10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

__________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-33816

_________________________________

__________________________________

Delaware	26-0287117
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6720 N. Scottsdale Road, Suite 190, Scottsdale, AZ 85253

(602) 903-7802

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

__________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed all the documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan of confirmation by a court. Yes  x    No  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No   x

The number of shares outstanding of the registrant’s common stock as of July 31, 2018 was 11,695,580.

TABLE OF CONTENTS

PART I —FINANCIAL INFORMATION		5
Item 1.	Condensed Consolidated Financial Statements	5
	Condensed Consolidated Balance Sheets as of June 30, 2018 (Successor) and December 31, 2017 (Successor)	5
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2018 (Successor) and the Three and Six Months Ended June 30, 2017 (Predecessor)	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 (Successor) and the Six Months Ended June 30, 2017 (Predecessor)	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II – OTHER INFORMATION		37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	37

2

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the United States Securities Exchange Act of 1934, as amended, or the “Exchange Act.” These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including, but not limited to, statements regarding:

• the expected benefits of our completed restructuring under chapter 11 of the United States Bankruptcy Code (“the Bankruptcy Code”) to improve our long-term capital structure;

• future financial performance and growth targets or expectations;

• market and industry trends and developments, including, but not limited to, statements regarding fluctuations in oil and natural gas prices and third-party projections for the markets in which we operate; and

• the potential benefits of our completed and any future merger, acquisition, disposition, restructuring, and financing transactions.

You can identify these and other forward-looking statements by the use of words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “might,” “will,” “should,” “would,” “could,” “potential,” “future,” “continue,” “ongoing,” “forecast,” “project,” “target” or similar expressions, and variations or negatives of these words.

These forward-looking statements are based on information available to us as of the date of this Quarterly Report and our current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured, and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include, among others:

• the effects of our completed restructuring on the Company and the interests of various constituents;

• risks and uncertainties associated with the restructuring process, including the outcome of a pending appeal of the order confirming the plan of reorganization and our ability to execute the requirements of the plan of reorganization subsequent to the effective date;

• the loss of one or more of our larger customers;

• our ability to attract and retain key executives and qualified employees in key areas of our business;

• our ability to attract and retain a sufficient number of qualified truck drivers in light of industry-wide driver shortages and high-turnover;

• risks associated with our indebtedness, including changes to interest rates, decreases in our borrowing availability, our ability to manage our liquidity needs and to comply with covenants under our credit facilities;

• the availability of less favorable credit and payment terms due to changes in industry condition or our financial condition, which could constrain our liquidity and reduce availability under our revolving credit facility;

• difficulties in successfully executing our growth initiatives, including identifying and completing acquisitions and divestitures, and differences in the type and availability of consideration or financing for such acquisitions and divestitures;

• higher than forecasted capital expenditures to maintain and repair our fleet of trucks, tanks, equipment and disposal wells;

• control of costs and expenses;

• risks associated with the limited trading volume of our common stock on the NYSE American Stock Exchange, including potential fluctuations in the trading prices of our common stock;

• risks associated with the reliance on third-party analyst and expert market projections and data for the markets in which we operate;

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• risks associated with changes in industry practices and operational technologies and the impact on our business;

• present and possible future claims, litigation or enforcement actions or investigations;

• financial results that may be volatile and may not reflect historical trends due to, among other things, changes in commodity prices or general market conditions, acquisition and disposition activities, fluctuations in consumer trends, pricing pressures, transportation costs, changes in raw material or labor prices or rates related to our business and changing regulations or political developments in the markets in which we operate;

• changes in customer drilling, completion and production activities, operating methods and capital expenditure plans, including impacts due to low oil and/or natural gas prices or the economic or regulatory environment;

• risks associated with the operation, construction, development and closure of saltwater disposal wells, solids and liquids treatment and transportation assets, landfills and pipelines, including access to additional locations and rights-of-way, environmental remediation obligations, unscheduled delays or inefficiencies and reductions in volume due to micro- and macro-economic factors or the availability of less expensive alternatives;

• the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets;

• changes in economic conditions in the markets in which we operate or in the world generally, including as a result of political uncertainty;

• reduced demand for our services due to regulatory or other influences related to extraction methods such as hydraulic fracturing, shifts in production among shale areas in which we operate or into shale areas in which we do not currently have operations;

• the unknown future impact of changes in laws and regulation on waste management and disposal activities, including those impacting the delivery, storage, collection, transportation, treatment and disposal of waste products, as well as the use or reuse of recycled or treated products or byproducts;

• risks involving developments in environmental or other governmental laws and regulations in the markets in which we operate and our ability to effectively respond to those developments including laws and regulations relating to oil and natural gas extraction businesses, particularly relating to water usage, and the disposal, transportation and treatment of liquid and solid wastes;

• natural disasters, such as hurricanes, earthquakes and floods, or acts of terrorism, or extreme weather conditions, that may impact our business locations, assets, including wells or pipelines, distribution channels, or which otherwise disrupt our or our customers’ operations or the markets we serve; and

• other risks identified in this Quarterly Report or referenced from time to time in our filings with the United States Securities and Exchange Commission.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.

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PART I—FINANCIAL INFORMATION

Item  1. Financial Statements.

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	Successor
	June 30,			December 31,
	2018			2017
Assets
Cash and cash equivalents	$	12,808		$	5,488
Restricted cash	1,548			1,296
Accounts receivable, net of allowance for doubtful accounts of $2.1 million and $1.9 million at June 30, 2018 and December 31, 2017, respectively	32,476			30,965
Inventories	3,846			4,089
Prepaid expenses and other receivables	3,334			8,594
Other current assets	483			226
Assets held for sale	3,381			2,765
Total current assets	57,876			53,423
Property, plant and equipment, net of accumulated depreciation of $56.2 million and $35.8 million at June 30, 2018 and December 31, 2017, respectively	192,899			229,874
Equity investments	41			48
Intangibles, net	454			547
Goodwill	27,139			27,139
Deferred income taxes	84			84
Other assets	144			207
Total assets	$	278,637		$	311,322
Liabilities and Shareholders’ Equity
Accounts payable	$	7,889		$	7,946
Accrued liabilities	15,874			13,939
Current contingent consideration	500			500
Current portion of long-term debt	4,698			5,525
Derivative warrant liability	188			477
Total current liabilities	29,149			28,387
Long-term debt	31,870			33,524
Other long-term liabilities	6,594			6,438
Total liabilities	67,613			68,349
Shareholders’ equity:
Common stock	117			117
Additional paid-in capital	302,145			290,751
Accumulated deficit	(91,238		)	(47,895		)
Total shareholders’ equity	211,024			242,973
Total liabilities and shareholders’ equity	$	278,637		$	311,322

The accompanying notes are an integral part of these statements.

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NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Successor			Predecessor			Successor			Predecessor
	Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017
Revenue:
Service revenue	$	45,320		$	37,538		$	90,847		$	72,956
Rental revenue	3,628			4,000			7,770			7,805
Total revenue	48,948			41,538			98,617			80,761
Costs and expenses:
Direct operating expenses	39,069			34,825			80,696			69,114
General and administrative expenses	6,014			8,867			25,334			21,226
Depreciation and amortization	11,969			12,107			26,713			24,978
Impairment of long-lived assets	332			—			4,463			—
Other, net	469			—			1,068			—
Total costs and expenses	57,853			55,799			138,274			115,318
Operating loss	(8,905		)	(14,261		)	(39,657		)	(34,557		)
Interest expense, net	(1,204		)	(5,338		)	(2,454		)	(19,546		)
Other income, net	587			5,698			514			4,240
Reorganization items, net	(1,654		)	(5,704		)	(1,746		)	(5,704		)
Loss before income taxes	(11,176		)	(19,605		)	(43,343		)	(55,567		)
Income tax benefit	—			18			—			18
Net loss	$	(11,176	)	$	(19,587	)	$	(43,343	)	$	(55,549	)
Net loss per common share:
Net loss per basic common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Net loss per diluted common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Weighted average shares outstanding:
Basic	11,696			150,941			11,696			150,938
Diluted	11,696			150,941			11,696			150,938

The accompanying notes are an integral part of these statements.

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NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Successor			Predecessor
	Six Months Ended
	June 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(43,343	)	$	(55,549	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	26,713			24,978
Amortization of debt issuance costs, net	—			2,135
Accrued interest added to debt principal	119			8,575
Stock-based compensation	11,394			421
Impairment of long-lived assets	4,463			—
Gain on sale of UGSI	(75		)	—
Gain on disposal of property, plant and equipment	(254		)	(223		)
Bad debt expense	120			784
Change in fair value of derivative warrant liability	(289		)	(4,025		)
Other, net	221			106
Changes in operating assets and liabilities:
Accounts receivable	(1,631		)	(5,204		)
Prepaid expenses and other receivables	(99		)	710
Accounts payable and accrued liabilities	2,243			13,882
Other assets and liabilities, net	(54		)	135
Net cash used in operating activities	(472		)	(13,275		)
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment	17,649			3,027
Purchases of property, plant and equipment	(7,103		)	(2,319		)
Proceeds from the sale of UGSI	75			—
Net cash provided by investing activities	10,621			708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	—			76,072
Payments on Predecessor revolving credit facility	—			(79,866		)
Proceeds from Predecessor term loan	—			15,700
Proceeds from debtor in possession term loan	—			6,875
Payments on Successor First and Second Lien Term Loans	(1,597		)	—
Proceeds from Successor revolving facility	117,092			—
Payments on Successor revolving facility	(117,092		)	—
Payments on vehicle financing and other financing activities	(980		)	(2,595		)
Net cash (used in) provided by financing activities	(2,577		)	16,186
Change in cash, cash equivalents and restricted cash	7,572			3,619
Cash and cash equivalents, beginning of period	5,488			994
Restricted cash, beginning of period	1,296			1,420
Cash, cash equivalents and restricted cash, beginning of period	6,784			2,414
Cash and cash equivalents, end of period	12,808			1,205
Restricted cash, end of period	1,548			4,828
Cash, cash equivalents and restricted cash, end of period	$	14,356		$	6,033
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,967		$	1,399
Cash paid for taxes, net	207			193

The accompanying notes are an integral part of these statements.

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NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2017, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018 (as amended on April 19, 2018, the “2017 Annual Report on Form 10-K”).

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Unless stated otherwise, any reference to statement of operations items in these accompanying condensed consolidated financial statements refers to results from continuing operations.

On May 1, 2017, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed voluntary petitions under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to pursue prepackaged plans of reorganization (together, and as amended, the “Plan”). On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan became effective on August 7, 2017 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Upon emergence, we elected to apply fresh start accounting effective July 31, 2017, to coincide with the timing of our normal accounting period close. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the condensed consolidated financial statements on or after August 1, 2017, are not comparable with the condensed consolidated financial statements prior to that date.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on and prior to July 31, 2017.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (or “FASB”) issued Accounting Standards Update (or “ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in this update will be added to the Account Standards Codification (“ASC”) as ASC 606, Revenue from Contracts with Customers, and replaces the guidance in ASC 605, Revenue Recognition. The new guidance in ASC 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services.

On January 1, 2018, we adopted the guidance in ASC 606 and all the related amendments (the “new revenue standard”) and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. See Note 3 for further information on the new standard.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification and guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and contingent consideration payments made after a business combination. The pronouncement is effective for fiscal years, and for interim periods within those fiscal

8

years, beginning after December 15, 2017, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning January 1, 2018, which did not have a significant impact on the consolidated statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is to be applied retrospectively. The adoption of this guidance as of January 1, 2018 did not have a significant impact on our consolidated statement of cash flows, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals. We have adjusted the prior year period to reflect this new presentation as well.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2017 Annual Report on Form 10-K.

Note 2 - Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-09 is permitted. While we are currently assessing the impact ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact upon adoption will be the recognition, on a discounted basis, of our minimum commitments under non-cancellable operating leases on our consolidated balance sheets resulting in the recording of right of use assets and lease obligations. Based upon the current effective date, the new guidance would first apply to our reporting period starting January 1, 2019.

Note 3 - Revenues

On January 1, 2018, we adopted the guidance in ASC 606, including all related amendments, and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under ASC 605, or the accounting guidance in effect for those periods.

Revenue Recognition

Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues.

Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transfer services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering.

9

The following tables present our revenues disaggregated by revenue source for each reportable segment for the three months ended June 30, 2018 and June 30, 2017:

	Successor
	For the Three Months Ended June 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	21,967	$	8,230	$	5,014	$	—	$	35,211
Disposal Services	4,540		955		1,081		—		6,576
Other Revenue	3,120		362		51		—		3,533
Total Service Revenue	29,627		9,547		6,146		—		45,320
Rental Revenue	3,538		59		31		—		3,628
Total Revenue	$	33,165	$	9,606	$	6,177	$	—	$	48,948

	Predecessor
	For the Three Months Ended June 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	16,470	$	7,694	$	6,937	$	—	$	31,101
Disposal Services	2,932		655		668		—		4,255
Other Revenue	820		1,172		190		—		2,182
Total Service Revenue	20,222		9,521		7,795		—		37,538
Rental Revenue	3,537		49		414		—		4,000
Total Revenue	$	23,759	$	9,570	$	8,209	$	—	$	41,538

The following tables present our revenues disaggregated by revenue source for each reportable segment for the six months endedJune 30, 2018 and June 30, 2017:

	Successor
	For the Six Months Ended June 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	43,227	$	16,249	$	13,125	$	—	$	72,601
Disposal Services	8,152		1,732		2,317		—		12,201
Other Revenue	5,244		616		185		—		6,045
Total Service Revenue	56,623		18,597		15,627		—		90,847
Rental Revenue	7,312		122		336		—		7,770
Total Revenue	$	63,935	$	18,719	$	15,963	$	—	$	98,617

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	Predecessor
	For the Six Months Ended June 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	32,966	$	14,341	$	13,067	$	—	$	60,374
Disposal Services	5,526		976		1,211		—		7,713
Other Revenue	2,650		1,943		276		—		4,869
Total Service Revenue	41,142		17,260		14,554		—		72,956
Rental Revenue	6,902		67		836		—		7,805
Total Revenue	$	48,044	$	17,327	$	15,390	$	—	$	80,761

Water Transfer Services

The majority of our revenues are from the removal and disposal of flowback and produced saltwater originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transport pipelines. Water transfer rates for trucking are generally based upon a fixed fee per barrel of disposal water, but in certain circumstances may be based upon an hourly rate. Revenue is recognized once the water has been transferred, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our saltwater pipeline are priced at a fixed fee per disposal barrel transferred, with revenues recognized over time from when the water is injected into our pipeline until the transfer is complete. Water transfer services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month.

Disposal Services

Revenues for disposal services are generated through fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Disposal rates are generally based on a fixed fee per barrel of disposal water, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time.

Other Revenue

Other revenue primarily includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil at a point in time once the goods are transferred.

Other revenue also historically included small-scale construction or maintenance projects, however we exited that business during the three months ended June 30, 2018. Under the new revenue standard, revenue for construction and maintenance projects, which generally spanned approximately two to three months, was recognized over time under the milestone method which is considered an output method. Since our construction contracts were short term in nature, the contractual milestone dates occurred close together over time such that there was no risk that we would not recognize revenue for goods or services transferred to the customer. All construction costs were expensed as incurred.

Rental Revenue

We generate rental revenue from the rental of various equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 840, Leases. When ASC 842, Leases, becomes effective on January 1, 2019, the Company will continue to recognize the revenues from rental equipment under this new standard as a lessor.

11

Practical Expedients

The new revenue standard requires the transaction price to exclude amounts collected on behalf of third parties. However, the new revenue standard also provides a practical expedient to allow entities to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority. Upon implementing the new revenue standard we adopted this practical expedient and have excluded sales and usage-based taxes from the transaction price, rather than making a jurisdiction-by-jurisdiction assessment.

Note 4 - Earnings Per Common Share

Net loss per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period. For the three and six months endedJune 30, 2018 and 2017, no shares of common stock, underlying stock options, restricted stock or warrants were included in the computation of diluted earnings per common share because the inclusion of such shares would be anti-dilutive based on the net losses reported for those periods.

The following table presents the calculation of basic and diluted net loss per common share, as well as the potentially dilutive stock-based awards that were excluded from the calculation of diluted loss per share for the periods presented:

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(11,176	)	$	(19,587	)	$	(43,343	)	$	(55,549	)
Denominator:
Weighted average shares—basic	11,696			150,941			11,696			150,938
Common stock equivalents	—			—			—			—
Weighted average shares—diluted	11,696			150,941			11,696			150,938
Net loss per common share:
Net loss per basic common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Net loss per diluted common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Potentially dilutive stock-based awards excluded:
Stock options	—			—			—			—
Restricted stock awards and units	537			—			—			—
Warrants	—			20,450			—			23,610
Total	537			20,450			—			23,610
Anti-dilutive stock-based awards excluded:	1,131			593			1,227			593

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Note 5 - Intangible Assets

Intangible assets consist of the following:

	Successor
	June 30, 2018
	Gross Carrying Amount		Additions/(Disposals)			Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	(12	)	$	(128	)	$	454	5.7
Total intangible assets	$	594	$	(12	)	$	(128	)	$	454	5.7

	Successor
	December 31, 2017
	Gross Carrying Amount		Additions/(Disposals)		Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	—	$	(47	)	$	547	6.2
Total intangible assets	$	594	$	—	$	(47	)	$	547	6.2

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

Note 6 - Assets Held for Sale and Impairment

During the three months ended March 31, 2018, management approved a plan to sell certain assets located in the Southern division as a result of exiting the Eagle Ford Shale area. As a result, we began to actively market these assets, which we expect to sell within one year. See Note 11 for additional details on the exit of the Eagle Ford Shale area. In addition, during the three months ended March 31, 2018, management approved the sale of certain assets, primarily frac tanks, located in the Northeast division, that are expected to sell within one year. In accordance with applicable accounting guidance, the assets were recorded at the lower of net book value or fair value less costs to sell and reclassified to “Assets held for sale” on the condensed consolidated balance sheet during the three months ended March 31, 2018. Upon reclassification we ceased to recognize depreciation expense on the assets. As the fair value of the assets reclassified as held for sale was lower than its net book value, we recorded an impairment charge of $4.1 million during the three months ended March 31, 2018. Of the $4.1 million recorded, $4.0 million related to the Southern division for the Eagle Ford exit and $0.1 million related to the Northeast division, and is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations for the six months ended June 30, 2018.

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division to “Impairment of long-lived assets” on our condensed consolidated statements of operations related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure.

Note 7 - Fair Value Measurements

Measurements

Fair value represents an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

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• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Successor
	June 30, 2018		December 31, 2017
Derivative warrant liability	$	188	$	477
Contingent consideration	500		500

Derivative Warrant Liability

Our derivative warrant liability is adjusted to reflect the estimated fair value at each quarter end, with any decrease or increase in the estimated fair value recorded in “Other expense, net” in the condensed consolidated statements of operations. We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed using a Monte Carlo simulation model. The key inputs in determining our derivative warrant liability typically include our stock price, the volatility of our stock price, and the risk free interest rate. Future changes in these factors could have a significant impact on the computed fair value of the derivative warrant liability. As such, we expect future changes in the fair value of the warrants could vary significantly from quarter to quarter.

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. Additionally, on the Effective Date, pursuant to the Plan we issued to the holders of our pre-Effective Date9.875%Senior Notes due 2018 (the “2018 Notes”) and holders of certain claims relating to the rejection of executory contracts and unexpired leases118,137warrants with an exercise price of$39.82and a termexpiring seven years from the Effective Date. Each warrant is exercisable for one share of our common stock, par value$0.01. The warrants issued by the Successor Company were also determined to be derivative liabilities.

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the six months endedJune 30, 2018, and the five months ended December 31, 2017.

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(289		)	(240		)
Balance at end of period	$	188		$	477

Contingent Consideration

We are liable for contingent consideration payments in connection with an acquisition. The fair value of the contingent consideration obligation was determined using a probability-weighted income approach at the acquisition date and is revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the performance measurements upon which the obligation is based.

On June 28, 2017, certain of the Nuverra Parties filed a motion with the Bankruptcy Court seeking authorization to resolve unsecured claims related to the $8.5 million contingent consideration from the Ideal Oilfield Disposal LLC acquisition (the “Ideal Settlement”). On July 11, 2017, the Bankruptcy Court entered an order authorizing the Ideal Settlement. Pursuant to the approved settlement terms, the $8.5 million contingent claim was replaced with an obligation on the part of the applicable Nuverra Party to transfer $0.5 million to the counterparties to the Ideal Settlement upon emergence from chapter 11, and $0.5 million when the Ideal Settlement counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit. The $0.5 million due upon emergence from chapter 11 was paid during the five months ended December 31, 2017. The remaining $0.5 million due when the counterparties deliver the required permits and

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certificates necessary for the issuance of the second special waste disposal permit has been classified as current, as these permits and certificates are expected to be received within one year.

