive permission to appeal, or that if such permission is granted, that any such appeal will be successful in reversing the Tribunal’s award. If the Zonda Debtors are successful in their appeal of the Tribunal’s award, the Zonda Debtors will emerge from bankruptcy pursuant to the terms of the Zonda Plan. If the Zonda Debtors are unsuccessful in the appeal, the Company expects that the Zonda Debtors will be liquidated in accordance with the terms of the Zonda Plan. As a result of the Tribunal’s decision, we have eliminated our investment and net receivable balances related to the Zonda Debtors as of December 31, 2019. As of December 31, 2019, we had no cost basis in our investment in the Zonda Debtors and discontinued the equity method of accounting. On December 20, 2018, after the Company and its subsidiaries other than the Zonda Debtors had completed the Plan of Reorganization and emerged from bankruptcy, SHI filed with the Bankruptcy Court an untimely secured contingency claim against Pacific Drilling S.A., our parent company, in the amount of approximately $387.4 million. We filed an objection to the claim on the basis that the claim should be disallowed due to its being filed long after the May 1, 2018 claims bar date established by order of the Bankruptcy Court. On March 26, 2020, the Bankruptcy Court sustained our objection and expunged SHI’s claim. The appeal deadline for such ruling expired on April 16, 2020 with no appeal filed, and a motion to close the Company’s bankruptcy case was filed on April 17, 2020. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | Note 12 — Supplemental Cash Flow Information During the three months ended March 31, 2020 and 2019, we paid $0.2 million and $0 of interest in cash, respectively. During the three months ended March 31, 2020 and 2019, we paid $0.6 million and $2.0 million of income taxes, respectively. During the three months ended March 31, 2020 and 2019, we paid $12.0 thousand and $3.8 million in reorganization items, respectively. Within our condensed consolidated statements of cash flows, capital expenditures represent expenditures for which cash payments were made during the period. These amounts exclude accrued capital expenditures, which are capital expenditures that were accrued but unpaid. During the three months ended March 31, 2020 and 2019, changes in accrued capital expenditures were $(4.6) million and $(4.4) million, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation — Our accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Pursuant to such rules and regulations, these financial statements do not include all disclosures required by GAAP for complete financial statements. Our condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the presented interim periods. Such adjustments are considered to be of a normal recurring nature unless otherwise identified. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any future period. The accompanying condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes of the Company for the year ended December 31, 2019, included in our annual report on Form 10-K filed on March 12, 2020. |
Principles of Consolidation | Principles of Consolidation — Our condensed consolidated financial statements include the accounts of Pacific Drilling S.A., and consolidated subsidiaries that we control by ownership of a majority voting interest and entities that meet the criteria for variable interest entities for which we are deemed to be the primary beneficiary for accounting purposes. We eliminate all intercompany transactions and balances in consolidation. We are party to a Nigerian joint venture, Pacific International Drilling West Africa Limited (“PIDWAL”), with Derotech Offshore Services Limited (“Derotech”), a privately-held Nigerian registered limited liability company. Derotech owns 51% of PIDWAL and we own 49% of PIDWAL. Pacific Bora Ltd. (“PBL”) and Pacific Scirocco Ltd. (“PSL”), which own the Pacific Bora and the Pacific Scirocco , respectively, are owned 49.9% by our wholly-owned subsidiary, Pacific Drilling Limited (“PDL”) and 50.1% by Pacific Drillship Nigeria Limited (“PDNL”). PDNL is owned 0.1% by PDL and 99.9% by PIDWAL. Derotech will not accrue the economic benefits of its interest in PIDWAL unless and until it satisfies certain outstanding obligations to us and a certain pledge is cancelled by us. Likewise, PIDWAL will not accrue the economic benefits of its interest in PDNL unless and until it satisfies certain outstanding obligations to us and a certain pledge is cancelled by us. PIDWAL and PDNL are variable interest entities for which we are the primary beneficiary. Accordingly, we consolidate all interests of PIDWAL and PDNL in our condensed consolidated financial statements and no portion of their operating results is allocated to the noncontrolling interest. |
