Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Ex Transition Period | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Quintana Energy Services Inc. | |
Entity Central Index Key | 0001704235 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Emerging Growth Company | true | |
Small Business | true | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 33,452,161 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 14,937 | $ 13,804 |
Accounts receivable, net of allowance of $2,635 and $1,841 | 85,725 | 101,620 |
Unbilled receivables | 7,175 | 13,766 |
Inventories (Note 3) | 23,323 | 23,464 |
Prepaid expenses and other current assets | 2,866 | 7,481 |
Total current assets | 134,026 | 160,135 |
Property, plant and equipment, net | 120,176 | 153,878 |
Operating lease right-of-use asset (Note 6) | 12,045 | |
Intangible assets, net | 0 | 9,019 |
Other assets | 1,248 | 1,517 |
Total assets | 267,495 | 324,549 |
Current liabilities: | ||
Accounts payable | 39,559 | 51,568 |
Accrued liabilities (Note 4) | 30,819 | 37,533 |
Other current liabilities | 7,476 | 422 |
Total current liabilities | 77,854 | 89,523 |
Long-term debt (Note 5) | 33,000 | 29,500 |
Long-term operating lease liabilities | 9,044 | |
Long-term finance lease liabilities (Note 6) | 8,663 | |
Long-term finance lease liabilities (Note 6) | 3,451 | |
Deferred tax liability | 256 | 130 |
Other long-term liabilities | 10 | 125 |
Total liabilities | 128,827 | 122,729 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity: | ||
Preferred shares, $0.01 par value, 10,000,000 authorized; none issued and outstanding | 0 | 0 |
Common shares, $0.01 par value, 150,000,000 authorized; 34,547,463 issued; 33,523,588 outstanding | 354 | 344 |
Additional paid-in-capital | 356,068 | 349,080 |
Treasury shares, at cost, 1,023,875 and 232,892 common shares | (4,401) | (1,821) |
Accumulated deficit | (213,353) | (145,783) |
Total shareholders’ equity | 138,668 | 201,820 |
Total liabilities and shareholders’ equity | $ 267,495 | $ 324,549 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable, net | $ 2,635 | $ 1,841 |
Deferred financing costs, net | $ 0 | $ 0 |
Preferred shares, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common shares, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock authorized (shares) | 150,000,000 | 150,000,000 |
Common stock issued (shares) | 34,547,463 | 34,547,463 |
Common stock outstanding (shares) | 33,523,588 | 33,523,588 |
Common treasury stock (shares) | 1,023,875 | 232,892 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 121,082 | $ 150,897 | $ 388,374 | $ 444,701 |
Costs and expenses: | ||||
Direct operating costs | 101,737 | 126,925 | 332,363 | 367,616 |
General and administrative | 12,056 | 14,140 | 41,627 | 48,940 |
Depreciation and amortization | 13,229 | 12,033 | 38,785 | 34,265 |
Gain on disposition of assets | (1,116) | (629) | (1,292) | (1,329) |
Impairment and other charges | 41,543 | 0 | 41,543 | 0 |
Operating loss income | (46,367) | (1,572) | (64,652) | (4,791) |
Non-operating loss expense: | ||||
Interest expense | (898) | (574) | (2,421) | (11,199) |
Loss before income tax | (47,265) | (2,146) | (67,073) | (15,990) |
Income tax expense | (164) | (207) | (495) | (584) |
Net loss | $ (47,429) | $ (2,353) | $ (67,568) | $ (16,574) |
Net loss per common share: | ||||
Basic (USD per share) | $ (1.41) | $ (0.07) | $ (2.01) | $ (0.45) |
Diluted (USD per share) | $ (1.41) | $ (0.07) | $ (2.01) | $ (0.45) |
Weighted average common shares outstanding: | ||||
Basic (shares) | 33,533 | 33,631 | 33,673 | 33,563 |
Diluted (shares) | 33,533 | 33,631 | 33,673 | 33,563 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Shareholder's Equity - USD ($) $ in Thousands | Total | Members' Equity | Common Stock | Additional Paid in Capital | Treasury Stock | Accumulated Deficit |
Members' Equity, beginning balance (shares) at Dec. 31, 2017 | 417,441,074 | |||||
Members' Equity, beginning balance at Dec. 31, 2017 | $ 212,630 | |||||
Balance at beginning of period (shares) at Dec. 31, 2017 | 0 | |||||
Balance at beginning of period at Dec. 31, 2017 | $ 84,968 | $ 0 | $ 0 | $ 0 | $ (127,662) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ (1,546) | (1,546) | ||||
Balance at end of period (shares) at Feb. 13, 2018 | 32,857,660 | |||||
Members' Equity, beginning balance (shares) at Dec. 31, 2017 | 417,441,074 | |||||
Members' Equity, beginning balance at Dec. 31, 2017 | $ 212,630 | |||||
Balance at beginning of period (shares) at Dec. 31, 2017 | 0 | |||||
Balance at beginning of period at Dec. 31, 2017 | $ 84,968 | $ 0 | 0 | 0 | (127,662) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Effect of Reorganization Transactions (shares) | (417,441,000) | 23,598,000 | ||||
Effect of Reorganization Transactions | 33,633 | $ (212,630) | $ 236 | 246,027 | ||
Issuance of common stock sold in initial public offering, net of offering costs (shares) | 9,632,000 | |||||
Issuance of common stock sold in initial public offering, net of offering costs | 90,541 | $ 96 | 90,445 | |||
Cost incurred for stock issuance | (4,307) | (4,307) | ||||
Equity-based compensation (shares) | 401,000 | |||||
Equity-based compensation | 9,886 | $ 4 | 9,882 | |||
Opening deferred tax adjustment | 185 | 185 | ||||
Stock buyback plan activity | (1,271) | (1,271) | ||||
Members' Equity, ending balance (shares) at Mar. 31, 2018 | 0 | |||||
Members' Equity, ending balance at Mar. 31, 2018 | $ 0 | |||||
Balance at end of period (shares) at Mar. 31, 2018 | 33,631,000 | |||||
Balance at end of period at Mar. 31, 2018 | 197,279 | $ 336 | 342,047 | (1,271) | (143,833) | |
Members' Equity, beginning balance (shares) at Dec. 31, 2017 | 417,441,074 | |||||
Members' Equity, beginning balance at Dec. 31, 2017 | $ 212,630 | |||||
Balance at beginning of period (shares) at Dec. 31, 2017 | 0 | |||||
Balance at beginning of period at Dec. 31, 2017 | 84,968 | $ 0 | 0 | 0 | (127,662) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (16,574) | |||||
Members' Equity, ending balance (shares) at Sep. 30, 2018 | 0 | |||||
Members' Equity, ending balance at Sep. 30, 2018 | $ 0 | |||||
Balance at end of period (shares) at Sep. 30, 2018 | 33,631,000 | |||||
Balance at end of period at Sep. 30, 2018 | $ 201,600 | $ 342 | 346,580 | (1,271) | (144,051) | |
Balance at beginning of period (shares) at Feb. 13, 2018 | 32,857,660 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ (14,810) | (14,810) | ||||
Members' Equity, ending balance (shares) at Mar. 31, 2018 | 0 | |||||
Members' Equity, ending balance at Mar. 31, 2018 | $ 0 | |||||
Balance at end of period (shares) at Mar. 31, 2018 | 33,631,000 | |||||
Balance at end of period at Mar. 31, 2018 | $ 197,279 | $ 336 | 342,047 | (1,271) | (143,833) | |
Balance at beginning of period (shares) at Feb. 13, 2018 | 32,857,660 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ (15,028) | |||||
Members' Equity, ending balance (shares) at Sep. 30, 2018 | 0 | |||||
Members' Equity, ending balance at Sep. 30, 2018 | $ 0 | |||||
Balance at end of period (shares) at Sep. 30, 2018 | 33,631,000 | |||||
Balance at end of period at Sep. 30, 2018 | 201,600 | $ 342 | 346,580 | (1,271) | (144,051) | |
Members' Equity, beginning balance (shares) at Mar. 31, 2018 | 0 | |||||
Members' Equity, beginning balance at Mar. 31, 2018 | $ 0 | |||||
Balance at beginning of period (shares) at Mar. 31, 2018 | 33,631,000 | |||||
Balance at beginning of period at Mar. 31, 2018 | 197,279 | $ 336 | 342,047 | (1,271) | (143,833) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Effect of Reorganization Transactions | (2) | 2 | (4) | |||
Issuance of common stock sold in initial public offering, net of offering costs | 1 | 1 | ||||
Net (loss) income | 2,134 | 2,134 | ||||
Cost incurred for stock issuance | (969) | (969) | ||||
Equity-based compensation | 2,940 | $ 2 | 2,938 | |||
Members' Equity, ending balance (shares) at Jun. 30, 2018 | 0 | |||||
Members' Equity, ending balance at Jun. 30, 2018 | $ 0 | |||||
Balance at end of period (shares) at Jun. 30, 2018 | 33,631,000 | |||||
Balance at end of period at Jun. 30, 2018 | 201,383 | $ 340 | 344,013 | (1,271) | (141,699) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (2,353) | |||||
Net income subsequent to Reorganization Transactions | (2,352) | (2,352) | ||||
Equity-based compensation | 2,569 | $ 2 | 2,567 | |||
Members' Equity, ending balance (shares) at Sep. 30, 2018 | 0 | |||||
Members' Equity, ending balance at Sep. 30, 2018 | $ 0 | |||||
Balance at end of period (shares) at Sep. 30, 2018 | 33,631,000 | |||||
Balance at end of period at Sep. 30, 2018 | $ 201,600 | $ 342 | 346,580 | (1,271) | (144,051) | |
Members' Equity, beginning balance (shares) at Dec. 31, 2018 | 0 | |||||
Members' Equity, beginning balance at Dec. 31, 2018 | $ 0 | |||||
Balance at beginning of period (shares) at Dec. 31, 2018 | 33,523,588 | 33,541,000 | ||||
Balance at beginning of period at Dec. 31, 2018 | $ 201,820 | $ 344 | 349,080 | (1,821) | (145,783) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (8,861) | (8,861) | ||||
Equity-based compensation (shares) | 609,000 | |||||
Equity-based compensation | 2,751 | $ 3 | 2,748 | |||
Tax withholding on stock vesting (shares) | (177,000) | |||||
Tax withholding on stock vesting | (954) | (954) | ||||
Stock buyback plan activity (shares) | (103,000) | |||||
Stock buyback plan activity | (486) | (486) | ||||
Members' Equity, ending balance (shares) at Mar. 31, 2019 | 0 | |||||
Members' Equity, ending balance at Mar. 31, 2019 | $ 0 | |||||
Balance at end of period (shares) at Mar. 31, 2019 | 33,870,000 | |||||
Balance at end of period at Mar. 31, 2019 | $ 194,270 | $ 347 | 351,828 | (3,261) | (154,644) | |
Members' Equity, beginning balance (shares) at Dec. 31, 2018 | 0 | |||||
Members' Equity, beginning balance at Dec. 31, 2018 | $ 0 | |||||
Balance at beginning of period (shares) at Dec. 31, 2018 | 33,523,588 | 33,541,000 | ||||
Balance at beginning of period at Dec. 31, 2018 | $ 201,820 | $ 344 | 349,080 | (1,821) | (145,783) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ (67,568) | |||||
Members' Equity, ending balance (shares) at Sep. 30, 2019 | 0 | |||||
Members' Equity, ending balance at Sep. 30, 2019 | $ 0 | |||||
Balance at end of period (shares) at Sep. 30, 2019 | 33,523,588 | 33,524,000 | ||||
Balance at end of period at Sep. 30, 2019 | $ 138,668 | $ 354 | 356,068 | (4,401) | (213,353) | |
Members' Equity, beginning balance (shares) at Mar. 31, 2019 | 0 | |||||
Members' Equity, beginning balance at Mar. 31, 2019 | $ 0 | |||||
Balance at beginning of period (shares) at Mar. 31, 2019 | 33,870,000 | |||||
Balance at beginning of period at Mar. 31, 2019 | 194,270 | $ 347 | 351,828 | (3,261) | (154,644) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (11,280) | (11,280) | ||||
Equity-based compensation | 2,692 | $ 3 | 2,689 | |||
Stock buyback plan activity (shares) | (165,000) | |||||
Stock buyback plan activity | (522) | (522) | ||||
Members' Equity, ending balance (shares) at Jun. 30, 2019 | 0 | |||||
Members' Equity, ending balance at Jun. 30, 2019 | $ 0 | |||||
Balance at end of period (shares) at Jun. 30, 2019 | 33,705,000 | |||||
Balance at end of period at Jun. 30, 2019 | 185,160 | $ 350 | 354,517 | (3,783) | (165,924) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ (47,429) | (47,429) | ||||
Equity-based compensation (shares) | 165,000 | |||||
Equity-based compensation | $ 1,555 | $ 4 | 1,551 | |||
Tax withholding on stock vesting (shares) | (41,000) | |||||
Tax withholding on stock vesting | (49) | (49) | ||||
Stock buyback plan activity (shares) | (305,000) | |||||
Stock buyback plan activity | $ (569) | (569) | ||||
Members' Equity, ending balance (shares) at Sep. 30, 2019 | 0 | |||||
Members' Equity, ending balance at Sep. 30, 2019 | $ 0 | |||||
Balance at end of period (shares) at Sep. 30, 2019 | 33,523,588 | 33,524,000 | ||||
Balance at end of period at Sep. 30, 2019 | $ 138,668 | $ 354 | $ 356,068 | $ (4,401) | $ (213,353) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (67,568) | $ (16,574) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 38,785 | 34,265 |
Impairment expense | 36,215 | 0 |
Gain on disposition of assets | (8,069) | (5,256) |
Non-cash interest expense | 263 | 944 |
Loss on debt extinguishment | 0 | 8,594 |
Provision for doubtful accounts | 841 | 573 |
Deferred income tax expense | 86 | 134 |
Stock-based compensation | 6,994 | 15,395 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 15,054 | (3,986) |
Unbilled receivables | 6,591 | 164 |
Inventories | 140 | (3,809) |
Prepaid expenses and other current assets | 5,042 | 2,538 |
Other noncurrent assets | 11 | (9) |
Accounts payable | (9,725) | 4,158 |
Accrued liabilities | (4,824) | (101) |
Other long-term liabilities | (117) | (46) |
Net cash provided by operating activities | 19,719 | 36,984 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (29,078) | (53,112) |
Proceeds from sale of property, plant and equipment | 13,157 | 6,836 |
Net cash used in investing activities | (15,921) | (46,276) |
Cash flows from financing activities: | ||
Proceeds from revolving debt | 7,500 | 37,000 |
Payments on revolving debt | (4,000) | (86,071) |
Payments on term loans | 0 | (11,225) |
Payments on finance leases | (1,307) | (280) |
Payments on financed payables | (2,278) | 0 |
Payment of deferred financing costs | 0 | (1,564) |
Prepayment premiums on early debt extinguishment | 0 | (1,346) |
Payments for treasury shares | (2,580) | (1,271) |
Proceeds from new shares issuance, net of underwriting commissions | 0 | 90,542 |
Costs incurred for stock issuance | 0 | (3,174) |
Net cash (used in) financing activities | (2,665) | 22,611 |
