Independence Contract Drilling, Inc. Reports Financial Results For The Fourth Quarter And Year Ended December 31, 2018
HOUSTON, March 1, 2019 /PRNewswire/ -- Independence Contract Drilling, Inc. (the "Company") (NYSE: ICD) today reported financial results for the three and twelve months ended December 31, 2018.
Fourth Quarter 2018 Highlights
-- Net loss of $8.6 million, or $0.11 per share.
-- Adjusted net income, as defined below, of $1.0 million, or $0.01 per
share.
-- Adjusted EBITDA, as defined below, of $16.0 million.
-- Net debt, excluding capitalized leases, of $117.1 million.
-- Fleet utilization of 95.7%.
-- Fully-burdened margin of $7,501 per day.
-- Completion of the Sidewinder merger on October 1, 2018.
In the fourth quarter of 2018, the Company reported revenues of $62.8 million, a net loss of $8.6 million, or $0.11 per share, adjusted net income (defined below) of $1.0 million, or $0.01 per share, and adjusted EBITDA (defined below) of $16.0 million. This compares to revenues of $28.4 million, a net loss of $3.9 million, or $0.10 per share, an adjusted net loss of $1.8 million, or $0.05 per share, and adjusted EBITDA of $6.8 million in the third quarter of 2018 and revenues of $25.0 million, a net loss of $5.7 million, or $0.15 per share, an adjusted net loss of $4.6 million, or $0.12 per share, and adjusted EBITDA of $3.7 million in the fourth quarter of 2017.
For the year ended December 31, 2018, the Company reported revenues of $142.6 million, a net loss of $20.0 million, or $0.42 per share, an adjusted net loss of $8.3 million, or $0.17 per share, and adjusted EBITDA of $31.9 million. This compares to revenues of $90.0 million, a net loss of $24.3 million, or $0.64 per share, an adjusted net loss of $20.1 million, or $0.53 per share, and adjusted EBITDA of $12.6 million for the year ended December 31, 2017.
Chief Executive Officer Anthony Gallegos commented, "The fourth quarter of 2018 was transformational for Independence Contract Drilling. We successfully completed the combination with Sidewinder, more than doubling our operating fleet. The combination fundamentally improved our profitability and free cash flow and the operating and financial scale of the Company.
The post-combination integration is progressing exceptionally well thanks to the efforts of our dedicated field and corporate employees who have worked diligently while maintaining our focus on safe and reliable operations and cost control. We are confident that we can exceed our $10 million synergy goal by the third quarter of 2019.
During the fourth quarter, we mobilized an incremental rig that commenced drilling operations in December under a one-year contract. We also successfully recontracted or extended contracts on five rigs with expiring contracts. As a result, we exited 2018 with 32 drilling rigs operating.
Looking forward into 2019, the decline in oil price during the fourth quarter of 2018 negatively impacted our customers' budgeting processes and 2019 capital budgets. Although we remain encouraged by the oil price recovery and recent stabilization, we have seen some softness in drilling activity. However, we expect super-spec rig utilization to remain robust, with only minimal periods of transitory idle time as operators reshape and high-grade their contracted rig fleets in light of their capital budgets."
Sidewinder Merger
On October 1, 2018, the Company completed its merger with Sidewinder Drilling, increasing its drilling fleet from 15 rigs to 34 rigs. Pursuant to the terms of the merger, the Company issued 36,752,657 shares of common stock and assumed $58.5 million of Sidewinder indebtedness. Contemporaneously with the closing of the merger, the Company entered into a new $130 million term loan and $40 million revolving line of credit facility, which were utilized to refinance the indebtedness assumed in the merger as well as the Company's then-existing outstanding bank debt.
The Company's results for the fourth quarter of 2018 fully reflect the combined operations. As a result, prior period results of operations may not be comparable. During the fourth quarter of 2018, the following items relating to the merger and associated financing impacted the Company's results of operations:
-- Non-cash revenues of $2.0 million associated with the amortization of
intangible revenues attributable to the merger, which is excluded from
the Company's reported adjusted net income, adjusted EBITDA and revenue
per day statistics during the quarter;
-- merger related expenses of $11.3 million, which is excluded from the
Company's reported adjusted net income and adjusted EBITDA during the
quarter; and
-- non-cash interest expense of $0.9 million associated with the write-off
of deferred financing costs associated with the termination of
pre-merger financing arrangements, which is excluded from the Company's
reported adjusted net income.