Emergence from Bankruptcy Proceedings | Emergence from Bankruptcy Proceedings — On November 2, 2018, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) confirmed the Company’s Modified Fourth Amended Joint Plan of Reorganization, dated October 31, 2018 (the “Plan of Reorganization”), and on November 19, 2018, the Plan of Reorganization became effective and we emerged from our Chapter 11 bankruptcy proceedings after successfully completing our reorganization pursuant to the Plan of Reorganization. We had filed the Plan of Reorganization with the Bankruptcy Court in connection with our voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, initially filed on November 12, 2017, which were jointly administered under the caption In re Pacific Drilling S.A., et al. , Case No. 17-13193 (MEW). The Company’s two subsidiaries involved in the arbitration with Samsung Heavy Industries Co. Ltd. (“SHI”) related to the Pacific Zonda (see Note 11), Pacific Drilling VIII Limited and Pacific Drilling Services, Inc. (together, the “Zonda Debtors”), filed a separate plan of reorganization that was confirmed by order of the Bankruptcy Court on January 30, 2019 (the “Zonda Plan”) and are not Debtors under the Plan of Reorganization. Pursuant to the Plan of Reorganization, we raised approximately $1.5 billion in new capital, before expenses, consisting of approximately $1.0 billion raised through the issuance of $750.0 million aggregate principal amount of our 8.375% First Lien Notes due 2023 (the “First Lien Notes”) and approximately $273.6 million aggregate principal amount of our 11.0%/12.0% Second Lien PIK Notes due 2024 (the “Second Lien PIK Notes” and, together with the First Lien Notes, the “Notes”), and $500.0 million raised through the issuance of new common shares pursuant to a private placement and a separate equity rights offering. We used a portion of the net proceeds to repay all of our pre-petition indebtedness that was not equitized pursuant to the Plan of Reorganization, to repay the post-petition debtor-in-possession financing, and to pay certain fees and expenses Upon our emergence from bankruptcy on November 19, 2018, we deconsolidated the Zonda Debtors. The Zonda Debtors remain in their Chapter 11 proceedings. During the year ended December 31, 2019, we accounted for our investment in the Zonda Debtors using the equity method of accounting. As of December 31, 2019, we discontinued applying the equity method on the Zonda Debtors. See Note 11. |
Related Party Transactions | Related Party Transactions — We have determined that Abrams Capital Management, L.P., Avenue Capital Management II, LP., Strategic Value Partners, LLC and certain of their affiliates (the “Principal Shareholders”) meet the definition of related parties under GAAP. As of both March 31, 2020 and December 31, 2019, the Principal Shareholders held, in the aggregate, $59.8 million of our Second Lien PIK Notes. |
Recently Adopted / Issued Accounting Standards | Recently Adopted Accounting Standards Measurement of Credit Losses on Financial Instruments — On June 16, 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) , which introduces a new model for recognizing credit losses based on an estimate of expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-term financings. In April 2019, the FASB issued codification improvements to Topic 326 to clarify all expected recoveries should be included in the estimate of the allowance for credit losses. We adopted the standard effective January 1, 2020 with no material effect on our consolidated statements of financial position, operations or cash flows or related disclosures. See Note 9. Recently Issued Accounting Standards Simplifications to Income Tax Accounting — On December 18, 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which removes certain exceptions for investments, intra-period allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. This update is effective for annual and interim periods beginning after January 1, 2021. We are currently evaluating the effect the standard may have on our consolidated financial statements and related disclosures. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment | |
Summary of property and equipment | March 31, December 31, 2020 2019 (in thousands) Drillships and related equipment $ 1,963,562 $ 1,962,211 Other property and equipment 259 259 Property and equipment, cost 1,963,821 1,962,470 Accumulated depreciation (146,852) (119,921) Property and equipment, net $ 1,816,969 $ 1,842,549 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Debt | March 31, December 31, 2020 2019 (in thousands) Revolving Credit Facility $ 50,000 $ — First Lien Notes 748,029 747,910 Second Lien PIK Notes 334,797 325,824 Total long-term debt $ 1,132,826 $ 1,073,734 |
