Note

- Segment Information

In accordance with ASC No.

280

Segment Reporting

the Company routinely evaluates whether its separate operating and reportable segments have changed. This determination is made based on the following factors:

(1)

the Company’s chief operating decision maker (“CODM”) is currently managing each operating segment as a separate business and evaluating the performance of each segment and making resource allocation decisions distinctly and expects to do so for the foreseeable future, and

(2)

discrete financial information for each operating segment is available.

Prior to the year ended

December

31,

2016,

the Company’s reportable segments were: (i) Completion Services, (ii) Well Support Services, and (iii) Other Services. In line with the discontinuance of the small, ancillary service lines and divisions in the Other Services reportable segment, subsequent to the year ended

December

31,

2016,

the Company is disclosing

two

reportable segments, and financial information for the Other Services reportable segment is only presented for the corresponding prior year period. The Company's reportable segments are now: (i) Completion Services and (ii) Well Support Services. This segment structure reflects the financial information and reports used by the Company’s management, including its CODM, to make decisions regarding the Company’s business, including performance evaluation and resource allocation decisions. The following is a brief description of the Company's reportable segments:

Completion Services

Completion Services consists of the following service lines:

(1)

hydraulic fracturing;

(2)

cased-hole wireline, pumpdown services, which also includes wireline logging, perforating, pressure pumping, well site make-up and pressure testing and other complementary services;

(3)

well construction services, specifically cementing and directional drilling services; and

(4)

R&T, which at this time is primarily engaged in the engineering and production of certain parts and components, such as perforating guns and addressable switches, which are used in the performance of our Completion Services.

Well Support Services

Well Support Services consists of the following service lines:

(1)

rig services, including workover and other support services primarily used for repair and maintenance of oil and gas wells, re-drilling operations and plugging and abandonment operations;

(2)

fluids management services, which provides storage, transportation and disposal services for produced fluids and fluids used in the drilling, completion and workover of oil and gas wells;

(3)

coiled tubing services, primarily used for frac plug drill-out during completion operations and for well workover and routine maintenance;

(4)

artificial lift; and

(5)

other specialty well site services.

Other Services

Other Services consisted of smaller, non-core business lines that were divested during

2016

or subsequent to

December

31,

2016,

including the specialty chemical business, equipment manufacturing and repair business and the Company's international coiled tubing operations in the Middle East. In line with the discontinuance of these small, ancillary service lines and divisions, beginning with the quarter ended

March

31,

2017,

the Company is disclosing

two

reportable segments and financial information for the Other Services reportable segment is only presented for the corresponding prior year period.

The following table sets forth certain financial information with respect to the Company’s reportable segments.

	Completion Services			Well Support Services			Other Services			Corporate / Elimination			Total
Three months ended March 31, 2017 (Successor)
Revenue from external customers	$	200,169		$	114,025		$	—		$	—		$	314,194
Inter-segment revenues		577			40						(617	)		—
Depreciation and amortization		16,647			13,902			—			1,057			31,606
Operating income (loss)		11,120			(9,078	)		—			(38,450	)		(36,408	)
Net income (loss)		10,596			(7,333	)		—			(35,564	)		(32,301	)
Adjusted EBITDA		21,589			4,874			—			(21,879	)		4,584
Capital expenditures		7,205			4,252			—			128			11,585
As of March 31, 2017 (Successor)
Total assets	$	514,945		$	384,469		$	—		$	199,588		$	1,099,002
Three months ended March 31, 2016 (Predecessor)
Revenue from external customers	$	151,724		$	116,054		$	1,837		$	—		$	269,615
Inter-segment revenues		105			—			15,049			(15,154	)		—
Depreciation and amortization		35,628			22,000			741			584			58,953
Operating loss		(117,448	)		(339,460	)		(5,570	)		(37,938	)		(500,416	)
Net income (loss)		(117,528	)		(336,901	)		(5,738	)		31,755			(428,412	)
Adjusted EBITDA		(17,615	)		5,762			(1,675	)		(18,278	)		(31,806	)
Capital expenditures		5,891			467			7,896			4,413			18,667
As of March 31, 2016 (Predecessor)
Total assets	$	817,837		$	785,320		$	110,538		$	75,180		$	1,788,875

