ASSETS HELD FOR SALE

3 Months Ended

Dec. 31, 2024

Property, Plant and Equipment Assets Held-for-Sale Disclosure [Abstract]

ASSETS HELD FOR SALE

ASSETS HELD FOR SALE

In the quarter ended March 31, 2024, the Company commenced the marketing of a portion of the contract drilling segment's property and equipment, the majority of which was already fully depreciated. There was no impairment related to the classification change from held and used to held for sale as the fair value, less estimated selling costs, of the disposal group exceeded its carrying value. The carrying value of these assets was recorded as “Assets held for sale” in the accompanying Condensed Consolidated Balance Sheets. The property and equipment deemed necessary to complete the contract drilling segment's contracts in backlog continue to be classified as held and used as of December 31, 2024. At December 31, 2024, a sale of the remainder of the contract drilling segment's property and equipment or the contract drilling segment as a whole was not estimated to be probable due to the lack of any definitive sale opportunities at that date.

In December 2024, the Company entered into an agreement with an independent third party for the sale of a contract drilling segment drilling rig and related ancillary equipment and received a payment of $585,000 from the buyer. At December 31, 2024, the delivery of the drilling rig and the transfer of the legal title to the buyer had not yet occurred, and therefore, the Company did not record a sale during the three months ended December 31, 2024. The payment received from the buyer was recognized as a deposit and recorded in “Other current liabilities” on the Company's Condensed Consolidated Balance Sheet at December 31, 2024. This drilling rig and related ancillary equipment was included in assets held for sale at December 31, 2024, and had a net book value of zero as the assets were already fully depreciated.

In February 2025, the drilling rig and ancillary equipment was delivered and the legal title was transferred to the buyer, and as a result, the Company will recognize a gain, net of costs, on the sale of the drilling rig and ancillary equipment in the quarter ending March 31, 2025.