Schedule of payments in the form of PIK Interest | Payment Date PIK Interest (in thousands) April 1, 2019 $ 16,873 October 1, 2019 17,429 |
Schedule of redemption prices expressed as a percentage of principal amount | At any time on or after April 1, 2020, the Company may redeem the Second Lien PIK Notes, in whole or in part, at the following redemption prices (expressed as a percentage of principal amount), plus any accrued and unpaid interest, during the six-month period beginning on the dates indicated below: Date Price April 1, 2020 October 1, 2020 April 1, 2021 October 1, 2021 April 1, 2022 and thereafter |
Occurrence Of Change Of Control | |
Schedule of redemption prices expressed as a percentage of principal amount | At any time after a Change of Control occurs, the Company may redeem all, but not less than all, of the Second Lien PIK Notes at the following redemption prices (expressed as a percentage of principal amount), plus any accrued and unpaid interest, during the six-month period beginning on the dates indicated below: Date Price April 1, 2020 October 1, 2020 April 1, 2021 October 1, 2021 April 1, 2022 and thereafter |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Income and Share Data Used In Basic and Diluted EPS Computations | Three Months Ended March 31, 2020 2019 (in thousands, except per share information) Numerator: Net loss, basic and diluted $ (60,963) $ (83,979) Denominator: Weighted-average shares outstanding, basic 75,184 75,031 Weighted-average shares outstanding, diluted 75,184 75,031 Loss per share: Basic $ (0.81) $ (1.12) Diluted $ (0.81) $ (1.12) |
Share Effects of Share-Based Compensation Awards Excluded from Computations of Diluted EPS | Three Months Ended March 31, 2020 2019 (in thousands) Share-based compensation awards 6,925 822 |
Revenue from Contracts with C_2
Revenue from Contracts with Clients (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contracts with Clients | |
Schedule of trade receivables, contract assets and contract liabilities | March 31, December 31, 2020 2019 (in thousands) Trade receivables, net $ 65,178 $ 28,926 Current contract assets 4,829 — Current contract liabilities (deferred revenue) 5,428 7,567 |
Schedule of significant changes in contract assets and contract liabilities | Contract Assets Contract Liabilities (in thousands) Balance at December 31, 2019 $ — $ 7,567 Decrease due to amortization of deferred revenue — (7,021) Increase due to billings related to mobilization revenue and capital upgrades — 5,019 Increase due to demobilization revenue recognized 4,966 — Transfers between balances (137) (137) Balance at March 31, 2020 $ 4,829 $ 5,428 |
Summary of revenue expected to be recognized in the future related to unsatisfied performance obligations | Remaining nine months For the years ending December 31, 2020 2021 2022 2023 and thereafter Total (in thousands) Amortization of contract liabilities $ 5,577 $ — $ — $ — $ 5,577 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of components and other information related to leases | Three Months Ended March 31, 2020 2019 (in thousands) Lease Expense Operating lease cost $ 10,813 $ 598 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 366 360 Right-of-use assets obtained in exchange for lease obligations: Operating leases — 6,935 March 31, 2020 March 31, 2019 Weighted Average Remaining Lease Term (in years) Operating leases 4.5 5.5 Weighted Average Discount Rate Operating leases |
Schedule of future minimum lease payments | Operating Leases Years Ending December 31, (in thousands) 2020 (excluding three months ended March 31, 2020) $ 1,106 2021 1,499 2022 1,525 2023 1,552 2024 1,179 Total future minimum lease payments 6,861 Less imputed interest (1,102) Total $ 5,759 Reported as of March 31, 2020 Accrued expenses $ 1,061 Other long-term liabilities 4,698 Total lease liabilities $ 5,759 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying Value and Estimated Fair Value of Other Long-term Debt Instruments | March 31, 2020 December 31, 2019 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value (in thousands) Cash and cash equivalents $ 273,957 $ 273,957 $ 278,620 $ 278,620 First Lien Notes 748,029 217,500 747,910 682,500 Second Lien PIK Notes 334,797 32,639 325,824 183,949 |
Significant Accounting Polici_3
Significant Accounting Policies - Principal of Consolidation (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Pacific International Drilling West Africa Limited | |
Variable Interest Entity [Line Items] | |
Percentage of ownership in joint venture | 49.00% |
Derotech Offshore Services Limited | Pacific International Drilling West Africa Limited | |
Variable Interest Entity [Line Items] | |
Percentage of ownership in joint venture | 51.00% |
