Drilling and Other Property and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Drilling and Other Property and Equipment

10. Drilling and Other Property and Equipment

Cost and accumulated depreciation of drilling and other property and equipment are summarized as follows (in thousands):

	Successor			Predecessor
	December 31,			December 31,
	2021			2020
Drilling rigs and equipment	$	1,057,739		$	6,987,631
Finance lease right of use asset (1)		174,571			—
Land and buildings		9,823			41,072
Office equipment and other		2,264			83,015
Cost		1,244,397			7,111,718
Less: accumulated depreciation		(68,502	)		(2,988,909	)
Drilling and other property and equipment, net	$	1,175,895		$	4,122,809

(1)Due to an amendment on the Effective Date, our BOP leases were recharacterized from operating to finance leases. See Note 3 "Fresh Start Accounting" and Note 13 "Leases and Lease Commitments."

Pursuant to fresh start accounting, our long-lived assets were valued at their estimated fair value, which resulted in a net $2.7 billion reduction in “Drilling and other property and equipment,” including the elimination of accumulated depreciation, on the Effective Date. Also on the Effective Date, we recorded an $8.4 million reduction in our "Finance lease right of use asset" to set the ROU assets equal to the ROU liabilities, less the prepaid amounts. See Note 3 "Fresh Start Accounting."

We recorded an aggregate impairment charge of $197.0 million during the Predecessor period from January 1, 2021 through April 23, 2021 to write down one of our semisubmersible rigs with indicators of impairment to its estimated fair value. During the Successor period from April 24, 2021 through December 31, 2021, we recorded an aggregate impairment charge of $132.4 million to write down two additional semisubmersible rigs with indicators of impairment to their estimated fair values. See Note 5 “Asset Impairments” and Note 9 “Financial Instruments and Fair Value Disclosures.”