Net increase in cash and cash equivalents | 1,133 | 13,319 |
Cash and cash equivalents beginning of period | 13,804 | 8,751 |
Cash and cash equivalents end of period | 14,937 | 22,070 |
Supplemental cash flow information | ||
Cash paid for interest | 2,058 | 1,608 |
Income taxes paid | 484 | 90 |
Supplemental non-cash investing and financing activities | ||
Fixed asset purchases in accounts payable and accrued liabilities | 2,148 | 1,989 |
Financed payables | 426 | 0 |
Non-cash finance lease additions | 8,873 | 53 |
Non-cash payment for property, plant and equipment | 0 | 3,279 |
Debt conversion of Former Term Loan to equity | 0 | 33,631 |
Issuance of common shares for members’ equity | $ 0 | $ 212,630 |
Organization and Nature of Oper
Organization and Nature of Operations and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations and Basis of Presentation | Organization and Nature of Operations and Basis of Presentation Quintana Energy Services Inc. (either individually or together with its subsidiaries, as the context requires, the “Company,” “QES,” “we,” “us,” and “our”) is a Delaware corporation that was incorporated on April 13, 2017. Our accounting predecessor, Quintana Energy Services LP (“QES LP” and “Predecessor”), was formed as a Delaware partnership on November 3, 2014. In connection with our initial public offering (the “IPO”) which closed on February 13, 2018, the existing investors in QES LP and QES Holdco LLC contributed all of their direct and indirect equity interests to QES in exchange for shares of common stock in QES, and we became the holding company for the reorganized QES LP and its subsidiaries. We are a diversified oilfield services provider of leading onshore oil and natural gas exploration and production (“E&P”) companies operating in both conventional and unconventional plays in all of the active major basins throughout the United States. The Company operates through four reporting segments which are Directional Drilling, Pressure Pumping, Pressure Control and Wireline. Initial Public Offering As of December 31, 2017, our Predecessor had approximately 417,441,074 common units outstanding and 227,885,579 warrants to purchase common units outstanding. Immediately prior to the IPO on February 13, 2018, the warrants were net settled for 223,394,762 common units, and immediately thereafter our Predecessor and affiliated entities were reorganized through mergers and related transactions and 20,235,193 shares of our common stock were issued to the holders of equity in our Predecessor at a ratio of 1 share of our common stock for 31.669363 common units of our Predecessor (with elimination of fractional shares) (the “Merger Transactions”). On February 13, 2018, immediately after the Merger Transactions, but prior to our IPO, our Predecessor’s Former Term Loan (as defined below) was extinguished and in partial consideration therefore 3,363,208 shares were issued to our Predecessor’s Former Term Loan lenders based on the price to the public of our IPO (representing 1 share of common stock for each $10.00 in Former Term Loan obligations converted) (together with the “Merger Transactions”, the “Reorganization Transactions”). The gross proceeds of the IPO to the Company, at the public offering price of $10.00 per share, were $92.6 million , which resulted in net proceeds to the Company of approximately $87.0 million , after deducting $5.6 million of underwriting discounts and commissions associated with the shares sold by the Company, excluding approximately $5.3 million in offering expenses payable by the Company. Taking together the Reorganization Transactions and the issuance of 9,259,259 shares of our common stock to the public in our IPO, as of February 13, 2018, we had 32,857,660 shares outstanding immediately following our IPO. Subsequent to our IPO, we issued 139,921 shares in connection with the vesting of awards under our Predecessor’s 2015 LTIP Plan on February 22, 2018, and 260,529 shares of our common stock were issued on March 8, 2018 in consideration of vesting of awards under our Predecessor’s 2017 LTIP which we assumed. In connection with both awards, certain shares were withheld to satisfy tax obligations of the holder of the award, which shares are currently treasury shares totaling 136,585 shares of common stock. Also in connection with the consummation of the IPO, on March 9, 2018, the underwriters exercised their overallotment option to purchase an additional 372,824 shares of common stock of QES, which resulted in additional net proceeds of approximately $3.5 million (the “Option Exercise”), net of underwriter’s discounts and commission of $0.1 million . Upon the completion of the Reorganization Transactions, the IPO and the Option Exercise, QES had 33,630,934 shares of common stock outstanding. The net proceeds received from the IPO and a $13.0 million drawdown on the New ABL Facility (described below) were used to fully repay the Company’s revolving credit facility balance of $81.1 million and repay $12.6 million of the Company’s $40.0 million , 10% Former Term Loan due 2020 , as described in “Note 4 - Long-Term Debt”. The remaining proceeds from the IPO were used for general corporate purposes. Basis of Presentation and Principles of Consolidation The accompanying interim unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These interim unaudited condensed consolidated financial accounts include all QES accounts and all of our subsidiaries. All inter-company transactions and account balances have been eliminated upon consolidation. The accompanying interim unaudited condensed consolidated financial statements have not been audited by the Company’s independent registered public accounting firm, except that the Consolidated Balance Sheet at December 31, 2018 , is derived from previously audited consolidated financial statements. In the opinion of management, all material adjustments, consisting of normal recurring adjustments, necessary for fair statement have been included. Certain reclassifications have been made to the prior year financial statements to conform to the current period financial statement presentation. These reclassification of costs between direct operating costs and general and administrative costs ("G&A") has no net impact to the condensed consolidated statements of income or to total segment reporting. Historically, and through December 31, 2018, certain direct operating costs related to business operations were classified and reported as G&A. The historical classification was consistent with the information used by our chief operating decision maker ("CODM") to assess performance of our segments and make resource allocation decisions, and the classification of such costs within the condensed consolidated statements of income was aligned with the segment presentation. Effective January 1, 2019, we changed the classification of certain of these costs in our segment reporting disclosures and within the condensed consolidated statements of income to reflect a change in the presentation of the information used by the Company’s CODM. For the three months ended September 30, 2018, we reclassified certain costs from G&A to direct operating costs, which decreased G&A by $8.4 million and increased direct operating costs by $8.4 million . For the nine months ended September 30, 2018, G&A decreased by $26.0 million and direct operating cost increased by $26.0 million . This reclassification of costs between direct operating costs and G&A has no net impact to the condensed consolidated statements of income or to total segment reporting. The change will better reflect the CODM's philosophy on assessing performance and allocating resources, as well as improve comparability to our peer group. This is a change in costs classification and has been reflected retrospectively for all periods presented. These interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Therefore, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Report”) filed with the SEC on March 8, 2019. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. There have been no material changes to the Company’s critical accounting policies or estimates from those disclosed in the 2018 Annual Report. The Company adopted certain accounting policies including the adoption of the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases, effective January 1, 2019. This ASU requires lessees to recognize an operating lease asset and a lease liability on the balance sheet. Accounting Pronouncements Recently Adopted Accounting Standard Update Leases In February 2016, the FASB issued ASU No. 2016-2, Leases ("Topic 842"), to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use ("ROU") asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related ROU asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The requirements in this update are effective during interim and annual periods beginning after December 15, 2018. The Company adopted this new guidance effective January 1, 2019. ASC 842 requires a modified retrospective approach to each lease that existed at the date of initial application as well as leases entered into after that date. Under the transition method selected by QES, leases existing at, or entered into after, January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with QES historical accounting. The Company has elected to report all leases at the beginning of the period of adoption and not restate its comparative periods. The adoption of ASU No. 2016-02 is discussed below and in Note 5 to our unaudited condensed consolidated financial statements herein. The standard had a material impact on our unaudited condensed consolidated balance sheets, but did not have an impact on our unaudited condensed consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. The Company has elected to adopt the following practical expedients upon the transition date to Topic 842 on January 1, 2019: • Transitional practical expedients package: An entity may elect to apply the listed practical expedients as a package to all the leases that commenced before the effective date. The practical expedients are: ◦ The entity need not reassess whether any expired or existing contracts are or contain leases; ◦ The entity need not reassess the lease classification for expired or existing contracts; ◦ The entity need not reassess initial direct costs for any existing leases. • Use of portfolio approach: An entity can apply this guidance to a portfolio of leases with similar characteristics if the entity reasonably expects that the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases in that portfolio. This approach can also be applied to other aspects of the lease guidance for which lessees/lessors need to make judgments and estimates, such as determining the discount rate and determining and reassessing the lease term. Accounting Standard Update not yet adopted In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This ASU is intended to simplify aspects of stock-based compensation issued to non-employees by making the guidance consistent with the accounting for employee stock-based compensation. The guidance is effective for the Company for the fiscal year beginning January 1, 2020. While the exact impact of this standard is not known, the guidance is not expected to have a material impact on the Company’s unaudited condensed consolidated financial statements, as non-employee stock compensation is nominal relative to the Company's total expenses as of September 30, 2019 . In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to update the measurement of credit losses on financial instruments. This update improves financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope by using the Current Expected Credit Losses model (CECL). This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The adoption of this ASU will not have a material impact to the Company's unaudited condensed consolidated financial statements. |
Impairments and Other Charges