Pacific International Drilling West Africa Limited | PDNL | |
Variable Interest Entity [Line Items] | |
Percentage of ownership in joint venture | 99.90% |
PDL | PDNL | |
Variable Interest Entity [Line Items] | |
Percentage of ownership in joint venture | 0.10% |
PDL | Pacific Bora Ltd and Pacific Scirocco Ltd | |
Variable Interest Entity [Line Items] | |
Percentage of ownership in joint venture | 49.90% |
PDNL | Pacific Bora Ltd and Pacific Scirocco Ltd | |
Variable Interest Entity [Line Items] | |
Percentage of ownership in joint venture | 50.10% |
Significant Accounting Polici_4
Significant Accounting Policies - Emergence from Bankruptcy Proceedings - (Details) $ in Millions | Nov. 19, 2018USD ($) | Sep. 26, 2018USD ($) | Mar. 31, 2020subsidiary |
Bankruptcy Proceeding and Liquidity [Line Items] | |||
Number of subsidiaries involved in arbitration with SHI | subsidiary | 2 | ||
Proceeds for Reorganization | $ 1,500 | ||
Proceeds raised from issuance of debt | 1,000 | ||
Proceeds from issuance of common stock | 500 | ||
First Lien Notes | |||
Bankruptcy Proceeding and Liquidity [Line Items] | |||
Aggregate principal amount | $ 750 | ||
Debt instrument, interest rate | 8.375% | ||
Second Lien PIK Notes | |||
Bankruptcy Proceeding and Liquidity [Line Items] | |||
Aggregate principal amount | $ 273.6 | $ 273.6 | |
Commitment fee | $ 23.6 | ||
Second Lien PIK Notes | Cash Interest | |||
Bankruptcy Proceeding and Liquidity [Line Items] | |||
Debt instrument, interest rate | 11.00% | 11.00% | |
Second Lien PIK Notes | Interest Payment in Kind | |||
Bankruptcy Proceeding and Liquidity [Line Items] | |||
Debt instrument, interest rate | 12.00% | 12.00% |
Significant Accounting Polici_5
Significant Accounting Policies - Related Party Transaction (Detail) - Second Lien PIK Notes - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 19, 2018 | Sep. 26, 2018 |
Related Party Transaction [Line Items] | ||||
Debt Instrument, Face Amount | $ 273.6 | $ 273.6 | ||
Principal Shareholders | ||||
Related Party Transaction [Line Items] | ||||
Debt Instrument, Face Amount | $ 59.8 | $ 59.8 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | $ 1,963,821 | $ 1,962,470 |
Accumulated depreciation | (146,852) | (119,921) |
Property and equipment, net | 1,816,969 | 1,842,549 |
Impairment loss | 0 | |
Drillships and Related Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 1,963,562 | 1,962,211 |
Other property and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | $ 259 | $ 259 |
Debt - Summary of Debt (Details
Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,132,826 | $ 1,073,734 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 50,000 | |
First Lien Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 748,029 | 747,910 |
Second Lien PIK Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 334,797 | $ 325,824 |
Debt - Lien Notes (Details)
Debt - Lien Notes (Details) - USD ($) | Oct. 01, 2019 | Apr. 01, 2019 | Sep. 26, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Nov. 19, 2018 |
Debt Instrument [Line Items] | ||||||
Interest paid-in-kind | $ 9,237,000 | $ 8,208,000 | ||||
First Lien Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 750,000,000 | |||||
Debt instrument, interest rate | 8.375% | |||||
First Lien Notes | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Original principal amount (as a percent) | 25.00% | |||||
First Lien Notes | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 101.00% | |||||
First Lien Notes | Redemption Scenario Certain Other Circumstances | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 100.00% | |||||
First Lien Notes | Redemption Scenario Pacific Zonda Arbitration Settlement Award Proceeds | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | $ 75 | |||||
Redemption price (as a percent) | 100.00% | |||||
Cash proceeds (as a percent) | 50.00% | |||||
First Lien Notes | Redemption Period One | Redemption Scenario With Premium | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 100.00% | |||||
First Lien Notes | Redemption Period One | Redemption Scenario Paid With Certain Equity Offerings | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 108.375% | |||||
Percentage of principal amount that may be redeemed | 35.00% | |||||
First Lien Notes | Redemption Period One | Redemption Scenario Once Per Year Amount Plus Accrued And Unpaid Interest | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 103.00% | |||||
First Lien Notes | Redemption Period One | Redemption Scenario Once Per Year Amount Plus Accrued And Unpaid Interest | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of principal amount that may be redeemed | 10.00% | |||||
First Lien Notes | Redemption Period Two | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 104.188% | |||||