Changes to the fair value of contingent consideration are recorded as “Other expense, net” in the condensed consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs. Changes to contingent consideration obligations during the six months endedJune 30, 2018, and five months ended December 31, 2017, were as follows:

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	500		$	1,000
Cash payments	—			(500		)
Balance at end of period	500			500
Less: current portion	(500		)	(500		)
Long-term contingent consideration	$	—		$	—

Note 8 - Accrued Liabilities

Accrued liabilities consisted of the following at June 30, 2018 and December 31, 2017:

	Successor
	June 30, 2018		December 31, 2017
Accrued payroll and employee benefits	$	6,437	$	3,304
Accrued insurance	2,285		2,701
Accrued legal	1,126		1,749
Accrued taxes	1,769		2,362
Accrued interest	141		161
Accrued operating costs	3,992		2,663
Accrued other	124		999
Total accrued liabilities	$	15,874	$	13,939

Note 9 - Debt

Debt consisted of the following at June 30, 2018 and December 31, 2017:

			Successor
			June 30, 2018					December 31, 2017
	Interest Rate	Maturity Date	Fair Value of Debt (d)		Carrying Value of Debt			Carrying Value of Debt
Successor Revolving Facility (a)	7.25%	Aug. 2020	$	—	$	—		$	—
Successor First Lien Term Loan (b)	9.25%	Aug. 2020	13,214		13,214			14,285
Successor Second Lien Term Loan (b)	11.00%	Feb 2021	20,593		20,593			21,000
Vehicle financings (c)	5.01%	Various	2,761		2,761			3,764
Total debt			$	36,568	36,568			39,049
Less: current portion of long-term debt					(4,698		)	(5,525		)
Long-term debt					$	31,870		$	33,524

_____________________

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(a) The interest rate presented represents the interest rate on the $30.0 million Successor Revolving Facility as of June 30, 2018.

(b) Interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. Interest on the Successor Second Lien Term Loan accrues at both an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018, and on or after February 7, 2018, at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 5.01%, which mature in varying installments between 2018 and 2020.

(d) Our Successor Revolving Facility, Successor First Lien Term Loan, Successor Second Lien Term Loan, and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

For a discussion of material changes and developments in our debt and its principal terms, see our discussion below.

Indebtedness

As of June 30, 2018, we had $36.6 million of indebtedness outstanding, consisting of $13.2 million under the Successor First Lien Term Loan (as defined herein), $20.6 million under the Successor Second Lien Term Loan (as defined herein), and $2.8 million of capital leases for vehicle financings.

First Lien Credit Agreement

On the Effective Date, pursuant to the Plan, the Company entered into a $45.0 million First Lien Credit Agreement (the “Credit Agreement”) by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the Credit Agreement, the Credit Agreement Lenders agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Successor Revolving Facility”) and a $15.0 million senior secured term loan facility (the “Successor First Lien Term Loan”) (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based lending facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses, and other general corporate purposes. The Credit Agreement also contains an accordion feature that provides for an increase in availability of up to an additional $20.0 million, subject to the satisfaction of certain terms and conditions contained in the Credit Agreement.

The Successor Revolving Facility and the Successor First Lien Term Loan mature on August 7, 2020, at which time the Company must repay the outstanding principal amount of the Successor Revolving Facility and the Successor First Lien Term Loan, together with interest accrued and unpaid thereon. The Successor Revolving Facility may be repaid and, subject to the terms and conditions of the Credit Agreement, reborrowed at any time during the term of the Credit Agreement. The principal amount of the Successor First Lien Term Loan shall be repaid in installments of $178.6 thousand beginning on September 1, 2017 and the first day of each calendar month thereafter prior to maturity. Interest on the Successor Revolving Facility accrues at an annual rate equal to the LIBOR Rate (as defined in the Credit Agreement) plus 5.25%, and interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%; however, if there is an Event of Default (as defined in the Credit Agreement), the Credit Agreement Agent, in its sole discretion, may increase the applicable interest rate at a per annum rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Credit Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. As of June 30, 2018, we were in compliance with all covenants.

Second Lien Term Loan Credit Agreement

On the Effective Date, pursuant to the Plan, the Company also entered into a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan Agreement”) by and among the lenders party thereto (the “Second Lien Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent (the “Second Lien Term Loan Agent”) and the Company. Pursuant to the Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to extend to the Company a $26.8 million second lien term loan facility (the “Successor Second Lien Term Loan”), of which $21.1 million was advanced on the Effective Date and up to an additional $5.7 million (“Delayed Draw Term Loan”) is available at the request of the Company after the closing date subject to the satisfaction of certain terms and conditions specified in the Second Lien Term Loan Agreement. The Second Lien Term Loan Lenders extended the Successor Second Lien Term Loan, among other things, (i) to

16

repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based revolving facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses and other general corporate purposes.

The Successor Second Lien Term Loan matures on February 7, 2021, at which time the Company must repay all outstanding obligations under the Successor Second Lien Term Loan. The principal amount of the Successor Second Lien Term Loan shall be repaid in installments of $263.2 thousand beginning on October 1, 2017, and the first day of each fiscal quarter thereafter prior to maturity, with such amount to be proportionally increased as the result of the incurrence of a Delayed Draw Term Loan. Interest on the Successor Second Lien Term Loan accrues at an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018 (or such later date as the Company may select in accordance with the terms of the Second Lien Term Loan Agreement) and, on or after February 7, 2018 (or such later date) at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. However, upon the occurrence and during the continuation of an Event of Default (as defined in the Second Lien Term Loan Agreement) due to a voluntary or involuntary bankruptcy filing, automatically, or any other Event of Default, at the election of the Second Lien Term Loan Agent, the Successor Second Lien Term Loan and all obligations thereunder shall bear interest at an annual rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Second Lien Term Loan Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for term loans of this type. As of June 30, 2018, we were in compliance with all covenants.

Note 10 - Derivative Warrants

Predecessor Warrants

During the year ended December 31, 2016, we issued 26.4 million warrants, with 17.5 million warrants for the exchange of the 2018 Notes for new 12.5%/10.0% Senior Secured Second Lien Notes due 2021 (the “2021 Notes”), 0.1 million warrants for the exchange of the 2018 Notes for common stock, and 8.8 million warrants to the lenders under the Predecessor Term Loan. All warrants were issued with an exercise price of $0.01 and had a term of ten years.

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. The following table shows the Predecessor warrant activity for the six months ended June 30, 2017:

	Predecessor
	Six Months Ended
	June 30, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(2	)
Outstanding at the end of the period	25,281

Successor Warrants

Pursuant to the Plan, on the Effective Date, we issued to the holders of the 2018 Notes and holders of certain claims relating to the rejection of executory contracts and unexpired leases warrants to purchase an aggregate of118,137shares of common stock, par value$0.01, at an exercise price of$39.82per share and with a termexpiring seven years from the Effective Date.

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The following table shows the Successor warrant activity for the six months endedJune 30, 2018:

	Successor
	Six Months Ended
	June 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

Fair Value of Warrants

We account for warrants in accordance with the accounting guidance for derivatives, which sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the shareholders’ equity section of the entity’s balance sheet. We determined that the Predecessor warrants are ineligible for equity classification due to the anti-dilution provisions in the contract. The Successor warrants are also ineligible for equity classification as the warrants are not indexed to our common stock. As such, both the Predecessor and Successor warrants are recorded as derivative liabilities at fair value in the condensed consolidated balance sheets. The warrants are classified as a current liability in the condensed consolidated balance sheets as they could be exercised by the holders at any time.

As discussed previously in Note 7, the fair value of the derivative warrant liability is estimated using a Monte Carlo simulation model on the date of issue and is re-measured at each quarter end until expiration or exercise of the underlying warrants with the resulting fair value adjustment recorded in “Other expense, net” in the condensed consolidated statements of operations.

The fair value of the derivative warrant liability as of June 30, 2018 and December 31, 2017 was estimated using the following model inputs:

	Successor			Successor
	As of June 30,			As of December 31,
	2018			2017
Exercise price	$	39.82		$	39.82
Closing stock price	$	12.00		$	18.18
Risk free rate	2.75		%	2.29		%
Expected volatility	42.26		%	40.59		%

Note 11 - Restructuring and Exit Costs

Eagle Ford Shale Area

On March 1, 2018, the Board of Directors (the “Board”) determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area in order to focus on other opportunities. The Board considered a number of factors in making this determination, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our operations, and recommendations from management. As a result, we have substantially exited the Eagle Ford Shale area during the six months ended June 30, 2018. We continue to incur minimal related costs while the remaining assets previously used in the operation of our business in that basin are divested.

The total costs of the exit recorded during the three and six months endedJune 30, 2018 were $0.5 million and $1.1 million, respectively. We previously recorded $0.6 million of exit related charges during the three months ended March 31, 2018. The charges are characterized as “Other, net” in the condensed consolidated statement of operations for the three and six months endedJune 30, 2018. Such costs consisted of the following and all related to the Southern operating segment:

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	Successor
	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Severance and termination benefits	$	10	$	236
Contract termination costs and exit costs	459		832
Total restructuring and exit costs for Eagle Ford	$	469	$	1,068

The remaining liability, shown below, totaled approximately $0.1 million as of June 30, 2018 and is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through June 30, 2018 is as follows:

	Employee Termination Costs (a)			Lease Exit Costs (b)			Other Exit Costs (c)			Total
Balance accrued at beginning of period - Successor	$	—		$	—		$	—		$	—
Restructuring and exit-related costs	236			63			769			1,068
Cash payments	(215		)	(39		)	(742		)	(996		)
Balance accrued at end of period - Successor	$	21		$	24		$	27		$	72

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to the Company.

(c) Other exit costs include costs related to the movement of vehicles, tanks and rental fleet in connection with the exit from the Eagle Ford Shale area.

Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business

In March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian shale area and the Tuscaloosa Marine Shale logistics business. Additionally, we closed certain yards within the Northeast and Southern divisions and transferred many of the related assets to our other operating locations. The total costs of the restructuring recognized in 2015 were approximately $7.1 million, and included severance and termination benefits, lease exit costs, other exits costs related to the movement of vehicles and rental fleet, and an asset impairment charge.

The remaining liability for the restructuring and exit costs incurred represents lease exit costs under non-cancellable operating leases and totaled approximately $0.1 million as of June 30, 2018, which is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through June 30, 2018 is as follows:

	Lease Exit Costs
Balance accrued at beginning of period - Successor	$	82
Cash payments	(25		)
Balance accrued at end of period - Successor	$	57

Note 12 - Income Taxes

We recorded no income tax benefit or expense for the three or six months endedJune 30, 2018. As a result, our effective income tax rate for the three and six months endedJune 30, 2018 was zero, which differs from the federal statutory benefit rate of 21.0%. The difference is primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

The effective income tax rate for the three and six months endedJune 30, 2017 was near zero, which differs from the federal statutory rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

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On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant changes in U.S. tax law including a reduction in the corporate statutory income tax rate from 35% to 21%, changes to net operating loss (“NOL”) carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. As a result of the enacted law, we were required to revalue deferred tax assets and liabilities as of December 22, 2017 using the new statutory rate and have reflected this revaluation in our effective tax rate reconciliation. As we are subject to a valuation allowance, there was no material impact to our tax provision at either June 30, 2018 or December 31, 2017.

We have significant deferred tax assets, consisting primarily of NOLs, which have a limited life, generally expiring between the years 2031 and 2038, and capital losses, which have a five year carryforward expiring in 2020. We regularly assess the positive and negative evidence available to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued ordinary losses, at June 30, 2018 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of ourdeferred tax assets that is not offset by deferred tax liabilities. We expect our effective income tax rate to be near zero for the remainder of 2018.

Note 13 - Share-based Compensation

Successor Share-based Compensation

The Second Amended and Restated Employment Agreement of Mr. Mark D. Johnsrud, our former Chairman and Chief Executive Officer, which was assumed by the Company on the Effective Date, provided for the issuance to Mr. Johnsrud of two tranches of options to purchase (i) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $475.0 million and (ii) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $525.0 million. Each tranche of options vests in substantially equal installments on the first three anniversaries following the Effective Date. Pursuant to Mr. Johnsrud’s Second Amended and Restated Employment Agreement and the Plan, the grant of stock options to Mr. Johnsrud was effective as of the Effective Date. On February 23, 2018, following the approval of the form of option agreement by the Compensation and Nominating Committee of the Board (the “Compensation Committee”), the Company and Mr. Johnsrud entered into a Notice of Grant of CEO Stock Options and Stock Option Award Agreement (the “Award Agreement”) to provide for the terms and conditions of Mr. Johnsrud’s stock option grant. Pursuant to the Award Agreement, Mr. Johnsrud was awarded 354,411 options to purchase common stock, with an exercise price of $37.03 per share, in Tranche 1, and 354,411 options to purchase common stock, with an exercise price of $41.31 per share, in Tranche 2. The stock options in Tranche 1 and Tranche 2 were scheduled to vest in three equal installments on the first three anniversaries of the Effective Date.

Pursuant to the requirements of the Plan, on February 22, 2018, the Board approved the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan (the “Incentive Plan”). The Incentive Plan is intended to provide for the grant of equity-based awards to designated members of the Company’s management and employees. Pursuant to the terms of the Plan, the Incentive Plan became effective on the Effective Date. The maximum number of shares of the Company’s common stock that is available for the issuance of awards under the Incentive Plan is 1,772,058.

On February 22, 2018, the Compensation Committee authorized the grant of performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“TRSUs”) under the Incentive Plan to Mr. Johnsrud, Edward A. Lang, the Company’s Executive Vice President and Chief Financial Officer, and Joseph M. Crabb, the Company’s Executive Vice President and Chief Legal Officer. On or after the applicable vesting date, the PRSUs and TRSUs will be settled for shares of common stock if all applicable conditions have been met. Mr. Johnsrud received 531,618 PRSUs, which initially were scheduled to vest in equal installments on the first two anniversaries of the Effective Date, but which partially vested on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 PRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020. Vesting of the PRSUs is subject to the achievement of pre-established performance targets during the applicable performance measurement periods. Mr. Johnsrud received 531,618 TRSUs, which were scheduled to vest in three equal installments on the date of grant, which was February 23, 2018, and the first two anniversaries of the Effective Date, but which vested in full on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 TRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020.

20

Further, the Compensation Committee on February 22, 2018 adopted the 2018 Restricted Stock Plan for Directors (the “Restricted Stock Plan”), which is subject to ratification by the Company’s shareholders at the Company’s 2018 Annual Meeting. The Restricted Stock Plan provides for the grant of restricted stock to the non-employee directors of the Company. The Restricted Stock Plan limits the shares that may be issued thereunder to 100,000 shares of common stock.

In coordination with the adoption of the Restricted Stock Plan, the Compensation Committee also authorized award grants of restricted stock to the current non-employee directors of the Company, which were granted on March 16, 2018 subject to ratification of the Restricted Stock Plan by the Company’s shareholders at the Company’s 2018 annual meeting. Each non-employee director was granted 4,688 shares of restricted stock for service during part of fiscal year 2017 and for fiscal 2018, all of which will fully vest on the first anniversary of the grant date.

On May 29, 2018, the Compensation Committee authorized the grant of 5,889 shares of restricted stock to the Company’s interim Chief Executive Officer, Mr. Charles K. Thompson. Per the terms of the grant agreement, the shares immediately vested in full on the date of grant.

The total grants awarded during the three and six months endedJune 30, 2018 are presented in the table below:

	Successor
	Three Months Ended	Six Months Ended
	June 30, 2018	June 30, 2018
Stock option grants	—	—
Restricted stock grants	6	20
Restricted stock unit grants	—	1,311
Total grants in the Successor period	6	1,331

On March 2, 2018, the Company announced that Mr. Johnsrud was leaving the Company, effective as of March 2, 2018 (the “Separation Date”). Pursuant to a Separation Agreement and Mutual Release entered into between Mr. Johnsrud and the Company on the Separation Date, Mr. Johnsrud vested in the following: (a) 354,412 unvested TRSUs that were granted on February 22, 2018; and (b) 708,822 unvested stock options that were granted on February 23, 2018, which will remain exercisable through the first anniversary of the Separation Date. Vested restricted stock units subject to time based vesting will be settled in accordance with the terms and conditions set forth in the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan and any applicable award agreement(s). Additionally, Mr. Johnsrud continued to hold 88,603 PRSUs that were granted on February 22, 2018, with a performance period that began on January 1, 2018 and ended on June 30, 2018. As the pre-established performance target was not met as of June 30, 2018, Mr. Johnsrud’s 88,603 PRSUs were canceled during the three months ended June 30, 2018. All other unvested equity awards granted to Mr. Johnsrud under the Incentive Plan were canceled as of the Separation Date.

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months endedJune 30, 2018 was as follows:

	Successor
	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Stock options	$	—	$	(788	)
Restricted stock	160		160
Restricted stock units	256		12,022
Total expense	$	416	$	11,394

Predecessor Share-based Compensation

Prior to the Effective Date, we granted stock options, stock appreciation rights, restricted common stock and restricted stock units, performance shares and units, other share-based awards and cash-based awards to our employees, directors, consultants and advisors pursuant to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (as amended, the “2009 Plan”).

21

On the Effective Date pursuant to the Plan, all of the pre-Effective Date share-based compensation awards issued and outstanding under the 2009 Plan were canceled.

There were no grants awarded during the three or six months endedJune 30, 2017 under the 2009 Plan. The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months endedJune 30, 2017 was as follows:

	Predecessor
	Three Months Ended		Six Months Ended
	June 30, 2017		June 30, 2017
Stock options	$	32	$	97
Restricted stock	65		131
Restricted stock units	15		193
Total expense	$	112	$	421

Note 14 - Legal Matters

Environmental Liabilities

We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law.

We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheet at June 30, 2018 and December 31, 2017 did not include any accruals for environmental matters.

Litigation

There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in pending lawsuits are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Chapter 11 Proceedings

On May 1, 2017, the Nuverra Parties filed voluntary petitions under chapter 11 of the Bankruptcy Code in the Bankruptcy Court to pursue the Plan. On July 25, 2017, the Bankruptcy Court entered the Confirmation Order confirming the Plan. The Plan became effective on the Effective Date, when all remaining conditions to the effectiveness of the Plan were satisfied or

22

waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Confirmation Order Appeal

On July 26, 2017, David Hargreaves, an individual holder of 2018 Notes, appealed the Confirmation Order to the District Court of the District of Delaware (the “District Court”) and filed a motion for a stay pending appeal from the District Court. The Company and the unsecured creditors’ committee opposed the stay in the District Court. On August 3, 2017, the District Court entered an order denying the motion for a stay pending appeal. Notwithstanding the denial of the motion for stay pending appeal, Hargreaves’ appeal remains pending in the District Court. The District Court heard oral arguments for the pending appeal on May 14, 2018. The ultimate outcome of this appeal and its effects on the Confirmation Order are impossible to predict with certainty. No assurance can be given that the appeal will not affect the finality, validity and enforceability of the Confirmation Order.

Note 15 - Related Party and Affiliated Company Transactions

There have been no significant changes to the other related party transactions as described in Note 21 to the consolidated financial statements in our 2017 Annual Report on Form 10-K.

Note 16 - Segments

We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our shale solutions business is comprised of three operating divisions, which we consider to be operating and reportable segments of our operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville Shale area and the Eagle Ford Shale area (which we substantially exited during the six months ended June 30, 2018) and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets.

Financial information for our reportable segments related to operations is presented below.

	Rocky Mountain			Northeast			Southern (b)			Corporate/ Other			Total
Three months ended June 30, 2018 - Successor
Revenue	$	33,165		$	9,606		$	6,177		$	—		$	48,948
Direct operating expenses	25,599			8,510			4,960			—			39,069
General and administrative expenses	1,882			518			251			3,363			6,014
Depreciation and amortization	5,923			3,283			2,750			13			11,969
Operating loss	(239		)	(2,705		)	(2,253		)	(3,708		)	(8,905		)
Loss before income taxes	(203		)	(2,780		)	(2,295		)	(5,898		)	(11,176		)
Six months ended June 30, 2018 - Successor
Revenue	63,935			18,719			15,963			—			98,617
Direct operating expenses	51,945			16,324			12,427			—			80,696
General and administrative expenses	3,158			1,280			829			20,067			25,334
Depreciation and amortization	12,212			7,589			6,874			38			26,713
Operating loss	(3,380		)	(6,543		)	(9,297		)	(20,437		)	(39,657		)
Loss before income taxes	(3,405		)	(6,679		)	(9,406		)	(23,853		)	(43,343		)
As of June 30, 2018 - Successor
Total assets (a)	125,679			47,707			89,346			15,905			278,637
Total assets held for sale	—			116			2,487			778			3,381

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	Rocky Mountain		Northeast		Southern (b)		Corporate/ Other		Total
Three months ended June 30, 2017 - Predecessor
Revenue	23,759		9,570		8,209		—		41,538
Direct operating expenses	19,171		9,831		5,823		—		34,825
General and administrative expenses	1,505		817		650		5,895		8,867
Depreciation and amortization	6,803		2,182		3,068		54		12,107
Operating loss	(3,720	)	(3,260	)	(1,332	)	(5,949	)	(14,261	)
Loss before income taxes	(4,209	)	(3,325	)	(1,406	)	(10,665	)	(19,605	)
Six months ended June 30, 2017 - Predecessor
Revenue	48,044		17,327		15,390		—		80,761
Direct operating expenses	40,403		17,788		10,923		—		69,114
General and administrative expenses	3,452		1,586		1,681		14,507		21,226
Depreciation and amortization	13,588		4,695		6,587		108		24,978
Operating loss	(9,399	)	(6,742	)	(3,801	)	(14,615	)	(34,557	)
Loss before income taxes	(9,910	)	(6,927	)	(3,933	)	(34,797	)	(55,567	)
As of December 31, 2017 - Successor
Total assets (a)	137,213		54,218		111,457		8,434		311,322
Total assets held for sale	2,765		—		—		—		2,765

_____________________

(a) Total assets exclude intercompany receivables eliminated in consolidation.

