Company Quick10K Filing
Ranger Energy Services
Price6.49 EPS1
Shares9 P/E9
MCap61 P/FCF2
Net Debt46 EBIT13
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-06
10-K 2020-12-31 Filed 2021-02-26
10-Q 2020-09-30 Filed 2020-10-23
10-Q 2020-06-30 Filed 2020-07-28
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10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-10-25
10-Q 2019-06-30 Filed 2019-07-26
10-Q 2019-03-31 Filed 2019-05-01
10-K 2018-12-31 Filed 2019-03-06
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-13
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-09-01
8-K 2020-10-22
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8-K 2020-05-08
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8-K 2019-10-24
8-K 2019-07-25
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8-K 2019-05-15
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8-K 2018-12-31
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8-K 2018-08-07
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8-K 2018-06-22
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8-K 2018-03-06
8-K 2018-01-05

RNGR 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Organization and Business Operations
Note 2 - Summary of Significant Accounting Policies
Note 3 - Property and Equipment, Net
Note 4 - Intangible Assets
Note 5 - Accrued Expenses
Note 6 - Leases
Note 7 - Debt
Note 8 - Equity
Note 9 - Risk Concentrations
Note 10 - Income Taxes
Note 11 - Earnings (Loss) per Share
Note 12 - Commitments and Contingencies
Note 13 - Segment Reporting
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risks
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 rngr-093020xex311dma.htm
EX-31.2 rngr-093020xex312jbb.htm
EX-32.1 rngr-093020xex321dma.htm
EX-32.2 rngr-093020xex322jbb.htm

Ranger Energy Services Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin


Washington, D.C. 20549
(Mark One)
For the quarterly period ended September 30, 2020
Commission file number 001-38183
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
800 Gessner Street, Suite 1000
Houston, Texas 77024
(Address of principal executive offices) (Zip Code)
(713) 935-8900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.01 par value RNGR New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐Accelerated filer ☐
Non-accelerated Filer ☒
Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
As of October 21, 2020, the registrant had 8,528,762 shares of Class A Common Stock and 6,866,154 shares of Class B Common Stock outstanding.


Item 1. Financial Statements
(in millions, except share amounts)
September 30, 2020December 31, 2019
Cash and cash equivalents$3.4 $6.9 
Accounts receivable, net21.0 41.5 
Contract assets0.9 1.2 
Inventory1.7 3.8 
Prepaid expenses1.9 5.3 
Total current assets28.9 58.7 
Property and equipment, net197.9 218.9 
Intangible assets, net8.7 9.3 
Operating leases, right-of-use assets5.2 6.5 
Other assets0.7 0.1 
Total assets$241.4 $293.5 
Liabilities and Stockholders' Equity
Accounts payable$8.2 $13.8 
Accrued expenses8.5 18.4 
Finance lease obligations, current portion3.0 5.1 
Long-term debt, current portion10.0 15.8 
Other current liabilities1.0 2.0 
Total current liabilities30.7 55.1 
Operating leases, right-of-use obligations4.2 4.5 
Finance lease obligations1.7 3.6 
Long-term debt, net12.4 26.6 
Other long-term liabilities1.8 0.7 
Total liabilities50.8 90.5 
Commitments and contingencies (Note 12)
Stockholders' equity
Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of September 30, 2020 and December 31, 2019
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 9,080,589 shares issued and 8,528,762 shares outstanding as of September 30, 2020; 8,839,788 shares issued and 8,725,851 shares outstanding as of December 31, 2019
0.1 0.1 
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; 6,866,154 shares issued and outstanding as of September 30, 2020 and December 31, 2019
0.1 0.1 
Less: Class A Common Stock held in treasury, at cost; 551,827 treasury shares as of September 30, 2020; 113,937 treasury shares as of December 31, 2019
Accumulated deficit(14.7)(8.1)
Additional paid-in capital122.0 121.8 
Total controlling stockholders' equity103.7 113.2 
Noncontrolling interest86.9 89.8 
Total stockholders' equity190.6 203.0 
Total liabilities and stockholders' equity$241.4 $293.5 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

