Note 9 - Related Party Transactions

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note

9

– Related Party Transactions

The Company obtained support services from Nabors Corporate Services, Inc., on a transitional basis, for the processing of payroll, benefits and certain administrative services of the C&P business in normal course following the completion of the Nabors Merger.  As of

December

31,

2015,

the Company’s payable balance was

$28.2

million and the support service fees incurred during

2015

totaled

$136.4

million. During

2016

and prior to the Confirmation Date, the Company, the Official Committee of Unsecured Creditors of CJ Holding Co, the Steering Committee of Lenders under the Credit Agreement and the DIP Facility, and Nabors entered into a mediated settlement agreement that was subsequently approved by the Bankruptcy Court whereby, among other things, Nabors was awarded

two

allowed proofs of claim totaling

$13.25

million. As of

December

31,

2016,

the allowed proofs of claim are included in liabilities subject to compromise on the consolidated balance sheet.

The Company leases certain properties from Nabors, and Nabors leases certain properties from the Company. For the year ended

December

31,

2016,

the Company incurred obligations to Nabors of approximately

$0.6

million under the leases, and Nabors incurred obligations to C&J of less than

$0.1

million under the leases. The Company plans to continue the leasing arrangements with Nabors for the foreseeable future.

The Company provided certain services to Shehtah Nabors LP, a Nabors partnership with a

third

party, pursuant to a Management Agreement and a Cash Flow Sharing Agreement (collectively, “Shehtah Agreements”). Nabors incurred obligations to the Company of approximately

$1.8

million under the Shehtah Agreements during

2016.

There were no amounts due to the Company under the Shehtah Agreements at

December

31,

2016.

The Company utilizes the services of certain saltwater disposal wells owned by Pyote Water Solutions, LLC, Pyote Water Systems, LLC, Pyote Water Systems II, LLC and Pyote Water Systems III, LLC (together “Pyote”) used in the disposal of certain fluids associated with oil and gas production. A former member of the Company's Board of Directors, who served from

March

24,

2015

until

December

16,

2016,

holds the position of President and Chief Manager of Pyote and serves as Chairman of the Board of Governors of Pyote. Amounts invoiced from Pyote totaled approximately

$0.8

million and

$0.6

million for the years ended

December

 

31,

2016

and

2015,

respectively. Amounts payable to this vendor at

December

31,

2016

and

2015

were less than

$0.1

million for both years. In addition, the Company provides certain workover rig services, fluid hauling services and plug and abandonment services to Pyote. Revenues from Pyote totaled approximately

$0.3

million for the year ended

December

 

31,

2015,

and

no

services were provided to Pyote during

2016.

There were

no

amounts due to the Company from Pyote at

December

31,

2016.

The Company obtains trucking and crane services from certain vendors affiliated with

two

of its executive officers. For the year ended

December

31,

2014,

purchases from these vendors totaled

$7.4

million, and there were no purchases from these vendors for the years ended

December

31,

2016

and

2015.

The Company purchased

certain of its equipment from vendors affiliated with a member of its Board of Directors. For the years ended

December

 

31,

2015,

and

2014,

purchases from these vendors totaled

$1.9

million and

$5.7

million, respectively. Amounts payable to these vendors at

December

 

31,

2015

were less than

$0.1

million. There were no purchases from these vendors for the year ended

December

31,

2016

.

The Company obtains office space, equipment rentals, tool repair services and other supplies from vendors affiliated with several employees. For the years ended

December

 

31,

2016,

2015

and

2014,

purchases from these vendors totaled

$0.45

million,

$0.5

million and

$1.0

million, respectively. Amounts payable to these vendors at

December

 

31,

2016

and

2015

were less than

$0.1

million for each respective year.

The Company has an unconsolidated equity method investment with a vendor that provided

the Company with raw material for its discontinued

specialty chemical business. For the years ended

December

 

31,

2016,

2015

and

2014,

purchases from this vendor were

$1.7

million,

$11.8

million and

$21.8

million, respectively. Amounts payable to this vendor

at

December

 

31,

2016

and

2015

were

$2.1

million and

$1.5

million, respectively.

The Company obtained drilling fluids from a vendor which was affiliated with

one

of its employees. For the year ended

December

 

31,

2015,

purchases from this vendor totaled

$2.1

million. Amounts due

to this vendor at

December

 

31,

2015

were

$0.2

million. There were no purchases from this vendor for the year ended

December

31,

2016

.

The Company obtains machined parts from a vendor which is affiliated with several of its employees. For the year ended

December

 

31,

2014,

purchases from this vendor totaled

$0.4

million. There were no purchases from this vendor for the years ended

December

31,

2016

and

2015.