(b) The Southern division includes the Eagle Ford Shale area which we substantially exited during the six months ended June 30, 2018. See Note 11 for further discussion.

Note 17 - Subsidiary Guarantors

The 2018 Notes and the 2021 Notes of the Predecessor Company were registered securities. As a result of these registered securities, we are required to present the following condensed consolidating financial information for the Predecessor periods pursuant to Rule 3-10 of SEC Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. Our Successor Revolving Facility, Successor First Lien Term Loan, and Successor Second Lien Term Loan are not registered securities. Therefore, the presentation of condensed consolidating financial information is not required for the Successor period.

The following tables present consolidating financial information for Nuverra Environmental Solutions, Inc. (“Parent”) and its 100% wholly owned subsidiaries (the “Guarantor Subsidiaries”) for the three and six months endedJune 30, 2017.

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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	41,538		$	—	$	41,538
Costs and expenses:
Direct operating expenses	—			34,825			—		34,825
General and administrative expenses	5,895			2,972			—		8,867
Depreciation and amortization	54			12,053			—		12,107
Total costs and expenses	5,949			49,850			—		55,799
Operating loss	(5,949		)	(8,312		)	—		(14,261		)
Interest expense, net	(5,178		)	(160		)	—		(5,338		)
Other income, net	5,643			63			—		5,706
(Loss) income from equity investments	(8,940		)	(8		)	8,940		(8		)
Reorganization items, net	(5,181		)	(523		)	—		(5,704		)
(Loss) income before income taxes	(19,605		)	(8,940		)	8,940		(19,605		)
Income tax benefit	18			—			—		18
Net (loss) income	$	(19,587	)	$	(8,940	)	$	8,940	$	(19,587	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	80,761		$	—	$	80,761
Costs and expenses:
Direct operating expenses	—			69,114			—		69,114
General and administrative expenses	14,507			6,719			—		21,226
Depreciation and amortization	108			24,870			—		24,978
Total costs and expenses	14,615			100,703			—		115,318
Operating loss	(14,615		)	(19,942		)	—		(34,557		)
Interest expense, net	(19,126		)	(420		)	—		(19,546		)
Other income, net	4,125			129			—		4,254
(Loss) income from equity investments	(20,770		)	(14		)	20,770		(14		)
Reorganization items, net	(5,181		)	(523		)	—		(5,704		)
(Loss) income before income taxes	(55,567		)	(20,770		)	20,770		(55,567		)
Income tax benefit	18			—			—		18
Net (loss) income	$	(55,549	)	$	(20,770	)	$	20,770	$	(55,549	)

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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	(12,952	)	$	(323	)	$	(13,275	)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	—			3,027			3,027
Purchase of property, plant and equipment	—			(2,319		)	(2,319		)
Net cash provided by investing activities	—			708			708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	76,072			—			76,072
Payments on Predecessor revolving credit facility	(79,866		)	—			(79,866		)
Proceeds from Predecessor term loan	15,700			—			15,700
Proceeds from debtor in possession term loan	6,875			—			6,875
Payments on vehicle financing and other financing activities	(2,595		)	—			(2,595		)
Net cash provided by financing activities	16,186			—			16,186
Net increase in cash	3,234			385			3,619
Cash, cash equivalents and restricted cash - beginning of period	1,388			1,026			2,414
Cash, cash equivalents and restricted cash - end of period	$	4,622		$	1,411		$	6,033

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note about Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and related notes thereto. See “Forward-Looking Statements” on page 3 of this Quarterly Report and “Risk Factors” included in our 2017 Annual Report on Form 10-K and in our other filings with the SEC for a description of important factors that could cause actual results to differ from expected results.

Company Overview

Nuverra is a leading provider of comprehensive, full-cycle environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations in the United States. We provide total environmental solutions and wellsite logistics management, including delivery, collection, treatment and disposal of solid and liquid materials that are used in and generated by the drilling, completion, and ongoing production of shale oil and natural gas.

We operate in shale basins where customer exploration and production (“E&P”) activities are predominantly focused on shale oil and natural gas as follows:

• Oil shale area: includes our operations in the Bakken Shale area.

• Natural gas shale areas: includes our operations in the Marcellus, Utica, and Haynesville Shale areas.

We support our customers’ demand for diverse, comprehensive and regulatory compliant environmental solutions required for the safe and efficient drilling, completion and production of oil and natural gas from shale formations.

Our service offering focuses on providing comprehensive environmental and logistics management solutions within three primary groups:

• Logistics and Wellsite Services:Delivery of freshwater to wellsites, freshwater procurement and transfer services, staging and storage of equipment and materials and rental of wellsite equipment.

• Water Midstream:Collection and transportation of produced and flowback water from wellsites to disposal network via truck or fixed pipeline system; supply of freshwater for drilling and completion via pipeline system; provision and operation of gathering systems for collection and transportation of produced and flowback water to disposal wells.

• Disposal Wells and Landfill:Disposal of liquid waste water from well completion operations and well production; disposal of solid drilling waste.

We utilize a broad array of assets to meet our customers’ logistics and environmental management needs. Our logistics assets include trucks and trailers, temporary and permanent pipelines, temporary and permanent storage facilities, ancillary rental equipment, treatment facilities, and liquid and solid waste disposal sites. We continue to optimize our suite of solutions for customers who demand safety, environmental compliance and accountability from their service providers. While we have agreements in place with certain of our customers to establish pricing for our services and various other terms and conditions, these agreements typically do not contain minimum volume commitments or otherwise require the customer to use us to provide covered services.  Accordingly, our customer agreements generally provide the customer the ability to change the relationship by either insourcing some or all services historically provided or by contracting with other service providers.  As a result, even with respect to customers with which we have an agreement to establish pricing, the revenue we ultimately receive from that customer, and the mix of revenue among lines of services provided, is unpredictable and subject to significant variation over time.

In order to address our liquidity issues due to the prolonged depression in oil and natural gas prices that began in 2014, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed voluntary petitions under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on May 1, 2017 to pursue prepackaged plans of reorganization (together, and as amended, the “Plan”). On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan became effective on August 7, 2017 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

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Upon emergence, we elected to apply fresh start accounting effective July 31, 2017, to coincide with the timing of our normal accounting period close. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the condensed consolidated financial statements on or after August 1, 2017, are not comparable with the condensed consolidated financial statements prior to that date.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on and prior to July 31, 2017.

Trends Affecting Our Operating Results

Our results are driven by demand for our services, which are in turn affected by E&P spending trends in the shale basins in which we operate, in particular the level of drilling and completion activities (which impacts the amount of environmental waste products being managed) and active wells (which impacts the amount of produced water being managed). In general, drilling and completion activities in the oil and natural gas industry are affected by the market prices (or anticipated prices) for those commodities.

Oil prices improved throughout 2017 and continued to improve in the first half of 2018. Average rig count in our active basins increased 21.6% year over year to 187 in the second quarter of 2018 and completed wells in those basins increased 22.4% year over year to 878. (Average rig count and completed wells in our active basins no longer includes those in the Eagle Ford Shale area as we have substantially exited that basin as of June 30, 2018.) We saw an increase in drilling and completion activities primarily in the Rocky Mountain division with stable activity in the Northeast and Southern divisions in the second quarter of 2018 as compared with the second quarter of 2017. We would expect continued stability in oil prices or further price growth to lead to level drilling and completion activities by our customer base throughout the remainder of 2018 as compared with 2017.

Our results are also driven by a number of other factors, including (i) availability of our equipment, which we have assembled through acquisitions and capital expenditures, (ii) transportation costs, which are affected by fuel costs, (iii) utilization rates for our equipment, which are also affected by the level of our customers’ drilling and production activities and competition, and our ability to relocate our equipment to areas in which oil and natural gas exploration and production activities are growing, (iv) the availability of qualified drivers (or alternatively, subcontractors) in the areas in which we operate, particularly in the Bakken, Marcellus, and Utica shale basins, (v) labor costs, (vi) developments in governmental regulations, (vii) seasonality and weather events, (viii) pricing and (ix) our health, safety and environmental performance record.

The following table summarizes our total revenues, loss before income taxes, and net loss by oil and natural gas shale area for the three and six months endedJune 30, 2018 and June 30, 2017 (in thousands):

	Successor			Predecessor			Successor			Predecessor
	Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017
Revenue - from predominantly oil shale areas (a)	$	33,173		$	26,490		$	66,075		$	52,882
Revenue - from predominantly natural gas shale areas (b)	15,775			15,048			32,542			27,879
Total revenue	$	48,948		$	41,538		$	98,617		$	80,761
Loss before income taxes	$	(11,176	)	$	(19,605	)	(43,343		)	(55,567		)
Net loss	(11,176		)	(19,587		)	(43,343		)	(55,549		)

(a) Represents revenues that are derived from predominantly oil-rich areas consisting of the Bakken Shale area and Eagle Ford Shale area (which we substantially exited during the six months ended June 30, 2018).

(b) Represents revenues that are derived from predominantly gas-rich areas consisting of the Marcellus, Utica and Haynesville Shale areas.

The results reported in the accompanying condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our 2017 Annual Report on Form 10-K.

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Results of Operations

Three Months Ended June 30, 2018 Compared to the Three Months Ended June 30, 2017

The following table sets forth for each of the periods indicated our statements of operations data (dollars in thousands):  

	Successor			Predecessor
	Three Months Ended
	June 30,						Increase (Decrease)
	2018			2017			2018 vs 2017
Service revenue	$	45,320		$	37,538		$	7,782		20.7	%
Rental revenue	3,628			4,000			(372		)	(9.3	)%
Total revenue	48,948			41,538			7,410			17.8	%
Costs and expenses:
Direct operating expenses	39,069			34,825			4,244			12.2	%
General and administrative expenses	6,014			8,867			(2,853		)	(32.2	)%
Depreciation and amortization	11,969			12,107			(138		)	(1.1	)%
Impairment of long-lived assets	332			—			332			100.0	%
Other, net	469			—			469			100.0	%
Total costs and expenses	57,853			55,799			2,054			3.7	%
Operating loss	(8,905		)	(14,261		)	(5,356		)	(37.6	)%
Interest expense, net	(1,204		)	(5,338		)	(4,134		)	(77.4	)%
Other income, net	587			5,698			(5,111		)	(89.7	)%
Reorganization items, net	(1,654		)	(5,704		)	(4,050		)	(71.0	)%
Loss before income taxes	(11,176		)	(19,605		)	(8,429		)	(43.0	)%
Income tax benefit	—			18			(18		)	(100.0	)%
Net loss	$	(11,176	)	$	(19,587	)	$	(8,411	)	(42.9	)%

Service Revenue

Service revenue consists of fees charged to customers for the removal and disposal of flowback and produced water originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and completion activities by trucks or through temporary or permanent water transport pipelines. Service revenue also includes fees for solids management services. Service revenue for the three months ended June 30, 2018 was $45.3 million, up $7.8 million, or 20.7%, from $37.5 million in the prior year period. Service revenue growth was driven primarily by improvements in both price and activity for water transfer and disposal services in the Rocky Mountain division. Additionally, due to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018, no revenues associated with the Eagle Ford Shale area were included in service revenues for the three months ended June 30, 2018, while $2.3 million was included in service revenue during the prior year period.

Rental Revenue

Rental revenue consists of fees charged to customers over the term of the rental for use of equipment owned by us, as well as other fees charged to customers for items such as delivery and pickup. Rental revenue for the three months ended June 30, 2018 was $3.6 million, down $0.4 million, or 9.3%, from $4.0 million in the prior year period. The decrease was the result of management’s decision to exit the Eagle Ford Shale area as of March 1, 2018. As a result, no rental revenues were reported for the Eagle Ford Shale area for the three months ended June 30, 2018, while $0.4 million were included in rental revenue during the prior year period.

Direct Operating Expenses

Direct operating expenses for the three months ended June 30, 2018 increased $4.2 million to $39.1 million compared to the prior year period. The increase in direct operating expenses is attributable to higher revenues resulting from increased demand for our services due to an increase in the number of average operating drilling rigs in the basins we serve from those operating

29

in the same period in the prior year. We continue to rely upon higher cost third party or subcontracted truck drivers due to difficulties in recruiting and retaining enough full-time drivers to satisfy customer demand, particularly in our Rocky Mountain division.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2018 were $6.0 million, down $2.9 million, or 32.2% from $8.9 million in the same period in the prior year. During the three months ended June 30, 2017, general and administrative expenses included $3.1 million in legal and professional fees for our chapter 11 filing that were incurred prior to the May 1, 2017 filing date. The legal and professional fees for our chapter 11 filing incurred after the May 1, 2017 filing date were included in “Reorganization items, net” for the three months ended June 30, 2017.

Depreciation and Amortization

Depreciation and amortization for the three months ended June 30, 2018 was $12.0 million, nearly flat to the $12.1 million in the prior year period.

Impairment of long-lived assets

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure. There were no impairment charges recorded for long-lived assets during the three months ended June 30, 2017.

Other, net

On March 1, 2018, the Board determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area. In making this determination, the Board considered a number of factors, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our business operations, and recommendations from management. As a result, we have substantially exited the Eagle Ford Shale area as of June 30, 2018. The total costs related to the exit recorded during the three months ended June 30, 2018 were $0.5 million.

Interest Expense, net

Interest expense, net during the three months ended June 30, 2018 was $1.2 million, down $4.1 million or 77.4% from $5.3 million in the prior year period. The lower interest expense is primarily due to an average debt balance of $37 million during the three months ended June 30, 2018, compared to an average debt balance of $496 million during the prior year period.

Other Income, net

Other income, net was $0.6 million for the three months ended June 30, 2018, compared to $5.7 million in the prior year period. The difference is primarily attributable to a $0.5 million gain associated with the change in the fair value of the derivative warrant liability during the three months ended June 30, 2018, compared to a $5.6 million gain during the three months ended June 30, 2017. We issued warrants with derivative features in connection with our chapter 11 filing in 2017 and our debt restructuring during 2016. These instruments are accounted for as derivative liabilities with any decrease or increase in the estimated fair value recorded in “Other income, net.” See Note 7 and Note 10 in the Notes to the Condensed Consolidated Financial Statements for further details on the warrants.

Reorganization Items, net

Expenses, gains and losses directly associated with the chapter 11 proceedings are reported as “Reorganization items, net” in the Condensed Consolidated Statements of Operations for the three months ended June 30, 2018 and June 30, 2017. These fees are primarily comprised of professional and legal fees, debtor in possession credit agreement financing costs, and retention bonus payments. Included in Reorganization items, net for the three months ended June 30, 2018 was $1.3 million in chapter 11 fees paid to the US Trustee.

Income Taxes

We did not record any income tax benefit or expense for the three months ended June 30, 2018, compared to a benefit of $18.0 thousand for the three months ended June 30, 2017. The effect of valuation allowance adjustments against our deferred tax assets resulted in no significant tax expense or benefit for the three months ended June 30, 2018. See Note 12 in the Notes to the Condensed Consolidated Financial Statements herein for additional information.

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Six Months EndedJune 30, 2018 Compared to the Six Months EndedJune 30, 2017

The following table sets forth for each of the periods indicated our statements of operations data (dollars in thousands):

	Successor			Predecessor
	Six Months Ended
	June 30,						Increase (Decrease)
	2018			2017			2018 vs 2017
Service revenue	$	90,847		$	72,956		$	17,891		24.5	%
Rental revenue	7,770			7,805			(35		)	(0.4	)%
Total revenue	98,617			80,761			17,856			22.1	%
Costs and expenses:
Direct operating expenses	80,696			69,114			11,582			16.8	%
General and administrative expenses	25,334			21,226			4,108			19.4	%
Depreciation and amortization	26,713			24,978			1,735			6.9	%
Impairment of long-lived assets	4,463			—			4,463			100.0	%
Other, net	1,068			—			1,068			100.0	%
Total costs and expenses	138,274			115,318			22,956			19.9	%
Operating loss	(39,657		)	(34,557		)	5,100			14.8	%
Interest expense, net	(2,454		)	(19,546		)	(17,092		)	(87.4	)%
Other income, net	514			4,240			(3,726		)	(87.9	)%
Reorganization items, net	(1,746		)	(5,704		)	(3,958		)	(69.4	)%
Loss before income taxes	(43,343		)	(55,567		)	(12,224		)	(22.0	)%
Income tax benefit	—			18			(18		)	(100.0	)%
Net loss	$	(43,343	)	$	(55,549	)	$	(12,206	)	(22.0	)%

Service Revenue

Service revenue for the six months endedJune 30, 2018 was $90.8 million, up $17.9 million, or 24.5% from $73.0 million in the prior year period. With oil prices continuing to stabilize, customer demand for our services has increased in all divisions as compared to the same period in the prior year. Additionally, pricing increases have also contributed to the increase in service revenue. Due to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018, $1.8 million in revenues associated with the Eagle Ford Shale area were included in service revenues for the six months ended June 30, 2018, while $4.0 million was included in service revenue during the prior year period.

Rental Revenue

Rental revenue for the six months endedJune 30, 2018 was $7.8 million, or flat as compared to the prior year period. However, the prior year period included $0.8 million of rental revenues from the Eagle Ford Shale area, while the six months ended June 30, 2018 only included $0.3 million of rental revenues due to management’s decision to exit the Eagle Ford Shale area as of March 1, 2018.

Direct Operating Expenses

Direct operating expenses for the six months endedJune 30, 2018 were $80.7 million, compared to $69.1 million in the prior year period. The increase in direct operating expenses is attributable to higher revenues resulting from increased demand for our services due an increase in the number of average operating oil rigs in the basins we serve from those operating in the same period in the prior year. We continue to rely upon higher cost third party or subcontracted truck drivers due to difficulties in recruiting and retaining enough full-time drivers to satisfy customer demand, particularly in our Rocky Mountain division.

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General and Administrative Expenses

General and administrative expenses for the six months endedJune 30, 2018 amounted to $25.3 million, up $4.1 million from $21.2 million in the prior year period. The increase was due to higher compensation costs primarily due to the departure of our former Chief Executive Officer. General and administrative expenses for the six months endedJune 30, 2017 included $8.8 million in legal and professional fees for our chapter 11 filing that were incurred prior to the May 1, 2017 filing date. The legal and professional fees for our chapter 11 filing incurred after the May 1, 2017 filing date have been included in “Reorganization items, net” for the six months endedJune 30, 2017.

Depreciation and Amortization

Depreciation and amortization for the six months endedJune 30, 2018 was $26.7 million, up approximately $1.7 million from $25.0 million in the prior year period. The increase is primarily attributable to a depreciable asset base with shorter useful lives as a result of the new fair values applied by fresh start accounting upon emergence from chapter 11 on August 7, 2017.

Impairment of long-lived assets

During the three months ended March 31, 2018, management approved a plan to sell certain assets located in the Southern division as a result of exiting the Eagle Ford Shale area. In addition, during the three months ended March 31, 2018, management approved the sale of certain assets, primarily frac tanks, located in the Northeast division, that are expected to sell within one year. These assets qualified to be classified as assets held for sale and as a result the assets were recorded at the lower of net book value or fair value less costs to sell, resulting in an impairment charge of $4.1 million during the three months ended March 31, 2018. Of the $4.1 million recorded, $4.0 million related to the Southern division and $0.1 million related to the Northeast division.

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure.

There were no impairment charges recorded for long-lived assets during the six months ended June 30, 2017.

Other, net

On March 1, 2018, the Board determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area. In making this determination, the Board considered a number of factors, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our business operations, and recommendations from management. As a result, we have substantially exited the Eagle Ford Shale area as of June 30, 2018. The total costs related to the exit recorded during the six months endedJune 30, 2018 were $1.1 million.

Interest Expense, net

Interest expense, net during the six months endedJune 30, 2018 was $2.5 million, or $17.1 million lower than the $19.5 million in the prior year period. The lower interest expense is primarily due to an average debt balance of $38 million during the six months endedJune 30, 2018, compared to an average debt balance of $488 million during the prior year period.