Impairments and Other Charges | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Impairment and Other Charges | Impairments and Other Charges During the third quarter of 2019, QES recorded the following charges, all of which are classified as Impairments and Other Charges in the Condensed Consolidated Statements of Operations ( in thousands of U.S. dollars ): Three Months Ended September 30, 2019 Property, plant and equipment - Pressure Pumping $ 26,350 Intangible assets - Pressure Pumping 7,659 Operating lease right of use assets - Pressure Pumping 169 Property, plant and equipment - Wireline 318 Operating and finance lease right of use assets - Wireline 1,719 Total impairment 36,215 Restructuring charges 5,328 Total impairment and restructuring $ 41,543 We evaluate our long-lived assets for impairment whenever there are changes in facts which suggest that the value of the asset is not recoverable. During the third quarter of 2019, we conducted a review of our Wireline and Pressure Pumping asset groups in consideration of the completion of our fourth quarter 2019 forecast which provided additional insights into expectations of lower growth and margins for the Wireline and Pressure Pumping asset groups. As a result of our review, we determined that the fair values of these asset groups were below their respective carrying amounts and thus were not recoverable. As a result, we performed an impairment assessment for these asset groups as of September 30, 2019 using the market and income approaches to determine fair value. The review included an assessment of certain assumptions, including, but not limited to, the evaluation of expected future cash flow estimates, discount rates, capital expenditures, and estimated economic useful lives. As a result of our impairment assessment, we impaired the carrying value to estimated fair value and recognized a non-cash impairment loss of $36.2 million . QES also recorded $5.3 million in restructuring charges during the three months ended September 30, 2019. During the third quarter of 2019, the Company implemented a corporate restructuring program to align its cost structure with the current and anticipated market conditions for onshore oilfield service providers. As a result, QES recorded $2.2 million in severance related costs related to leadership and organizational structure changes primarily in its Corporate segment, $1.3 million write down of inventory at its Wireline segment due to changes in its business model, $1.6 million related to the early termination of a supply contract in its Pressure Pumping segment, and $0.2 million related to the abandonment of a facility lease at its Pressure Pumping segment. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Inventories: Consumables and materials $ 5,771 $ 7,566 Spare parts 17,552 15,898 Total Inventories $ 23,323 $ 23,464 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Current accrued liabilities: Accrued payables $ 10,649 $ 12,943 Payroll and payroll taxes 6,924 7,051 Bonus 2,356 6,117 Workers compensation insurance premiums 1,597 1,532 Sales tax 1,601 2,599 Ad valorem tax 1,897 581 Health insurance claims 1,148 921 Other accrued liabilities 4,647 5,789 Total accrued liabilities $ 30,819 $ 37,533 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Former Revolving Credit Facility The Company had a revolving credit facility (“the Former Revolving Credit Facility”), which had a maximum borrowing facility of $110.0 million that was scheduled to mature on September 19, 2018. All obligations under the credit agreement for the Former Revolving Credit Facility were collateralized by substantially all of the assets of the Company. The Revolving Credit Facility’s credit agreement contained customary restrictive covenants that required the Company not to exceed or fall below two key ratios, a maximum loan to value ratio of 70% and a minimum liquidity of $7.5 million . In connection with the closing of the IPO on February 13, 2018, we fully repaid and terminated the Former Revolving Credit Facility. No early termination fees were incurred by the Company in connection with the termination of the Former Revolving Credit Facility. A loss on extinguishment of $0.3 million relating to unamortized deferred costs was recognized in interest expense during the first quarter of 2018. Former Term Loan The Company also had a four -year, $40.0 million term loan agreement (the "Former Term Loan") with a lending group, which included Geveran Investments Limited, Archer Holdco LLC and Robertson QES Investment LLC, an affiliate of Quintana Capital Group, L.P., that was scheduled to mature on December 19, 2020. The Former Term Loan agreement contained customary restrictive covenants that required the Company not to exceed or fall below two key ratios, a maximum loan to value ratio of 77% and a minimum liquidity of $6.8 million . The interest rate on the unpaid principal was 10.0% interest per annum and accrued on a daily basis. At the end of each quarter all accrued and unpaid interest was paid in kind by capitalizing and adding to the outstanding principal balance. In connection with the closing of the IPO on February 13, 2018, the Former Term Loan was settled in full by cash and common shares in the Company. In connection with the settlement of the Former Term Loan, a prepayment fee of 3% , or approximately $1.3 million was paid. The prepayment fee is recorded as a loss on extinguishment and included within interest expense. The Company also recognized within interest expense $5.4 million of unamortized discount expense and $1.7 million of unamortized deferred financing cost in interest expense during the first quarter of 2018. New ABL Facility In connection with the closing of the IPO on February 13, 2018, we entered into a new asset-based revolving credit agreement (the “New ABL Facility”) with each lender party thereto and Bank of America, N.A. as administrative agent and collateral agent. The New ABL Facility replaced the Former Revolving Credit Facility, which was terminated in conjunction with the effectiveness of the New ABL Facility. The New ABL Facility provides for a $100.0 million revolving credit facility subject to a borrowing base. Upon closing of the New ABL Facility, the borrowing capacity was $77.6 million and $13.0 million was immediately drawn. The loan interest rate on the $33.0 million borrowings outstanding at September 30, 2019 was 4.9% . The outstanding balance is recorded as long-term debt under the New ABL Facility. At September 30, 2019 , we had $14.9 of cash and cash equivalents and $39.1 million net availability on the New ABL Facility, which resulted in a total liquidity position of $54.0 million . The New ABL Facility contains various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions) and transactions with affiliates. Certain affirmative covenants, including certain reporting requirements and requirements to establish cash dominion accounts with the administrative agent, are triggered by failing to maintain availability under the New ABL Facility at or above specified thresholds or by the existence of an event of default under the New ABL Facility. The New ABL Facility provides for some exemptions to its negative covenants allowing the Company to make certain restricted payments and investments; subject to maintaining availability under the New ABL Facility at or above a specified threshold and the absence of a default. The New ABL Facility contains a minimum fixed charge coverage ratio of 1.0 to 1.0 that is triggered when availability under the New ABL Facility falls below a specified threshold and is tested until availability exceeds a separate specified threshold for 30 consecutive days. The New ABL Facility contains events of default customary for facilities of this nature, including, but not limited, to: (i) events of default resulting from the Company's failure or the failure of any credit party to comply with covenants (including the above-referenced financial covenant during periods in which the financial covenant is tested); (ii) the occurrence of a change of control; (iii) the institution of insolvency or similar proceedings against QES or any credit party; and (iv) the occurrence of a default under any other material indebtedness QES or any guarantor may have. Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the New ABL Facility, the lenders will be able to declare any outstanding principal balance of our New ABL Facility, together with accrued and unpaid interest, to be immediately due and payable and exercise other remedies, including remedies against the collateral, as more particularly specified in the New ABL Facility. As of September 30, 2019 the Company was in compliance with all debt covenants. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases During the first quarter of 2019, the Company adopted Topic 842, effective January 1, 2019. This ASC requires lessees to recognize an operating lease asset and an operating lease liability on the balance sheet, with the exception of short-term leases. Under the transition method selected by QES, leases existing at, or entered into after, January 1, 2019 are to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with QES’s historical accounting. The adoption of this standard resulted in the recording of operating lease assets and operating lease liabilities of approximately of $29.1 million as of January 1, 2019, with no related impact on our condensed consolidated statement of shareholders' equity or condensed consolidated statement of operations. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at the lease commencement. QES elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows companies to carry forward their historical lease classification. QES made an accounting policy election by class of underlying asset not to recognize the lease liability and related right-of-use asset for leases with a term of one year or less. We have operating and finance leases for administrative offices, operations and manufacturing facilities, and certain equipment. Our leases have remaining lease terms of one year to eight years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year . Options to extend or terminate leases that are considered reasonably certain are included in our determination of the lease term. The components of lease expense were as follows ( in thousands of U.S. dollars ): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost: $ 1,328 $ 8,122 Finance lease cost: Amortization of ROU assets 684 1,269 Interest on lease liabilities 253 603 Total finance lease cost 937 1,872 Short-term lease cost: $ 109 $ 596 Supplemental cash flow information related to leases was as follows ( in thousands of U.S. dollars ): Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,222 Operating cash flows for finance leases 547 Financing cash flows for finance leases 1,337 ROU assets obtained in exchange for lease obligations: Operating leases $ 22,437 Finance leases 12,746 Supplemental balance sheet information related to leases was as follows ( in thousands of U.S. dollars, except lease term and discount rate ): September 30, 2019 Operating Leases Operating lease ROU assets $ 12,045 Other current liabilities 4,718 Long-term operating lease liabilities 9,044 Total operating lease liabilities $ 13,762 Finance Leases Property and equipment, net 9,413 Other current liabilities 2,775 Long-term finance lease liabilities 8,663 Total finance lease liabilities $ 11,438 Weighted Average Remaining Lease Term Operating leases (in years) 3.8 Finance leases (in years) 4.5 Weighted Average Discount Rate Operating leases 8.9 % Finance leases 8.6 % Maturities of lease liabilities were as follows at September 30, 2019 ( in thousands of U.S. dollars ): Operating Leases Finance Leases Remainder of 2019 $ 1,537 $ 951 2020 5,429 3,767 2021 4,457 3,712 2022 2,550 2,997 2023 921 1,150 Thereafter 1,613 1,938 Total lease payments 16,507 14,515 Less: imputed interest (2,745 ) (3,077 ) Total $ 13,762 $ 11,438 At December 31, 2018, future minimum lease payments under the Company's finance leases for the five years ending December 31, 2019 through December 31, 2023 and thereafter are as follows: $0.7 million , $0.7 million , $0.6 million , $0.6 million , $0.6 million and $1.9 million , respectively. At December 31, 2018, future minimum lease payments under the Company's operating leases for the five years ending December 31, 2019 through December 31, 2023 and thereafter are as follows: $11.0 million , $6.9 million , $6.3 million , $4.5 million , $1.1 million and $1.2 million , respectively. |
Leases | Leases During the first quarter of 2019, the Company adopted Topic 842, effective January 1, 2019. This ASC requires lessees to recognize an operating lease asset and an operating lease liability on the balance sheet, with the exception of short-term leases. Under the transition method selected by QES, leases existing at, or entered into after, January 1, 2019 are to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with QES’s historical accounting. The adoption of this standard resulted in the recording of operating lease assets and operating lease liabilities of approximately of $29.1 million as of January 1, 2019, with no related impact on our condensed consolidated statement of shareholders' equity or condensed consolidated statement of operations. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at the lease commencement. QES elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows companies to carry forward their historical lease classification. QES made an accounting policy election by class of underlying asset not to recognize the lease liability and related right-of-use asset for leases with a term of one year or less. We have operating and finance leases for administrative offices, operations and manufacturing facilities, and certain equipment. Our leases have remaining lease terms of one year to eight years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year . Options to extend or terminate leases that are considered reasonably certain are included in our determination of the lease term. The components of lease expense were as follows ( in thousands of U.S. dollars ): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost: $ 1,328 $ 8,122 Finance lease cost: Amortization of ROU assets 684 1,269 Interest on lease liabilities 253 603 Total finance lease cost 937 1,872 Short-term lease cost: $ 109 $ 596 Supplemental cash flow information related to leases was as follows ( in thousands of U.S. dollars ): Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,222 Operating cash flows for finance leases 547 Financing cash flows for finance leases 1,337 ROU assets obtained in exchange for lease obligations: Operating leases $ 22,437 Finance leases 12,746 Supplemental balance sheet information related to leases was as follows ( in thousands of U.S. dollars, except lease term and discount rate ): September 30, 2019 Operating Leases Operating lease ROU assets $ 12,045 Other current liabilities 4,718 Long-term operating lease liabilities 9,044 Total operating lease liabilities $ 13,762 Finance Leases Property and equipment, net 9,413 Other current liabilities 2,775 Long-term finance lease liabilities 8,663 Total finance lease liabilities $ 11,438 Weighted Average Remaining Lease Term Operating leases (in years) 3.8 Finance leases (in years) 4.5 Weighted Average Discount Rate Operating leases 8.9 % Finance leases 8.6 % Maturities of lease liabilities were as follows at September 30, 2019 ( in thousands of U.S. dollars ): Operating Leases Finance Leases Remainder of 2019 $ 1,537 $ 951 2020 5,429 3,767 2021 4,457 3,712 2022 2,550 2,997 2023 921 1,150 Thereafter 1,613 1,938 Total lease payments 16,507 14,515 Less: imputed interest (2,745 ) (3,077 ) Total $ 13,762 $ 11,438 At December 31, 2018, future minimum lease payments under the Company's finance leases for the five years ending December 31, 2019 through December 31, 2023 and thereafter are as follows: $0.7 million , $0.7 million , $0.6 million , $0.6 million , $0.6 million and $1.9 million , respectively. At December 31, 2018, future minimum lease payments under the Company's operating leases for the five years ending December 31, 2019 through December 31, 2023 and thereafter are as follows: $11.0 million , $6.9 million , $6.3 million , $4.5 million , $1.1 million and $1.2 million , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Quintana Energy Services LP was originally organized as a limited partnership and treated as a flow-through entity for federal and most state income tax purposes. As such, taxable income and any related tax credits were passed through to its members and were included in their tax returns. As a result of the IPO and related Reorganization Transactions, Quintana Energy Services Inc. was formed as a corporation to hold all of the operational assets of Quintana Energy Services LP. Accordingly, in 2018, a provision for federal and state corporate income taxes was only made for the operations of Quintana Energy Services Inc. from February 8, 2018 through September 30, 2018 in the unaudited condensed consolidated financial statements. The valuation allowance as of September 30, 2019 fully offsets the deferred tax assets recorded by the Company. As the Company does not operate internationally, income from continuing operations is sourced exclusively from the United States. Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any items, which are recorded in the period in which they occur. Items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rate was (0.3)% and (8.8)% for the three months ended September 30, 2019 and 2018, respectively. Our effective tax rate was (0.7)% and (4.0)% for the nine months ended September 30, 2019 and 2018, respectively. The increase in the effective tax rate for the period ended September 30, 2019 as compared to the same period in 2018 was primarily due to stock-based compensation as a result of RSU vestings and PSU forfeitures. Tax positions are evaluated for recognition using a more-likely-than-not threshold, and those tax positions requiring recognition are measured as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The Company’s policy is to record interest and penalties relating to uncertain tax positions in income tax expense. At September 30, 2019, the Company did not have any accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. The federal and state statutes of limitations have expired for all tax years prior to 2015 and we are not currently under audit by the IRS or any state jurisdiction. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company utilizes some Quintana Capital Group, L.P. affiliate employees for certain accounting and risk management functions and incurs some tool rental and maintenance charges from Archer Well Company Inc. These amounts are reimbursed by the Company on a monthly basis. At September 30, 2019 and 2018 , QES had the following transactions with related parties ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Accounts payable to affiliates of Quintana Capital Group, L.P. $ 27 $ — Accounts payable to affiliates of Archer Well Company Inc. $ 26 $ 40 Three Months Ended September 30, 2019 2018 Operating expenses from affiliates of Quintana Capital Group, L.P. $ 80 $ 81 Operating expenses from affiliates of Archer Well Company Inc. $ — $ 66 Nine Months Ended September 30, 2019 2018 Operating expenses from affiliates of Quintana Capital Group, L.P. $ 334 $ 303 Operating expenses from affiliates of Archer Well Company Inc. $ 20 $ 77 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental Regulations & Liabilities The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for the protection of the environment. The Company continues to monitor the status of these laws and regulations. However, the Company cannot predict the future impact of such standards and requirements on its business, which are subject to change and can have retroactive effectiveness. Currently, the Company has not been fined, cited or notified of any environmental violations or liabilities that would have a material adverse effect upon its condensed consolidated financial position, results of operations, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the future to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification. Litigation The Company is a defendant or otherwise involved in a number of lawsuits in the ordinary course of business. Estimates of the range of liability related to pending litigation are made when the Company believes the amount and range of loss can be estimated and records its best estimate of a loss when the loss is considered probable. When a liability is probable, and there is a range of estimated loss with no best estimate in the range, the minimum estimated liability related to the lawsuits or claims is recorded. As additional information becomes available, the potential liability related to pending litigation and claims is assessed and the estimate is revised. Due to uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ from estimates. The Company’s ultimate exposure with respect to pending lawsuits and claims is not expected to have a material adverse effect on our financial position, results of operations or cash flows. The Company previously disclosed a class action filed in 2016 against one of the Company’s subsidiaries alleging violations of state based wage and hour laws and the Fair Labor Standards Act (“FLSA”) relating to non-payment of overtime pay. The Company believes its pay practices comply with the FLSA and presented a vigorous defense. In September 2019, the District Court for the Southern District of Texas issued a Final Judgment in favor of the Company on all claims, and the time for claimants to appeal has passed. Other Commitments and Contingencies The Company is not aware of any other matter that may have a material effect on its financial position or results of operations. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information QES currently has four reportable segments: Directional Drilling, Pressure Pumping, Pressure Control and Wireline. These segments have been selected based on the Company’s CODM assessment of resource allocation and performance. The Company considers its Chief Executive Officer to be its CODM. The CODM evaluates the performance of our segments based on revenue and income measures, which include Adjusted EBITDA. Directional Drilling Our Directional Drilling segment is comprised of directional drilling services, downhole navigational and rental tools businesses and support services, including well planning and site supervision, which assists customers in the drilling and placement of complex directional and horizontal wellbores. This segment utilizes its fleet of in-house positive pulse measurement-while-drilling navigational tools, mud motors and ancillary downhole tools, as well as electromagnetic navigational systems. The demand for these services tends to be influenced primarily by customer drilling-related activity levels. We provide directional drilling and associated services to E&P companies in many of the most active areas of onshore oil and natural gas development in the United States, including the Permian Basin, Eagle Ford Shale, Mid-Continent region (including the SCOOP/STACK), Marcellus/Utica Shale and DJ/Powder River Basin. Pressure Pumping Our Pressure Pumping segment provides hydraulic fracturing stimulation services, cementing services and acidizing services. The majority of the revenues generated in this segment are derived from pressure pumping services focused on fracturing, cementing and acidizing services in the Permian Basin, Mid-Continent region and the DJ/Powder River Basin. These pressure pumping and stimulation services are primarily used in the completion, production and maintenance of oil and gas wells. Customers for this segment include large public E&P operators as well as independent oil and gas producers. Pressure Control Our Pressure Control segment supplies a wide variety of equipment, services and expertise in support of completion and workover operations throughout the United States. Its capabilities include coiled tubing, snubbing, fluid pumping, nitrogen, well control and other pressure control related services. Our Pressure Control equipment is tailored to the unconventional resources market with the ability to operate under high pressures without having to delay or cease production during completion operations. We provide our pressure control services primarily in the Mid-Continent region (including the SCOOP/STACK), Eagle Ford Shale, Permian Basin, DJ/Powder River Basin, Haynesville Shale and East Texas Basin. Wireline Our Wireline segment provides new well wireline conveyed tight-shale reservoir perforating services across many of the major U.S. shale basins and also offers a range of services such as cased-hole investigation and production logging services, conventional wireline, mechanical services and pipe recovery services. These services are offered in both new well completions and for remedial work. The majority of the revenues generated in our Wireline segment are derived from the Permian Basin, Eagle Ford Shale, Mid-Continent region (including the SCOOP/STACK), Haynesville Shale and East Texas Basin as well as in industrial and petrochemical facilities. Segment Adjusted EBITDA The Company views Adjusted EBITDA as an important indicator of segment performance. The Company defines Segment Adjusted EBITDA as net income (loss) plus income taxes, net interest expense, depreciation and amortization, impairment charges, net (gain) loss on disposition of assets - excluding (gain) loss of lost in hole assets, stock based compensation, transaction expenses, rebranding expenses, settlement expenses, restructuring expenses, impairment expenses, severance expenses and equipment stand-up expense. The CODM uses Segment Adjusted EBITDA as the primary measure of segment operating performance. The following table presents a reconciliation of Segment Adjusted EBITDA to net (loss) income ( in thousands of U.S. dollars ): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Segment Adjusted EBITDA: Directional Drilling $ 9,103 $ 6,452 $ 24,437 $ 14,273 Pressure Pumping 1,218 5,795 (1,524 ) 24,569 Pressure Control 3,670 4,421 8,495 13,673 Wireline (2,719 ) (738 ) (271 ) 2,614 Corporate and Other (3,983 ) (6,098 ) (16,753 ) (26,984 ) Impairment and other expense (41,543 ) — (41,543 ) — Income tax expense (164 ) (207 ) (495 ) (584 ) Interest expense (898 ) (574 ) (2,421 ) (11,199 ) Depreciation and amortization (13,229 ) (12,033 ) (38,785 ) (34,265 ) Gain on disposition of assets, net 1,116 629 1,292 1,329 Net loss $ (47,429 ) $ (2,353 ) $ (67,568 ) $ (16,574 ) Financial information related to the Company’s total assets position as of September 30, 2019 and December 31, 2018 , by segment, is as follows ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Directional Drilling $ 122,965 $ 105,942 Pressure Pumping 63,345 121,824 Pressure Control 71,218 70,401 Wireline 26,384 28,039 Total $ 283,912 $ 326,206 Corporate & Other 5,837 7,344 Eliminations (22,254 ) (9,001 ) Total assets $ 267,495 $ 324,549 The following tables set forth certain financial information with respect to QES’ reportable segments ( in thousands of U.S. dollars): Three Months Ended September 30, 2019 Directional Pressure Pressure Wireline Total Revenues $ 57,056 $ 27,312 $ 26,838 $ 9,876 $ 121,082 Depreciation and amortization $ 3,143 $ 5,931 $ 3,184 $ 971 $ 13,229 Capital expenditures $ 4,503 $ 874 $ 2,115 $ 65 $ 7,557 Three Months Ended September 30, 2018 Directional Pressure Pressure Wireline Total Revenues $ 50,919 $ 49,987 $ 31,138 $ 18,853 $ 150,897 Depreciation and amortization $ 2,767 $ 5,912 $ 2,378 $ 976 $ 12,033 Capital expenditures $ 2,889 $ 2,208 $ 5,716 $ 1,105 $ 11,918 Nine Months Ended September 30, 2019 Directional Drilling Pressure Pumping Pressure Control Wireline Total Revenues $ 173,392 $ 79,981 $ 83,259 $ 51,742 $ 388,374 Depreciation and amortization $ 9,181 $ 17,232 $ 9,280 $ 3,092 $ 38,785 Capital expenditures $ 13,236 $ 4,710 $ 9,526 $ 1,606 $ 29,078 Nine Months Ended September 30, 2018 Directional Pressure Pressure Wireline Total Revenues $ 132,127 $ 160,089 $ 91,063 $ 61,422 $ 444,701 Depreciation and amortization $ 7,920 $ 16,915 $ 6,459 $ 2,971 $ 34,265 Capital expenditures $ 10,244 $ 26,039 $ 15,365 $ 1,464 $ 53,112 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Performance Obligations and Transaction Price Customers generally contract with us to provide an integrated service of personnel and equipment for directional drilling, pressure pumping, pressure control or wireline services. The Company is seen by the operator as the overseer of its services and is compensated to provide an entire