Quarterly Operational Results
In the fourth quarter of 2018, the Company's fleet operated at 95.7% utilization and recorded 2,818 revenue days, compared to 99% utilization and 1,345 revenue days in the third quarter of 2018, and 100% utilization and 1,289 revenue days in the fourth quarter of 2017. The decrease in utilization compared to prior periods reflects idle time associated with the transition of one drilling rig assumed in the Sidewinder merger to a new contract during the quarter.
Operating revenues in the fourth quarter of 2018 totaled $62.8 million, compared to $28.4 million in the third quarter of 2018 and $25.0 million in the fourth quarter of 2017. Fourth quarter 2018 revenues include $2.0 million of non-cash intangible revenue associated with the Sidewinder merger. Excluding this non-cash revenue, revenue per day in the fourth quarter of 2018 was $20,433, compared to $20,538 in the third quarter of 2018 and $18,338 in the fourth quarter of 2017. The slight sequential revenue per day decline is associated primarily with below-market dayrate contracts assumed in the Sidewinder merger.
Operating costs in the fourth quarter of 2018 totaled $39.9 million, compared to $18.4 million in the third quarter of 2018 and $18.8 million in the fourth quarter of 2017. Fully-burdened operating costs were $12,932 per day in the fourth quarter of 2018, compared to $12,986 in the third quarter of 2018 and $13,094 in the fourth quarter of 2017.
Fully-burdened rig operating margins, excluding reactivation and rig construction costs, in the fourth quarter of 2018 were $7,501 per day, compared to $7,552 per day in the third quarter of 2018 and $5,244 per day in the fourth quarter of 2017.
Selling, general and administrative expenses in the fourth quarter of 2018 were $5.0 million (including $0.2 million of non-cash stock-based compensation), compared to $3.9 million (including $0.7 million of non-cash stock-based compensation) in the third quarter of 2018 and $3.1 million (including $0.5 million of non-cash stock-based compensation) in the fourth quarter of 2017. Sequential increases in SG&A were primarily associated with additional operations acquired in the Sidewinder merger, but do not reflect the full realization of combined synergies, which the Company does not expect to realize on a run-rate basis until the end of the second quarter of 2019.
Drilling Operations Update
The Company is marketing 32 drilling rigs, including one rig acquired in the Sidewinder merger that was reactivated and began drilling operations in December 2018.
The Company's December 31, 2018 backlog of revenues from contracts with original terms of six months or more was $120.9 million. Approximately $114.2 million of this backlog is expected to be realized during 2019.
Capital Expenditures and Liquidity Update
The Company's capital expenditure budget for 2019, net of asset sales and recoveries is $29 million, including $9.0 million associated with the delivery of long lead-time items required to complete four SCR conversions to AC pad-optimal status based upon market conditions and the timing of the rigs' existing drilling commitments, and $5.0 million reserved for future equipment enhancements based upon market conditions and customer demand.
As of December 31, 2018, the Company had cash on hand of $12.2 million, $2.5 million drawn on its $40 million revolving credit facility and a $130 million term loan outstanding. The term loan includes a fully-committed $15 million accordion that remains undrawn and fully available to the Company.
Conference Call Details
A conference call for investors will be held today, March 1, 2019, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss the Company's fourth quarter and year end 2018 results.
The call can be accessed live over the telephone by dialing (855) 239-3115 or for international callers, (412) 542-4125. A replay will be available shortly after the call and can be accessed by dialing (877) 344-7529 or for international callers, (412) 317-0088. The passcode for the replay is 10128988. The replay will be available until March 8, 2019.
Interested parties may also listen to a simultaneous webcast of the conference call by logging onto the Company's website at www.icdrilling.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About Independence Contract Drilling, Inc.
Independence Contract Drilling provides land-based contract drilling services for oil and natural gas producers in the United States. The Company constructs, owns and operates a fleet of pad-optimal ShaleDriller rigs that are specifically engineered and designed to accelerate its clients' production profiles and cash flows from their most technically demanding and economically impactful oil and gas properties. For more information, visit www.icdrilling.com.
