Business Combinations and Divestitures

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Business Combinations and Dispositions

8. Business Combinations and Divestitures

Acquisitions

We did not have any acquisitions of businesses during the years ended December 31, 2020 or 2019.

In the 2018 Predecessor Period we acquired the remaining 50% equity interest in our Qatari joint venture that we previously consolidated and accounted for as an equity method investment. The total consideration to purchase the remaining equity interest was $87 million, which is comprised of a cash consideration of $72 million ($48 million in the year of closing and $24 million deferred consideration to be paid two years from closing) and an estimated contingent consideration of $15 million related to services the Qatari entity will render under new contracts. As a result of this step acquisition transaction with a change in control, we remeasured our previously held equity investment to fair value and recognized a $12 million gain in the 2018 Predecessor Period. We paid the $24 million deferred consideration in the 2020 Successor Period.

Divestitures

We did not have any significant divestitures of businesses during the Successor year ended December 31, 2020.

On April 30, 2019, we completed the sale of our Reservoir Solutions business, also known as our laboratory services business to Oil & Gas Labs, LLC, an affiliate of CSL Capital Management, L.P., for an aggregate purchase price of $206 million in cash, subject to escrow release and customary post-closing working capital adjustments. The business disposition included our laboratory and geological analysis business, including the transfer of substantially all personnel and associated contracts related to the business. We recognized a gain of $117 million and divested a carrying amount of $61 million in net assets.

On April 30, 2019, we completed the sale of our surface data logging business to Excellence Logging for $50 million in total consideration, subject to customary post-closing working capital adjustments. The business disposition included our surface data logging equipment, technology and associated contracts related to the business. We recognized an insignificant loss and divested a carrying amount of $34 million in net assets.

In the 2019 Predecessor Period, we completed the final closings in a series of closings pursuant to the purchase and sale agreements entered into with ADES International Holding Ltd. in July of 2018 to sell our land drilling rig operations in Algeria, Kuwait and Saudi Arabia, as well as two idle land rigs in Iraq, for an aggregate purchase price of $288 million. In the 2018 Predecessor Period, we received gross proceeds of $216 million and recognized a loss of $9 million after recognizing asset write-down charges of $58 million for deferred mobilization costs and other rigs related assets as such costs were no longer recoverable. The carrying amount of the assets and liabilities sold in 2018 totaled $253 million and $36 million, respectively, to include PP&E, inventory, accounts receivable and other assets and liabilities. In the 2019 Predecessor Period we received the remaining gross proceeds of $72 million and recognized a loss of $6 million. The carrying amounts of net assets divested during the 2019 Predecessor Period was $66 million. We divested several of our remaining rig assets through separate asset sale agreements throughout 2019.

In the 2018 Predecessor Period, we completed the sale of our continuous sucker rod service business in Canada for a purchase price of $25 million and recognized a gain of $2 million. During 2018, we also completed the sale of an equity investment in a joint venture for $12.5 million and recognized a gain of $3 million.

See “Note 10 – Long-Lived Asset Impairments” for further details related to impairments and those specific to our land drilling rigs assets.