Note

- Mergers and Acquisitions

2017

Acquisition of O-Tex

November 30, 2017,

the Company acquired all of the outstanding equity interest of O-Tex for approximately

$271.9

million, consisting of cash of approximately

$132.5

million and

4.42

million shares of the Company's common stock with a fair value of

$138.2

million. The Company also acquired the remaining

49.0%

non-controlling interest in an O-Tex subsidiary for

$1.25

million.

O-Tex specializes in both primary and secondary downhole specialty cementing services in most major U.S. shale plays. This strategic transaction immediately expands C&J

’s cementing business with enhanced capabilities and strengthens the Company’s position as a leading oilfield services provider with a best-in-class well construction, intervention and completions platform.

The O-Tex transaction was accounted for using the acquisition method of accounting for business combinations. In applying the acquisition method of accounting, the Company was required to determine the accounting acquirer which

was deemed to be the party possessing the controlling financial interest. The Company determined that C&J possessed the controlling financial interest

The preliminary purchase price was allocated to the net assets acquired based upon their estimated fair values, as shown below (in thousands). The estimated fair values of certain assets and liabilities, including property plant and equipment, other intangible assets, and contingencies required significant judgments and estimates. As a result, the provisional measurements below are preliminary and subject to change during the measurement period and such changes could be material. Valuations are

not

complete due to the timing of the acquisition during the

second

half of the

fourth

quarter. C&J continues to assess the fair values of the assets acquired and liabilities assumed. All of the goodwill associated with the O-Tex transaction was allocated to the Completion Services reporting unit.

The preliminary purchase price was allocated to the net assets acquired based upon their estimated fair values, as follows (in thousands):

Current assets	$	45,895
Property and equipment		64,496
Goodwill		147,515
Other intangible assets		71,500
Total assets acquired	$	329,406

Current liabilities	$	17,442
Deferred income taxes		31,301
Other liabilities		8,746
Total liabilities assumed	$	57,489
Net assets acquired	$	271,917

The preliminary fair value and gross contractual amount of accounts receivable acquired on

November 30, 2017

was

$30.0

million and

$30.1

million, respectively. Based on the age of certain accounts receivable, a portion of the gross contractual amount was estimated to be uncollectible.

Property, plant and equipment assets acquired consist of the following preliminary fair values (in thousands) and preliminary ranges of estimated useful lives. As with fair value estimates, the determination of estimated useful lives requires judgments and assumptions that are preliminary and subject to change during the measurement period.

	Estimated Useful Lives			Estimated Fair Value
Land	Indefinite			$	2,010
Building and leasehold improvements	5	-	25		5,700
Office furniture, fixtures and equipment	3	-	5		946
Machinery & Equipment	2	-	10		52,880
Construction in progress					2,960
Property, plant and equipment				$	64,496

Other intangibles were assessed a preliminary fair value of

$71.5

million with a preliminary weighted average amortization period of approximately

14.8

years. These intangible assets consist of customer relationships of

$58.1

million, amortizable over

years, trade name of

$11.8

million, amortizable over

years, and non-compete agreements of

$1.6

million, amortizable over

five

years. The amount allocated to goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill was allocated to the Company's Completion Services reporting unit. The goodwill recognized as a result of the O-Tex transaction was primarily attributable to the expected increased economies of scale, enhanced capabilities and resources, and an expanded geographic footprint. The tax deductible portion of goodwill and other intangibles is

$4.4

million and

$10.7

million, respectively

The Company treated the O-Tex acquisition as a non-taxable transaction. Such treatment resulted in the acquired assets and liabilities having carryover basis for tax purposes. An estimated deferred tax liability in the amount of

$31.3

million was recorded to account for the differences between the preliminary purchase price allocation and carryover tax basis.

Acquisition-related costs associated with the O-Tex transaction were expensed as incurred and totaled

$4.4

million for the year ended

December 31, 2017,

and are included in selling, general and administrative expenses.

The results of operations for O-Tex that have been included in C&J's consolidated financial statements subsequent to the

November 30, 2017

acquisition date through

December 31, 2017

include revenue of

$16.2

million and a net income of

$0.4

million. The following unaudited pro forma results of operations have been prepared as though the O-Tex transaction was completed on

January

2016.