Forward-Looking Statements
This news release contains certain forward-looking statements within the meaning of the federal securities laws. Words such as "anticipated," "estimated," "expected," "planned," "scheduled," "targeted," "believes," "intends," "objectives," "projects," "strategies" and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to Independence Contract Drilling's operations are based on a number of expectations or assumptions which have been used to develop such information and statements but which may prove to be incorrect. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by management of Independence Contract Drilling. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the "Risk Factors" section of the Company's Annual Report on Form 10-K, filed with the SEC and the information included in subsequent amendments and other filings. These forward-looking statements are based on and include our expectations as of the date hereof. Independence Contract Drilling does not undertake any obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Independence Contract Drilling becomes aware of, after the date hereof.
INDEPENDENCE CONTRACT DRILLING, INC.
Unaudited
(in thousands, except par value and share data)
CONSOLIDATED BALANCE SHEETS
December 31, 2018
December 31, 2017
Assets
Cash and cash equivalents $12,247 $2,533
Accounts receivable, net 41,987 18,056
Inventories 2,693 2,710
Assets held for sale 19,711 4,637
Prepaid expenses and other current assets 8,930 2,957
---
Total current assets 85,568 30,893
Property, plant and equipment, net 496,197 272,388
Goodwill 1,627
Other long-term assets, net 1,470 1,364
Total assets $584,862 $304,645
Liabilities and Stockholders' Equity
Liabilities
Current portion of
long-term debt (1) $587 $533
Accounts payable 16,312 11,627
Accrued liabilities 29,219 6,969
Total current
liabilities 46,118 19,129
Long-term debt (2) 130,012 49,278
Deferred income taxes,
net 774 683
Other long-term
liabilities 16,425 73
Total liabilities 193,329 69,163
Commitments and contingencies
Stockholders' equity
Common stock, $0.01
par value,
200,000,000 shares
authorized;
77,598,806 and
38,246,919 shares
issued, respectively;
and 77,078,252 and
37,985,225 shares
outstanding,
respectively
771 380
Additional paid-in
capital 503,446 326,616
Accumulated deficit (109,638) (89,645)
(3,046) (1,869)
Treasury stock, at
cost, 520,554 and
261,694 shares,
respectively
Total stockholders'
equity 391,533 235,482
Total liabilities and
stockholders' equity $584,862 $304,645
(1) Current portion of long-term
debt relates to the current
portion of vehicle capital lease
obligations.
(2) As of December 31, 2018, long-
term debt includes $0.6 million
of long-term vehicle capital
lease obligations. As of
December 31, 2017, long-term
debt included $0.7 million of
long-term vehicle capital lease
obligations.
INDEPENDENCE CONTRACT DRILLING, INC.
Unaudited
(in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
---
December 31,
September 30, December 31,
2018 2017 2018 2018 2017
Revenues $62,789 $25,041 $28,439 $142,609 $90,007
Costs and expenses
Operating costs 39,908 18,780 18,420 95,220 67,733
Selling, general
and administrative 5,030 3,112 3,903 15,907 13,213
Merger related
expenses 11,270 - 1,933 13,646 -
Depreciation and
amortization 10,890 6,724 6,831 30,891 25,844
Asset impairment,
net (371) 994 431 25 2,568
(Gain) loss on
disposition of
assets, net (65) 104 (260) (740) 1,677
Total cost and
expenses 66,662 29,714 31,258 154,949 111,035
Operating loss (3,873) (4,673) (2,819) (12,340) (21,028)
Interest expense (4,513) (895) (1,168) (7,562) (2,983)
---
Loss before
income taxes (8,386) (5,568) (3,987) (19,902) (24,011)
Income tax expense (benefit) 211 177 (50) 91 287
---
Net loss $(8,597) $(5,745) $(3,937) $(19,993) $(24,298)
Loss per share:
Basic and Diluted $(0.11) $(0.15) $(0.10) $(0.42) $(0.64)
Weighted average number of common shares outstanding:
Basic and Diluted 75,692 37,983 38,253 47,580 37,762
INDEPENDENCE CONTRACT DRILLING, INC.