suite of services. QES determined that each service contract contains a single performance obligation, which is each day’s service. In addition, each day’s service is within the scope of the series guidance as both criteria of series guidance are met per ASC 606: 1) each distinct increment of service (i.e. days available to supervise or number of stages determined at contract inception) that the Company agrees to transfer represents a performance obligation that meets the criteria for recognizing revenue over time, and 2) the Company would use the same method for measuring progress toward satisfaction of the performance obligation for each distinct increment of service in the series. Therefore, the Company has determined that each service contract contains one single performance obligation, which is the series of each distinct daily service rendered. The transaction price for the Company’s service contracts is based on the amount of consideration the Company expects to receive for providing the services over the specified term and includes both fixed amounts and unconstrained variable amounts. In addition, the contract term may impact the determination and allocation of the transaction price and recognition of revenue. As the Company’s contracts do not stipulate substantive termination penalties, the contract is treated as day to day. Typically, the only fixed or known consideration at contract inception is initial mobilization and demobilization (where it is contractually guaranteed). In cases where the demobilization fee is not fixed, the Company estimates the variable consideration using the expected value method and includes this in the transaction price to the extent it is not constrained. Variable consideration is generally constrained if it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. As the contracts are not enforceable, the contract price should not include any estimation for the day rate or stage rate charges. Recognition of Revenue Directional drilling, pressure pumping, pressure control and wireline services are consumed as the services are performed and generally enhances the customer or operators well site. Work performed on a well site does not create an asset with an alternative use to the contractor since the well/asset being worked on is owned by the customer. Therefore, the Company’s measure of progress for our contracts are hours available to provide the services over the contracted duration. This unit of measure is representative of an output method as described in ASC 606. The following chart details the types of fees found in a typical service contract and the related recognition method under ASC 606: Fee type Revenue Recognition Day rate Revenue is recognized based on the day rates earned as it relates to the level of service provided for each day throughout the contract. Initial mobilization Revenue is estimated at contract inception and included in the transaction price to be recognized ratably over contract term. Demobilization Unconstrained demobilization revenue is estimated at contract inception, included in the transaction price, and recognized ratably over the contract term. Reimbursement Recognized (gross of costs incurred) at the amount billed to the customer. Disaggregation of Revenue The Company discloses a reconciliation of the disaggregated revenue with the reported results in "Note 9 - Segment Information." Future Performance Obligations and Financing Arrangements As our contracts are day to day and short-term in nature, the Company determined that it does not have material future performance obligations or financing arrangements under its service contracts. Payments are typically due within 30 days after the services are rendered. The timing between the recognition of revenue and receipt of payment is not significant. No contract assets or liabilities were recognized related to contracts with our customers. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation As of September 30, 2019 , the Company had three types of stock-based compensation under the Company's 2018 Long-Term Incentive Plan (i) restricted stock awards ("RSA") issued to directors (ii) restricted stock units (“RSU”) issued to executive officers and other key employees and (iii) performance stock units (“PSU”), which are RSUs with performance requirements, issued to executive officers and other senior management. Stock-based compensation issued prior to the Company’s IPO was subject to a dual vesting component, one of which was the time vesting component and the other was the consummation of a specified transaction, which included a public offering. As the public offering occurred on February 9, 2018, there was no stock-based compensation expense recognized in periods prior to the IPO. The stock-based compensation awards and units are classified as equity awards as they are settled in shares of QES common stock. The following table summarizes stock-based compensation costs for the three months ended September 30, 2019 and 2018 (in thousands of U.S. dollars): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Restricted stock awards $ 145 $ 144 $ 455 $ 294 Restricted stock units 1,500 1,886 5,853 14,353 Performance stock units (94 ) 539 686 748 Stock-based compensation expense $ 1,551 $ 2,569 $ 6,994 $ 15,395 i. Restricted Stock Awards In March 2018, the Company's Compensation Committee of the Board of Directors approved the issuance of RSAs to the Company's non-executive directors. During the second quarter 2018, we granted 57,145 RSAs, which had a grant date fair value of $8.75 per share. The stock awards fully vested in February 2019. The Company recognized these RSAs at fair value based on the closing price of the Company's common stock on the date of grant. The compensation expense associated with these RSAs will be amortized into income on a straight-line basis over the vesting period. In January 2019, the Company's Compensation Committee of the Board of Directors approved the issuance of RSAs to the Company's non-executive directors. We granted 140,844 RSAs, which had a grant date fair value of $4.26 per share. The stock awards will fully vest in February 2020. As of September 30, 2019 and 2018, the total unamortized compensation costs related to the non-executive RSAs was $0.2 million , which the Company expects to recognize over the remaining vesting period of 0.3 years . ii. Restricted Stock Units During the second quarter 2018, executive officers and key employees were granted a total of 476,042 RSUs, net of forfeitures, under the 2018 Long-Term Incentive Plan. These RSUs vest ratably over a three -year service condition with one-third vesting on each anniversary of the Company’s IPO provided that the employee remains employed by the Company at the applicable vesting date. During the first quarter 2019, executive officers and key employees were granted a total of 897,967 RSUs, net of forfeitures, under the 2018 Long-Term Incentive Plan. These RSUs vest ratably over a three -year service condition with one-third vesting on each anniversary of the RSU's grant date provided that the employee remains employed by the Company at the applicable vesting date. The Company recognized these RSUs at fair value based on the closing price of the Company's common stock on the date of grant. The compensation expense associated with these RSUs will be amortized into income on a straight-line basis over the vesting period. As of September 30, 2019 and 2018 total unamortized compensation cost related to unvested restricted stock units were $ 11.0 million and $18.9 million , respectively, which the Company expects to recognize over the remaining weighted-average period of 1.85 years . During the third quarter the Company made certain changes to its leadership and organizational structure, which included the departure of certain officers and employees of the Company. As a result of the departures, 84,847 RSUs were forfeited and the $0.9 million of previously recognized RSU stock compensation expense was reversed during the three months ended September 30, 2019. In addition to the forfeitures, 164,867 previously unvested RSUs were accelerated resulting in $0.3 million of stock compensation expense recognized as a part of the departures. A summary of the status and changes during the three and nine months ended September 30, 2019 of the Company’s shares of non-vested RSUs is as follows: Number of Shares (in thousands) Grant Date Fair Value per Share Weighted Average Remaining Life (in years) Outstanding at December 31, 2018: 1,551 $ 15.74 2.36 Granted 898 4.26 2.87 Forfeited (13 ) 15.46 — Vested (509 ) 14.77 — Outstanding at March 31, 2019: 1,927 $ 10.65 2.35 Granted — — — Forfeited — — — Vested — — — Outstanding at June 30, 2019 1,927 $ 10.65 2.10 Granted — — — Forfeited (85 ) — — Vested (165 ) — — Outstanding at September 30, 2019 1,677 $ 10.65 1.85 iii. Performance Stock Units During the second quarter 2018, executive officers and senior management were granted a total of 425,083 PSUs under the 2018 Long-Term Incentive Plan. The PSUs were subject to both a performance and service requirement. The PSUs required the achievement of a certain performance as measured on December 31, 2018, based on (i) the Company’s performance with respect to relative total stockholder return and (ii) the Company’s performance with respect to absolute total stockholder return. Any PSUs that were not earned at the end of the performance period were forfeited. As a result of not fully achieving the performance measure, 297,558 PSUs were forfeited. The remaining 127,525 PSUs were earned and should the grantee satisfy the service requirement applicable to such earned performance share unit, vesting shall occur in equal installments on the first three anniversaries of the Company’s IPO. During the first quarter 2019, executive officers and senior management were awarded a total of 646,966 PSUs under the 2018 Long-Term Incentive Plan. The PSUs are subject to both a performance and service requirement. Under current accounting guidance 323,483 of the awarded 646,966 PSU are accounted for as being granted. These 323,483 PSUs still require the achievement of a certain performance as measured on December 31, 2019, based on the Company’s performance with respect to relative total stockholder return and the other 323,483 PSUs, which were awarded but are not yet considered granted, are based on the performance of management and the Company during the period between January 1, 2019 and December 31, 2019 determined by the Board's compensation committee. Any PSUs that have not been earned at the end of a performance period will be forfeited. Should the grantee satisfy the service requirement applicable to such earned performance share unit, vesting shall occur in equal installments on the first three anniversaries of the award date. The Company recognized the 323,483 PSUs deemed granted at their fair value determined using the Monte Carlo simulation model. The compensation expense associated with these PSUs will be amortized on a graded straight line basis over the vesting period. The PSUs that were awarded but not yet granted will be deemed granted on the date the Board's compensation committee determines how many PSUs have been earned. These additional earned PSUs will then be amortized on a straight line basis over the remaining vesting period, based on the grant date stock price. As of September 30, 2019 and 2018, the total unamortized compensation cost related to unvested PSUs was $ 1.0 million and $1.6 million , respectively. The Company expects to recognize the expense over the remaining weighted-average period of 2.16 years . During the third quarter the Company made certain changes to its leadership and organizational structure, which included the departure of certain officers and employees of the Company. As a result of the departures, 75,217 PSUs were forfeited and the $0.4 million of previously recognized PSU stock compensation expense was reversed during the three months ended September 30, 2019. A summary of the outstanding PSUs for the three and nine months ended September 30, 2019 is as follows: Number of Shares (in thousands) Grant Date Fair Value per Share Weighted Average Remaining Life (in years) Outstanding at December 31, 2018: 128 $ 5.49 2.11 Granted 323 3.98 2.87 Forfeited (1 ) — — Vested (43 ) — — Outstanding at March 31, 2019: 407 $ 4.29 2.66 Granted — — — Forfeited — — — Vested — — — Outstanding at June 30, 2019 407 $ 4.29 2.41 Granted — — — Forfeited (75 ) — — Vested — — — Outstanding at September 30, 2019 332 $ 4.29 2.16 |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share (“EPS”) is based on the weighted average number of common shares outstanding during the period. A reconciliation of the number of shares used for the basic EPS computation is as follows ( in thousands, except per share amounts ): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss attributed to common share holders $ (47,429 ) $ (2,353 ) $ (67,568 ) $ (15,028 ) Denominator: Weighted average common shares outstanding - basic 33,533 33,631 33,673 33,563 Weighted average common shares outstanding - diluted 33,533 33,631 33,673 33,563 Net loss per common share: Basic $ (1.41 ) $ (0.07 ) $ (2.01 ) $ (0.45 ) Diluted $ (1.41 ) $ (0.07 ) $ (2.01 ) $ (0.45 ) Potentially dilutive securities excluded as anti-dilutive 1 2,150 2,050 2,150 2,050 1 The Company's potentially dilutive securities include outstanding RSAs, RSUs and PSUs. |
Organization and Nature of Op_2