Other Income, net

Other income, net was $0.5 million for the six months endedJune 30, 2018, compared to $4.2 million in the prior year period. The difference is primarily attributable to the $0.3 million gain associated with the change in the fair value of the derivative warrant liability during the six months endedJune 30, 2018, compared to a $4.0 million gain during the six months endedJune 30, 2017. See Note 7 and Note 10 in the Notes to the Condensed Consolidated Financial Statements for further details on the warrants.

Reorganization Items, net

Expenses, gains and losses directly associated with the chapter 11 proceedings are reported as “Reorganization items, net” in the Condensed Consolidated Statements of Operations for the six months endedJune 30, 2018 and June 30, 2017, which includes the net gain on debt discharge, professional and insurance fees, debtor in possession credit agreement financing costs, retention bonus payments, and other chapter 11 related items. Included in Reorganization items, net for the six months ended June 30, 2018 was $1.3 million in chapter 11 fees paid to the US Trustee.

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Income Taxes

We did not record any income tax benefit or expense for the six months endedJune 30, 2018, compared to a benefit of $18.0 thousand for the six months endedJune 30, 2017. The effect of valuation allowance adjustments against our deferred tax assets resulted in no significant tax expense or benefit for the six months ended June 30, 2018. See Note 12 in the Notes to the Condensed Consolidated Financial Statements herein for additional information.

Liquidity and Capital Resources

Cash Flows and Liquidity

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. Cash used in operating activities was $0.5 million for three months ended June 30, 2018. Total liquidity as of June 30, 2018, consisting of cash and available borrowings, was $20.2 million. Not included in the $20.2 million of liquidity, was an additional $10.6 million of borrowings available under the Successor Revolving Facility (as defined herein) that could be spent only on capital expenditures. Our sources of cash for 2018 have included cash generated by our operations, asset sales, and borrowings from our Successor Revolving Facility. Based on our current sources of cash, we believe we have adequate liquidity to meet our current and future needs.

The following table summarizes our sources and uses of cash for the six months endedJune 30, 2018 and June 30, 2017 (in thousands):

	Successor			Predecessor
	Six months ended June 30,
Net cash (used in) provided by:	2018			2017
Operating activities	$	(472	)	(13,275		)
Investing activities	10,621			708
Financing activities	(2,577		)	16,186
Net increase in cash, cash equivalents and restricted cash	$	7,572		$	3,619

Operating Activities

Net cash used in operating activities was $0.5 million for the six months endedJune 30, 2018. The net loss, after adjustments for non-cash items, used cash of $0.9 million, compared to $22.8 million in the corresponding 2017 period. Changes in operating assets and liabilities provided $0.5 million in cash primarily due to an increase in accounts payable and other accrued expenses, offset by an increase in accounts receivable. The non-cash items and other adjustments included $26.7 million of depreciation and amortization, stock-based compensation expense of $11.4 million, long-lived asset impairment charges of $4.5 million, accrued interest added to debt principal of $0.1 million, an increase in bad debt expense of $0.1 million, offset by a $0.3 million gain resulting from the change in the fair value of the derivative warrant liability and a $0.3 million gain on the sale of assets.

Net cash used in operating activities was $13.3 million for the six months endedJune 30, 2017. The net loss, after adjustments for non-cash items, used cash of $22.8 million. Changes in operating assets and liabilities provided $9.5 million in cash primarily due to an increase in accounts payable and accrued expenses. The non-cash items and other adjustments included $25.0 million of depreciation and amortization, accrued interest added to debt principal of $8.6 million, amortization of debt issuance costs of $2.1 million, a $4.0 million gain resulting from the change in the fair value of the derivative warrant liability, an increase in bad debt expense of $0.8 million, and stock-based compensation expense of $0.4 million.

Investing Activities

Net cash provided by investing activities was $10.6 million for the six months endedJune 30, 2018 and primarily consisted of $17.6 million of proceeds from the sale of property, plant and equipment, offset by $7.1 million of purchases of property, plant and equipment.

Net cash provided in investing activities was $0.7 million for the six months endedJune 30, 2017 which consisted primarily of $3.0 million of proceeds from the sale of property, plant and equipment, offset by $2.3 million of purchases of property, plant and equipment.

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Financing Activities

Net cash used in financing activities was $2.6 million for the six months endedJune 30, 2018 and was primarily comprised of $1.6 million of payments on the Successor First Lien Term Loan and the Successor Second Lien Term Loan and $1.0 million of payments on vehicle financing and other financing activities.

Net cash provided by financing activities was $16.2 million for the six months endedJune 30, 2017 and consisted of $15.7 million in additional proceeds from our Predecessor term loan and $6.9 million in cash proceeds from our Predecessor debtor in possession term loan, offset by $3.8 million of net payments under our Predecessor asset-based lending facility and $2.6 million of payments on vehicle financing and other financing activities.

Capital Expenditures

Our capital expenditure program is subject to market conditions, including customer activity levels, commodity prices, industry capacity and specific customer needs. During the recent industry downturn, we sought to maximize liquidity by limiting our capital expenditures to only those deemed critical to our ongoing operations and those necessary to support our key growth initiatives. In addition, we more than offset the cash impact of these expenditures by selling underutilized or non-core assets. Cash required for capital expenditures for the six months endedJune 30, 2018 totaled $7.1 million compared to $2.3 million for the six months endedJune 30, 2017. These capital expenditures were offset by proceeds received from the sale of under-utilized or non-core assets of $17.6 million and $3.0 million in the six months endedJune 30, 2018 and 2017, respectively. Although the proceeds from asset sales exceeded capital expenditures during the six months ended June 30, 2018, we expect to reinvest these proceeds in both maintenance and growth projects during the remainder of 2018.

Historically, a portion of our transportation-related capital requirements were financed through capital leases. We had no new equipment additions under capital leases in the six months endedJune 30, 2018 or June 30, 2017. We continue to focus on improving the utilization of our existing assets and optimizing the allocation of resources in the various shale areas in which we operate. Our planned capital expenditures for the remainder of 2018 could be financed through cash flow from operations, borrowings under the Successor Revolving Facility and Successor Second Lien Term Loan, capital leases, other financing structures, or a combination of the foregoing.

Indebtedness

As of June 30, 2018, we had $36.6 million of indebtedness outstanding, consisting of $13.2 million under the Successor First Lien Term Loan (as defined herein), $20.6 million under the Successor Second Lien Term Loan (as defined herein), and $2.8 million of capital leases for vehicle financings.

First Lien Credit Agreement

On the Effective Date, pursuant to the Plan, the Company entered into a $45.0 million First Lien Credit Agreement (the “Credit Agreement”) by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the Credit Agreement, the Credit Agreement Lenders agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Successor Revolving Facility”) and a $15.0 million senior secured term loan facility (the “Successor First Lien Term Loan”) (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset based lending facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses, and other general corporate purposes. The Credit Agreement also contains an accordion feature that provides for an increase in availability of up to an additional $20.0 million, subject to the satisfaction of certain terms and conditions contained in the Credit Agreement.

The Successor Revolving Facility and the Successor First Lien Term Loan mature on August 7, 2020, at which time the Company must repay the outstanding principal amount of the Successor Revolving Facility and the Successor First Lien Term Loan, together with interest accrued and unpaid thereon. The Successor Revolving Facility may be repaid and, subject to the terms and conditions of the Credit Agreement, reborrowed at any time during the term of the Credit Agreement. The principal amount of the Successor First Lien Term Loan shall be repaid in installments of $178.6 thousand beginning on September 1, 2017 and the first day of each calendar month thereafter prior to maturity. Interest on the Successor Revolving Facility accrues at an annual rate equal to the LIBOR Rate (as defined in the Credit Agreement) plus 5.25%, and interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%; however, if there is an Event of Default (as defined in the Credit Agreement), the Credit Agreement Agent, in its sole discretion, may increase the applicable interest rate at a per annum rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Credit Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio

34

covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. As of June 30, 2018, we were in compliance with all covenants.

Second Lien Term Loan Credit Agreement

On the Effective Date, pursuant to the Plan, the Company also entered into a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan Agreement”) by and among the lenders party thereto (the “Second Lien Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent (the “Second Lien Term Loan Agent”), and the Company. Pursuant to the Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to extend to the Company a $26.8 million second lien term loan facility (the “Successor Second Lien Term Loan”), of which $21.1 million was advanced on the Effective Date and up to an additional $5.7 million (“Delayed Draw Term Loan”) is available at the request of the Company after the closing date, subject to the satisfaction of certain terms and conditions specified in the Second Lien Term Loan Agreement. The Second Lien Term Loan Lenders extended the Successor Second Lien Term Loan, among other things, (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based revolving facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses and other general corporate purposes.

The Successor Second Lien Term Loan matures on February 7, 2021, at which time the Company must repay all outstanding obligations under the Successor Second Lien Term Loan. The principal amount of the Successor Second Lien Term Loan shall be repaid in installments of $263.2 thousand beginning on October 1, 2017, and the first day of each fiscal quarter thereafter prior to maturity, with such amount to be proportionally increased as the result of the incurrence of a Delayed Draw Term Loan. Interest on the Successor Second Lien Term Loan accrues at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. However, upon the occurrence and during the continuation of an Event of Default (as defined in the Second Lien Term Loan Agreement) due to a voluntary or involuntary bankruptcy filing, automatically, or any other Event of Default, at the election of the Second Lien Term Loan Agent, the Successor Second Lien Term Loan and all obligations thereunder shall bear interest at an annual rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Second Lien Term Loan Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for term loans of this type. As of June 30, 2018, we were in compliance with all covenants.

Off Balance Sheet Arrangements

As of June 30, 2018, other than operating leases, we did not have any off-balance-sheet arrangements that have or are reasonably likely to have a current or future effect on the our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Contractual Obligations

Our contractual obligations at June 30, 2018 did not change materially from those disclosed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Contractual Obligations” of our 2017 Annual Report on Form 10-K.

Critical Accounting Policies

There have been no significant changes to our Critical Accounting Policies in the six months endedJune 30, 2018 from those disclosed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2017 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

See Note 2 in the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of accounting pronouncements recently issued that could potentially impact our consolidated financial statements.

35

Item  3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our 2017 Annual Report on Form 10-K.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we performed an evaluation, under the supervision and with the participation of our Interim Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at that time to provide reasonable assurance that the information required to be disclosed in our reports filed with the SEC under the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and are accumulated and communicated to our management, including the Interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended June 30, 2018 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item  1. Legal Proceedings.

See “Legal Matters” in Note 14 of the Notes to the Condensed Consolidated Financial Statements for a description of our material legal proceedings.

Item  1A. Risk Factors.

In addition to information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors of our 2017 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

As previously disclosed on Exhibit 10.9 to our Form 10-Q filed with the SEC on May 9, 2018, on May 29, 2018, we issued 5,889 shares of restricted stock to the Company’s interim Chief Executive Officer, Mr. Charles K. Thompson.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item  5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed on the “Exhibit Index” set forth below are filed or furnished with this Quarterly Report on Form 10-Q or incorporated by reference as set forth therein.

Exhibit Number	Description
10.1	Employment Agreement dated June 18, 2018, between Nuverra Environmental Solutions, Inc. and Robert Fox (incorporated by reference to Exhibit 10.1 to Nuverra’s Current Report on Form 8-K filed with the SEC on June 21, 2018).
31.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.

37

Exhibit Number	Description
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

_______________

* Filed herewith.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	August 7, 2018
/s/ Charles K. Thompson
Name:	Charles K. Thompson
Title:	Interim Chief Executive Officer
	(Principal Executive Officer)
/s/ Edward A. Lang
Name:	Edward A. Lang
Title:	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

39

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Charles K. Thompson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2018 of Nuverra Environmental Solutions, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. As the registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. As the registrant's certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2018

By:	/s/ Charles K. Thompson
Name:	Charles K. Thompson
Title:	Interim Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Edward A. Lang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2018 of Nuverra Environmental Solutions, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. As the registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. As the registrant's certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2018

By:	/s/ Edward A. Lang
Name:	Edward A. Lang
Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the report of Nuverra Environmental Solutions, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2018 (the “Report”) as filed with the Securities and Exchange Commission on the date hereof, I, Charles K. Thompson, the Interim Chief Executive Officer of the Company, and I, Edward A. Lang, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 7, 2018

By:	/s/ Charles K. Thompson	By:	/s/ Edward A. Lang
Name:	Charles K. Thompson	Name:	Edward A. Lang
Title:	Interim Chief Executive Officer (Principal Executive Officer)	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the Secretary of the Company and will be retained by the Office of General Counsel of the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	NES
Entity Registrant Name	Nuverra Environmental Solutions, Inc.
Entity Central Index Key	0001403853
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,695,580

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	$ 12,808	$ 5,488
Restricted cash	1,548	1,296
Accounts receivable, net of allowance for doubtful accounts of $2.1 million and $1.9 million at June 30, 2018 and December 31, 2017, respectively	32,476	30,965
Inventories	3,846	4,089
Prepaid expenses and other receivables	3,334	8,594
Other current assets	483	226
Assets held for sale	3,381	2,765
Total current assets	57,876	53,423
Property, plant and equipment, net of accumulated depreciation of $56.2 million and $35.8 million at June 30, 2018 and December 31, 2017, respectively	192,899	229,874
Equity investments	41	48
Intangibles, net	454	547
Goodwill	27,139	27,139
Deferred income taxes	84	84
Other assets	144	207
Total assets	278,637	311,322
Liabilities and Shareholders’ Equity
Accounts payable	7,889	7,946
Accrued liabilities	15,874	13,939
Current contingent consideration	500	500
Current portion of long-term debt	4,698	5,525
Derivative warrant liability	188	477
Total current liabilities	29,149	28,387
Long-term debt	31,870	33,524
Other long-term liabilities	6,594	6,438
Total liabilities	67,613	68,349
Shareholders’ equity:
Common stock	117	117
Additional paid-in capital	302,145	290,751
Accumulated deficit	(91,238)	(47,895)
Total shareholders’ equity	211,024	242,973
Total liabilities and shareholders’ equity	$ 278,637	$ 311,322

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 2.1	$ 1.9
Property, plant and equipment, accumulated depreciation	$ 56.2	$ 35.8

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Service revenue	$ 45,320		$ 90,847
Rental revenue	3,628		7,770
Total revenue	48,948		98,617
Costs and expenses:
Direct operating expenses	39,069		80,696
General and administrative expenses	6,014		25,334
Depreciation and amortization	11,969		26,713
Impairment of long-lived assets	332		4,463
Other, net	469	$ 0	1,068	$ 0
Total costs and expenses	57,853		138,274
Operating loss	(8,905)		(39,657)
Interest expense, net	(1,204)		(2,454)
Other income, net	587		514
Reorganization items, net	(1,654)		(1,746)
Loss before income taxes	(11,176)		(43,343)
Income tax benefit	0		0
Net loss	$ (11,176)		$ (43,343)
Net loss per common share:
Net loss per basic common share (usd per share)	$ (0.96)		$ (3.71)
Net loss per diluted common share (usd per share)	$ (0.96)		$ (3.71)
Weighted average shares outstanding:
Basic (in shares)	11,696		11,696
Diluted (in shares)	11,696		11,696
Predecessor
Revenue:
Service revenue		37,538		72,956
Rental revenue		4,000		7,805
Total revenue		41,538		80,761
Costs and expenses:
Direct operating expenses		34,825		69,114
General and administrative expenses		8,867		21,226
Depreciation and amortization		12,107		24,978
Impairment of long-lived assets		0		0
Total costs and expenses		55,799		115,318
Operating loss		(14,261)		(34,557)
Interest expense, net		(5,338)		(19,546)
Other income, net		5,698		4,240
Reorganization items, net		(5,704)		(5,704)
Loss before income taxes		(19,605)		(55,567)
Income tax benefit		18		18
Net loss		$ (19,587)		$ (55,549)
Net loss per common share:
Net loss per basic common share (usd per share)		$ (0.13)		$ (0.37)
Net loss per diluted common share (usd per share)		$ (0.13)		$ (0.37)
Weighted average shares outstanding:
Basic (in shares)		150,941		150,938
Diluted (in shares)		150,941		150,938

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (43,343)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	26,713
Amortization of debt issuance costs, net	0
Accrued interest added to debt principal	119
Stock-based compensation	11,394
Impairment of long-lived assets	4,463
Gain on sale of UGSI	(75)
Gain on disposal of property, plant and equipment	(254)
Bad debt expense	120
Change in fair value of derivative warrant liability	(289)
Other, net	221
Changes in operating assets and liabilities:
Accounts receivable	(1,631)
Prepaid expenses and other receivables	(99)
Accounts payable and accrued liabilities	2,243
Other assets and liabilities, net	(54)
Net cash used in operating activities	(472)
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment	17,649
Purchases of property, plant and equipment	(7,103)
Proceeds from the sale of UGSI	75
Net cash provided by investing activities	10,621
Cash flows from financing activities:
Proceeds from debtor in possession term loan	0
Payments on vehicle financing and other financing activities	(980)
Net cash (used in) provided by financing activities	(2,577)
Change in cash, cash equivalents and restricted cash	7,572
Cash and cash equivalents, beginning of period	5,488
Restricted cash, beginning of period	1,296
Cash and cash equivalents, beginning of period	6,784
Cash and cash equivalents, end of period	12,808
Restricted cash, end of period	1,548	$ 4,828
Cash, cash equivalents and restricted cash, end of period	14,356
Supplemental disclosure of cash flow information:
Cash paid for interest	1,967
Cash paid for taxes, net	207
Predecessor Revolving Credit Facility
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	0
Payments on Predecessor revolving credit facility	0
Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans	0
First and Second Lien Term Loans
Cash flows from financing activities:
Payments on Predecessor revolving credit facility	(1,597)
Successor Revolving Facility
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	117,092
Payments on Predecessor revolving credit facility	$ (117,092)
Predecessor
Cash flows from operating activities:
Net loss		(55,549)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		24,978
Amortization of debt issuance costs, net		2,135
Accrued interest added to debt principal		8,575
Stock-based compensation		421
Impairment of long-lived assets		0
Gain on sale of UGSI		0
Gain on disposal of property, plant and equipment		(223)
Bad debt expense		784
Change in fair value of derivative warrant liability		(4,025)
Other, net		106
Changes in operating assets and liabilities:
Accounts receivable		(5,204)
Prepaid expenses and other receivables		710
Accounts payable and accrued liabilities		13,882
Other assets and liabilities, net		135
Net cash used in operating activities		(13,275)
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment		3,027
Purchases of property, plant and equipment		(2,319)
Proceeds from the sale of UGSI		0
Net cash provided by investing activities		708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility		76,072
Payments on Predecessor revolving credit facility		(79,866)
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans		15,700
Proceeds from debtor in possession term loan		6,875
Payments on vehicle financing and other financing activities		(2,595)
Net cash (used in) provided by financing activities		16,186
Change in cash, cash equivalents and restricted cash		3,619
Cash and cash equivalents, beginning of period		994
Restricted cash, beginning of period		1,420
Cash and cash equivalents, beginning of period		2,414
Cash and cash equivalents, end of period		1,205
Cash, cash equivalents and restricted cash, end of period		6,033
Supplemental disclosure of cash flow information:
Cash paid for interest		1,399
Cash paid for taxes, net		193
Predecessor | Predecessor Revolving Credit Facility
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility		76,072
Payments on Predecessor revolving credit facility		(79,866)
Predecessor | Predecessor Term Loan
Cash flows from financing activities:
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans		15,700
Predecessor | First and Second Lien Term Loans
Cash flows from financing activities:
Payments on Predecessor revolving credit facility		0
Predecessor | Successor Revolving Facility
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility		0
Payments on Predecessor revolving credit facility		$ 0

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Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2017, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018 (as amended on April 19, 2018, the “2017 Annual Report on Form 10-K”).

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Unless stated otherwise, any reference to statement of operations items in these accompanying condensed consolidated financial statements refers to results from continuing operations.

On May 1, 2017, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed voluntary petitions under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to pursue prepackaged plans of reorganization (together, and as amended, the “Plan”). On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan became effective on August 7, 2017 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Upon emergence, we elected to apply fresh start accounting effective July 31, 2017, to coincide with the timing of our normal accounting period close. As a result of the application of fresh start accounting, as well as the effects of the implementation of the Plan, a new entity for financial reporting purposes was created, and as such, the condensed consolidated financial statements on or after August 1, 2017, are not comparable with the condensed consolidated financial statements prior to that date.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to July 31, 2017. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company on and prior to July 31, 2017.

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (or “FASB”) issued Accounting Standards Update (or “ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in this update will be added to the Account Standards Codification (“ASC”) as ASC 606, Revenue from Contracts with Customers, and replaces the guidance in ASC 605, Revenue Recognition. The new guidance in ASC 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services.