Unaudited
(in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twelve Months Ended December 31,
2018 2017
---
Cash flows from operating activities
Net loss $(19,993) $(24,298)
Adjustments to reconcile net loss to net cash provided by
operating activities
Depreciation and
amortization 30,891 25,844
Asset impairment, net 25 2,568
Stock-based
compensation 4,829 3,565
(Gain) loss on
disposition of
assets, net (740) 1,677
Amortization of
deferred rent 105
Deferred income taxes 91 287
Amortization of
deferred financing
costs 492 434
Write-off of
deferred financing
costs 856
Bad debt expense 22
Changes in operating assets and liabilities, net of effects of
Sidewinder merger
Accounts receivable (1,022) (6,588)
Inventories 250 (301)
Prepaid expenses and
other assets (4,681) 133
Accounts payable and
accrued liabilities 5,010 1,612
Net cash provided by
operating activities 16,135 4,933
---
Cash flows from investing activities
Cash acquired in
Sidewinder merger 10,743
Purchases of
property, plant and
equipment (37,550) (31,347)
Proceeds from
insurance claims 257
Proceeds from the
sale of assets 1,303 1,253
Net cash used in
investing activities (25,247) (30,094)
---
Cash flows from financing activities
Borrowings under Term
Loan Facility 130,000
Borrowings under ABL
Credit Facility 5,066
Borrowings under CIT
Credit Facility 50,666 44,451
Repayments under ABL
Credit Facility (2,500)
Repayments under CIT
Credit Facility (99,207) (21,662)
Repayment of
Sidewinder debt (58,512)
Purchase of treasury
stock (1,180) (174)
RSUs withheld for
taxes (710) (863)
Financing costs paid
under Term Loan
Facility (3,371)
Financing costs paid
under ABL Credit
Facility (676)
Financing costs paid
under CIT Credit
Facility (114) (530)
Payments for capital
lease obligations (636) (599)
Net cash provided by
financing activities 18,826 20,623
---
Net increase
(decrease) in cash
and cash equivalents 9,714 (4,538)
Cash and cash equivalents
Beginning of year 2,533 7,071
End of year $12,247 $2,533
Supplemental disclosure of cash flow information
Cash paid during the
period for interest $3,202 $2,680
Supplemental disclosure of non-cash investing and financing
activity
Change in property,
plant and equipment
purchases in
accounts payable $1,175 $(882)
Additions to
property, plant and
equipment through
capital leases $601 $1,102
Additions to property, plant and equipment through tenant
allowance on
leasehold improvement
$694
$ -
Sidewinder merger
consideration $231,617
$ -
The following table provides various financial and operational data for the Company's operations the three months ending December 31, 2018 and 2017 and September 30, 2018 and the twelve months ending December 31, 2018 and 2017. This information contains non-GAAP financial measures of the Company's operating performance. The Company believes this non-GAAP information is useful because it provides a means to evaluate the operating performance of the Company on an ongoing basis using criteria that are used by our management. Additionally, it highlights operating trends and aids analytical comparisons. However, this information has limitations and should not be used as an alternative to operating income (loss) or cash flow performance measures determined in accordance with GAAP, as this information excludes certain costs that may affect the Company's operating performance in future periods.
OTHER FINANCIAL & OPERATING DATA
Unaudited
Three Months Ended Twelve Months Ended
December 31,
December 31,
September 30,
December 31,
December 31,
2018 2017 2018 2018 2017
Number of marketed rigs end
of period (1) 32 14 15 32 14
Rig operating days (2) 2,817.5 1,288.6 1,345.1 6,686.7 4,707.4
Average number of operating
rigs (3) 30.6 14.0 14.6 18.3 12.9
Rig utilization (4) 95.7% 100.0% 99.0% 97.8% 96.0%
Average revenue per
operating day (5) $20,433 $18,338 $20,538 $20,001 $18,137
Average cost per operating
day (6) $12,932 $13,094 $12,986 $13,053 $12,899
Average rig margin per
operating day $7,501 $5,244 $7,552 $6,948 $5,238
(1) Number of marketed rigs as of
December 31, 2018 increased by 18
rigs as compared to the number of
marketed rigs as of December 31,
2017. Our 15th ShaleDriller rig was
completed and commenced operations
during the third quarter of 2018,
and as a result of the Sidewinder
merger we acquired 17 marketed rigs.
Marketed rigs exclude two idle rigs
acquired in the Sidewinder merger
that require additional upgrade
before they enter our marketed
fleet.