Organization and Nature of Operations and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying interim unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These interim unaudited condensed consolidated financial accounts include all QES accounts and all of our subsidiaries. All inter-company transactions and account balances have been eliminated upon consolidation. The accompanying interim unaudited condensed consolidated financial statements have not been audited by the Company’s independent registered public accounting firm, except that the Consolidated Balance Sheet at December 31, 2018 , is derived from previously audited consolidated financial statements. In the opinion of management, all material adjustments, consisting of normal recurring adjustments, necessary for fair statement have been included. Certain reclassifications have been made to the prior year financial statements to conform to the current period financial statement presentation. These reclassification of costs between direct operating costs and general and administrative costs ("G&A") has no net impact to the condensed consolidated statements of income or to total segment reporting. Historically, and through December 31, 2018, certain direct operating costs related to business operations were classified and reported as G&A. The historical classification was consistent with the information used by our chief operating decision maker ("CODM") to assess performance of our segments and make resource allocation decisions, and the classification of such costs within the condensed consolidated statements of income was aligned with the segment presentation. Effective January 1, 2019, we changed the classification of certain of these costs in our segment reporting disclosures and within the condensed consolidated statements of income to reflect a change in the presentation of the information used by the Company’s CODM. For the three months ended September 30, 2018, we reclassified certain costs from G&A to direct operating costs, which decreased G&A by $8.4 million and increased direct operating costs by $8.4 million . For the nine months ended September 30, 2018, G&A decreased by $26.0 million and direct operating cost increased by $26.0 million . This reclassification of costs between direct operating costs and G&A has no net impact to the condensed consolidated statements of income or to total segment reporting. The change will better reflect the CODM's philosophy on assessing performance and allocating resources, as well as improve comparability to our peer group. This is a change in costs classification and has been reflected retrospectively for all periods presented. These interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. Therefore, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Report”) filed with the SEC on March 8, 2019. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. There have been no material changes to the Company’s critical accounting policies or estimates from those disclosed in the 2018 Annual Report. The Company adopted certain accounting policies including the adoption of the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases, effective January 1, 2019. This ASU requires lessees to recognize an operating lease asset and a lease liability on the balance sheet. |
Accounting Pronouncements | Accounting Pronouncements Recently Adopted Accounting Standard Update Leases In February 2016, the FASB issued ASU No. 2016-2, Leases ("Topic 842"), to provide guidance for the accounting for leasing transactions. The standard requires the lessee to recognize a lease liability along with a right-of-use ("ROU") asset for all leases with a term longer than one year. A lessee is permitted to make an accounting policy election by class of underlying asset to not recognize the lease liability and related ROU asset for leases with a term of one year or less. The provisions of this standard also apply to situations where the Company is the lessor. The requirements in this update are effective during interim and annual periods beginning after December 15, 2018. The Company adopted this new guidance effective January 1, 2019. ASC 842 requires a modified retrospective approach to each lease that existed at the date of initial application as well as leases entered into after that date. Under the transition method selected by QES, leases existing at, or entered into after, January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with QES historical accounting. The Company has elected to report all leases at the beginning of the period of adoption and not restate its comparative periods. The adoption of ASU No. 2016-02 is discussed below and in Note 5 to our unaudited condensed consolidated financial statements herein. The standard had a material impact on our unaudited condensed consolidated balance sheets, but did not have an impact on our unaudited condensed consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. The Company has elected to adopt the following practical expedients upon the transition date to Topic 842 on January 1, 2019: • Transitional practical expedients package: An entity may elect to apply the listed practical expedients as a package to all the leases that commenced before the effective date. The practical expedients are: ◦ The entity need not reassess whether any expired or existing contracts are or contain leases; ◦ The entity need not reassess the lease classification for expired or existing contracts; ◦ The entity need not reassess initial direct costs for any existing leases. • Use of portfolio approach: An entity can apply this guidance to a portfolio of leases with similar characteristics if the entity reasonably expects that the application of the lease model to the portfolio would not differ materially from the application of the lease model to the individual leases in that portfolio. This approach can also be applied to other aspects of the lease guidance for which lessees/lessors need to make judgments and estimates, such as determining the discount rate and determining and reassessing the lease term. Accounting Standard Update not yet adopted In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This ASU is intended to simplify aspects of stock-based compensation issued to non-employees by making the guidance consistent with the accounting for employee stock-based compensation. The guidance is effective for the Company for the fiscal year beginning January 1, 2020. While the exact impact of this standard is not known, the guidance is not expected to have a material impact on the Company’s unaudited condensed consolidated financial statements, as non-employee stock compensation is nominal relative to the Company's total expenses as of September 30, 2019 . In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to update the measurement of credit losses on financial instruments. This update improves financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope by using the Current Expected Credit Losses model (CECL). This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The adoption of this ASU will not have a material impact to the Company's unaudited condensed consolidated financial statements. |
Income Tax | Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any items, which are recorded in the period in which they occur. Items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rate was (0.3)% and (8.8)% for the three months ended September 30, 2019 and 2018, respectively. Our effective tax rate was (0.7)% and (4.0)% for the nine months ended September 30, 2019 and 2018, respectively. The increase in the effective tax rate for the period ended September 30, 2019 as compared to the same period in 2018 was primarily due to stock-based compensation as a result of RSU vestings and PSU forfeitures. Tax positions are evaluated for recognition using a more-likely-than-not threshold, and those tax positions requiring recognition are measured as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The Company’s policy is to record interest and penalties relating to uncertain tax positions in income tax expense. |
Impairments and Other Charges (
Impairments and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Impairments and Other Charges | During the third quarter of 2019, QES recorded the following charges, all of which are classified as Impairments and Other Charges in the Condensed Consolidated Statements of Operations ( in thousands of U.S. dollars ): Three Months Ended September 30, 2019 Property, plant and equipment - Pressure Pumping $ 26,350 Intangible assets - Pressure Pumping 7,659 Operating lease right of use assets - Pressure Pumping 169 Property, plant and equipment - Wireline 318 Operating and finance lease right of use assets - Wireline 1,719 Total impairment 36,215 Restructuring charges 5,328 Total impairment and restructuring $ 41,543 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Inventories: Consumables and materials $ 5,771 $ 7,566 Spare parts 17,552 15,898 Total Inventories $ 23,323 $ 23,464 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Current accrued liabilities: Accrued payables $ 10,649 $ 12,943 Payroll and payroll taxes 6,924 7,051 Bonus 2,356 6,117 Workers compensation insurance premiums 1,597 1,532 Sales tax 1,601 2,599 Ad valorem tax 1,897 581 Health insurance claims 1,148 921 Other accrued liabilities 4,647 5,789 Total accrued liabilities $ 30,819 $ 37,533 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Information Related to Leases | The components of lease expense were as follows ( in thousands of U.S. dollars ): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost: $ 1,328 $ 8,122 Finance lease cost: Amortization of ROU assets 684 1,269 Interest on lease liabilities 253 603 Total finance lease cost 937 1,872 Short-term lease cost: $ 109 $ 596 Supplemental cash flow information related to leases was as follows ( in thousands of U.S. dollars ): Nine Months Ended September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,222 Operating cash flows for finance leases 547 Financing cash flows for finance leases 1,337 ROU assets obtained in exchange for lease obligations: Operating leases $ 22,437 Finance leases 12,746 |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows ( in thousands of U.S. dollars, except lease term and discount rate ): September 30, 2019 Operating Leases Operating lease ROU assets $ 12,045 Other current liabilities 4,718 Long-term operating lease liabilities 9,044 Total operating lease liabilities $ 13,762 Finance Leases Property and equipment, net 9,413 Other current liabilities 2,775 Long-term finance lease liabilities 8,663 Total finance lease liabilities $ 11,438 Weighted Average Remaining Lease Term Operating leases (in years) 3.8 Finance leases (in years) 4.5 Weighted Average Discount Rate Operating leases 8.9 % Finance leases 8.6 % |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows at September 30, 2019 ( in thousands of U.S. dollars ): Operating Leases Finance Leases Remainder of 2019 $ 1,537 $ 951 2020 5,429 3,767 2021 4,457 3,712 2022 2,550 2,997 2023 921 1,150 Thereafter 1,613 1,938 Total lease payments 16,507 14,515 Less: imputed interest (2,745 ) (3,077 ) Total $ 13,762 $ 11,438 |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows at September 30, 2019 ( in thousands of U.S. dollars ): Operating Leases Finance Leases Remainder of 2019 $ 1,537 $ 951 2020 5,429 3,767 2021 4,457 3,712 2022 2,550 2,997 2023 921 1,150 Thereafter 1,613 1,938 Total lease payments 16,507 14,515 Less: imputed interest (2,745 ) (3,077 ) Total $ 13,762 $ 11,438 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Transactions with Related Parties | At September 30, 2019 and 2018 , QES had the following transactions with related parties ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Accounts payable to affiliates of Quintana Capital Group, L.P. $ 27 $ — Accounts payable to affiliates of Archer Well Company Inc. $ 26 $ 40 Three Months Ended September 30, 2019 2018 Operating expenses from affiliates of Quintana Capital Group, L.P. $ 80 $ 81 Operating expenses from affiliates of Archer Well Company Inc. $ — $ 66 Nine Months Ended September 30, 2019 2018 Operating expenses from affiliates of Quintana Capital Group, L.P. $ 334 $ 303 Operating expenses from affiliates of Archer Well Company Inc. $ 20 $ 77 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Segment Adjusted EBITDA to Net Loss | The following table presents a reconciliation of Segment Adjusted EBITDA to net (loss) income ( in thousands of U.S. dollars ): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Segment Adjusted EBITDA: Directional Drilling $ 9,103 $ 6,452 $ 24,437 $ 14,273 Pressure Pumping 1,218 5,795 (1,524 ) 24,569 Pressure Control 3,670 4,421 8,495 13,673 Wireline (2,719 ) (738 ) (271 ) 2,614 Corporate and Other (3,983 ) (6,098 ) (16,753 ) (26,984 ) Impairment and other expense (41,543 ) — (41,543 ) — Income tax expense (164 ) (207 ) (495 ) (584 ) Interest expense (898 ) (574 ) (2,421 ) (11,199 ) Depreciation and amortization (13,229 ) (12,033 ) (38,785 ) (34,265 ) Gain on disposition of assets, net 1,116 629 1,292 1,329 Net loss $ (47,429 ) $ (2,353 ) $ (67,568 ) $ (16,574 ) |
Schedule of Financial Information Related to Assets Position | Financial information related to the Company’s total assets position as of September 30, 2019 and December 31, 2018 , by segment, is as follows ( in thousands of U.S. dollars ): September 30, 2019 December 31, 2018 Directional Drilling $ 122,965 $ 105,942 Pressure Pumping 63,345 121,824 Pressure Control 71,218 70,401 Wireline 26,384 28,039 Total $ 283,912 $ 326,206 Corporate & Other 5,837 7,344 Eliminations (22,254 ) (9,001 ) Total assets $ 267,495 $ 324,549 |