On January 1, 2018, we adopted the guidance in ASC 606 and all the related amendments (the “new revenue standard”) and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. See Note 3 for further information on the new standard.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification and guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and contingent consideration payments made after a business combination. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning January 1, 2018, which did not have a significant impact on the consolidated statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is to be applied retrospectively. The adoption of this guidance as of January 1, 2018 did not have a significant impact on our consolidated statement of cash flows, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals. We have adjusted the prior year period to reflect this new presentation as well.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2017 Annual Report on Form 10-K.

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Recently Issued Accounting Pronouncements

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-09 is permitted. While we are currently assessing the impact ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact upon adoption will be the recognition, on a discounted basis, of our minimum commitments under non-cancellable operating leases on our consolidated balance sheets resulting in the recording of right of use assets and lease obligations. Based upon the current effective date, the new guidance would first apply to our reporting period starting January 1, 2019.

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Revenues

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

On January 1, 2018, we adopted the guidance in ASC 606, including all related amendments, and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under ASC 605, or the accounting guidance in effect for those periods.

Revenue Recognition

Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues.

Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transfer services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering.

The following tables present our revenues disaggregated by revenue source for each reportable segment for the three months ended June 30, 2018 and June 30, 2017:

	Successor
	For the Three Months Ended June 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	21,967	$	8,230	$	5,014	$	—	$	35,211
Disposal Services	4,540		955		1,081		—		6,576
Other Revenue	3,120		362		51		—		3,533
Total Service Revenue	29,627		9,547		6,146		—		45,320
Rental Revenue	3,538		59		31		—		3,628
Total Revenue	$	33,165	$	9,606	$	6,177	$	—	$	48,948

	Predecessor
	For the Three Months Ended June 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	16,470	$	7,694	$	6,937	$	—	$	31,101
Disposal Services	2,932		655		668		—		4,255
Other Revenue	820		1,172		190		—		2,182
Total Service Revenue	20,222		9,521		7,795		—		37,538
Rental Revenue	3,537		49		414		—		4,000
Total Revenue	$	23,759	$	9,570	$	8,209	$	—	$	41,538

The following tables present our revenues disaggregated by revenue source for each reportable segment for the six months endedJune 30, 2018 and June 30, 2017:

	Successor
	For the Six Months Ended June 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	43,227	$	16,249	$	13,125	$	—	$	72,601
Disposal Services	8,152		1,732		2,317		—		12,201
Other Revenue	5,244		616		185		—		6,045
Total Service Revenue	56,623		18,597		15,627		—		90,847
Rental Revenue	7,312		122		336		—		7,770
Total Revenue	$	63,935	$	18,719	$	15,963	$	—	$	98,617

	Predecessor
	For the Six Months Ended June 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	32,966	$	14,341	$	13,067	$	—	$	60,374
Disposal Services	5,526		976		1,211		—		7,713
Other Revenue	2,650		1,943		276		—		4,869
Total Service Revenue	41,142		17,260		14,554		—		72,956
Rental Revenue	6,902		67		836		—		7,805
Total Revenue	$	48,044	$	17,327	$	15,390	$	—	$	80,761

Water Transfer Services

The majority of our revenues are from the removal and disposal of flowback and produced saltwater originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transport pipelines. Water transfer rates for trucking are generally based upon a fixed fee per barrel of disposal water, but in certain circumstances may be based upon an hourly rate. Revenue is recognized once the water has been transferred, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our saltwater pipeline are priced at a fixed fee per disposal barrel transferred, with revenues recognized over time from when the water is injected into our pipeline until the transfer is complete. Water transfer services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month.

Disposal Services

Revenues for disposal services are generated through fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Disposal rates are generally based on a fixed fee per barrel of disposal water, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time.

Other Revenue

Other revenue primarily includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil at a point in time once the goods are transferred.

Other revenue also historically included small-scale construction or maintenance projects, however we exited that business during the three months ended June 30, 2018. Under the new revenue standard, revenue for construction and maintenance projects, which generally spanned approximately two to three months, was recognized over time under the milestone method which is considered an output method. Since our construction contracts were short term in nature, the contractual milestone dates occurred close together over time such that there was no risk that we would not recognize revenue for goods or services transferred to the customer. All construction costs were expensed as incurred.

Rental Revenue

We generate rental revenue from the rental of various equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 840, Leases. When ASC 842, Leases, becomes effective on January 1, 2019, the Company will continue to recognize the revenues from rental equipment under this new standard as a lessor.

Practical Expedients

The new revenue standard requires the transaction price to exclude amounts collected on behalf of third parties. However, the new revenue standard also provides a practical expedient to allow entities to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority. Upon implementing the new revenue standard we adopted this practical expedient and have excluded sales and usage-based taxes from the transaction price, rather than making a jurisdiction-by-jurisdiction assessment.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Net loss per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period. For the three and six months endedJune 30, 2018 and 2017, no shares of common stock, underlying stock options, restricted stock or warrants were included in the computation of diluted earnings per common share because the inclusion of such shares would be anti-dilutive based on the net losses reported for those periods.

The following table presents the calculation of basic and diluted net loss per common share, as well as the potentially dilutive stock-based awards that were excluded from the calculation of diluted loss per share for the periods presented:

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(11,176	)	$	(19,587	)	$	(43,343	)	$	(55,549	)
Denominator:
Weighted average shares—basic	11,696			150,941			11,696			150,938
Common stock equivalents	—			—			—			—
Weighted average shares—diluted	11,696			150,941			11,696			150,938
Net loss per common share:
Net loss per basic common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Net loss per diluted common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Potentially dilutive stock-based awards excluded:
Stock options	—			—			—			—
Restricted stock awards and units	537			—			—			—
Warrants	—			20,450			—			23,610
Total	537			20,450			—			23,610
Anti-dilutive stock-based awards excluded:	1,131			593			1,227			593

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Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets consist of the following:

	Successor
	June 30, 2018
	Gross Carrying Amount		Additions/(Disposals)			Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	(12	)	$	(128	)	$	454	5.7
Total intangible assets	$	594	$	(12	)	$	(128	)	$	454	5.7

	Successor
	December 31, 2017
	Gross Carrying Amount		Additions/(Disposals)		Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	—	$	(47	)	$	547	6.2
Total intangible assets	$	594	$	—	$	(47	)	$	547	6.2

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

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Assets Held for Sale and Impairment

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Assets Held for Sale and Impairment

Assets Held for Sale and Impairment

During the three months ended March 31, 2018, management approved a plan to sell certain assets located in the Southern division as a result of exiting the Eagle Ford Shale area. As a result, we began to actively market these assets, which we expect to sell within one year. See Note 11 for additional details on the exit of the Eagle Ford Shale area. In addition, during the three months ended March 31, 2018, management approved the sale of certain assets, primarily frac tanks, located in the Northeast division, that are expected to sell within one year. In accordance with applicable accounting guidance, the assets were recorded at the lower of net book value or fair value less costs to sell and reclassified to “Assets held for sale” on the condensed consolidated balance sheet during the three months ended March 31, 2018. Upon reclassification we ceased to recognize depreciation expense on the assets. As the fair value of the assets reclassified as held for sale was lower than its net book value, we recorded an impairment charge of $4.1 million during the three months ended March 31, 2018. Of the $4.1 million recorded, $4.0 million related to the Southern division for the Eagle Ford exit and $0.1 million related to the Northeast division, and is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations for the six months ended June 30, 2018.

During the three months ended June 30, 2018, we recorded an impairment charge of $0.3 million for the Corporate division to “Impairment of long-lived assets” on our condensed consolidated statements of operations related to the sale of certain real property in Texas as the fair value was lower than the net book value. The real property was approved to be sold as part of the Eagle Ford closure.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Measurements

Fair value represents an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Successor
	June 30, 2018		December 31, 2017
Derivative warrant liability	$	188	$	477
Contingent consideration	500		500

Derivative Warrant Liability

Our derivative warrant liability is adjusted to reflect the estimated fair value at each quarter end, with any decrease or increase in the estimated fair value recorded in “Other expense, net” in the condensed consolidated statements of operations. We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed using a Monte Carlo simulation model. The key inputs in determining our derivative warrant liability typically include our stock price, the volatility of our stock price, and the risk free interest rate. Future changes in these factors could have a significant impact on the computed fair value of the derivative warrant liability. As such, we expect future changes in the fair value of the warrants could vary significantly from quarter to quarter.

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. Additionally, on the Effective Date, pursuant to the Plan we issued to the holders of our pre-Effective Date9.875%Senior Notes due 2018 (the “2018 Notes”) and holders of certain claims relating to the rejection of executory contracts and unexpired leases118,137warrants with an exercise price of$39.82and a termexpiring seven years from the Effective Date. Each warrant is exercisable for one share of our common stock, par value$0.01. The warrants issued by the Successor Company were also determined to be derivative liabilities.

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the six months endedJune 30, 2018, and the five months ended December 31, 2017.

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(289		)	(240		)
Balance at end of period	$	188		$	477

Contingent Consideration

We are liable for contingent consideration payments in connection with an acquisition. The fair value of the contingent consideration obligation was determined using a probability-weighted income approach at the acquisition date and is revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the performance measurements upon which the obligation is based.

On June 28, 2017, certain of the Nuverra Parties filed a motion with the Bankruptcy Court seeking authorization to resolve unsecured claims related to the $8.5 million contingent consideration from the Ideal Oilfield Disposal LLC acquisition (the “Ideal Settlement”). On July 11, 2017, the Bankruptcy Court entered an order authorizing the Ideal Settlement. Pursuant to the approved settlement terms, the $8.5 million contingent claim was replaced with an obligation on the part of the applicable Nuverra Party to transfer $0.5 million to the counterparties to the Ideal Settlement upon emergence from chapter 11, and $0.5 million when the Ideal Settlement counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit. The $0.5 million due upon emergence from chapter 11 was paid during the five months ended December 31, 2017. The remaining $0.5 million due when the counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit has been classified as current, as these permits and certificates are expected to be received within one year.

Changes to the fair value of contingent consideration are recorded as “Other expense, net” in the condensed consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs. Changes to contingent consideration obligations during the six months endedJune 30, 2018, and five months ended December 31, 2017, were as follows:

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	500		$	1,000
Cash payments	—			(500		)
Balance at end of period	500			500
Less: current portion	(500		)	(500		)
Long-term contingent consideration	$	—		$	—

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Accrued Liabilities

6 Months Ended

Jun. 30, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following at June 30, 2018 and December 31, 2017:

	Successor
	June 30, 2018		December 31, 2017
Accrued payroll and employee benefits	$	6,437	$	3,304
Accrued insurance	2,285		2,701
Accrued legal	1,126		1,749
Accrued taxes	1,769		2,362
Accrued interest	141		161
Accrued operating costs	3,992		2,663
Accrued other	124		999
Total accrued liabilities	$	15,874	$	13,939

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

Debt consisted of the following at June 30, 2018 and December 31, 2017:

			Successor
			June 30, 2018					December 31, 2017
	Interest Rate	Maturity Date	Fair Value of Debt (d)		Carrying Value of Debt			Carrying Value of Debt
Successor Revolving Facility (a)	7.25%	Aug. 2020	$	—	$	—		$	—
Successor First Lien Term Loan (b)	9.25%	Aug. 2020	13,214		13,214			14,285
Successor Second Lien Term Loan (b)	11.00%	Feb 2021	20,593		20,593			21,000
Vehicle financings (c)	5.01%	Various	2,761		2,761			3,764
Total debt			$	36,568	36,568			39,049
Less: current portion of long-term debt					(4,698		)	(5,525		)
Long-term debt					$	31,870		$	33,524

_____________________

(a) The interest rate presented represents the interest rate on the $30.0 million Successor Revolving Facility as of June 30, 2018.

(b) Interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. Interest on the Successor Second Lien Term Loan accrues at both an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018, and on or after February 7, 2018, at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 5.01%, which mature in varying installments between 2018 and 2020.

(d) Our Successor Revolving Facility, Successor First Lien Term Loan, Successor Second Lien Term Loan, and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

For a discussion of material changes and developments in our debt and its principal terms, see our discussion below.

Indebtedness

As of June 30, 2018, we had $36.6 million of indebtedness outstanding, consisting of $13.2 million under the Successor First Lien Term Loan (as defined herein), $20.6 million under the Successor Second Lien Term Loan (as defined herein), and $2.8 million of capital leases for vehicle financings.

First Lien Credit Agreement

On the Effective Date, pursuant to the Plan, the Company entered into a $45.0 million First Lien Credit Agreement (the “Credit Agreement”) by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the Credit Agreement, the Credit Agreement Lenders agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Successor Revolving Facility”) and a $15.0 million senior secured term loan facility (the “Successor First Lien Term Loan”) (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based lending facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses, and other general corporate purposes. The Credit Agreement also contains an accordion feature that provides for an increase in availability of up to an additional $20.0 million, subject to the satisfaction of certain terms and conditions contained in the Credit Agreement.

The Successor Revolving Facility and the Successor First Lien Term Loan mature on August 7, 2020, at which time the Company must repay the outstanding principal amount of the Successor Revolving Facility and the Successor First Lien Term Loan, together with interest accrued and unpaid thereon. The Successor Revolving Facility may be repaid and, subject to the terms and conditions of the Credit Agreement, reborrowed at any time during the term of the Credit Agreement. The principal amount of the Successor First Lien Term Loan shall be repaid in installments of $178.6 thousand beginning on September 1, 2017 and the first day of each calendar month thereafter prior to maturity. Interest on the Successor Revolving Facility accrues at an annual rate equal to the LIBOR Rate (as defined in the Credit Agreement) plus 5.25%, and interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%; however, if there is an Event of Default (as defined in the Credit Agreement), the Credit Agreement Agent, in its sole discretion, may increase the applicable interest rate at a per annum rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Credit Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. As of June 30, 2018, we were in compliance with all covenants.

Second Lien Term Loan Credit Agreement

On the Effective Date, pursuant to the Plan, the Company also entered into a Second Lien Term Loan Credit Agreement (the “Second Lien Term Loan Agreement”) by and among the lenders party thereto (the “Second Lien Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent (the “Second Lien Term Loan Agent”) and the Company. Pursuant to the Second Lien Term Loan Agreement, the Second Lien Term Loan Lenders agreed to extend to the Company a $26.8 million second lien term loan facility (the “Successor Second Lien Term Loan”), of which $21.1 million was advanced on the Effective Date and up to an additional $5.7 million (“Delayed Draw Term Loan”) is available at the request of the Company after the closing date subject to the satisfaction of certain terms and conditions specified in the Second Lien Term Loan Agreement. The Second Lien Term Loan Lenders extended the Successor Second Lien Term Loan, among other things, (i) to repay obligations outstanding under the Predecessor asset-based lending facility and debtor in possession asset-based revolving facility, (ii) to make certain payments as provided in the Plan, (iii) to pay costs and expenses incurred in connection with the Plan, and (iv) for working capital, transaction expenses and other general corporate purposes.

The Successor Second Lien Term Loan matures on February 7, 2021, at which time the Company must repay all outstanding obligations under the Successor Second Lien Term Loan. The principal amount of the Successor Second Lien Term Loan shall be repaid in installments of $263.2 thousand beginning on October 1, 2017, and the first day of each fiscal quarter thereafter prior to maturity, with such amount to be proportionally increased as the result of the incurrence of a Delayed Draw Term Loan. Interest on the Successor Second Lien Term Loan accrues at an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018 (or such later date as the Company may select in accordance with the terms of the Second Lien Term Loan Agreement) and, on or after February 7, 2018 (or such later date) at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. However, upon the occurrence and during the continuation of an Event of Default (as defined in the Second Lien Term Loan Agreement) due to a voluntary or involuntary bankruptcy filing, automatically, or any other Event of Default, at the election of the Second Lien Term Loan Agent, the Successor Second Lien Term Loan and all obligations thereunder shall bear interest at an annual rate equal to three percentage points above the annual rate otherwise applicable thereunder.

The Second Lien Term Loan Agreement also contains certain affirmative and negative covenants, including a fixed charge coverage ratio covenant, as well as other terms and conditions that are customary for term loans of this type. As of June 30, 2018, we were in compliance with all covenants.

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Derivative Warrants

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Derivative Warrants

Derivative Warrants

Predecessor Warrants

During the year ended December 31, 2016, we issued 26.4 million warrants, with 17.5 million warrants for the exchange of the 2018 Notes for new 12.5%/10.0% Senior Secured Second Lien Notes due 2021 (the “2021 Notes”), 0.1 million warrants for the exchange of the 2018 Notes for common stock, and 8.8 million warrants to the lenders under the Predecessor Term Loan. All warrants were issued with an exercise price of $0.01 and had a term of ten years.

Upon emergence from chapter 11 on the Effective Date, all existing warrants outstanding under the Predecessor Company were canceled under the Plan. The following table shows the Predecessor warrant activity for the six months ended June 30, 2017:

	Predecessor
	Six Months Ended
	June 30, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(2	)
Outstanding at the end of the period	25,281

Successor Warrants

Pursuant to the Plan, on the Effective Date, we issued to the holders of the 2018 Notes and holders of certain claims relating to the rejection of executory contracts and unexpired leases warrants to purchase an aggregate of118,137shares of common stock, par value$0.01, at an exercise price of$39.82per share and with a termexpiring seven years from the Effective Date.

The following table shows the Successor warrant activity for the six months endedJune 30, 2018:

	Successor
	Six Months Ended
	June 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

Fair Value of Warrants

We account for warrants in accordance with the accounting guidance for derivatives, which sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the shareholders’ equity section of the entity’s balance sheet. We determined that the Predecessor warrants are ineligible for equity classification due to the anti-dilution provisions in the contract. The Successor warrants are also ineligible for equity classification as the warrants are not indexed to our common stock. As such, both the Predecessor and Successor warrants are recorded as derivative liabilities at fair value in the condensed consolidated balance sheets. The warrants are classified as a current liability in the condensed consolidated balance sheets as they could be exercised by the holders at any time.

As discussed previously in Note 7, the fair value of the derivative warrant liability is estimated using a Monte Carlo simulation model on the date of issue and is re-measured at each quarter end until expiration or exercise of the underlying warrants with the resulting fair value adjustment recorded in “Other expense, net” in the condensed consolidated statements of operations.

The fair value of the derivative warrant liability as of June 30, 2018 and December 31, 2017 was estimated using the following model inputs:

	Successor			Successor
	As of June 30,			As of December 31,
	2018			2017
Exercise price	$	39.82		$	39.82
Closing stock price	$	12.00		$	18.18
Risk free rate	2.75		%	2.29		%
Expected volatility	42.26		%	40.59		%

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Restructuring and Exit Costs

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Exit Costs

Restructuring and Exit Costs

Eagle Ford Shale Area

On March 1, 2018, the Board of Directors (the “Board”) determined it was in the best interests of the Company to cease our operations in the Eagle Ford Shale area in order to focus on other opportunities. The Board considered a number of factors in making this determination, including among other things, the historical and projected financial performance of our operations in the Eagle Ford Shale area, pricing for our services, capital requirements and projected returns on additional capital investment, competition, scope and scale of our operations, and recommendations from management. As a result, we have substantially exited the Eagle Ford Shale area during the six months ended June 30, 2018. We continue to incur minimal related costs while the remaining assets previously used in the operation of our business in that basin are divested.

The total costs of the exit recorded during the three and six months endedJune 30, 2018 were $0.5 million and $1.1 million, respectively. We previously recorded $0.6 million of exit related charges during the three months ended March 31, 2018. The charges are characterized as “Other, net” in the condensed consolidated statement of operations for the three and six months endedJune 30, 2018. Such costs consisted of the following and all related to the Southern operating segment:

	Successor
	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Severance and termination benefits	$	10	$	236
Contract termination costs and exit costs	459		832
Total restructuring and exit costs for Eagle Ford	$	469	$	1,068

The remaining liability, shown below, totaled approximately $0.1 million as of June 30, 2018 and is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through June 30, 2018 is as follows:

	Employee Termination Costs (a)			Lease Exit Costs (b)			Other Exit Costs (c)			Total
Balance accrued at beginning of period - Successor	$	—		$	—		$	—		$	—
Restructuring and exit-related costs	236			63			769			1,068
Cash payments	(215		)	(39		)	(742		)	(996		)
Balance accrued at end of period - Successor	$	21		$	24		$	27		$	72

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to the Company.

(c) Other exit costs include costs related to the movement of vehicles, tanks and rental fleet in connection with the exit from the Eagle Ford Shale area.

Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business

In March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian shale area and the Tuscaloosa Marine Shale logistics business. Additionally, we closed certain yards within the Northeast and Southern divisions and transferred many of the related assets to our other operating locations. The total costs of the restructuring recognized in 2015 were approximately $7.1 million, and included severance and termination benefits, lease exit costs, other exits costs related to the movement of vehicles and rental fleet, and an asset impairment charge.