(2) Rig operating days represent the
number of days our rigs are earning
revenue under a contract during the
period, including days that standby
revenues are earned. During the
three months ended December 31, 2018
and 2017, and September 30, 2018
there were 4.3, zero and zero
operating days in which we earned
revenue on a standby basis,
respectively. During the twelve
months ended December 31, 2018 and
2017, there were 4.3 and 77.9
operating days, respectively, in
which we earned revenue on a standby
basis, including zero and 69.0
standby-without-crew days,
respectively.
(3) Average number of operating rigs is
calculated by dividing the total
number of rig operating days in the
period by the total number of
calendar days in the period.
(4) Rig utilization is calculated as rig
operating days divided by the total
number of days our marketed drilling
rigs are available during the
applicable period.
(5) Average revenue per operating day
represents total contract drilling
revenues earned during the period
divided by rig operating days in the
period. Excluded in calculating
average revenue per operating day
are revenues associated with the
reimbursement of out-of-pocket
costs paid by customers of $3.2
million, $1.4 million and $0.8
million for the three months ended
December 31, 2018 and 2017 and
September 30, 2018, respectively,
and $6.8 million and $4.6 million
for the twelve months ended December
31, 2018 and 2017, respectively, and
revenues associated with the
amortization of intangible revenue
acquired in the Sidewinder merger of
$2.0 million for the three months
and the year ended December 31,
2018.
(6) Average cost per operating day
represents operating costs incurred
during the period divided by rig
operating days in the period. The
following costs are excluded in
calculating average cost per
operating day: (i) out-of-pocket
costs reimbursed by customers of
$3.2 million, $1.4 million and $0.8
million during the three months
ended December 31, 2018 and 2017 and
September 30, 2018, respectively,
and $6.8 million and $4.6 million
for the twelve months ended December
31, 2018 and 2017, respectively,
(ii) new crew training costs of zero
during the three months ended
December 31, 2018 and 2017 and
September 30, 2018, respectively,
and $0.1 million and $0.1 million
during the twelve months ended
December 31, 2018 and 2017,
respectively, (iii) construction
overhead costs expensed due to
reduced rig construction activity of
$0.3 million, $0.5 million and $0.1
million during the three months
ended December 31, 2018 and 2017 and
September 30, 2018, respectively,
and $1.0 million and $1.1 million
during the twelve months ended
December 31, 2018 and 2017,
respectively, (iv) rig reactivation
costs associated with the
redeployment of previously stacked
rigs, excluding new crew training
costs (included in (ii) above), of
zero and $1.0 million during the
three and twelve months ended
December 31, 2017, respectively, and
(v) out-of-pocket expenses of $0.1
million, net of insurance
recoveries, incurred as a result of
damage to one of our rig's mast
during the twelve months ended
December 31, 2017.
Non-GAAP Financial Measures
Adjusted net loss, EBITDA and adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. In addition, adjusted EBITDA is consistent with how EBITDA is calculated under our credit facility for purposes of determining our compliance with various financial covenants. We define "EBITDA" as earnings (or loss) before interest, taxes, depreciation, and amortization, and we define "adjusted EBITDA" as EBITDA before stock-based compensation, non-cash asset impairments, gains or losses on disposition of assets, and other non-recurring items added back to, or subtracted from, net income for purposes of calculating EBITDA under our credit facility. Neither adjusted net loss, EBITDA or adjusted EBITDA is a measure of net income as determined by U.S. generally accepted accounting principles ("GAAP").
