Note

- Debt

Debt consisted of the following as of

June

30,

2017

and

December

31,

2016

(in thousands):

	Successor		Predecessor
	June 30, 2017		December 31, 2016
Revolving Credit Facility	$	—	$	284,400
Five-Year Term Loans		—		569,250
Seven-Year Term Loans		—		480,150
Total debt		—		1,333,800
Less: liabilities subject to compromise		—		(1,333,800	)
Long-term debt	$	—	$	—

DIP Facility	$	—	$	25,000

Amended Credit Facility	$	—	$	—

July 20, 2016,

the Debtors filed Bankruptcy Petitions in the Bankruptcy Court seeking relief under Chapter

of the Bankruptcy Code under the caption “

In re: CJ Holding Co., et al., Case

No.

33590

.” The filing of the Bankruptcy Petitions constituted an event of default with respect to the Original Credit Agreement. As a result, the Company’s pre-petition secured indebtedness under the Original Credit Agreement became immediately due and payable and any efforts to enforce such payment obligations were automatically stayed as a result of the Chapter

Proceeding. As of

December 31, 2016,

$1.3

billion of debt under the Original Credit Agreement was classified as liabilities subject to compromise.

Additional information regarding the Chapter

Proceeding is included in Note

- Chapter

Proceeding and Emergence.

Amended Credit Facility

January 6, 2017,

in connection with the emergence from bankruptcy, the Company entered into the New Credit Facility, and subsequently on

May 4, 2017,

entered into the Amended Credit Facility.

The Amended Credit Facility allows the Company and certain of its subsidiaries, as borrowers (the "Borrowers"), to incur revolving loans in an aggregate amount up to the lesser of

$200.0

million and a borrowing base, which borrowing base is based upon the value of the Borrowers’ accounts receivable and inventory, subject to eligibility criteria and customary reserves which

may

be modified in the Agent’s permitted discretion. The Amended Credit Facility also provides for the issuance of letters of credit, which would further reduce borrowing capacity thereunder. The maturity date of the Amended Credit Facility is

May 4, 2022.

If at any time the amount of loans and other extensions of credit outstanding under the Amended Credit Facility exceed the borrowing base, the Borrowers

may

be required, among other things, to prepay outstanding loans immediately.

The Borrowers’ obligations under the Amended Credit Facility are secured by liens on a substantial portion of the Borrowers’ personal property, subject to certain exclusions and limitations. Upon the occurrence of certain events, additional collateral, including a portion of the Borrowers’ real properties,

may

also be required to be pledged. Each of the Borrowers is jointly and severally liable for the obligations of the other Borrowers under the Amended Credit Facility.

At the Borrowers’ election, interest on borrowings under the Amended Credit Facility will be determined by reference to either LIBOR plus an applicable margin of

2.0%

or an “alternate base rate” plus an applicable margin of

1.0%.

Beginning after the fiscal month ending on or about

September 30, 2017,

these margins will be subject to a monthly step-up of

0.25%

in the event that average excess availability under the Amended Credit Facility is less than

37.5%

of the total commitment, and a monthly step-down of

0.25%

in the event that average excess availability under the Amended Credit Facility is equal to or greater than

62.5%

of the total commitment. Interest will be payable quarterly for loans bearing interest based on the alternative base rate and on the last day of the interest period applicable to LIBOR-based loans. The Borrowers will also be required to pay a fee on the unused portion of the Amended Credit Facility equal to (i)

0.75%

in the event that utilization is less than

25.0%

of the total commitment, (ii)

0.50%

in the event utilization is equal to or greater than

25%

of the total commitment but less than

50%

of the total commitment and (iii)

0.375%

in the event that utilization is equal to or greater than

50%

of the total commitment.

The Amended Credit Facility contains covenants that limit the Borrowers’ and their subsidiaries’ ability to incur additional indebtedness, grant liens, make loans or investments, make distributions, merge into or consolidate with other persons, make capital expenditures or engage in certain asset dispositions including a sale of all or substantially all of the Company’s assets.

The Amended Credit Facility also contains a financial covenant that requires the Company to maintain a monthly minimum fixed charge coverage ratio of

1.0:1.0

if, as of any month-end, liquidity is less than

$40.0

million.

The fixed charge coverage ratio is generally defined in the Amended Credit Facility as the ratio of (i) EBITDA minus certain capital expenditures and cash taxes paid to (ii) the sum of cash interest expenses, scheduled principal payments on borrowed money and certain distributions.

As of

June 30, 2017,

the Company was in compliance with all financial covenants.