First Lien Notes | Redemption Period Three | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 102.094% | |||||
First Lien Notes | Redemption Period Four | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 100.00% | |||||
Second Lien PIK Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 273,600,000 | $ 273,600,000 | ||||
Cash interest (as a percent) | 50.00% | |||||
PIK Interest (as a percent) | 50.00% | |||||
Commitment fee | $ 23,600,000 | |||||
Second Lien PIK Notes | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 25.00% | |||||
Second Lien PIK Notes | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 101.00% | |||||
Second Lien PIK Notes | Redemption Scenario Certain Other Circumstances | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 100.00% | |||||
Second Lien PIK Notes | Redemption Scenario Pacific Zonda Arbitration Settlement Award Proceeds | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | $ 75,000,000 | |||||
Redemption price (as a percent) | 100.00% | |||||
Cash proceeds (as a percent) | 50.00% | |||||
Second Lien PIK Notes | Cash Interest | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 11.00% | 11.00% | ||||
Second Lien PIK Notes | Interest Payment in Kind | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 12.00% | 12.00% | ||||
Payment of PIK Interest | $ 17,429,000 | $ 16,873,000 | ||||
Second Lien PIK Notes | Redemption Period One | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 112.00% | |||||
Second Lien PIK Notes | Redemption Period One | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 106.00% | |||||
Second Lien PIK Notes | Redemption Period Two | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 109.00% | |||||
Second Lien PIK Notes | Redemption Period Two | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 109.00% | |||||
Second Lien PIK Notes | Redemption Period Three | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 106.00% | |||||
Second Lien PIK Notes | Redemption Period Three | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 106.00% | |||||
Second Lien PIK Notes | Redemption Period Four | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 103.00% | |||||
Second Lien PIK Notes | Redemption Period Four | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 103.00% | |||||
Second Lien PIK Notes | Redemption Period Five | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 100.00% | |||||
Second Lien PIK Notes | Redemption Period Five | Redemption Scenario Change Of Control | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price (as a percent) | 100.00% |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) $ in Millions | Feb. 07, 2020 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 50 | |
Amount drawn | $ 50 | |
Ratio of accounts receivable and unrestricted cash to commitments | 1.3 | |
Commitment fee (as a percent) | 1.50% | |
Vessel fleet value | $ 500 | |
Redemption Period One | ||
Debt Instrument [Line Items] | ||
Percentage of principal amount of such commitments | 2.00% | |
Redemption Period Two | ||
Debt Instrument [Line Items] | ||
Percentage of principal amount of such commitments | 1.00% | |
Minimum | ||
Debt Instrument [Line Items] | ||
Early repayment of line of credit allowed | $ 5 | |
Three-month LIBOR | ||
Debt Instrument [Line Items] | ||
LIBO rate floor | 1.50% | |
Interest rate (as a percent) | 7.50% |
Earnings per Share - Income and
Earnings per Share - Income and Share Data Used In Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net loss, basic and diluted | $ (60,963) | $ (83,979) |
Denominator: | ||
Weighted-average shares outstanding, basic | 75,184 | 75,031 |
Weighted-average shares outstanding, diluted | 75,184 | 75,031 |
Loss per share: | ||
Basic (in dollars per share) | $ (0.81) | $ (1.12) |
Diluted (in dollars per share) | $ (0.81) | $ (1.12) |
Earnings per Share - Share Effe
Earnings per Share - Share Effects of Share-based Compensation Awards Excluded from Computations of Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-Based Compensation Awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Share-based compensation awards (in shares) | 6,925 | 822 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Income Taxes | ||
Unrecognized Tax Benefits | $ 43,500 | $ 43,500 |
Penalties and interest accrued | $ 0 | $ 0 |
Revenue from Contracts with C_3
Revenue from Contracts with Clients (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Contract with Customer, Asset and Liability [Abstract] | ||
Trade receivables, net | $ 65,178 | $ 28,926 |
Current contract assets | 4,829 | |
Current contract liabilities (deferred revenue) | $ 5,428 | $ 7,567 |
Revenue from Contracts with C_4
Revenue from Contracts with Clients - Contract assets and liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Contract Assets | |
