Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

11

- Commitments and Contingencies

Environmental

The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for the protection of the environment. The Company continues to monitor the status of these laws and regulations. However, the Company cannot predict the future impact of such standards and requirements on its business, which are subject to change and can have retroactive effectiveness.

Currently, the Company has not been fined, cited or notified of any environmental violations or liabilities that would have a material adverse effect upon its consolidated financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which

may

be required, the determination of the Company’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

Litigation

The Company is, and from time to time

may

be, involved in claims and litigation arising in the ordinary course of business. Because there are inherent uncertainties in the ultimate outcome of such matters, it is presently not possible to determine the ultimate outcome of any pending or potential claims or litigation against the Company; however, management believes that the outcome of those matters that are presently known to the Company will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

Contingent Consideration Liability

On

May

18,

2015,

the Company acquired all of the outstanding equity interests of ESP Completion Technologies LLC, a manufacturer of wellheads, artificial lift completion tools and electric submersible pumps for approximately

$34.0

million and including a contingent consideration liability valued at approximately

$14.4

million at the date of the acquisition. If the acquiree is able to achieve certain levels of EBITDA over a

three

-year period, the Company will be obligated to make future tiered payments of up to

$29.5

million. The contingent consideration liability is remeasured on a fair value basis each quarter until it is paid or expires. As of

December

31,

2016,

the earn-out was estimated to have

zero

value.

Operating Leases

The Company leases certain property and equipment under non-cancelable operating leases. The remaining terms of the operating leases generally range from

1

to

11

years.

Lease expense under all operating leases totaled 

$10.0

million, 

$14.2

million and

$14.0

million for the years ended

December

 

31,

2016,

2015

and

2014,

respectively. As of

December

 

31,

2016,

the future minimum lease payments under non-cancelable operating leases were as follows (in thousands):

Years Ending December 31,
2017	$	6,934
2018		4,205
2019		3,189
2020		2,985
2021		2,836
Thereafter		5,450
	$	25,599