DIP Facility

July 29, 2016,

the Predecessor entered into a

$100.0

million Superpriority Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”) with the other Debtors, the DIP Lenders and Cortland Capital Market Services LLC, as administrative agent.

The borrowers under the DIP Facility were the Predecessor and CJ Holding Co. All obligations under the DIP Facility were guaranteed by the Company’s subsidiaries that were debtors in the Bankruptcy cases. Borrowings under the DIP Credit Agreement were generally secured by superpriority priming liens on substantially all of the assets of the borrowers and guarantors.

Amounts outstanding under the DIP Facility bore interest based on, at the option of the borrower, LIBOR or an alternative base rate, plus an applicable margin equal to

9.0%

in the case of LIBOR loans and

8.0%

in the case of base rate loans. The alternative base rate was equal to the highest of (i) the published ‘prime rate’, (ii) the Federal Funds Effective Rate (as defined in the DIP Credit Agreement) plus

0.5%

and (iii) LIBOR plus

1.0%.

The DIP Facility also required that the Company pay various fees to the DIP Lenders, including a commitment fee equal to

5.0%

of the unused commitments thereunder. The DIP Facility was scheduled to mature on

March 31, 2017.

In accordance with the Restructuring Plan, on the Plan Effective Date, the Company repaid all amounts outstanding under the DIP Facility with the proceeds from the Rights Offering and the DIP Facility was canceled and discharged.

Predecessor Credit Agreements

March

24,

2015,

in connection with the closing of the Nabors Merger, the Predecessor entered into the Original Credit Agreement. The Original Credit Agreement provided for senior secured credit facilities in an aggregate principal amount of

$1.66

billion, consisting of (i) a revolving credit facility (“Revolving Credit Facility” or the “Revolver”) in the aggregate principal amount of

$600.0

million and (ii) a term loan B facility (“Term Loan B”) in the aggregate principal amount of

$1.06

billion. The Company simultaneously repaid all amounts outstanding and terminated Old C&J’s prior credit agreement;

penalties were due in connection with such repayment and termination. All obligations under the Original Credit Agreement were guaranteed by the Predecessor’s wholly-owned domestic subsidiaries, other than immaterial subsidiaries.

September 29, 2015,

the Company obtained and the Predecessor entered into a waiver and amendments to the Original Credit Agreement, which, among other things, suspended certain financial covenants set forth in the Original Credit Agreement. The suspension of these financial covenants commenced with the fiscal quarter ending

September 30, 2015

and would have lasted through the fiscal quarter ending

June 30, 2017.

May 10, 2016,

the Company obtained a temporary limited waiver agreement from certain of the lenders pursuant to which, effective as of

March 31, 2016,

such lenders agreed to

not

consider a breach of the Minimum Cumulative Consolidated EBITDA (as defined in the Original Credit Agreement) covenant measured as of

March 31, 2016

an event of default through

May 31, 2016.

May

31,

2016,

the Company obtained and the Predecessor entered into the Forbearance Agreement with certain of the lenders pursuant to which, among other things, such lenders agreed

not

to pursue default remedies against the Company with respect to its breach of the Minimum Cumulative Consolidated EBITDA Covenant or certain specified payment defaults.

June

30,

2016,

this forbearance was extended through

July 17, 2016

pursuant to the Second Forbearance Agreement, and prior to the termination of the Second Forbearance Agreement, this forbearance period was once again extended through

July 20, 2016.

The Second Forbearance Agreement provided that the forbearance would terminate upon the occurrence of certain events, including the failure of the Predecessor to enter into the Restructuring Support Agreement on or prior to

July

2016.

July 8, 2016,

the Predecessor entered into the Restructuring Support Agreement with the Supporting Lenders. The Restructuring Support Agreement contemplated the implementation of a restructuring of the Company through a debt-to-equity conversion and Rights Offering, which transaction was effectuated through the Restructuring Plan.

July 20, 2016,

the Debtors filed Bankruptcy Petitions in the Bankruptcy Court seeking relief under Chapter

11.

Additional information, including definitions of capitalized defined terms, regarding the Chapter

Proceeding is included in Note

- Chapter

Proceeding and Emergence.

Revolving Credit Facility

The Revolver was scheduled to mature on

March 24, 2020 (

except that if any Five-Year Term Loans (as defined herein) had

not

been repaid prior to

September 24, 2019,

the Revolver was scheduled to mature on

September 24, 2019).