Management believes adjusted net loss, EBITDA and adjusted EBITDA are useful because they allow our stockholders to more effectively evaluate our operating performance and compliance with various financial covenants under our credit facility and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure or non-recurring, non-cash transactions. We exclude the items listed above from net income (loss) in calculating adjusted net loss, EBITDA and adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. None of adjusted net loss, EBITDA or adjusted EBITDA should be considered an alternative to, or more meaningful than, net income (loss), the most closely comparable financial measure calculated in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from adjusted net loss, EBITDA and adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's return on assets, cost of capital and tax structure. Our presentation of adjusted net loss, EBITDA and adjusted EBITDA should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Our computations of adjusted net loss, EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
Reconciliation of Net Loss to Adjusted Net Income (Loss):
(Unaudited)
(Unaudited)
---
Three Months Ended
Twelve Months Ended
---
December 31, December 31, September 30, December 31, December 31,
2018 2017 2018 2018 2017
Amount Per Amount Per Amount Per Amount Per Amount Per
Share Share Share Share Share
---
(in thousands)
Net loss $(8,597) $(0.11) $(5,745) $(0.15) $(3,937) $(0.10) $(19,993) $(0.42) $(24,298) $(0.64)
Add back:
Asset
impairment,
net (1) (371) (0.01) 994 0.03 431 0.01 25 2,568 0.07
(Gain) loss on
disposition of
assets, net
(2) (65) 104 (260) (0.01) (740) (0.02) 1,677 0.04
Intangible
revenue (3) (2,044) (0.03) (2,044) (0.04) -
Merger related
expenses (4) 11,270 0.15 1,933 0.05 13,646 0.29 -
Write-off of
deferred
financing
costs (5) 856 0.01 856 0.02 -
Adjusted net
income (loss) $1,049 $0.01 $(4,647) $(0.12) $(1,833) $(0.05) $(8,250) $(0.17) $(20,053) $(0.53)
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA:
(Unaudited) (Unaudited)
---
Three Months Ended Twelve Months Ended
---
December 31,
December 31,
September 30,
December 31,
December 31,
2018 2017 2018 2018 2017
(in thousands)
Net loss $(8,597) $(5,745) $(3,937) $(19,993) $(24,298)
Add back:
Income tax expense
(benefit) 211 177 (50) 91 287
Interest expense 4,513 895 1,168 7,562 2,983
Depreciation and
amortization 10,890 6,724 6,831 30,891 25,844
Asset impairment,
net (1) (371) 994 431 25 2,568
EBITDA 6,646 3,045 4,443 18,576 7,384
(Gain) loss on
disposition of
assets, net (2) (65) 104 (260) (740) 1,677
Stock-based
compensation 240 528 718 2,438 3,565
Intangible revenue
(3) (2,044) (2,044) -
Merger related
expenses( 4) 11,270 1,933 13,646 -
Adjusted EBITDA $16,047 $3,677 $6,834 $31,876 $12,626
===
(1) In the fourth quarter of 2018, we
recorded insurance recoveries, net
of impairments of $0.6 million on
the Galayda facility water damage
incurred during Hurricane Harvey
after receiving a proof of loss
letter from our insurance carrier,
offset by an increased impairment
of $0.2 million related to
increased estimated costs to sell
the Galayda facility. In the
third quarter of 2018, we recorded
a $0.4 million, or $0.01 per
share, charge to asset
impairments, net, reflecting a
$650 thousand estimated loss from
the expected sale of our Galayda
facility, offset by a $219
thousand insurance recovery
related to some damaged equipment.
In the fourth quarter of 2017 we
recorded a $0.9 million, or $0.03
per share, non-cash charge
consisting of a $0.6 million
impairment to our Galayda facility
as a result of damage associated
with Hurricane Harvey in August
2017, as well as a non-cash
impairment representing the
estimated damage to a piece of
drilling equipment, net of
estimated insurance recoveries
totaling $0.3 million.
(2) In the fourth quarter of 2018 and
the third quarter of 2018, we
recorded a gain on disposition of
assets of $0.1 million and $0.3
million, respectively. In the
fourth quarter of 2017, we
recorded a loss on disposition of
assets of $0.1 million. All three
quarters were primarily due to the
gain or loss on the sale or
disposition of miscellaneous
drilling equipment.
(3) For the three months and the year
ended December 31, 2018, we
amortized intangible revenue
related to an unfavorable contract
liability acquired in the
Sidewinder merger.
(4) For the three months ended December
31, 2018 and September 30, 2018,
and the twelve months ended
December 31, 2018, we incurred
$11.3 million, $1.9 million and
$13.6 million, respectively, of
costs directly associated with the
Sidewinder merger.
(5) For the three months and the year
ended December 31, 2018, we wrote-
off $0.9 million of unamortized
deferred financing costs
associated with the CIT Credit
Facility, which was terminated
upon the closing of the Sidewinder
merger.
INVESTOR CONTACTS:
Independence Contract Drilling, Inc.
E-mail inquiries to: Investor.relations@icdrilling.com
Phone inquiries: (281) 598-1211
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SOURCE Independence Contract Drilling, Inc.