The remaining liability for the restructuring and exit costs incurred represents lease exit costs under non-cancellable operating leases and totaled approximately $0.1 million as of June 30, 2018, which is included in “Accrued liabilities” in the condensed consolidated balance sheet. A rollforward of the liability from December 31, 2017 through June 30, 2018 is as follows:

	Lease Exit Costs
Balance accrued at beginning of period - Successor	$	82
Cash payments	(25		)
Balance accrued at end of period - Successor	$	57

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We recorded no income tax benefit or expense for the three or six months endedJune 30, 2018. As a result, our effective income tax rate for the three and six months endedJune 30, 2018 was zero, which differs from the federal statutory benefit rate of 21.0%. The difference is primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

The effective income tax rate for the three and six months endedJune 30, 2017 was near zero, which differs from the federal statutory rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant changes in U.S. tax law including a reduction in the corporate statutory income tax rate from 35% to 21%, changes to net operating loss (“NOL”) carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. As a result of the enacted law, we were required to revalue deferred tax assets and liabilities as of December 22, 2017 using the new statutory rate and have reflected this revaluation in our effective tax rate reconciliation. As we are subject to a valuation allowance, there was no material impact to our tax provision at either June 30, 2018 or December 31, 2017.

We have significant deferred tax assets, consisting primarily of NOLs, which have a limited life, generally expiring between the years 2031 and 2038, and capital losses, which have a five year carryforward expiring in 2020. We regularly assess the positive and negative evidence available to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued ordinary losses, at June 30, 2018 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of ourdeferred tax assets that is not offset by deferred tax liabilities. We expect our effective income tax rate to be near zero for the remainder of 2018.

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Share-based Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

Successor Share-based Compensation

The Second Amended and Restated Employment Agreement of Mr. Mark D. Johnsrud, our former Chairman and Chief Executive Officer, which was assumed by the Company on the Effective Date, provided for the issuance to Mr. Johnsrud of two tranches of options to purchase (i) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $475.0 million and (ii) 2.5% of the outstanding equity securities of the reorganized Company, on a fully diluted basis, at a premium exercise price equal to the value of a share of the reorganized Company’s common stock at an enterprise valuation of $525.0 million. Each tranche of options vests in substantially equal installments on the first three anniversaries following the Effective Date. Pursuant to Mr. Johnsrud’s Second Amended and Restated Employment Agreement and the Plan, the grant of stock options to Mr. Johnsrud was effective as of the Effective Date. On February 23, 2018, following the approval of the form of option agreement by the Compensation and Nominating Committee of the Board (the “Compensation Committee”), the Company and Mr. Johnsrud entered into a Notice of Grant of CEO Stock Options and Stock Option Award Agreement (the “Award Agreement”) to provide for the terms and conditions of Mr. Johnsrud’s stock option grant. Pursuant to the Award Agreement, Mr. Johnsrud was awarded 354,411 options to purchase common stock, with an exercise price of $37.03 per share, in Tranche 1, and 354,411 options to purchase common stock, with an exercise price of $41.31 per share, in Tranche 2. The stock options in Tranche 1 and Tranche 2 were scheduled to vest in three equal installments on the first three anniversaries of the Effective Date.

Pursuant to the requirements of the Plan, on February 22, 2018, the Board approved the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan (the “Incentive Plan”). The Incentive Plan is intended to provide for the grant of equity-based awards to designated members of the Company’s management and employees. Pursuant to the terms of the Plan, the Incentive Plan became effective on the Effective Date. The maximum number of shares of the Company’s common stock that is available for the issuance of awards under the Incentive Plan is 1,772,058.

On February 22, 2018, the Compensation Committee authorized the grant of performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“TRSUs”) under the Incentive Plan to Mr. Johnsrud, Edward A. Lang, the Company’s Executive Vice President and Chief Financial Officer, and Joseph M. Crabb, the Company’s Executive Vice President and Chief Legal Officer. On or after the applicable vesting date, the PRSUs and TRSUs will be settled for shares of common stock if all applicable conditions have been met. Mr. Johnsrud received 531,618 PRSUs, which initially were scheduled to vest in equal installments on the first two anniversaries of the Effective Date, but which partially vested on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 PRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020. Vesting of the PRSUs is subject to the achievement of pre-established performance targets during the applicable performance measurement periods. Mr. Johnsrud received 531,618 TRSUs, which were scheduled to vest in three equal installments on the date of grant, which was February 23, 2018, and the first two anniversaries of the Effective Date, but which vested in full on his Separation Date (as described below). Mr. Lang and Mr. Crabb each received an award of 62,022 TRSUs, which are scheduled to vest in three equal installments on December 31, 2018, December 31, 2019, and December 31, 2020.

Further, the Compensation Committee on February 22, 2018 adopted the 2018 Restricted Stock Plan for Directors (the “Restricted Stock Plan”), which is subject to ratification by the Company’s shareholders at the Company’s 2018 Annual Meeting. The Restricted Stock Plan provides for the grant of restricted stock to the non-employee directors of the Company. The Restricted Stock Plan limits the shares that may be issued thereunder to 100,000 shares of common stock.

In coordination with the adoption of the Restricted Stock Plan, the Compensation Committee also authorized award grants of restricted stock to the current non-employee directors of the Company, which were granted on March 16, 2018 subject to ratification of the Restricted Stock Plan by the Company’s shareholders at the Company’s 2018 annual meeting. Each non-employee director was granted 4,688 shares of restricted stock for service during part of fiscal year 2017 and for fiscal 2018, all of which will fully vest on the first anniversary of the grant date.

On May 29, 2018, the Compensation Committee authorized the grant of 5,889 shares of restricted stock to the Company’s interim Chief Executive Officer, Mr. Charles K. Thompson. Per the terms of the grant agreement, the shares immediately vested in full on the date of grant.

The total grants awarded during the three and six months endedJune 30, 2018 are presented in the table below:

	Successor
	Three Months Ended	Six Months Ended
	June 30, 2018	June 30, 2018
Stock option grants	—	—
Restricted stock grants	6	20
Restricted stock unit grants	—	1,311
Total grants in the Successor period	6	1,331

On March 2, 2018, the Company announced that Mr. Johnsrud was leaving the Company, effective as of March 2, 2018 (the “Separation Date”). Pursuant to a Separation Agreement and Mutual Release entered into between Mr. Johnsrud and the Company on the Separation Date, Mr. Johnsrud vested in the following: (a) 354,412 unvested TRSUs that were granted on February 22, 2018; and (b) 708,822 unvested stock options that were granted on February 23, 2018, which will remain exercisable through the first anniversary of the Separation Date. Vested restricted stock units subject to time based vesting will be settled in accordance with the terms and conditions set forth in the Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan and any applicable award agreement(s). Additionally, Mr. Johnsrud continued to hold 88,603 PRSUs that were granted on February 22, 2018, with a performance period that began on January 1, 2018 and ended on June 30, 2018. As the pre-established performance target was not met as of June 30, 2018, Mr. Johnsrud’s 88,603 PRSUs were canceled during the three months ended June 30, 2018. All other unvested equity awards granted to Mr. Johnsrud under the Incentive Plan were canceled as of the Separation Date.

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months endedJune 30, 2018 was as follows:

	Successor
	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Stock options	$	—	$	(788	)
Restricted stock	160		160
Restricted stock units	256		12,022
Total expense	$	416	$	11,394

Predecessor Share-based Compensation

Prior to the Effective Date, we granted stock options, stock appreciation rights, restricted common stock and restricted stock units, performance shares and units, other share-based awards and cash-based awards to our employees, directors, consultants and advisors pursuant to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (as amended, the “2009 Plan”). On the Effective Date pursuant to the Plan, all of the pre-Effective Date share-based compensation awards issued and outstanding under the 2009 Plan were canceled.

There were no grants awarded during the three or six months endedJune 30, 2017 under the 2009 Plan. The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months endedJune 30, 2017 was as follows:

	Predecessor
	Three Months Ended		Six Months Ended
	June 30, 2017		June 30, 2017
Stock options	$	32	$	97
Restricted stock	65		131
Restricted stock units	15		193
Total expense	$	112	$	421

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Legal Matters

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Legal Matters

Legal Matters

Environmental Liabilities

We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law.

We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheet at June 30, 2018 and December 31, 2017 did not include any accruals for environmental matters.

Litigation

There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in pending lawsuits are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Chapter 11 Proceedings

On May 1, 2017, the Nuverra Parties filed voluntary petitions under chapter 11 of the Bankruptcy Code in the Bankruptcy Court to pursue the Plan. On July 25, 2017, the Bankruptcy Court entered the Confirmation Order confirming the Plan. The Plan became effective on the Effective Date, when all remaining conditions to the effectiveness of the Plan were satisfied or waived. On June 22, 2018, the Bankruptcy Court issued a final decree and order closing the chapter 11 cases, subject to certain conditions as set forth therein.

Confirmation Order Appeal

On July 26, 2017, David Hargreaves, an individual holder of 2018 Notes, appealed the Confirmation Order to the District Court of the District of Delaware (the “District Court”) and filed a motion for a stay pending appeal from the District Court. The Company and the unsecured creditors’ committee opposed the stay in the District Court. On August 3, 2017, the District Court entered an order denying the motion for a stay pending appeal. Notwithstanding the denial of the motion for stay pending appeal, Hargreaves’ appeal remains pending in the District Court. The District Court heard oral arguments for the pending appeal on May 14, 2018. The ultimate outcome of this appeal and its effects on the Confirmation Order are impossible to predict with certainty. No assurance can be given that the appeal will not affect the finality, validity and enforceability of the Confirmation Order.

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Related Party and Affiliated Company Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party and Affiliated Company Transactions

Related Party and Affiliated Company Transactions

There have been no significant changes to the other related party transactions as described in Note 21 to the consolidated financial statements in our 2017 Annual Report on Form 10-K.

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Segments

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segments

Segments

We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our shale solutions business is comprised of three operating divisions, which we consider to be operating and reportable segments of our operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville Shale area and the Eagle Ford Shale area (which we substantially exited during the six months ended June 30, 2018) and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets.

Financial information for our reportable segments related to operations is presented below.

	Rocky Mountain			Northeast			Southern (b)			Corporate/ Other			Total
Three months ended June 30, 2018 - Successor
Revenue	$	33,165		$	9,606		$	6,177		$	—		$	48,948
Direct operating expenses	25,599			8,510			4,960			—			39,069
General and administrative expenses	1,882			518			251			3,363			6,014
Depreciation and amortization	5,923			3,283			2,750			13			11,969
Operating loss	(239		)	(2,705		)	(2,253		)	(3,708		)	(8,905		)
Loss before income taxes	(203		)	(2,780		)	(2,295		)	(5,898		)	(11,176		)
Six months ended June 30, 2018 - Successor
Revenue	63,935			18,719			15,963			—			98,617
Direct operating expenses	51,945			16,324			12,427			—			80,696
General and administrative expenses	3,158			1,280			829			20,067			25,334
Depreciation and amortization	12,212			7,589			6,874			38			26,713
Operating loss	(3,380		)	(6,543		)	(9,297		)	(20,437		)	(39,657		)
Loss before income taxes	(3,405		)	(6,679		)	(9,406		)	(23,853		)	(43,343		)
As of June 30, 2018 - Successor
Total assets (a)	125,679			47,707			89,346			15,905			278,637
Total assets held for sale	—			116			2,487			778			3,381

	Rocky Mountain		Northeast		Southern (b)		Corporate/ Other		Total
Three months ended June 30, 2017 - Predecessor
Revenue	23,759		9,570		8,209		—		41,538
Direct operating expenses	19,171		9,831		5,823		—		34,825
General and administrative expenses	1,505		817		650		5,895		8,867
Depreciation and amortization	6,803		2,182		3,068		54		12,107
Operating loss	(3,720	)	(3,260	)	(1,332	)	(5,949	)	(14,261	)
Loss before income taxes	(4,209	)	(3,325	)	(1,406	)	(10,665	)	(19,605	)
Six months ended June 30, 2017 - Predecessor
Revenue	48,044		17,327		15,390		—		80,761
Direct operating expenses	40,403		17,788		10,923		—		69,114
General and administrative expenses	3,452		1,586		1,681		14,507		21,226
Depreciation and amortization	13,588		4,695		6,587		108		24,978
Operating loss	(9,399	)	(6,742	)	(3,801	)	(14,615	)	(34,557	)
Loss before income taxes	(9,910	)	(6,927	)	(3,933	)	(34,797	)	(55,567	)
As of December 31, 2017 - Successor
Total assets (a)	137,213		54,218		111,457		8,434		311,322
Total assets held for sale	2,765		—		—		—		2,765

_____________________

(a) Total assets exclude intercompany receivables eliminated in consolidation.

(b) The Southern division includes the Eagle Ford Shale area which we substantially exited during the six months ended June 30, 2018. See Note 11 for further discussion.

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Subsidiary Guarantors

6 Months Ended

Jun. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Subsidiary Guarantors

Subsidiary Guarantors

The 2018 Notes and the 2021 Notes of the Predecessor Company were registered securities. As a result of these registered securities, we are required to present the following condensed consolidating financial information for the Predecessor periods pursuant to Rule 3-10 of SEC Regulation S-X, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. Our Successor Revolving Facility, Successor First Lien Term Loan, and Successor Second Lien Term Loan are not registered securities. Therefore, the presentation of condensed consolidating financial information is not required for the Successor period.

The following tables present consolidating financial information for Nuverra Environmental Solutions, Inc. (“Parent”) and its 100% wholly owned subsidiaries (the “Guarantor Subsidiaries”) for the three and six months endedJune 30, 2017.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	41,538		$	—	$	41,538
Costs and expenses:
Direct operating expenses	—			34,825			—		34,825
General and administrative expenses	5,895			2,972			—		8,867
Depreciation and amortization	54			12,053			—		12,107
Total costs and expenses	5,949			49,850			—		55,799
Operating loss	(5,949		)	(8,312		)	—		(14,261		)
Interest expense, net	(5,178		)	(160		)	—		(5,338		)
Other income, net	5,643			63			—		5,706
(Loss) income from equity investments	(8,940		)	(8		)	8,940		(8		)
Reorganization items, net	(5,181		)	(523		)	—		(5,704		)
(Loss) income before income taxes	(19,605		)	(8,940		)	8,940		(19,605		)
Income tax benefit	18			—			—		18
Net (loss) income	$	(19,587	)	$	(8,940	)	$	8,940	$	(19,587	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	80,761		$	—	$	80,761
Costs and expenses:
Direct operating expenses	—			69,114			—		69,114
General and administrative expenses	14,507			6,719			—		21,226
Depreciation and amortization	108			24,870			—		24,978
Total costs and expenses	14,615			100,703			—		115,318
Operating loss	(14,615		)	(19,942		)	—		(34,557		)
Interest expense, net	(19,126		)	(420		)	—		(19,546		)
Other income, net	4,125			129			—		4,254
(Loss) income from equity investments	(20,770		)	(14		)	20,770		(14		)
Reorganization items, net	(5,181		)	(523		)	—		(5,704		)
(Loss) income before income taxes	(55,567		)	(20,770		)	20,770		(55,567		)
Income tax benefit	18			—			—		18
Net (loss) income	$	(55,549	)	$	(20,770	)	$	20,770	$	(55,549	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	(12,952	)	$	(323	)	$	(13,275	)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	—			3,027			3,027
Purchase of property, plant and equipment	—			(2,319		)	(2,319		)
Net cash provided by investing activities	—			708			708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	76,072			—			76,072
Payments on Predecessor revolving credit facility	(79,866		)	—			(79,866		)
Proceeds from Predecessor term loan	15,700			—			15,700
Proceeds from debtor in possession term loan	6,875			—			6,875
Payments on vehicle financing and other financing activities	(2,595		)	—			(2,595		)
Net cash provided by financing activities	16,186			—			16,186
Net increase in cash	3,234			385			3,619
Cash, cash equivalents and restricted cash - beginning of period	1,388			1,026			2,414
Cash, cash equivalents and restricted cash - end of period	$	4,622		$	1,411		$	6,033

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Basis of Presentation Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2017, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018 (as amended on April 19, 2018, the “2017 Annual Report on Form 10-K”).

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Unless stated otherwise, any reference to statement of operations items in these accompanying condensed consolidated financial statements refers to results from continuing operations.

Recently Adopted/Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (or “FASB”) issued Accounting Standards Update (or “ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in this update will be added to the Account Standards Codification (“ASC”) as ASC 606, Revenue from Contracts with Customers, and replaces the guidance in ASC 605, Revenue Recognition. The new guidance in ASC 606 requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services.

On January 1, 2018, we adopted the guidance in ASC 606 and all the related amendments (the “new revenue standard”) and applied the new revenue standard to all contracts using the modified retrospective method. The impact of the new revenue standard was not material and there was no adjustment required to the opening balance of retained earnings. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. See Note 3 for further information on the new standard.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) related to the classification of certain cash receipts and cash payments on the statement of cash flows. The pronouncement provides clarification and guidance on eight specific cash flow presentation issues that have developed due to diversity in practice. The issues include, but are not limited to, debt prepayment or extinguishment costs, settlement of zero-coupon debt, proceeds from the settlement of insurance claims, and contingent consideration payments made after a business combination. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We adopted this pronouncement for our fiscal year beginning January 1, 2018, which did not have a significant impact on the consolidated statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and is to be applied retrospectively. The adoption of this guidance as of January 1, 2018 did not have a significant impact on our consolidated statement of cash flows, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals. We have adjusted the prior year period to reflect this new presentation as well.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2017 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-09 is permitted. While we are currently assessing the impact ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact upon adoption will be the recognition, on a discounted basis, of our minimum commitments under non-cancellable operating leases on our consolidated balance sheets resulting in the recording of right of use assets and lease obligations. Based upon the current effective date, the new guidance would first apply to our reporting period starting January 1, 2019.

Revenue Recognition

Water Transfer Services

The majority of our revenues are from the removal and disposal of flowback and produced saltwater originating from oil and natural gas wells or the transportation of fresh water and saltwater to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transport pipelines. Water transfer rates for trucking are generally based upon a fixed fee per barrel of disposal water, but in certain circumstances may be based upon an hourly rate. Revenue is recognized once the water has been transferred, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our saltwater pipeline are priced at a fixed fee per disposal barrel transferred, with revenues recognized over time from when the water is injected into our pipeline until the transfer is complete. Water transfer services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month.

Disposal Services

Revenues for disposal services are generated through fees charged for disposal of oilfield wastes in our landfill and disposal of fluids in our disposal wells. Disposal rates are generally based on a fixed fee per barrel of disposal water, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time.

Other Revenue

Other revenue primarily includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil at a point in time once the goods are transferred.

Other revenue also historically included small-scale construction or maintenance projects, however we exited that business during the three months ended June 30, 2018. Under the new revenue standard, revenue for construction and maintenance projects, which generally spanned approximately two to three months, was recognized over time under the milestone method which is considered an output method. Since our construction contracts were short term in nature, the contractual milestone dates occurred close together over time such that there was no risk that we would not recognize revenue for goods or services transferred to the customer. All construction costs were expensed as incurred.

Rental Revenue

We generate rental revenue from the rental of various equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 840, Leases. When ASC 842, Leases, becomes effective on January 1, 2019, the Company will continue to recognize the revenues from rental equipment under this new standard as a lessor.

Practical Expedients

The new revenue standard requires the transaction price to exclude amounts collected on behalf of third parties. However, the new revenue standard also provides a practical expedient to allow entities to make an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority. Upon implementing the new revenue standard we adopted this practical expedient and have excluded sales and usage-based taxes from the transaction price, rather than making a jurisdiction-by-jurisdiction assessment.

Revenue Recognition

Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues.

Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transfer services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering.

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Revenues (Tables)

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Revenues Disaggregated by Revenue Source

The following tables present our revenues disaggregated by revenue source for each reportable segment for the three months ended June 30, 2018 and June 30, 2017:

	Successor
	For the Three Months Ended June 30, 2018
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	21,967	$	8,230	$	5,014	$	—	$	35,211
Disposal Services	4,540		955		1,081		—		6,576
Other Revenue	3,120		362		51		—		3,533
Total Service Revenue	29,627		9,547		6,146		—		45,320
Rental Revenue	3,538		59		31		—		3,628
Total Revenue	$	33,165	$	9,606	$	6,177	$	—	$	48,948

	Predecessor
	For the Three Months Ended June 30, 2017
	Rocky Mountain		Northeast		Southern		Corp/Other		Total
Water Transfer Services	$	16,470	$	7,694	$	6,937	$	—	$	31,101
Disposal Services	2,932		655		668		—		4,255
Other Revenue	820		1,172		190		—		2,182
Total Service Revenue	20,222		9,521		7,795		—		37,538
Rental Revenue	3,537		49		414		—		4,000
Total Revenue	$	23,759	$	9,570	$	8,209	$	—	$	41,538

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents the calculation of basic and diluted net loss per common share, as well as the potentially dilutive stock-based awards that were excluded from the calculation of diluted loss per share for the periods presented:

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Numerator:
Net loss	$	(11,176	)	$	(19,587	)	$	(43,343	)	$	(55,549	)
Denominator:
Weighted average shares—basic	11,696			150,941			11,696			150,938
Common stock equivalents	—			—			—			—
Weighted average shares—diluted	11,696			150,941			11,696			150,938
Net loss per common share:
Net loss per basic common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Net loss per diluted common share	$	(0.96	)	$	(0.13	)	$	(3.71	)	$	(0.37	)
Potentially dilutive stock-based awards excluded:
Stock options	—			—			—			—
Restricted stock awards and units	537			—			—			—
Warrants	—			20,450			—			23,610
Total	537			20,450			—			23,610
Anti-dilutive stock-based awards excluded:	1,131			593			1,227			593

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets consist of the following:

	Successor
	June 30, 2018
	Gross Carrying Amount		Additions/(Disposals)			Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	(12	)	$	(128	)	$	454	5.7
Total intangible assets	$	594	$	(12	)	$	(128	)	$	454	5.7

	Successor
	December 31, 2017
	Gross Carrying Amount		Additions/(Disposals)		Accumulated Amortization			Net		Remaining Useful Life (Years)
Disposal permits	$	594	$	—	$	(47	)	$	547	6.2
Total intangible assets	$	594	$	—	$	(47	)	$	547	6.2

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy of the Valuation Techniques

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Successor
	June 30, 2018		December 31, 2017
Derivative warrant liability	$	188	$	477
Contingent consideration	500		500

Schedule of Stockholders' Equity Note, Warrants or Rights

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the six months endedJune 30, 2018, and the five months ended December 31, 2017.