Schedule of Financial Information with Respect to Reportable Segments | The following tables set forth certain financial information with respect to QES’ reportable segments ( in thousands of U.S. dollars): Three Months Ended September 30, 2019 Directional Pressure Pressure Wireline Total Revenues $ 57,056 $ 27,312 $ 26,838 $ 9,876 $ 121,082 Depreciation and amortization $ 3,143 $ 5,931 $ 3,184 $ 971 $ 13,229 Capital expenditures $ 4,503 $ 874 $ 2,115 $ 65 $ 7,557 Three Months Ended September 30, 2018 Directional Pressure Pressure Wireline Total Revenues $ 50,919 $ 49,987 $ 31,138 $ 18,853 $ 150,897 Depreciation and amortization $ 2,767 $ 5,912 $ 2,378 $ 976 $ 12,033 Capital expenditures $ 2,889 $ 2,208 $ 5,716 $ 1,105 $ 11,918 Nine Months Ended September 30, 2019 Directional Drilling Pressure Pumping Pressure Control Wireline Total Revenues $ 173,392 $ 79,981 $ 83,259 $ 51,742 $ 388,374 Depreciation and amortization $ 9,181 $ 17,232 $ 9,280 $ 3,092 $ 38,785 Capital expenditures $ 13,236 $ 4,710 $ 9,526 $ 1,606 $ 29,078 Nine Months Ended September 30, 2018 Directional Pressure Pressure Wireline Total Revenues $ 132,127 $ 160,089 $ 91,063 $ 61,422 $ 444,701 Depreciation and amortization $ 7,920 $ 16,915 $ 6,459 $ 2,971 $ 34,265 Capital expenditures $ 10,244 $ 26,039 $ 15,365 $ 1,464 $ 53,112 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Types of Fees in Typical Service Contract and Related Recognition | The following chart details the types of fees found in a typical service contract and the related recognition method under ASC 606: Fee type Revenue Recognition Day rate Revenue is recognized based on the day rates earned as it relates to the level of service provided for each day throughout the contract. Initial mobilization Revenue is estimated at contract inception and included in the transaction price to be recognized ratably over contract term. Demobilization Unconstrained demobilization revenue is estimated at contract inception, included in the transaction price, and recognized ratably over the contract term. Reimbursement Recognized (gross of costs incurred) at the amount billed to the customer. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Costs | The following table summarizes stock-based compensation costs for the three months ended September 30, 2019 and 2018 (in thousands of U.S. dollars): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Restricted stock awards $ 145 $ 144 $ 455 $ 294 Restricted stock units 1,500 1,886 5,853 14,353 Performance stock units (94 ) 539 686 748 Stock-based compensation expense $ 1,551 $ 2,569 $ 6,994 $ 15,395 |
Schedule of Status and Changes of Non-vested RSUs | A summary of the status and changes during the three and nine months ended September 30, 2019 of the Company’s shares of non-vested RSUs is as follows: Number of Shares (in thousands) Grant Date Fair Value per Share Weighted Average Remaining Life (in years) Outstanding at December 31, 2018: 1,551 $ 15.74 2.36 Granted 898 4.26 2.87 Forfeited (13 ) 15.46 — Vested (509 ) 14.77 — Outstanding at March 31, 2019: 1,927 $ 10.65 2.35 Granted — — — Forfeited — — — Vested — — — Outstanding at June 30, 2019 1,927 $ 10.65 2.10 Granted — — — Forfeited (85 ) — — Vested (165 ) — — Outstanding at September 30, 2019 1,677 $ 10.65 1.85 |
Schedule of Status and Changes of Outstanding PSUs | A summary of the outstanding PSUs for the three and nine months ended September 30, 2019 is as follows: Number of Shares (in thousands) Grant Date Fair Value per Share Weighted Average Remaining Life (in years) Outstanding at December 31, 2018: 128 $ 5.49 2.11 Granted 323 3.98 2.87 Forfeited (1 ) — — Vested (43 ) — — Outstanding at March 31, 2019: 407 $ 4.29 2.66 Granted — — — Forfeited — — — Vested — — — Outstanding at June 30, 2019 407 $ 4.29 2.41 Granted — — — Forfeited (75 ) — — Vested — — — Outstanding at September 30, 2019 332 $ 4.29 2.16 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Number of Shares Used for the Basic EPS Computation | A reconciliation of the number of shares used for the basic EPS computation is as follows ( in thousands, except per share amounts ): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net loss attributed to common share holders $ (47,429 ) $ (2,353 ) $ (67,568 ) $ (15,028 ) Denominator: Weighted average common shares outstanding - basic 33,533 33,631 33,673 33,563 Weighted average common shares outstanding - diluted 33,533 33,631 33,673 33,563 Net loss per common share: Basic $ (1.41 ) $ (0.07 ) $ (2.01 ) $ (0.45 ) Diluted $ (1.41 ) $ (0.07 ) $ (2.01 ) $ (0.45 ) Potentially dilutive securities excluded as anti-dilutive 1 2,150 2,050 2,150 2,050 |
Organization and Nature of Op_3
Organization and Nature of Operations and Basis of Presentation - Narrative (Details) $ / shares in Units, $ in Thousands | Mar. 09, 2018USD ($)shares | Mar. 08, 2018shares | Feb. 22, 2018shares | Feb. 13, 2018USD ($)$ / sharesshares | Dec. 31, 2017shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2019USD ($)Segmentshares | Sep. 30, 2018USD ($)shares | Jun. 30, 2019shares | Mar. 31, 2019shares | Dec. 31, 2018shares | Jun. 30, 2018shares | Mar. 31, 2018shares | Mar. 10, 2018shares |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Number of reportable segments | Segment | 4 | ||||||||||||||
Warrants to purchase common units outstanding (warrants) | shares | 227,885,579 | ||||||||||||||
Stock issued holders of equity (shares) | shares | 20,235,193 | ||||||||||||||
Offering expense | $ 0 | $ 3,174 | |||||||||||||
Common stock outstanding (shares) | shares | 32,857,660 | 33,523,588 | 33,523,588 | 33,523,588 | 33,630,934 | ||||||||||
Stock withheld to satisfy tax obligations of holder of award (shares) | shares | 136,585 | ||||||||||||||
Repayment of revolving credit facility | $ 4,000 | 86,071 | |||||||||||||
Decrease to general and administrative costs | $ (12,056) | $ (14,140) | (41,627) | (48,940) | |||||||||||
Increase to direct operating costs | 101,737 | $ 126,925 | 332,363 | $ 367,616 | |||||||||||
2015 Long Term Incentive Plan | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Stock issued in connection with vesting of awards (shares) | shares | 139,921 | ||||||||||||||
2017 Long Term Incentive Plan | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Stock issued in connection with vesting of awards (shares) | shares | 260,529 | ||||||||||||||
IPO | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Gross proceeds from public offering | $ 92,600 | ||||||||||||||
Net proceeds on issuance of common stock after deducting underwriting discounts and commissions | 87,000 | ||||||||||||||
Underwriting discounts and commissions | 5,600 | ||||||||||||||
Offering expense | $ 5,300 | ||||||||||||||
Issuance of common stock sold in initial public offering, net of offering costs (shares) | shares | 9,259,259 | ||||||||||||||
Over-Allotment Option | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Net proceeds on issuance of common stock after deducting underwriting discounts and commissions | $ 3,500 | ||||||||||||||
Underwriting discounts and commissions | $ 100 | ||||||||||||||
Issuance of common stock sold in initial public offering, net of offering costs (shares) | shares | 372,824 | ||||||||||||||
Former Term Loan | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Stock issued to settle debt (shares) | shares | 3,363,208 | ||||||||||||||
Public offering price (USD per share) | $ / shares | $ 10 | ||||||||||||||
Term Loan | $ 40,000 | 40,000 | |||||||||||||
Repayment of term loan | $ 12,600 | ||||||||||||||
Interest rate (as a percent) | 10.00% | 10.00% | |||||||||||||
Term loan maturity period | 2020 | ||||||||||||||
New ABL Facility | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Term Loan | $ 13,000 | $ 33,000 | $ 33,000 | ||||||||||||
Revolving credit facility | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Repayment of revolving credit facility | $ 81,100 | ||||||||||||||
Member Units | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Common units outstanding with Predecessor (units) | shares | 417,441,074 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Ratio of shares issued | 31.669363 | ||||||||||||||
Warrant | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Stock issued to settle warrants (shares) | shares | 223,394,762 | ||||||||||||||
Restatement Adjustment | |||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||
Decrease to general and administrative costs | $ 8,400 | $ 26,000 | |||||||||||||
Increase to direct operating costs | $ 8,400 | $ 26,000 |
Impairments and Other Charges -
Impairments and Other Charges - Schedule of Impairments and Other Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Impairment expense | $ 36,215 | $ 36,215 | $ 0 | |
Restructuring charges | 5,328 | |||
Impairment and other charges | 41,543 | $ 0 | $ 41,543 | $ 0 |
Pressure Pumping | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment impairment | 26,350 | |||
Impairment of intangible assets | 7,659 | |||
Operating lease impairment loss | 169 | |||
Wireline | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment impairment | 318 | |||
Operating and finance Lease impairment loss | $ 1,719 |
Impairments and Other Charges_2
Impairments and Other Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Impairment expense | $ 36,215 | $ 36,215 | $ 0 |
Restructuring charges | 5,328 | ||
Employee Severance | |||
Property, Plant and Equipment [Line Items] | |||
Restructuring charges | 2,200 | ||
Write-Down Of Inventory | Wireline | |||
Property, Plant and Equipment [Line Items] | |||
Restructuring charges | 1,300 | ||
Contract Termination | Pressure Pumping | |||
Property, Plant and Equipment [Line Items] | |||
Restructuring charges | 1,600 | ||
Lease Abandonment | Pressure Pumping | |||
Property, Plant and Equipment [Line Items] | |||
Restructuring charges | $ 200 |
Inventories - Summary (Details)
Inventories - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Consumables and materials | $ 5,771 | $ 7,566 |
Spare parts | 17,552 | 15,898 |
Total Inventories | $ 23,323 | $ 23,464 |
Accrued Liabilities - Summary (
Accrued Liabilities - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current accrued liabilities: | ||
Accrued payables | $ 10,649 | $ 12,943 |
Payroll and payroll taxes | 6,924 | 7,051 |
Bonus | 2,356 | 6,117 |
Workers compensation insurance premiums | 1,597 | 1,532 |
Sales tax | 1,601 | 2,599 |
Ad valorem tax | 1,897 | 581 |
Health insurance claims | 1,148 | 921 |
Other accrued liabilities | 4,647 | 5,789 |
Total accrued liabilities | $ 30,819 | $ 37,533 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Feb. 13, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)d | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Cash and cash equivalents | $ 14,937,000 | $ 13,804,000 | ||
Former Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing facility | $ 110,000,000 | |||
Maximum loan to value ratio (as a percent) | 70.00% | |||
Minimum liquidity amount | $ 7,500,000 | |||
Loss on extinguishment of unamortized deferred costs | $ 300,000 | |||
Former Term Loan | ||||
Debt Instrument [Line Items] | ||||
Term Loan | 40,000,000 | |||
Former Term Loan | Archer Well Company Inc. | ||||
Debt Instrument [Line Items] | ||||
Maximum loan to value ratio (as a percent) | 77.00% | |||
Minimum liquidity amount | $ 6,800,000 | |||
Term of debt instrument | 4 years | |||
Term Loan | $ 40,000,000 | |||
Interest rate on unpaid principal amount (as a percent) | 10.00% | |||
Loan prepayment fee rate (as a percent) | 3.00% | |||
Prepayment fee | $ 1,300,000 | |||
Unamortized discount expense | 5,400,000 | |||
Unamortized deferred financing cost | $ 1,700,000 | |||
New ABL Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing facility | 100,000,000 | |||
Term Loan | 13,000,000 | 33,000,000 | ||
Remaining borrowing capacity | $ 77,600,000 | $ 39,100,000 | ||
Loan interest rate on borrowings outstanding (as a percent) | 4.90% | |||
Total liquidity position | $ 54,000,000 | |||
Minimum fixed charge coverage ratio | 1 | |||
Threshold consecutive days | d | 30 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease ROU assets | $ 12,045 | ||
Operating lease liability | $ 13,762 | ||
Renewal term, operating and finance leases | 5 years | ||
Termination period, operating and finance leases | 1 year | ||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2019 | $ 700 | ||
2020 | 700 | ||
2021 | 600 | ||
2022 | 600 | ||
2023 | 600 | ||
Thereafter | 1,900 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2019 | 11,000 | ||
2020 | 6,900 | ||
2021 | 6,300 | ||
2022 | 4,500 | ||
2023 | 1,100 | ||
Thereafter | $ 1,200 | ||
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease ROU assets | $ 29,100 | ||
Operating lease liability | $ 29,100 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining contract term, operating and finance leases | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining contract term, operating and finance leases | 8 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost: | $ 1,328 | $ 8,122 |
Finance lease cost: | ||
Amortization of ROU assets | 684 | 1,269 |
Interest on lease liabilities | 253 | 603 |
Total finance lease cost | 937 | 1,872 |
Short-term lease cost: | $ 109 | $ 596 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows for operating leases | $ 8,222 |
Operating cash flows for finance leases | 547 |
Financing cash flows for finance leases | 1,337 |
ROU assets obtained in exchange for lease obligations: | |
Operating leases | 22,437 |
Finance leases | $ 12,746 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
Operating lease ROU assets | $ 12,045 |