Pro forma amounts are based on the purchase price allocation of the acquisition and are

not

necessarily indicative of results that

may

be reported in the future (in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016
Revenues	$	1,797,231		$	1,067,075
Net loss	$	(7,520	)	$	(939,454	)

2015

Merger between Old C&J and the C&P Business of Nabors

March

24,

2015,

Old C&J and Nabors completed the combination of Old C&J with the C&P Business. The resulting combined company was renamed C&J Energy Services Ltd. At the closing of the combination, Nabors received total consideration of

$1.4

billion, subject to working capital adjustments, in the form of

$688.1

million in cash,

$5.5

million in cash to reimburse Nabors for operating assets acquired prior to

March

24,

2015,

and

$714.8

million in C&J common shares. The C&J common share value was based upon Old C&J’s closing stock price on

March

23,

2015

and consisted of approximately

62.5

million C&J common shares issued to Nabors and approximately

0.4

million designated C&J common shares attributable to replacement restricted share and share option awards issued to certain employees of the C&P Business for the pre-acquisition-related employee service period. Upon the closing of the combination and as of

December 31, 2015,

Nabors owned approximately

53.0%

of the outstanding and issued common shares of Old C&J, with the remainder held by former Old C&J shareholders.

September 25, 2015,

C&J and Nabors agreed to a working capital adjustment of

$43.4

million in favor of C&J, which was accounted for as a reduction to the purchase price of the C&P Business.

The Nabors Merger was accounted for using the acquisition method of accounting for business combinations. In applying the acquisition method of accounting, Old C&J and Nabors were required to determine both the accounting acquirer and the accounting acquiree with the accounting acquirer deemed to be the party possessing the controlling financial interest. Irrespective of Nabors

53.0%

common share ownership in C&J immediately following the closing of the Nabors Merger, Old C&J and Nabors determined that Old C&J possessed the controlling financial interest, based on, among other factors, the presence of a majority of Old C&J directors on the C&J board of directors and through the composition of C&J senior management consisting almost entirely of the executive officers of Old C&J. Old C&J and Nabors therefore concluded the business combination should be treated as a reverse acquisition with Old C&J as the accounting acquirer.

C&J financed the cash portion of the Nabors Merger and repaid previously outstanding revolver debt with borrowings drawn under the Original Credit Agreement which provided for senior secured credit facilities in an aggregate principal amount of

$1.66

billion. See Note

- Debt for further discussion on the Company

’s Original Credit Agreement.

The purchase price was allocated to the net assets acquired based upon their estimated fair values, as shown below (in thousands). The estimated fair values of certain assets and liabilities, including accounts receivable, inventory, property plant and equipment, other intangible assets, taxes (including uncertain tax positions), and contingencies required significant judgments and estimates.

All of the goodwill associated with the Nabors Merger was allocated to the Completion Services and Well Support Services reporting units. As part of the Company's interim test for goodwill impairment, during the

third

quarter of

2015,

all of the goodwill allocated to the Completion Services reporting unit was written off. In addition, during the

first

quarter of

2016,

all of the goodwill allocated to the Well Support Services reporting unit was written off. See Note

- Goodwill and Other Intangible Assets for further discussion.

The purchase price was initially allocated to the net assets acquired during the

first

quarter of

2015

and subsequently adjusted during

2015

and in the

first

quarter of

2016

in connection with the measurement period based upon revised estimated fair values, as follows (in thousands):

	Amounts Recognized as of Merger Date			Measurement Period Adjustments (1)			Estimated Fair Value
Accounts receivable	$	262,973		$	11,079		$	274,052
Inventory		35,491			(7,372	)		28,119
Other current assets		8,857			(1,940	)		6,917
Property, plant and equipment		1,024,622			(59,378	)		965,244
Goodwill		444,162			12,684			456,846
Other intangible assets		28,300			13,700			42,000
Other assets		11,171			(2,913	)		8,258
Total assets acquired		1,815,576			(34,140	)		1,781,436
Accounts payable		(195,913	)		19,610			(176,303	)
Other current liabilities		(23,813	)		(7,503	)		(31,316	)
Deferred income taxes		(187,515	)		(21,368	)		(208,883	)
Total liabilities assumed		(407,241	)		(9,261	)		(416,502	)
Net assets acquired	$	1,408,335		$	(43,401	)	$	1,364,934

(

) The measurement period adjustments reflect changes in the estimated fair values of certain assets and liabilities, including income taxes. The measurement period adjustments were recorded to reflect new information obtained about facts and circumstances existing as of the date the Nabors Merger was consummated and did

not

result from intervening events subsequent to that date.