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(289		)	(240		)
Balance at end of period	$	188		$	477

The following table shows the Successor warrant activity for the six months endedJune 30, 2018:

	Successor
	Six Months Ended
	June 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

The following table shows the Predecessor warrant activity for the six months ended June 30, 2017:

	Predecessor
	Six Months Ended
	June 30, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(2	)
Outstanding at the end of the period	25,281

Changes to Contingent Consideration

Changes to contingent consideration obligations during the six months endedJune 30, 2018, and five months ended December 31, 2017, were as follows:

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	500		$	1,000
Cash payments	—			(500		)
Balance at end of period	500			500
Less: current portion	(500		)	(500		)
Long-term contingent consideration	$	—		$	—

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following at June 30, 2018 and December 31, 2017:

	Successor
	June 30, 2018		December 31, 2017
Accrued payroll and employee benefits	$	6,437	$	3,304
Accrued insurance	2,285		2,701
Accrued legal	1,126		1,749
Accrued taxes	1,769		2,362
Accrued interest	141		161
Accrued operating costs	3,992		2,663
Accrued other	124		999
Total accrued liabilities	$	15,874	$	13,939

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt consisted of the following at June 30, 2018 and December 31, 2017:

			Successor
			June 30, 2018					December 31, 2017
	Interest Rate	Maturity Date	Fair Value of Debt (d)		Carrying Value of Debt			Carrying Value of Debt
Successor Revolving Facility (a)	7.25%	Aug. 2020	$	—	$	—		$	—
Successor First Lien Term Loan (b)	9.25%	Aug. 2020	13,214		13,214			14,285
Successor Second Lien Term Loan (b)	11.00%	Feb 2021	20,593		20,593			21,000
Vehicle financings (c)	5.01%	Various	2,761		2,761			3,764
Total debt			$	36,568	36,568			39,049
Less: current portion of long-term debt					(4,698		)	(5,525		)
Long-term debt					$	31,870		$	33,524

_____________________

(a) The interest rate presented represents the interest rate on the $30.0 million Successor Revolving Facility as of June 30, 2018.

(b) Interest on the Successor First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. Interest on the Successor Second Lien Term Loan accrues at both an annual rate equal to 11.0%, with 5.5% payable in cash and 5.5% payable in kind prior to February 7, 2018, and on or after February 7, 2018, at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 5.01%, which mature in varying installments between 2018 and 2020.

(d) Our Successor Revolving Facility, Successor First Lien Term Loan, Successor Second Lien Term Loan, and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

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Derivative Warrants (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights

The following table provides a reconciliation of the beginning and ending balances of the Successor “Derivative warrant liability” presented in the condensed consolidated balance sheet during the six months endedJune 30, 2018, and the five months ended December 31, 2017.

	Successor
	Six Months Ended			Five Months Ended
	June 30, 2018			December 31, 2017
Balance at beginning of period	$	477		$	—
Issuance of warrants	—			717
Adjustments to estimated fair value	(289		)	(240		)
Balance at end of period	$	188		$	477

The following table shows the Successor warrant activity for the six months endedJune 30, 2018:

	Successor
	Six Months Ended
	June 30, 2018
Outstanding at the beginning of the period	118
Issued	—
Exercised	—
Outstanding at the end of the period	118

The following table shows the Predecessor warrant activity for the six months ended June 30, 2017:

	Predecessor
	Six Months Ended
	June 30, 2017
Outstanding at the beginning of the period	25,283
Issued	—
Exercised	(2	)
Outstanding at the end of the period	25,281

Schedule of Assumptions Used

The fair value of the derivative warrant liability as of June 30, 2018 and December 31, 2017 was estimated using the following model inputs:

	Successor			Successor
	As of June 30,			As of December 31,
	2018			2017
Exercise price	$	39.82		$	39.82
Closing stock price	$	12.00		$	18.18
Risk free rate	2.75		%	2.29		%
Expected volatility	42.26		%	40.59		%

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Restructuring and Exit Costs (Tables)

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

Such costs consisted of the following and all related to the Southern operating segment:

	Successor
	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Severance and termination benefits	$	10	$	236
Contract termination costs and exit costs	459		832
Total restructuring and exit costs for Eagle Ford	$	469	$	1,068

A rollforward of the liability from December 31, 2017 through June 30, 2018 is as follows:

	Lease Exit Costs
Balance accrued at beginning of period - Successor	$	82
Cash payments	(25		)
Balance accrued at end of period - Successor	$	57

A rollforward of the liability from December 31, 2017 through June 30, 2018 is as follows:

	Employee Termination Costs (a)			Lease Exit Costs (b)			Other Exit Costs (c)			Total
Balance accrued at beginning of period - Successor	$	—		$	—		$	—		$	—
Restructuring and exit-related costs	236			63			769			1,068
Cash payments	(215		)	(39		)	(742		)	(996		)
Balance accrued at end of period - Successor	$	21		$	24		$	27		$	72

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to the Company.

(c) Other exit costs include costs related to the movement of vehicles, tanks and rental fleet in connection with the exit from the Eagle Ford Shale area.

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Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months endedJune 30, 2017 was as follows:

	Predecessor
	Three Months Ended		Six Months Ended
	June 30, 2017		June 30, 2017
Stock options	$	32	$	97
Restricted stock	65		131
Restricted stock units	15		193
Total expense	$	112	$	421

The total share-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months endedJune 30, 2018 was as follows:

	Successor
	Three Months Ended		Six Months Ended
	June 30, 2018		June 30, 2018
Stock options	$	—	$	(788	)
Restricted stock	160		160
Restricted stock units	256		12,022
Total expense	$	416	$	11,394

The total grants awarded during the three and six months endedJune 30, 2018 are presented in the table below:

	Successor
	Three Months Ended	Six Months Ended
	June 30, 2018	June 30, 2018
Stock option grants	—	—
Restricted stock grants	6	20
Restricted stock unit grants	—	1,311
Total grants in the Successor period	6	1,331

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Segments (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Financial Information for Reportable Segments

Financial information for our reportable segments related to operations is presented below.

	Rocky Mountain			Northeast			Southern (b)			Corporate/ Other			Total
Three months ended June 30, 2018 - Successor
Revenue	$	33,165		$	9,606		$	6,177		$	—		$	48,948
Direct operating expenses	25,599			8,510			4,960			—			39,069
General and administrative expenses	1,882			518			251			3,363			6,014
Depreciation and amortization	5,923			3,283			2,750			13			11,969
Operating loss	(239		)	(2,705		)	(2,253		)	(3,708		)	(8,905		)
Loss before income taxes	(203		)	(2,780		)	(2,295		)	(5,898		)	(11,176		)
Six months ended June 30, 2018 - Successor
Revenue	63,935			18,719			15,963			—			98,617
Direct operating expenses	51,945			16,324			12,427			—			80,696
General and administrative expenses	3,158			1,280			829			20,067			25,334
Depreciation and amortization	12,212			7,589			6,874			38			26,713
Operating loss	(3,380		)	(6,543		)	(9,297		)	(20,437		)	(39,657		)
Loss before income taxes	(3,405		)	(6,679		)	(9,406		)	(23,853		)	(43,343		)
As of June 30, 2018 - Successor
Total assets (a)	125,679			47,707			89,346			15,905			278,637
Total assets held for sale	—			116			2,487			778			3,381

	Rocky Mountain		Northeast		Southern (b)		Corporate/ Other		Total
Three months ended June 30, 2017 - Predecessor
Revenue	23,759		9,570		8,209		—		41,538
Direct operating expenses	19,171		9,831		5,823		—		34,825
General and administrative expenses	1,505		817		650		5,895		8,867
Depreciation and amortization	6,803		2,182		3,068		54		12,107
Operating loss	(3,720	)	(3,260	)	(1,332	)	(5,949	)	(14,261	)
Loss before income taxes	(4,209	)	(3,325	)	(1,406	)	(10,665	)	(19,605	)
Six months ended June 30, 2017 - Predecessor
Revenue	48,044		17,327		15,390		—		80,761
Direct operating expenses	40,403		17,788		10,923		—		69,114
General and administrative expenses	3,452		1,586		1,681		14,507		21,226
Depreciation and amortization	13,588		4,695		6,587		108		24,978
Operating loss	(9,399	)	(6,742	)	(3,801	)	(14,615	)	(34,557	)
Loss before income taxes	(9,910	)	(6,927	)	(3,933	)	(34,797	)	(55,567	)
As of December 31, 2017 - Successor
Total assets (a)	137,213		54,218		111,457		8,434		311,322
Total assets held for sale	2,765		—		—		—		2,765

_____________________

(a) Total assets exclude intercompany receivables eliminated in consolidation.

(b) The Southern division includes the Eagle Ford Shale area which we substantially exited during the six months ended June 30, 2018. See Note 11 for further discussion.

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Subsidiary Guarantors (Tables)

6 Months Ended

Jun. 30, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	41,538		$	—	$	41,538
Costs and expenses:
Direct operating expenses	—			34,825			—		34,825
General and administrative expenses	5,895			2,972			—		8,867
Depreciation and amortization	54			12,053			—		12,107
Total costs and expenses	5,949			49,850			—		55,799
Operating loss	(5,949		)	(8,312		)	—		(14,261		)
Interest expense, net	(5,178		)	(160		)	—		(5,338		)
Other income, net	5,643			63			—		5,706
(Loss) income from equity investments	(8,940		)	(8		)	8,940		(8		)
Reorganization items, net	(5,181		)	(523		)	—		(5,704		)
(Loss) income before income taxes	(19,605		)	(8,940		)	8,940		(19,605		)
Income tax benefit	18			—			—		18
Net (loss) income	$	(19,587	)	$	(8,940	)	$	8,940	$	(19,587	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	80,761		$	—	$	80,761
Costs and expenses:
Direct operating expenses	—			69,114			—		69,114
General and administrative expenses	14,507			6,719			—		21,226
Depreciation and amortization	108			24,870			—		24,978
Total costs and expenses	14,615			100,703			—		115,318
Operating loss	(14,615		)	(19,942		)	—		(34,557		)
Interest expense, net	(19,126		)	(420		)	—		(19,546		)
Other income, net	4,125			129			—		4,254
(Loss) income from equity investments	(20,770		)	(14		)	20,770		(14		)
Reorganization items, net	(5,181		)	(523		)	—		(5,704		)
(Loss) income before income taxes	(55,567		)	(20,770		)	20,770		(55,567		)
Income tax benefit	18			—			—		18
Net (loss) income	$	(55,549	)	$	(20,770	)	$	20,770	$	(55,549	)

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2017

(Unaudited)

	Predecessor
	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash used in operating activities	$	(12,952	)	$	(323	)	$	(13,275	)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	—			3,027			3,027
Purchase of property, plant and equipment	—			(2,319		)	(2,319		)
Net cash provided by investing activities	—			708			708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility	76,072			—			76,072
Payments on Predecessor revolving credit facility	(79,866		)	—			(79,866		)
Proceeds from Predecessor term loan	15,700			—			15,700
Proceeds from debtor in possession term loan	6,875			—			6,875
Payments on vehicle financing and other financing activities	(2,595		)	—			(2,595		)
Net cash provided by financing activities	16,186			—			16,186
Net increase in cash	3,234			385			3,619
Cash, cash equivalents and restricted cash - beginning of period	1,388			1,026			2,414
Cash, cash equivalents and restricted cash - end of period	$	4,622		$	1,411		$	6,033

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Revenues - Schedule of Revenues Disaggregated by Revenue Source (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Service revenue	$ 45,320		$ 90,847
Rental revenue	3,628		7,770
Total revenue	48,948		$ 98,617
Minimum
Disaggregation of Revenue [Line Items]
Revenue from construction and maintenance projects period (in months)			2 months
Maximum
Disaggregation of Revenue [Line Items]
Revenue from construction and maintenance projects period (in months)			3 months
Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0		$ 0
Rental revenue	0		0
Total revenue	0		0
Water Transfer Services
Disaggregation of Revenue [Line Items]
Service revenue	35,211		72,601
Water Transfer Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0		0
Disposal Services
Disaggregation of Revenue [Line Items]
Service revenue	6,576		12,201
Disposal Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0		0
Other Revenue
Disaggregation of Revenue [Line Items]
Service revenue	3,533		6,045
Other Revenue | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue	0		0
Rocky Mountain | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	29,627		56,623
Rental revenue	3,538		7,312
Total revenue	33,165		63,935
Rocky Mountain | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	21,967		43,227
Rocky Mountain | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	4,540		8,152
Rocky Mountain | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	3,120		5,244
Northeast | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	9,547		18,597
Rental revenue	59		122
Total revenue	9,606		18,719
Northeast | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	8,230		16,249
Northeast | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	955		1,732
Northeast | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	362		616
Southern | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	6,146		15,627
Rental revenue	31		336
Total revenue	6,177		15,963
Southern | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	5,014		13,125
Southern | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	1,081		2,317
Southern | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue	$ 51		$ 185
Predecessor
Disaggregation of Revenue [Line Items]
Service revenue		$ 37,538		$ 72,956
Rental revenue		4,000		7,805
Total revenue		41,538		80,761
Predecessor | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0		0
Rental revenue		0		0
Total revenue		0		0
Predecessor | Water Transfer Services
Disaggregation of Revenue [Line Items]
Service revenue		31,101		60,374
Predecessor | Water Transfer Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0		0
Predecessor | Disposal Services
Disaggregation of Revenue [Line Items]
Service revenue		4,255		7,713
Predecessor | Disposal Services | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0		0
Predecessor | Other Revenue
Disaggregation of Revenue [Line Items]
Service revenue		2,182		4,869
Predecessor | Other Revenue | Corporate/ Other
Disaggregation of Revenue [Line Items]
Service revenue		0		0
Predecessor | Rocky Mountain | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		20,222		41,142
Rental revenue		3,537		6,902
Total revenue		23,759		48,044
Predecessor | Rocky Mountain | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		16,470		32,966
Predecessor | Rocky Mountain | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		2,932		5,526
Predecessor | Rocky Mountain | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		820		2,650
Predecessor | Northeast | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		9,521		17,260
Rental revenue		49		67
Total revenue		9,570		17,327
Predecessor | Northeast | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		7,694		14,341
Predecessor | Northeast | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		655		976
Predecessor | Northeast | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		1,172		1,943
Predecessor | Southern | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		7,795		14,554
Rental revenue		414		836
Total revenue		8,209		15,390
Predecessor | Southern | Water Transfer Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		6,937		13,067
Predecessor | Southern | Disposal Services | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		668		1,211
Predecessor | Southern | Other Revenue | Operating Segments
Disaggregation of Revenue [Line Items]
Service revenue		$ 190		$ 276

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Earnings Per Common Share - Narrative (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Common stock equivalents (in shares)	0	0	0	0

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- Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator:
Net loss	$ (11,176)		$ (43,343)
Denominator:
Weighted average shares—basic (in shares)	11,696,000		11,696,000
Common stock equivalents (in shares)	0	0	0	0
Weighted average shares—diluted (in shares)	11,696,000		11,696,000
Net loss per common share:
Net loss per basic common share (usd per share)	$ (0.96)		$ (3.71)
Net loss per diluted common share (usd per share)	$ (0.96)		$ (3.71)
Potentially dilutive stock-based awards excluded:
Stock options (in shares)	0		0
Restricted stock awards and units (in shares)	537,000		0
Warrants (in shares)	0		0
Total (in shares)	537,000		0
Antidilutive stock-based awards excluded (in shares)	1,131,000		1,227,000
Predecessor
Numerator:
Net loss		$ (19,587)		$ (55,549)
Denominator:
Weighted average shares—basic (in shares)		150,941,000		150,938,000
Common stock equivalents (in shares)		0		0
Weighted average shares—diluted (in shares)		150,941,000		150,938,000
Net loss per common share:
Net loss per basic common share (usd per share)		$ (0.13)		$ (0.37)
Net loss per diluted common share (usd per share)		$ (0.13)		$ (0.37)
Potentially dilutive stock-based awards excluded:
Stock options (in shares)		0		0
Restricted stock awards and units (in shares)		0		0
Warrants (in shares)		20,450,000		23,610,000
Total (in shares)		20,450,000		23,610,000
Antidilutive stock-based awards excluded (in shares)		593,000		593,000

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Intangible Assets (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 594	$ 594
Additions/(Disposals)	(12)	0
Accumulated Amortization	(128)	(47)
Net	$ 454	$ 547
Remaining Useful Life (Years)	5 years 8 months 24 days	6 years 2 months
Disposal permits
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 594	$ 594
Additions/(Disposals)	(12)	0
Accumulated Amortization	(128)	(47)
Net	$ 454	$ 547
Remaining Useful Life (Years)	5 years 8 months 24 days	6 years 2 months

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Assets Held for Sale and Impairment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2018
Goodwill [Line Items]
Impairment of assets to be disposed of		$ 4,100	$ 4,100
Impairment of long-lived assets	$ 332		4,463
Southern
Goodwill [Line Items]
Impairment of assets to be disposed of			4,000
Northeast
Goodwill [Line Items]
Impairment of assets to be disposed of			$ 100

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Fair Value Measurements - Measured on a Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jul. 31, 2017
Liabilities:
Derivative warrant liability	$ 188	$ 477	$ 0
Contingent consideration	$ 500	$ 500

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Fair Value Measurements - Derivative Warrant Liability (Details) $ / shares in Units, $ in Thousands		5 Months Ended	6 Months Ended
	Jul. 31, 2017 USD ($) warrants $ / shares	Dec. 31, 2017 USD ($)	Jun. 30, 2018 USD ($) $ / shares
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Plan of reorganization, number of warrants Issued | warrants	118,137
Exercise price of warrants (in USD per warrant) | $ / shares	$ 39.82		$ 39.82
Expiration term (in years)	7 years
Par value of successor common stock (USD per share) | $ / shares	$ 0.01
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period		$ 0	$ 477
Issuance of warrants		717	0
Adjustments to estimated fair value		(240)	(289)
Balance at end of period	$ 0	$ 477	$ 188
2018 Notes
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Interest rate	9.875%

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Fair Value Measurements - Changes to Contingent Consideration (Detail) - USD ($) $ in Thousands		5 Months Ended	6 Months Ended
	Jul. 11, 2017	Dec. 31, 2017	Jun. 30, 2018	Jun. 28, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Less: current portion		$ (500)	$ (500)
Contingent consideration
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		1,000	500
Liability settlements		(500)	0
Balance at end of period		500	500
Less: current portion		(500)	(500)
Long-term contingent consideration		$ 0	$ 0
Chapter 11 Bankruptcy
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Amount to be transferred upon emergence from Chapter 11	$ 500
Amount to be transferred when required permits are delivered	$ 500
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Long-term contingent consideration				$ 8,500

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Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued payroll and employee benefits	$ 6,437	$ 3,304
Accrued insurance	2,285	2,701
Accrued legal	1,126	1,749
Accrued taxes	1,769	2,362
Accrued interest	141	161
Accrued operating costs	3,992	2,663
Accrued other	124	999
Total accrued liabilities	$ 15,874	$ 13,939