Management evaluates reportable segment performance and allocates resources based on total earnings (loss) before net interest expense, income taxes, depreciation and amortization, other income (expense), net gain or loss on disposal of assets, acquisition-related costs, and non-routine items (“Adjusted EBITDA”), because Adjusted EBITDA is considered an important measure of each reportable segment’s performance. In addition, management believes that the disclosure of Adjusted EBITDA as a measure of each reportable segment’s operating performance allows investors to make a direct comparison to competitors, without regard to differences in capital and financing structure. Investors should be aware, however, that there are limitations inherent in using Adjusted EBITDA as a measure of overall profitability because it excludes significant expense items. An improving trend in Adjusted EBITDA

may

not be indicative of an improvement in the Company’s profitability. To compensate for the limitations in utilizing Adjusted EBITDA as an operating measure, management also uses U.S. GAAP measures of performance, including operating income (loss) and net income (loss), to evaluate performance, but only with respect to the Company as a whole and not on a reportable segment basis.

As required under Item

10(e)

of Regulation S-K of the Exchange Act, included below is a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, from net income (loss), which is the nearest comparable U.S. GAAP financial measure (in thousands) on a consolidated basis for the

three

months ended

March

31,

2017

(Successor) and

2016

(Predecessor), and on a reportable segment basis for the

three

months ended

March

31,

2017

(Successor) and

2016

(Predecessor).

	Successor			Predecessor
	Three Months Ended March 31, 2017			Three Months Ended March 31, 2016
Net loss	$	(32,301	)	$	(428,412	)
Interest expense, net		691			25,468
Income tax benefit		(3,236	)		(94,148	)
Depreciation and amortization		31,606			58,953
Other (income) expense, net		(1,562	)		(3,324	)
(Gain) loss on disposal of assets		(6,056	)		3,202
Impairment expense		—			381,694
Severance, facility closures and other		—			10,545
Share-based compensation expense acceleration		15,658			7,792
Acquisition-related costs		—			3,689
Customer settlement/bad debt write-off		—			1,468
Inventory write-down		—			1,267
Other		(216	)		—
Adjusted EBITDA	$	4,584		$	(31,806	)

	Three Months Ended March 31, 2017 (Successor)
	Completion Services			Well Support Services			Corporate / Elimination			Total
Net income (loss)	$	10,596		$	(7,333	)	$	(35,564	)	$	(32,301	)
Interest expense, net		155			(26	)		562			691
Income tax benefit		—			—			(3,236	)		(3,236	)
Depreciation and amortization		16,647			13,902			1,057			31,606
Other (income) expense, net		369			(1,719	)		(212	)		(1,562	)
(Gain) loss on disposal of assets		(6,214	)		36			122			(6,056	)
Other		36			14			(266	)		(216	)
Share-based compensation acceleration		—			—			15,658			15,658
Adjusted EBITDA	$	21,589		$	4,874		$	(21,879	)	$	4,584

	Three Months Ended March 31, 2016 (Predecessor)
	Completion Services			Well Support Services			Other Services			Corporate / Elimination			Total
Net income (loss)	$	(117,528	)	$	(336,901	)	$	(5,737	)	$	31,754		$	(428,412	)
Interest expense, net		80			(53	)		—			25,441			25,468
Income tax benefit		—			—			—			(94,148	)		(94,148	)
Depreciation and amortization		35,628			22,000			741			584			58,953
Impairment expense		60,558			320,588			548			—			381,694
Other (income) expense, net		—			(2,506	)		168			(986	)		(3,324	)
(Gain) loss on disposal of assets		14			(1,795	)		—			4,983			3,202
Acquisition-related costs		73			—			20			3,596			3,689
Severance, facility closures and other		2,519			3,086			2,234			2,706			10,545
Customer settlement/bad debt write-off		125			1,343			—			—			1,468
Inventory write-down		916			—			351			—			1,267
Share-based compensation expense acceleration		—			—			—			7,792			7,792
Adjusted EBITDA	$	(17,615	)	$	5,762		$	(1,675	)	$	(18,278	)	$	(31,806	)