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SEC Filings

10-Q
KEY ENERGY SERVICES INC filed this Form 10-Q on 11/09/2017
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No events occurred after September 30, 2017 that would materially affect the number of weighted average shares outstanding.
NOTE 12. SHARE-BASED COMPENSATION
We recognized employee share-based compensation expense of $2.5 million and $0.5 million during the three months ended September 30, 2017 and 2016, respectively. We recognized employee share-based compensation expense of $10.9 million and $3.4 million during the nine months ended September 30, 2017 and 2016, respectively. Our employee share-based awards vest in equal installments over a four-year period. Additionally, we recognized share-based compensation expense related to our outside directors of $0.1 million and zero during the three months ended September 30, 2017 and 2016, respectively. We recognized share-based compensation expense related to our outside directors of $0.6 million and zero during the nine months ended September 30, 2017 and 2016, respectively. The unrecognized compensation cost related to our unvested share-based awards as of September 30, 2017 is estimated to be $12.3 million and is expected to be recognized over a weighted-average period of 1.7 years.
We recognized compensation expense related to our stock options of $0.8 million and zero during the three months ended September 30, 2017 and 2016, respectively. We recognized compensation expense related to our stock options of $2.7 million and zero during the nine months ended September 30, 2017 and 2016, respectively. Our employee stock options vest in equal installments over a four-year period. The unrecognized compensation cost related to our unvested stock options as of September 30, 2017 is estimated to be $4.2 million and is expected to be recognized over a weighted-average period of 1.7 years.
NOTE 13. TRANSACTIONS WITH RELATED PARTIES
The Company has purchased equipment and services from a few affiliates of certain directors. The dollar amounts related to these related party activities are not material to the Company’s condensed consolidated financial statements.
NOTE 14. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities. These carrying amounts approximate fair value because of the short maturity of the instruments or because the carrying value is equal to the fair value of those instruments on the balance sheet date.
Term Loan Facility due 2021. Because the variable interest rates of these loans approximate current market rates, the fair values of the loans borrowed under this facility approximate their carrying values.
NOTE 15. SEGMENT INFORMATION
Our reportable business segments are U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services and International. We also have a “Functional Support” segment associated with overhead and other costs in support of our reportable segments. Our U.S. Rig Services, Fluid Management Services, Coiled Tubing Services, Fishing and Rental Services operate geographically within the United States. The International reportable segment includes our former operations in Canada, Mexico and Russia. During the third quarter of 2017, second quarter of 2017 and the fourth quarter of 2016, we completed the sale of our businesses in Russia, Canada and Mexico, respectively. We evaluate the performance of our segments based on gross margin measures. All inter-segment sales pricing is based on current market conditions.
U.S. Rig Services
Our U.S. Rig Services include the completion of newly drilled wells, workover and recompletion of existing oil and natural gas wells, well maintenance, and the plugging and abandonment of wells at the end of their useful lives. We also provide specialty drilling services to oil and natural gas producers with certain of our larger rigs that are capable of providing conventional and horizontal drilling services. Our rigs encompass various sizes and capabilities, allowing us to service all types of wells. Many of our rigs are outfitted with our proprietary KeyView® technology, which captures and reports well site operating data and provides safety control systems. We believe that this technology allows our customers and our crews to better monitor well site operations, improves efficiency and safety, and adds value to the services that we offer.
The completion and recompletion services provided by our rigs prepare wells for production, whether newly drilled, or recently extended through a workover operation. The completion process may involve selectively perforating the well casing to access production zones, stimulating and testing these zones, and installing tubular and downhole equipment. We typically provide a well service rig and may also provide other equipment to assist in the completion process. Completion services vary by well and our work may take a few days to several weeks to perform, depending on the nature of the completion.
The workover services that we provide are designed to enhance the production of existing wells and generally are more complex and time consuming than normal maintenance services. Workover services can include deepening or extending wellbores

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