Other current liabilities | 4,718 |
Long-term operating lease liabilities | 9,044 |
Total operating lease liabilities | 13,762 |
Finance Leases | |
Property and equipment, net | 9,413 |
Other current liabilities | 2,775 |
Long-term finance lease liabilities | 8,663 |
Total finance lease liabilities | $ 11,438 |
Weighted Average Remaining Lease Term | |
Operating leases (in years) | 3 years 9 months 18 days |
Finance leases (in years) | 4 years 6 months |
Weighted Average Discount Rate | |
Operating leases | 8.90% |
Finance leases | 8.60% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
Remainder of 2019 | $ 1,537 |
2020 | 5,429 |
2021 | 4,457 |
2022 | 2,550 |
2023 | 921 |
Thereafter | 1,613 |
Total lease payments | 16,507 |
Less: imputed interest | (2,745) |
Total | 13,762 |
Finance Leases | |
Remainder of 2019 | 951 |
2020 | 3,767 |
2021 | 3,712 |
2022 | 2,997 |
2023 | 1,150 |
Thereafter | 1,938 |
Total lease payments | 14,515 |
Less: imputed interest | (3,077) |
Total finance lease liabilities | $ 11,438 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | (0.30%) | (8.80%) | (0.70%) | (4.00%) |
Accrued liability for uncertain tax positions | $ 0 | $ 0 |
Related Party Transactions - Su
Related Party Transactions - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Quintana Capital Group | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable to affiliates | $ 27 | $ 27 | $ 0 | ||
Operating expenses from affiliates | 80 | $ 81 | 334 | $ 303 | |
Archer Well Company Inc. | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable to affiliates | 26 | 26 | $ 40 | ||
Operating expenses from affiliates | $ 0 | $ 66 | $ 20 | $ 77 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Adjusted EBITDA to Net Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Impairment and other expense | $ (41,543) | $ 0 | $ (41,543) | $ 0 |
Income tax expense | (164) | (207) | (495) | (584) |
Interest expense | (898) | (574) | (2,421) | (11,199) |
Depreciation and amortization | (13,229) | (12,033) | (38,785) | (34,265) |
Gain on disposition of assets, net | 1,116 | 629 | 1,292 | 1,329 |
Net loss | (47,429) | (2,353) | (67,568) | (16,574) |
Directional Drilling | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Depreciation and amortization | (3,143) | (2,767) | (9,181) | (7,920) |
Pressure Pumping | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Depreciation and amortization | (5,931) | (5,912) | (17,232) | (16,915) |
Pressure Control | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Depreciation and amortization | (3,184) | (2,378) | (9,280) | (6,459) |
Wireline | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Depreciation and amortization | (971) | (976) | (3,092) | (2,971) |
Operating Segments | Directional Drilling | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment Adjusted EBITDA | 9,103 | 6,452 | 24,437 | 14,273 |
Operating Segments | Pressure Pumping | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment Adjusted EBITDA | 1,218 | 5,795 | (1,524) | 24,569 |
Operating Segments | Pressure Control | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment Adjusted EBITDA | 3,670 | 4,421 | 8,495 | 13,673 |
Operating Segments | Wireline | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment Adjusted EBITDA | (2,719) | (738) | (271) | 2,614 |
Corporate and Other | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Segment Adjusted EBITDA | $ (3,983) | $ (6,098) | $ (16,753) | $ (26,984) |
Segment Information - Financial
Segment Information - Financial Information Related to Assets Position (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | $ 267,495 | $ 324,549 |
Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | 283,912 | 326,206 |
Operating Segments | Directional Drilling | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | 122,965 | 105,942 |
Operating Segments | Pressure Pumping | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | 63,345 | 121,824 |
Operating Segments | Pressure Control | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | 71,218 | 70,401 |
Operating Segments | Wireline | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | 26,384 | 28,039 |
Corporate and Other | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | 5,837 | 7,344 |
Eliminations | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Total assets | $ (22,254) | $ (9,001) |
Segment Information - Financi_2
Segment Information - Financial Information with Respect to Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | $ 121,082 | $ 150,897 | $ 388,374 | $ 444,701 |
Depreciation and amortization | 13,229 | 12,033 | 38,785 | 34,265 |
Capital expenditures | 7,557 | 11,918 | 29,078 | 53,112 |
Directional Drilling | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 57,056 | 50,919 | 173,392 | 132,127 |
Depreciation and amortization | 3,143 | 2,767 | 9,181 | 7,920 |
Capital expenditures | 4,503 | 2,889 | 13,236 | 10,244 |
Pressure Pumping | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 27,312 | 49,987 | 79,981 | 160,089 |
Depreciation and amortization | 5,931 | 5,912 | 17,232 | 16,915 |
Capital expenditures | 874 | 2,208 | 4,710 | 26,039 |
Pressure Control | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 26,838 | 31,138 | 83,259 | 91,063 |
Depreciation and amortization | 3,184 | 2,378 | 9,280 | 6,459 |
Capital expenditures | 2,115 | 5,716 | 9,526 | 15,365 |
Wireline | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenues | 9,876 | 18,853 | 51,742 | 61,422 |
Depreciation and amortization | 971 | 976 | 3,092 | 2,971 |
Capital expenditures | $ 65 | $ 1,105 | $ 1,606 | $ 1,464 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) | Sep. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Contract assets recognized related to contracts with customers | $ 0 |
Contract liabilities recognized related to contracts with customers | $ 0 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,551 | $ 2,569 | $ 6,994 | $ 15,395 |
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 145 | 144 | 455 | 294 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,500 | 1,886 | 5,853 | 14,353 |
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ (94) | $ 539 | $ 686 | $ 748 |
Revenue - Fees Type in Typical
Revenue - Fees Type in Typical Service Contract and Related Recognition (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Day rate | |
Revenue from Contract with Customers [Line Items] | |
Revenue Recognition | Revenue is recognized based on the day rates earned as it relates to the level of service provided for each day throughout the contract. |
Initial mobilization | |
Revenue from Contract with Customers [Line Items] | |
Revenue Recognition | Revenue is estimated at contract inception and included in the transaction price to be recognized ratably over contract term. |
Demobilization | |
Revenue from Contract with Customers [Line Items] | |
Revenue Recognition | Unconstrained demobilization revenue is estimated at contract inception, included in the transaction price, and recognized ratably over the contract term. |
Reimbursement | |
Revenue from Contract with Customers [Line Items] | |
Revenue Recognition | Recognized (gross of costs incurred) at the amount billed to the customer. |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jan. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Previously recognized RSU expense | $ (1,551) | $ (2,569) | $ (6,994) | $ (15,395) | |||||
Restricted stock awards | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (shares) | 140,844 | 57,145 | |||||||
Fair value of grants (USD per share) | $ 4.26 | $ 8.75 | |||||||
Previously recognized RSU expense | (145) | (144) | (455) | (294) | |||||
Restricted stock awards | Employees | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unamortized compensation costs | $ 200 | 400 | $ 200 | 400 | |||||
Award vesting period | 4 months | ||||||||
Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (shares) | 0 | 0 | 897,967 | 476,042 | |||||
Fair value of grants (USD per share) | $ 10.65 | $ 10.65 | $ 10.65 | $ 10.65 | $ 15.74 | ||||
Unamortized compensation costs | $ 11,000 | 18,900 | $ 11,000 | 18,900 | |||||
Award vesting period | 3 years | 3 years | 1 year 10 months 6 days | ||||||
Number of awards forfeited during period (shares) | 85,000 | 0 | 13,000 | ||||||
Previously recognized RSU expense | $ (1,500) | (1,886) | $ (5,853) | (14,353) | |||||
Restricted stock units | Officers And Employees | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of awards forfeited during period (shares) | 84,847 | ||||||||
Previously recognized RSU expense | $ 900 | ||||||||
Shares previously unvested, accelerated vesting (shares) | 164,867 | ||||||||
Accelerated vesting stock compensation expense | $ 300 | ||||||||
Performance stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (shares) | 0 | 0 | 323,000 | ||||||
Fair value of grants (USD per share) | $ 4.29 | $ 4.29 | $ 4.29 | $ 4.29 | $ 5.49 | ||||
Unamortized compensation costs | $ 1,000 | 1,600 | $ 1,000 | 1,600 | |||||
Award vesting period | 2 years 1 month 29 days | ||||||||
Number of awards forfeited during period (shares) | 75,000 | 0 | 1,000 | ||||||
Previously recognized RSU expense | $ 94 | $ (539) | $ (686) | $ (748) | |||||
Performance stock units | Officers And Employees | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of awards forfeited during period (shares) | 75,217 | ||||||||
Previously recognized RSU expense | $ 400 | ||||||||
2018 | Performance stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (shares) | 323,483 | 425,083 | |||||||
Number of awards forfeited during period (shares) | 297,558 | ||||||||
Number of awards earned during period (shares) | 127,525 | ||||||||
Number of awards awarded during period (shares) | 646,966 | ||||||||
Number of awards awarded but not yet considered granted in period (shares) | 323,483 | ||||||||
Year 1 | 2018 | Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual vesting percentage | 33.00% | 33.00% | |||||||
Year 2 | 2018 | Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual vesting percentage | 33.00% | 33.00% | |||||||
Year 3 | 2018 | Restricted stock units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual vesting percentage | 33.00% | 33.00% |
Stock-Based Compensation - Stat
Stock-Based Compensation - Status and Changes of Non-vested RSUs and PSUs (Details) - $ / shares | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Restricted stock units | ||||||||
Number of Shares (in thousands) | ||||||||
Balance at beginning of period (shares) | 1,927,000 | 1,927,000 | 1,551,000 | |||||
Granted (shares) | 0 | 0 | 897,967 | 476,042 | ||||
Forfeited (shares) | (85,000) | 0 | (13,000) | |||||
Vested (shares) | (165,000) | 0 | (509,000) | |||||
Balance at end of period (shares) | 1,677,000 | 1,927,000 | 1,551,000 | 1,677,000 | 1,927,000 | 1,927,000 | ||
Grant Date Fair Value per Share | ||||||||
Outstanding at beginning of period (USD per share) | $ 10.65 | $ 10.65 | $ 15.74 | |||||
Granted (USD per share) | 0 | 0 | 4.26 | |||||
Forfeited (USD per share) | 0 | 0 | 15.46 | |||||
Vested (USD per share) | 0 | 0 | 14.77 | |||||
Outstanding at end of period (USD per share) | $ 10.65 | $ 10.65 | $ 15.74 | $ 10.65 | $ 10.65 | $ 10.65 | ||
Weighted Average Remaining Life (in years) | ||||||||
Outstanding at beginning of period | 1 year 10 months 6 days | 2 years 1 month 6 days | 2 years 4 months 9 days | 2 years 4 months 6 days | 2 years 10 months 14 days | |||
Outstanding at end of period | 1 year 10 months 6 days | 2 years 1 month 6 days | 2 years 4 months 9 days | 2 years 4 months 6 days | 2 years 10 months 14 days | |||
Performance stock units | ||||||||
Number of Shares (in thousands) | ||||||||
Balance at beginning of period (shares) | 407,000 | 407,000 | 128,000 | |||||
Granted (shares) | 0 | 0 | 323,000 | |||||
Forfeited (shares) | (75,000) | 0 | (1,000) | |||||
Vested (shares) | 0 | 0 | (43,000) | |||||
Balance at end of period (shares) | 332,000 | 407,000 | 128,000 | 332,000 | 407,000 | 407,000 | ||
Grant Date Fair Value per Share | ||||||||
Outstanding at beginning of period (USD per share) | $ 4.29 | $ 4.29 | $ 5.49 | |||||
Granted (USD per share) | 0 | 0 | 3.98 | |||||
Forfeited (USD per share) | 0 | 0 | 0 | |||||
Vested (USD per share) | 0 | 0 | 0 | |||||
Outstanding at end of period (USD per share) | $ 4.29 | $ 4.29 | $ 5.49 | $ 4.29 | $ 4.29 | $ 4.29 | ||
Weighted Average Remaining Life (in years) | ||||||||
Outstanding at beginning of period | 2 years 1 month 28 days | 2 years 4 months 28 days | 2 years 1 month 9 days | 2 years 7 months 28 days | 2 years 10 months 14 days | |||
Outstanding at end of period | 2 years 1 month 28 days | 2 years 4 months 28 days | 2 years 1 month 9 days | 2 years 7 months 28 days | 2 years 10 months 14 days |
Loss Per Share - Reconciliation
Loss Per Share - Reconciliation of Number of Shares Used for the Basic EPS Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Numerator: | |||||
Net loss attributed to common share holders | $ (47,429) | $ (2,353) | $ (67,568) | $ (15,028) | |
Denominator: | |||||
Weighted average common shares outstanding - basic (shares) | 33,533,000 | 33,631,000 | 33,673,000 | 33,563,000 | |
Weighted average common shares outstanding - diluted (shares) | 33,533,000 | 33,631,000 | 33,673,000 | 33,563,000 | |
Net loss per common share: | |||||
Basic (USD per share) | $ (1.41) | $ (0.07) | $ (2.01) | $ (0.45) | |
Diluted (USD per share) | $ (1.41) | $ (0.07) | $ (2.01) | $ (0.45) | |
Potentially dilutive securities excluded as anti-dilutive | [1] | 2,150 | 2,050 | 2,150 | 2,050 |
[1] | 1 The Company's potentially dilutive securities include outstanding RSAs, RSUs and PSUs. |