Borrowings under the Revolver were non-amortizing. Amounts outstanding under the Revolver bore interest based on, at the option of the borrower, LIBOR or an alternative base rate, plus an applicable margin determined pursuant to a pricing grid based on the ratio of consolidated total indebtedness of C&J and its subsidiaries to Consolidated EBITDA of C&J and its subsidiaries for the most recent

four

fiscal quarter period for which financial statements are available (the “Total Leverage Ratio”).

July 20, 2016,

the Debtors filed the Bankruptcy Petitions which constituted an event of default under the Original Credit Agreement and accelerated the Revolver and Term Loan B Facility indebtedness to become immediately due and payable. On the Plan Effective Date, pursuant to the Restructuring Support Agreement entered into on

July 8, 2016,

holders of the Revolver and Term Loan B Facility received their pro rata share of

100.0%

of the New Equity in the Successor, subject to dilution from the issuance of New Equity on account of the Management Incentive Plan, the Rights Offering, the Backstop Fee and the New Warrants as discussed further in Note

- Chapter

Proceeding and Emergence.

Term Loan B Facility

Borrowings under the Term Loan B were comprised of

two

tranches: a tranche consisting of

$575.0

million in aggregate principal amount of term loans maturing on

March 24, 2020 (

the “Five-Year Term Loans”) and a tranche consisting of a

$485.0

million in aggregate principal amount of term loans maturing on

March 24, 2022 (

the “Seven-Year Term Loans”). The Company was required to make quarterly amortization payments in an amount equal to

1.0%,

with the remaining balance payable on the applicable maturity date. As of

December

31,

2016,

the Company had borrowings outstanding under the Five-Year Term Loans and the Seven-Year Term Loans of

$569.3

million and

$480.2

million, respectively.

Five-Year Term Loans outstanding under the Term Loan B bore interest based on, at the option of the Company, (i) LIBOR subject to a floor of

1.0%,

plus a margin of

5.5%,

or (ii) an alternative base rate, plus a margin of

4.5%.

Seven-Year Term Loans outstanding under the Term Loan B bore interest based on, at the option of the Company, (i) LIBOR subject to a floor of

1.0%,

plus a margin of

6.25%,

or (ii) an alternative base rate, plus a margin of

5.25%.

The alternative base rate was equal to the highest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Effective Rate plus

0.5%,

or (iii) LIBOR plus

1.0%.

July 20, 2016,

the Debtors filed the Bankruptcy Petitions which constituted an event of default under the Original Credit Agreement and accelerated the Term Loan B Facility indebtedness to become immediately due and payable; however, any efforts to enforce such payment obligations were automatically stayed as a result of the Chapter

Proceeding. On the Plan Effective Date, pursuant to the Restructuring Support Agreement entered into on

July 8, 2016,

holders of the Term Loan B Facility debt received their pro rata share of

100.0%

- Chapter

Proceeding and Emergence.

Interest Expense

As of

June 30, 2016,

based on the negotiations between the Company and the lenders, it became evident that the restructuring of the Company's capital structure would

not

include a restructuring of the Company's Revolving Credit Facility, the Five-Year Term Loans and the Seven-Year Term Loans, and these debt obligations, as demand obligations, would

not

be paid in the ordinary course of business over the term of these loans. As a result, during the

second

quarter of

2016,

the Company accelerated the amortization of the associated original issue discount and deferred financing costs, fully amortizing these amounts as of

June 30, 2016.

For the

three

and

six

months ended

June 30, 2017 (

Successor) and

2016

(Predecessor), interest expense consisted of the following (in thousands):

	Successor			Predecessor
	Three Months Ended June 30, 2017			Three Months Ended June 30, 2016

Amended Credit Facility	$	426		$	—
Original Credit Agreement		—			25,322
Capital leases		157			337
Accretion of original issue discount		—			2,113
Amortization of deferred financing costs		153			2,310
Original issue discount accelerated amortization		—			48,221
Deferred financing costs accelerated amortization		—			43,720
Interest income and other		(322	)		(89	)
Interest expense, net	$	414		$	121,934

	Successor			Predecessor
	Six Months Ended June 30, 2017			Six Months Ended June 30, 2016

Amended Credit Facility	$	876		$	—
Credit Agreements		—			46,215
Capital leases		314			570
Accretion of original issue discount		—			4,192
Amortization of deferred financing costs		306			4,589
Original issue discount accelerated amortization		—			48,221
Deferred financing costs accelerated amortization		—			43,720
Interest income and other		(391	)		(106	)
Interest expense, net	$	1,105		$	147,401