Related-Party Transactions |
9 Months Ended |
|---|---|
Sep. 30, 2019 | |
| Related Party Transactions [Abstract] | |
| Related-Party Transactions | Related-Party Transactions Corporate Office Building
The Company rents its corporate office building and the associated real property from an entity, in which a former executive officer of the Company has an equity interest. The rent expense incurred on our corporate office building is approximately $0.1 million per year. During the nine months ended September 30, 2019, the total improvements on our corporate office building that we rent from the related party was $1.3 million. In April 2020, the Company acquired the corporate office building and associated real property for approximately $1.5 million.
Operations and Maintenance Yards
The Company also leases five yards from an entity, which certain former executive officers, an executive officer and a director of the Company have equity interests and total annual rent expense for each of the five yards was approximately $0.03 million, $0.03 million, $0.1 million, $0.1 million, and $0.2 million, respectively. The Company also leased a yard from another entity, which a certain executive officer of the Company has an equity interest, and with annual lease expense of $0.1 million.
Subsequent to the issuance of the consolidated financial statements for the year ended December 31, 2018 we identified the following related party transaction. In 2018, the Company entered into a construction and purchase agreement for a maintenance facility for our pressure pumping operations with a developer. The developer for the maintenance facility was an equal partner with a former executive officer of the Company in a separate legal entity. The entity the former executive officer was associated with provided funding to the developer related to the construction of the maintenance facility. The construction and purchase cost of $2.3 million was paid to the developer during the year ended December 31, 2018.
Transportation and Equipment Rental
For the nine months ended September 30, 2019 and 2018, the Company incurred costs for transportation services with an entity, in which a former executive officer of the Company had an equity interest, of approximately $0.2 million and $0.3 million, respectively.
The Company also rented equipment in Elk City, Oklahoma for our flowback operations from an entity, which a former executive officer of the Company has an equity interest. During the nine months ended September 30, 2019 and 2018, the Company incurred and paid $0.1 million and $0.1 million, respectively. This rental arrangement was terminated in January 2020.
At September 30, 2019 and December 31, 2018, the Company had $0 and $0.01 million in payables to the above related parties.
PT Petroleum, LLC
Subsequent to the issuance of the consolidated financial statements for the year ended December 31, 2018 we identified the following related party transaction. During the nine months ended September 30, 2018, the Company provided services to PT Petroleum, LLC, an entity in which a director was an officer, of approximately $16.7 million.
Pioneer
On December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property from Pioneer Natural Resources USA, Inc. ("Pioneer") and Pioneer Pressure Pumping Services, LLC (the Pioneer Pressure Pumping Acquisition). The acquisition cost of the assets was comprised of approximately $110.0 million of cash and 16.6 million shares of our common stock. In addition, we entered into a real estate lease for a crew camp facility with Pioneer, as disclosed in Note 9. The real estate lease for the crew camp was terminated in July 2019. In connection with the consummation of the transaction, we became a long-term service provider to Pioneer, providing pressure pumping and related services for a term of up to ten years. Revenue from services provided to Pioneer accounted for approximately $120.7 million and $17.8 million of our total revenue during the three months ended September 30, 2019 and 2018, respectively. Revenue from services provided to Pioneer accounted for approximately $407.8 million and $56.0 million of our total revenue during the nine months ended September 30, 2019 and 2018, respectively. During the nine months ended September 30, 2019, the Company reimbursed Pioneer approximately $2.9 million for our portion of the retention bonuses paid to former Pioneer employees that were subsequently employed by the Company and also Pioneer reimbursed the Company approximately $2.5 million for severance payments made on their behalf, in connection with the Pioneer Pressure Pumping Acquisition. As of September 30, 2019, the total accounts receivable due from Pioneer, including estimated unbilled receivable for services we provided, amounted to $76.1 million and the amount due to Pioneer was $0. As of December 31, 2018, the balance due from Pioneer for services provided and billed amounted to $15.7 million and the amount due to Pioneer was $109.8 million.
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