Annual report pursuant to Section 13 and 15(d)

ORGANIZATION AND HISTORY

v3.10.0.1
ORGANIZATION AND HISTORY
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND HISTORY
ORGANIZATION AND HISTORY
ProPetro Holding Corp. (“Holding”), a Texas corporation was formed on April 14, 2007, to serve as a holding company for its wholly owned subsidiary ProPetro Services, Inc. (“Services”), a Texas corporation. Services provides hydraulic fracturing (inclusive of acidizing), cementing, coil tubing, drilling and flowback services to oil and gas producers, located primarily in Texas, Oklahoma, New Mexico, Utah, Colorado, and Wyoming. Holding was converted and incorporated to a Delaware Corporation on March 8, 2017.
Holding and Services are collectively referred to as the “Company” in the accompanying consolidated financial statements.
On December 22, 2016, the Company restated and amended the Company’s Shareholders Agreement and certificate of formation in the state of Texas, approving a reverse stock split, such that each holder of common stock of the Company shall receive one share of common stock for every 170.4667 shares of previous common stock held. In conjunction, the Company amended the amount of authorized shares to 230,000,000, of which 200,000,000 are common and 30,000,000 are preferred.
On March 22, 2017, we consummated our initial public offering (“IPO”) in which 25,000,000 shares of our common stock, par value $0.001 per share, were sold at a public offering price of $14.00 per share, with 13,250,000 shares issued and sold by the Company and 11,750,000 shares sold by existing stockholders. We received net proceeds of approximately $170.1 million after deducting $10.9 million of underwriting discounts and commissions, and $4.5 million of other offering expenses. At closing, we used the proceeds (i) to repay $71.8 million in outstanding borrowings under the term loan, (ii) $86.8 million to fund the purchase of additional hydraulic fracturing units and other equipment, and (iii) the remaining for general corporate purposes.
In connection with the IPO, the Company executed a stock split, such that each holder of common stock of the Company received 1.45 shares of common stock for every one share of previous common stock, and all 16,999,990 shares of our outstanding Series A preferred stock converted to common stock on a 1:1 basis.
Accordingly, any information related to or dependent upon the share or option counts in the 2018, 2017 and 2016 consolidated financial statements and Note 13 Net Income (loss) Per Share, Note 14 Stock‑Based Compensation, Note 18 Equity Capitalization and Note 19 Quarterly Financial Data (Unaudited) have been updated to reflect the effect of the reverse stock split in December 2016 and the stock split in March 2017, as applicable.
On December 31, 2018, we consummated the purchase of pressure pumping and related assets of Pioneer and Pioneer Pumping Services. The pressure pumping assets acquired were used to provide integrated well completion services in the Permian Basin to Pioneer’s completion and production operations. The acquisition cost of the assets was comprised of $110.0 million of cash and 16.6 million shares of our common stock. The incremental direct cost of $3.4 million incurred to consummate the transaction was capitalized as part of the acquisition cost. In connection with the acquisition, we became a long-term service provider to Pioneer, providing pressure pumping and related services for a term of up to 10 years. The pressure pumping assets acquired include eight hydraulic fracturing fleets with 510,000 HHP, four coiled tubing units and the associated equipment maintenance facility. We evaluated and determined that the acquisition did not meet the definition of a Business under GAAP because substantially all of the assets acquired are concentrated in a group of similar assets. Accordingly, we have accounted for the acquisition as an asset purchase.