Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.19.1
Segment Information
3 Months Ended
Mar. 31, 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 Mid-Continent and Rocky Mountains regions. 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, Marcellus/Utica Shale, DJ/Powder River Basin, Haynesville Shale, Fayetteville Shale and Williston Basins (including the Bakken Shale).
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, 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 (in thousands of dollars):
 

Three Months Ended
March 31,
 

2019

2018
Directional Drilling

$
9,480


$
2,580

Pressure Pumping

(3,504
)

9,889

Pressure Control

3,241


3,650

Wireline

2,064


2,564

Corporate and Other

(6,877
)

(13,824
)
Income tax expense

(177
)

(51
)
Interest expense

(671
)

(10,192
)
Depreciation and amortization

(12,440
)

(11,078
)
Gain on disposition of assets, net

23


106

       Net loss

$
(8,861
)

$
(16,356
)


Financial information related to the Company’s total assets position as of March 31, 2019 and December 31, 2018, by segment, is as follows (in thousands of dollars):
 
 
March 31, 2019
 
December 31, 2018
Directional Drilling
 
$
119,886

 
$
105,942

Pressure Pumping
 
113,202

 
121,824

Pressure Control
 
75,424

 
70,401

Wireline
 
39,697

 
28,039

Total
 
$
348,209

 
$
326,206

Corporate & Other
 
9,493

 
7,344

Eliminations
 
(12,003
)
 
(9,001
)
       Total assets
 
$
345,699

 
$
324,549


The following tables set forth certain financial information with respect to QES’ reportable segments (in thousands of dollars):
 
 
Three Months Ended March 31, 2019
 
 
Directional
Drilling
 
Pressure
Pumping
 
Pressure
Control
 
Wireline
 
Total
Revenues
 
$
61,956

 
$
28,631

 
$
28,775

 
$
22,303

 
$
141,665

Depreciation and amortization
 
2,966

 
5,478

 
2,932

 
1,064

 
12,440

Capital expenditures
 
$
3,391

 
$
3,289

 
$
5,048

 
$
910

 
$
12,638

 
 
Three Months Ended March 31, 2018
 
 
Directional
Drilling
 
Pressure
Pumping
 
Pressure
Control
 
Wireline
 
Total
Revenues
 
$
37,602

 
$
53,400

 
$
27,961

 
$
22,305

 
$
141,268

Depreciation and amortization
 
2,607

 
5,536

 
1,913

 
1,022

 
11,078

Capital expenditures
 
$
2,708

 
$
5,211

 
$
4,380

 
$
115

 
$
12,414