The fair value and gross contractual amount of accounts receivable acquired on

March

24,

2015

was

$274.1

million and

$296.2

million, respectively. Based on the age of certain accounts receivable, a portion of the gross contractual amount was estimated to be uncollectible.

Property, plant and equipment assets acquired consist of the following fair values (in thousands) and ranges of estimated useful lives. As with fair value estimates, the determination of estimated useful lives requires judgments and assumptions.

	Estimated Useful Lives			Estimated Fair Value
Land	Indefinite			$	42,741
Building and leasehold improvements	2	-	25		79,456
Office furniture, fixtures and equipment	2	-	5		2,845
Machinery & Equipment	2	-	10		628,791
Transportation equipment	2	-	5		166,457
Construction in progress					44,954
Property, plant and equipment				$	965,244

Other intangibles were assessed a fair value of

$42.0

million with a weighted average amortization period of approximately

years. These intangible assets consist of developed technology of

$19.6

million, amortizable over

–

years, customer relationships of

$13.0

million, amortizable over

years, trade name of

$8.5

million, amortizable over

ten

years, and non-compete agreements of

$0.9

million, amortizable over

five

years. The amount allocated to goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill was allocated between C&J’s Completion Services and Well Support Services reporting units on the basis of historical levels of EBITDA with

$141.4

million allocated to Completion Services and

$315.4

million allocated to Well Support Services. The goodwill recognized as a result of the Nabors Merger was primarily attributable to the expected increased economies of scale, capabilities, resources and geographic footprint of the combined company as well as the cost savings opportunities as C&J expected to capitalize on synergies from the new combined company. The tax deductible portion of goodwill and other intangibles is

$60.8

million and

$22.3

million, respectively.

The Company treated the Nabors Merger as a non-taxable transaction. Such treatment resulted in the acquired assets and liabilities having carryover basis for tax purposes. A deferred tax liability in the amount of

$208.9

million was recorded to account for the differences between the preliminary purchase price allocation and carryover tax basis.

Acquisition-related costs associated with the Nabors Merger were expensed as incurred and totaled

$42.7

million for the year ended

December 31, 2015,

and are included in selling, general and administrative expenses.

The results of operations for the C&P Business that have been included in C&J's consolidated financial statements from the

March 24, 2015

acquisition date through

December 31, 2015

include revenue of

$822.2

million and a net loss of

$211.1

million. The following unaudited pro forma results of operations have been prepared as though the Nabors Merger was completed on

January

2014.

Pro forma amounts are based on the purchase price allocation of the acquisition and are

not

necessarily indicative of results that

may

be reported in the future (in thousands):

	Year Ended December 31, 2015			Year Ended December 31, 2014
Revenues	$	2,114,671		$	3,861,412
Net loss	$	(879,231	)	$	(244,183	)

Acquisition of Artificial Lift Provider

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 ("Artificial Lift Provider") for approximately

$34.0

million consisting of cash of approximately

$13.6

million, a holdback of

$6.0

million, and an earn-out valued at approximately

$14.4

million on the acquisition date.

During the

second

quarter of

2016,

C&J and the sellers agreed to a working capital adjustment of

$0.5

million in favor of C&J, which was accounted for as a reduction to the purchase price of ESP Completion Technologies LLC. The adjusted purchase price of

$33.5

million was allocated to the net assets acquired based upon their estimated fair values, as follows (in thousands):

Current assets	$	5,822
Property, plant and equipment		2,529
Goodwill		24,219
Other intangible assets		5,173
Total assets acquired		37,743
Current liabilities		(1,927	)
Deferred income taxes		(2,067	)
Other liabilities		(276	)
Total liabilities assumed		(4,270	)
Net assets acquired	$	33,473

If Artificial Lift Provider 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. This could result in a maximum total purchase price of

$49.1

million. The potential payment is considered contingent consideration. At the acquisition date, the fair value of this earn-out was determined using a Monte Carlo simulation model over many simulated possible future outcomes which yielded a value of

$14.4

million. The earn-out has been remeasured on a fair value basis each quarter and will continue to be remeasured each quarter until the contingent consideration is paid or expires. As of

December 31, 2017,

the earn-out was estimated to have

zero

value.