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Debt - Schedule of Debt (Detail) - USD ($)		6 Months Ended
	Jul. 31, 2017	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Fair Value of Debt		$ 36,568,000
Carrying Value of Debt		36,568,000	$ 39,049,000
Less: current portion of long-term debt		(4,698,000)	(5,525,000)
Long-term debt		$ 31,870,000	33,524,000
Successor Second Lien Term Loan | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 26,800,000
Interest rate		11.00%
Interest rate payable in cash		5.50%
Interest rate payable in kind		5.50%
ACF FinCo I, LP | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	30,000,000.0	$ 30,000,000.0
ACF FinCo I, LP | First Lien Credit Agreement | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 45,000,000.0
ACF FinCo I, LP | First Lien Credit Agreement | Line of Credit | LIBOR
Debt Instrument [Line Items]
Variable interest rate	5.25%
Successor Revolving Facility
Debt Instrument [Line Items]
Variable interest rate		7.25%
Fair Value of Debt		$ 0
Carrying Value of Debt		$ 0	0
Successor First Lien Term Loan
Debt Instrument [Line Items]
Variable interest rate		9.25%
Fair Value of Debt		$ 13,214,000
Carrying Value of Debt		$ 13,214,000	14,285,000
Successor First Lien Term Loan | First Lien Credit Agreement | LIBOR
Debt Instrument [Line Items]
Variable interest rate		7.25%
Successor First Lien Term Loan | ACF FinCo I, LP | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 15,000,000.0
Successor Second Lien Term Loan
Debt Instrument [Line Items]
Variable interest rate		11.00%
Fair Value of Debt		$ 20,593,000
Carrying Value of Debt		$ 20,593,000	21,000,000
Vehicle Financings
Debt Instrument [Line Items]
Weighted-average interest rate		5.01%
Fair Value of Debt		$ 2,761,000
Carrying Value of Debt		$ 2,761,000	$ 3,764,000

XML

Debt - Additional Information (Details) - USD ($)		6 Months Ended
	Jul. 31, 2017	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Carrying Value of Debt		$ 36,568,000	$ 39,049,000
First Lien Credit Agreement
Debt Instrument [Line Items]
Credit agreement, accordion feature	$ 20,000,000.0
Line of Credit | First Lien Credit Agreement | ACF FinCo I, LP
Debt Instrument [Line Items]
Maximum amount from credit agreement	45,000,000.0
Installment payment amount	$ 178,600
Increase in interest rate in event of default (percent)	3.00%
Line of Credit | First Lien Credit Agreement | ACF FinCo I, LP | LIBOR
Debt Instrument [Line Items]
Variable interest rate	5.25%
Line of Credit | Revolving Credit Facility | ACF FinCo I, LP
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 30,000,000.0	$ 30,000,000.0
Line of Credit | Successor Second Lien Term Loan
Debt Instrument [Line Items]
Maximum amount from credit agreement	26,800,000
Installment payment amount	$ 263,200
Increase in interest rate in event of default (percent)	3.00%
Proceeds from Predecessor term loan/Successor First and Second Lien Term Loans	$ 21,100,000
Additional borrowings available at request	5,700,000
Interest rate		11.00%
Interest rate payable in cash		5.50%
Interest rate payable in kind		5.50%
Successor First Lien Term Loan
Debt Instrument [Line Items]
Carrying Value of Debt		$ 13,214,000	14,285,000
Variable interest rate		9.25%
Successor First Lien Term Loan | First Lien Credit Agreement | LIBOR
Debt Instrument [Line Items]
Variable interest rate		7.25%
Successor First Lien Term Loan | Line of Credit | Revolving Credit Facility | ACF FinCo I, LP
Debt Instrument [Line Items]
Maximum amount from credit agreement	$ 15,000,000.0
Successor Second Lien Term Loan
Debt Instrument [Line Items]
Carrying Value of Debt		$ 20,593,000	21,000,000
Variable interest rate		11.00%
Vehicle Financings
Debt Instrument [Line Items]
Carrying Value of Debt		$ 2,761,000	$ 3,764,000
Vehicle Financings | Appalachian Water Services
Debt Instrument [Line Items]
Carrying Value of Debt		$ 2,800,000

XML

Derivative Warrants - Additional Information (Details) shares in Millions		12 Months Ended
	Jul. 31, 2017 warrants $ / shares	Dec. 31, 2016 $ / shares shares	Jun. 30, 2018 $ / shares
Derivative [Line Items]
Exercise price of warrants (in USD per warrant) | $ / shares	$ 39.82		$ 39.82
Plan of reorganization, number of warrants Issued | warrants	118,137
Par value of successor common stock (USD per share) | $ / shares	$ 0.01
Expiration term (in years)	7 years
2021 Notes | Minimum
Derivative [Line Items]
Interest rate			10.00%
2021 Notes | Maximum
Derivative [Line Items]
Interest rate			12.50%
Warrant
Derivative [Line Items]
Warrants issued during period (shares)		26.4
Exercise price of warrants (in USD per warrant) | $ / shares		$ 0.01
Class of warrant or right, term		10 years
Warrant | Common Class A
Derivative [Line Items]
Warrants issued during period (shares)		0.1
Warrant | 2021 Notes
Derivative [Line Items]
Warrants issued during period (shares)		17.5
Warrant | Term Loan
Derivative [Line Items]
Warrants issued during period (shares)		8.8

XML

Derivative Warrants - Warrants Outstanding Reconciliation (Details) - USD ($) shares in Thousands, $ in Thousands	5 Months Ended	6 Months Ended
	Dec. 31, 2017	Jun. 30, 2018	Jun. 30, 2017
Increase (Decrease) in Temporary Equity [Roll Forward]
Issued	$ 717	$ 0
Warrant
Increase (Decrease) in Temporary Equity [Roll Forward]
Outstanding at the beginning of the period		118
Issued		$ 0
Exercised		$ 0
Outstanding at the end of the period	118	118
Predecessor | Warrant
Increase (Decrease) in Temporary Equity [Roll Forward]
Outstanding at the beginning of the period			25,283
Issued			$ 0
Exercised			$ (2)
Outstanding at the end of the period			25,281

XML

Derivative Warrants - Schedule of Assumptions Used (Details)	Jun. 30, 2018 $ / shares	Jul. 31, 2017 $ / shares	Jun. 30, 2017 $ / shares
Class of Warrant or Right [Line Items]
Exercise price (in USD per warrant)	$ 39.82	$ 39.82
Closing stock price (in USD per share)	$ 12.00
Risk free rate
Class of Warrant or Right [Line Items]
Measurement input	0.0275
Expected volatility
Class of Warrant or Right [Line Items]
Measurement input	0.4226
Predecessor
Class of Warrant or Right [Line Items]
Exercise price (in USD per warrant)			$ 39.82
Closing stock price (in USD per share)			$ 18.18
Predecessor | Risk free rate
Class of Warrant or Right [Line Items]
Measurement input			0.0229
Predecessor | Expected volatility
Class of Warrant or Right [Line Items]
Measurement input			0.4059

XML

Restructuring and Exit Costs - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2015	Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs	$ 469		$ 0	$ 1,068	$ 0
Eagle Ford Shale Area
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs	469	$ 600		1,068
Restructuring reserve	72			72			$ 0
Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs						$ 7,100
Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business | Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 100			$ 100

XML

Restructuring and Exit Costs - Schedule of Restructuring Costs (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restructuring Cost and Reserve [Line Items]
Total restructuring and exit costs for Eagle Ford	$ 469		$ 0	$ 1,068	$ 0
Eagle Ford Shale Area
Restructuring Cost and Reserve [Line Items]
Severance and termination benefits	10			236
Contract termination costs and exit costs	459			832
Total restructuring and exit costs for Eagle Ford	$ 469	$ 600		$ 1,068

XML

Restructuring and Exit Costs - Liability Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring and exit-related costs	$ 469		$ 0	$ 1,068	$ 0
Eagle Ford Shale Area
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor		$ 0		0
Restructuring and exit-related costs	469	600		1,068
Cash payments				(996)
Balance accrued at end of period - Successor	72			72
Eagle Ford Shale Area | Employee Termination Costs
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor		0		0
Restructuring and exit-related costs				236
Cash payments				(215)
Balance accrued at end of period - Successor	21			21
Eagle Ford Shale Area | Lease Exit Costs
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor		0		0
Restructuring and exit-related costs				63
Cash payments				(39)
Balance accrued at end of period - Successor	24			24
Eagle Ford Shale Area | Other Exit Costs
Restructuring Cost and Reserve [Line Items]
Balance accrued at beginning of period - Successor		$ 0		0
Restructuring and exit-related costs				769
Cash payments				(742)
Balance accrued at end of period - Successor	$ 27			$ 27

XML

Restructuring and Exit Costs - Restructuring Reserve (Details) - Mississippian Shale Area and Tuscaloosa Marine Shale Logistics Business - Facility Closing $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Restructuring Reserve [Roll Forward]
Cash payments	$ (25)
Balance accrued at end of period - Successor	57
Predecessor
Restructuring Reserve [Roll Forward]
Balance accrued at beginning of period - Successor	$ 82

XML

Income Taxes - Narrative (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2018
Income Tax Contingency [Line Items]
Effective income tax benefit rate (near zero for QTD and YTD June 2017)	0.00%	0.00%	0.00%	0.00%
Scenario, Forecast
Income Tax Contingency [Line Items]
Effective income tax benefit rate (near zero for QTD and YTD June 2017)					0.00%

XML

Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions					3 Months Ended	6 Months Ended
	May 29, 2018	Feb. 23, 2018	Feb. 22, 2018	Jul. 31, 2017	Jun. 30, 2018	Jun. 30, 2018	Mar. 02, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares of common stock available for issuance of awards (in shares)			100,000
2017 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares of common stock available for issuance of awards (in shares)			1,772,058
Chief Executive Officer | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)		33.33%		33.33%
Chief Executive Officer | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)		33.33%		33.33%
Chief Executive Officer | Share-based Compensation Award, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)		33.33%		33.33%
Chief Financial Officer | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)			33.33%
Chief Financial Officer | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)			33.33%
Chief Financial Officer | Share-based Compensation Award, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anniversary vesting installments (percent)			33.33%
Stock options, tranche one | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option award (percent)				2.50%
Enterprise valuation of company's common stock				$ 475.0
Options awarded to purchase common stock (in shares)		354,411
Exercise price (in dollars per share)		$ 37.03
Stock options, tranche two | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option award (percent)				2.50%
Enterprise valuation of company's common stock				$ 525.0
Options awarded to purchase common stock (in shares)		354,411
Exercise price (in dollars per share)		$ 41.31
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants (in shares)					0	1,311,000
Restricted stock units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awarded to purchase common stock (in shares)			88,603				354,412
Restricted stock units | Interim Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants (in shares)	5,889
Performance-based Restricted Stock Units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			531,618
Performance-based Restricted Stock Units | Chief Financial Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			62,022
Performance-based Restricted Stock Units | Chief Legal Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awarded to purchase common stock (in shares)			62,022
Time-based Restricted Stock Units | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			531,618
Time-based Restricted Stock Units | Chief Financial Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			62,022
Time-based Restricted Stock Units | Chief Legal Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)			62,022
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock received for service by non-employee directors (in shares)			4,688
Restricted stock and stock unit grants (in shares)					6,000	20,000
Stock options | Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options awarded to purchase common stock (in shares)							708,822

XML

- Share-based Compensation (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grants	6		1,331
Stock-based compensation	$ 416		$ 11,394
Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation		$ 112		$ 421
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option grants	0		0
Stock-based compensation	$ 0		$ (788)
Stock options | Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation		32		97
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants	6		20
Stock-based compensation	$ 160		$ 160
Restricted stock | Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation		65		131
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock and stock unit grants	0		1,311
Restricted stock units	$ 256		$ 12,022
Restricted stock units | Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units		$ 15		$ 193

XML

Segments - Additional Information (Detail)	Jun. 30, 2018 operating_division
Segment Reporting [Abstract]
Number of operating divisions	3

XML

Segments - Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Revenue	$ 48,948		$ 98,617
Direct operating expenses	39,069		80,696
General and administrative expenses	6,014		25,334
Depreciation and amortization	11,969		26,713
Operating loss	(8,905)		(39,657)
Loss before income taxes	(11,176)		(43,343)
Total assets	278,637		278,637		$ 311,322
Total assets held for sale	3,381		3,381		2,765
Operating Segments | Rocky Mountain
Segment Reporting Information [Line Items]
Revenue	33,165		63,935
Direct operating expenses	25,599		51,945
General and administrative expenses	1,882		3,158
Depreciation and amortization	5,923		12,212
Operating loss	(239)		(3,380)
Loss before income taxes	(203)		(3,405)
Total assets	125,679		125,679		137,213
Total assets held for sale	0		0		2,765
Operating Segments | Northeast
Segment Reporting Information [Line Items]
Revenue	9,606		18,719
Direct operating expenses	8,510		16,324
General and administrative expenses	518		1,280
Depreciation and amortization	3,283		7,589
Operating loss	(2,705)		(6,543)
Loss before income taxes	(2,780)		(6,679)
Total assets	47,707		47,707		54,218
Total assets held for sale	116		116		0
Operating Segments | Southern
Segment Reporting Information [Line Items]
Revenue	6,177		15,963
Direct operating expenses	4,960		12,427
General and administrative expenses	251		829
Depreciation and amortization	2,750		6,874
Operating loss	(2,253)		(9,297)
Loss before income taxes	(2,295)		(9,406)
Total assets	89,346		89,346		111,457
Total assets held for sale	2,487		2,487		0
Corporate/ Other
Segment Reporting Information [Line Items]
Revenue	0		0
Direct operating expenses	0		0
General and administrative expenses	3,363		20,067
Depreciation and amortization	13		38
Operating loss	(3,708)		(20,437)
Loss before income taxes	(5,898)		(23,853)
Total assets	15,905		15,905		8,434
Total assets held for sale	$ 778		$ 778		$ 0
Predecessor
Segment Reporting Information [Line Items]
Revenue		$ 41,538		$ 80,761
Direct operating expenses		34,825		69,114
General and administrative expenses		8,867		21,226
Depreciation and amortization		12,107		24,978
Operating loss		(14,261)		(34,557)
Loss before income taxes		(19,605)		(55,567)
Predecessor | Operating Segments | Rocky Mountain
Segment Reporting Information [Line Items]
Revenue		23,759		48,044
Direct operating expenses		19,171		40,403
General and administrative expenses		1,505		3,452
Depreciation and amortization		6,803		13,588
Operating loss		(3,720)		(9,399)
Loss before income taxes		(4,209)		(9,910)
Predecessor | Operating Segments | Northeast
Segment Reporting Information [Line Items]
Revenue		9,570		17,327
Direct operating expenses		9,831		17,788
General and administrative expenses		817		1,586
Depreciation and amortization		2,182		4,695
Operating loss		(3,260)		(6,742)
Loss before income taxes		(3,325)		(6,927)
Predecessor | Operating Segments | Southern
Segment Reporting Information [Line Items]
Revenue		8,209		15,390
Direct operating expenses		5,823		10,923
General and administrative expenses		650		1,681
Depreciation and amortization		3,068		6,587
Operating loss		(1,332)		(3,801)
Loss before income taxes		(1,406)		(3,933)
Predecessor | Corporate/ Other
Segment Reporting Information [Line Items]
Revenue		0		0
Direct operating expenses		0		0
General and administrative expenses		5,895		14,507
Depreciation and amortization		54		108
Operating loss		(5,949)		(14,615)
Loss before income taxes		$ (10,665)		$ (34,797)

XML

Subsidiary Guarantors - Additional Information (Detail)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Subsidiary ownership percentage	100.00%	100.00%

XML

Subsidiary Guarantors - Condensed Consolidating Statement of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Condensed Income Statements, Captions [Line Items]
Revenue	$ 48,948		$ 98,617
Costs and expenses:
Direct operating expenses	39,069		80,696
General and administrative expenses	6,014		25,334
Depreciation and amortization	11,969		26,713
Total costs and expenses	57,853		138,274
Operating loss	(8,905)		(39,657)
Interest expense, net	(1,204)		(2,454)
Reorganization items, net	(1,654)		(1,746)
Loss before income taxes	(11,176)		(43,343)
Income tax benefit	0		0
Net loss	$ (11,176)		$ (43,343)
Predecessor
Condensed Income Statements, Captions [Line Items]
Revenue		$ 41,538		$ 80,761
Costs and expenses:
Direct operating expenses		34,825		69,114
General and administrative expenses		8,867		21,226
Depreciation and amortization		12,107		24,978
Total costs and expenses		55,799		115,318
Operating loss		(14,261)		(34,557)
Interest expense, net		(5,338)		(19,546)
Other income, net		5,706		4,254
(Loss) income from equity investments		(8)		(14)
Reorganization items, net		(5,704)		(5,704)
Loss before income taxes		(19,605)		(55,567)
Income tax benefit		18		18
Net loss		(19,587)		(55,549)
Predecessor | Reportable Legal Entities | Parent
Condensed Income Statements, Captions [Line Items]
Revenue		0		0
Costs and expenses:
Direct operating expenses		0		0
General and administrative expenses		5,895		14,507
Depreciation and amortization		54		108
Total costs and expenses		5,949		14,615
Operating loss		(5,949)		(14,615)
Interest expense, net		(5,178)		(19,126)
Other income, net		5,643		4,125
(Loss) income from equity investments		(8,940)		(20,770)
Reorganization items, net		(5,181)		(5,181)
Loss before income taxes		(19,605)		(55,567)
Income tax benefit		18		18
Net loss		(19,587)		(55,549)
Predecessor | Reportable Legal Entities | Guarantor Subsidiaries
Condensed Income Statements, Captions [Line Items]
Revenue		41,538		80,761
Costs and expenses:
Direct operating expenses		34,825		69,114
General and administrative expenses		2,972		6,719
Depreciation and amortization		12,053		24,870
Total costs and expenses		49,850		100,703
Operating loss		(8,312)		(19,942)
Interest expense, net		(160)		(420)
Other income, net		63		129
(Loss) income from equity investments		(8)		(14)
Reorganization items, net		(523)		(523)
Loss before income taxes		(8,940)		(20,770)
Income tax benefit		0		0
Net loss		(8,940)		(20,770)
Predecessor | Consolidation, Eliminations
Condensed Income Statements, Captions [Line Items]
Revenue		0		0
Costs and expenses:
Direct operating expenses		0		0
General and administrative expenses		0		0
Depreciation and amortization		0		0
Total costs and expenses		0		0
Operating loss		0		0
Interest expense, net		0		0
Other income, net		0		0
(Loss) income from equity investments		8,940		20,770
Reorganization items, net		0		0
Loss before income taxes		8,940		20,770
Income tax benefit		0		0
Net loss		$ 8,940		$ 20,770

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Subsidiary Guarantors - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net cash used in operating activities	$ (472)
Cash flows from investing activities:
Proceeds from the sale of property and equipment	17,649
Purchase of property, plant and equipment	(7,103)
Net cash provided by investing activities	10,621
Cash flows from financing activities:
Proceeds from debtor in possession term loan	0
Payments on vehicle financing and other financing activities	(980)
Net cash (used in) provided by financing activities	(2,577)
Change in cash, cash equivalents and restricted cash	7,572
Cash and cash equivalents, beginning of period	6,784
Cash, cash equivalents and restricted cash, end of period	$ 14,356
Predecessor
Cash flows from operating activities:
Net cash used in operating activities		$ (13,275)
Cash flows from investing activities:
Proceeds from the sale of property and equipment		3,027
Purchase of property, plant and equipment		(2,319)
Net cash provided by investing activities		708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility		76,072
Payments on Predecessor revolving credit facility		(79,866)
Proceeds from Predecessor term loan		15,700
Proceeds from debtor in possession term loan		6,875
Payments on vehicle financing and other financing activities		(2,595)
Net cash (used in) provided by financing activities		16,186
Change in cash, cash equivalents and restricted cash		3,619
Cash and cash equivalents, beginning of period		2,414
Cash, cash equivalents and restricted cash, end of period		6,033
Predecessor | Reportable Legal Entities | Parent
Cash flows from operating activities:
Net cash used in operating activities		(12,952)
Cash flows from investing activities:
Proceeds from the sale of property and equipment		0
Purchase of property, plant and equipment		0
Net cash provided by investing activities		0
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility		76,072
Payments on Predecessor revolving credit facility		(79,866)
Proceeds from Predecessor term loan		15,700
Proceeds from debtor in possession term loan		6,875
Payments on vehicle financing and other financing activities		(2,595)
Net cash (used in) provided by financing activities		16,186
Change in cash, cash equivalents and restricted cash		3,234
Cash and cash equivalents, beginning of period		1,388
Cash, cash equivalents and restricted cash, end of period		4,622
Predecessor | Reportable Legal Entities | Guarantor Subsidiaries
Cash flows from operating activities:
Net cash used in operating activities		(323)
Cash flows from investing activities:
Proceeds from the sale of property and equipment		3,027
Purchase of property, plant and equipment		(2,319)
Net cash provided by investing activities		708
Cash flows from financing activities:
Proceeds from Predecessor revolving credit facility		0
Payments on Predecessor revolving credit facility		0
Proceeds from Predecessor term loan		0
Proceeds from debtor in possession term loan		0
Payments on vehicle financing and other financing activities		0
Net cash (used in) provided by financing activities		0
Change in cash, cash equivalents and restricted cash		385
Cash and cash equivalents, beginning of period		1,026
Cash, cash equivalents and restricted cash, end of period		$ 1,411