Increase due to demobilization revenue recognized | $ 4,966 |
Transfers between balances | (137) |
Balance at the end of period | 4,829 |
Contract Liabilities | |
Balance at the beginning of period | 7,567 |
Decrease due to amortization of deferred revenue | (7,021) |
Increase due to billings related to mobilization revenue and capital upgrades | 5,019 |
Transfers between balances | (137) |
Balance at the end of period | $ 5,428 |
Revenue from Contracts with C_5
Revenue from Contracts with Clients - Future Amortization of Contract Liabilities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Amortization of contract liabilities | $ 5,577 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Amortization of contract liabilities | $ 5,577 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 10,813 | $ 598 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 366 | 360 |
Right-of-use assets obtained in exchange for lease obligations - operating leases | $ 6,935 | |
Weighted Average Remaining Lease Term (in years) | ||
Operating leases | 4 years 6 months | 5 years 6 months |
Weighted Average Discount Rate | ||
Operating leases | 8.10% | 8.10% |
Leases - Maturity (Details)
Leases - Maturity (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
2020 (excluding three months ended March 31, 2020) | $ 1,106 |
2021 | 1,499 |
2022 | 1,525 |
2023 | 1,552 |
2024 | 1,179 |
Total future minimum lease payments | 6,861 |
Less imputed interest | (1,102) |
Total | $ 5,759 |
Leases - Balance Sheet Reportin
Leases - Balance Sheet Reporting (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
Operating lease liability current | $ 1,061 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current |
Operating lease liability noncurrent | $ 4,698 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Total | $ 5,759 |
Credit Losses (Details)
Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Jan. 01, 2020 | |
Credit Losses | ||
Allowance for doubtful receivables | $ 0 | $ 0 |
Change in credit loss allowance | $ 0 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Fair Value Disclosure | ||
Cash equivalents carrying value | $ 273,957 | $ 278,620 |
Carrying Value | First Lien Notes | ||
Fair Value Disclosure | ||
Long-term debt | 748,029 | 747,910 |
Carrying Value | Second Lien PIK Notes | ||
Fair Value Disclosure | ||
Long-term debt | 334,797 | 325,824 |
Estimated Fair Value | ||
Fair Value Disclosure | ||
Cash and cash equivalents | 273,957 | 278,620 |
Estimated Fair Value | First Lien Notes | ||
Fair Value Disclosure | ||
Long-term debt | 217,500 | 682,500 |
Estimated Fair Value | Second Lien PIK Notes | ||
Fair Value Disclosure | ||
Long-term debt | $ 32,639 | $ 183,949 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Jan. 15, 2020USD ($) | Dec. 20, 2018USD ($) | Oct. 29, 2015USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 30, 2019USD ($) | Nov. 25, 2015item | Jan. 25, 2013USD ($) |
Loss Contingencies [Line Items] | ||||||||
Cash and cash equivalents | $ 273,957 | $ 278,620 | ||||||
Construction Contract with SHI | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of arbitrators | item | 3 | |||||||
Zonda debtors | ||||||||
Loss Contingencies [Line Items] | ||||||||
Cash | $ 4,600 | |||||||
SHI | Settled litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Claim awarded to SHI | $ 320,000 | |||||||
SHI | Pending Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Interest award to be decided | $ 100,000 | |||||||
Drillships and Related Equipment | SHI | ||||||||
Loss Contingencies [Line Items] | ||||||||
Aggregate purchase price of vessels under construction | $ 517,500 | |||||||
Asserted claims | $ 387,400 | |||||||
Property and equipment | $ 75,000 | |||||||
Capital Addition Purchase Commitments | Drillships and Related Equipment | SHI | ||||||||
Loss Contingencies [Line Items] | ||||||||
Carrying value at date of rescission | 315,700 | |||||||
Payments of advances on contract to purchase drillship | $ 181,100 | |||||||
Primary Beneficiary | Surety Bond | ||||||||
Loss Contingencies [Line Items] | ||||||||
Guarantor Obligation maximum exposure | 5,400 | |||||||
Capital Lease Facility | ||||||||
Loss Contingencies [Line Items] | ||||||||
Potential aggregate borrowing capacity | 50,000 | |||||||
Revolving Credit Facility | ||||||||
Loss Contingencies [Line Items] | ||||||||
Potential aggregate borrowing capacity | $ 50,000 |
Supplemental Cash Flow inform_2
Supplemental Cash Flow information - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Supplemental Cash Flow Information | ||
Interest paid net of capitalized | $ 200,000 | $ 0 |
Income taxes paid | 600,000 | 2,000,000 |
Payment of cash for reorganization | 12,000 | 3,800,000 |
Increase (decrease) in capital expenditure | $ (4,600,000) | $ (4,400,000) |