(in millions, except share and per share amounts)
Three Months EndedNine Months Ended
September 30,September 30,
High specification rigs$14.5 $32.5 $60.8 $97.3 
Completion and other services18.9 45.3 79.9 143.2 
Processing solutions1.2 6.3 5.6 16.2 
Total revenues34.6 84.1 146.3 256.7 
Operating expenses
Cost of services (exclusive of depreciation and amortization):
High specification rigs12.3 29.3 52.3 85.4 
Completion and other services14.0 34.6 59.0 107.5 
Processing solutions0.3 2.8 2.2 6.9 
Total cost of services26.6 66.7 113.5 199.8 
General and administrative4.6 6.7 15.1 20.2 
Depreciation and amortization8.4 9.1 26.8 25.9 
Total operating expenses39.6 82.5 155.4 245.9 
Operating income (loss)(5.0)1.6 (9.1)10.8 
Other expenses
Interest expense, net0.8 1.4 2.7 4.6 
Total other expenses0.8 1.4 2.7 4.6 
Income (loss) before income tax expense(5.8)0.2 (11.8)6.2 
Tax expense (benefit)(0.1)1.1  1.7 
Net income (loss)(5.7)(0.9)(11.8)4.5 
Less: Net income (loss) attributable to noncontrolling interests(2.5)(0.4)(5.2)2.0 
Net income (loss) attributable to Ranger Energy Services, Inc.$(3.2)$(0.5)$(6.6)$2.5 
Earnings (loss) per common share
Weighted average common shares outstanding
Basic8,506,781 8,769,389 8,532,788 8,591,128 
Diluted8,506,781 8,769,389 8,532,788 15,457,282 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

(in millions, except share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
Shares, Class A Common Stock
Balance, beginning of period9,031,495 8,717,026 $0.1 $0.1 8,839,788 8,448,527 $0.1 $0.1 
Issuance of shares under share-based compensation plans51,975 113,159 — — 322,110 214,780 — — 
Shares withheld for taxes on equity transactions(2,881)(1,183)— — (81,309)(41,202)— — 
Issuance of Class A Common Stock to related party— — — — — 206,897 — — 
Balance, end of period9,080,589 8,829,002 $0.1 $0.1 9,080,589 8,829,002 $0.1 $0.1 
Shares, Class B Common Stock
Balance, beginning of period6,866,154 6,866,154 $0.1 $0.1 6,866,154 6,866,154 $0.1 $0.1 
Balance, end of period6,866,154 6,866,154 $0.1 $0.1 6,866,154 6,866,154 $0.1 $0.1 
Treasury Stock
Balance, beginning of period(551,827) $(3.8)$ (113,937) $(0.7)$ 
Repurchase of Class A Common Stock— (47,474)— (0.3)(437,890)(47,474)(3.1)(0.3)
Balance, end of period(551,827)(47,474)$(3.8)$(0.3)(551,827)(47,474)$(3.8)$(0.3)
Accumulated deficit
Balance, beginning of period$(11.5)$(6.9)$(8.1)$(9.9)
Net income (loss) attributable to controlling interest(3.2)(0.5)(6.6)2.5 
Balance, end of period$(14.7)$(7.4)$(14.7)$(7.4)
Additional paid-in capital
Balance, beginning of period$121.0 $119.9 $121.8 $111.6 
Equity based compensation amortization1.1 0.8 2.7 2.2 
Shares withheld for taxes on equity transactions— 0.1 (0.3)(0.3)
Issuance of Class A Common Stock to related party— — — 3.0 
Benefit from reversal of valuation allowance— 0.6 — 1.2 
Impact of transactions affecting noncontrolling interest(0.1)0.1 (2.2)3.8 
Balance, end of period$122.0 $121.5 $122.0 $121.5 
Total controlling interest shareholders’ equity
Balance, beginning of period$105.9 $113.2 $113.2 $101.9 
Net income (loss) attributable to controlling interest(3.2)(0.5)(6.6)2.5 
Equity based compensation amortization1.1 0.8 2.7 2.2 
Shares withheld for taxes on equity transactions— 0.1 (0.3)(0.3)
Issuance of Class A Common Stock to related party— — — 3.0 
Benefit from reversal of valuation allowance— 0.6 — 1.2 
Repurchase of Class A Common Stock— (0.3)(3.1)(0.3)
Impact of transactions affecting noncontrolling interest(0.1)0.1 (2.2)3.8 
Balance, end of period$103.7 $114.0 $103.7 $114.0 
Noncontrolling interest
Balance, beginning of period$89.3 $88.9 $89.8 $90.1 
Net income (loss) attributable to noncontrolling interest(2.5)(0.4)(5.2)2.0 
Equity based compensation amortization— 0.1 0.1 0.2 
Impact of transactions affecting noncontrolling interest0.1 (0.1)2.2 (3.8)
Balance, end of period$86.9 $88.5 $86.9 $88.5 
Total Stockholders' Equity
Balance, beginning of period$195.2 $202.1 $203.0 $192.0 
Net income (loss)(5.7)(0.9)(11.8)4.5 
Equity based compensation amortization1.1 0.9 2.8 2.4 
Shares withheld for taxes on equity transactions— 0.1 (0.3)(0.3)
Issuance of Class A Common Stock to related party— — — 3.0 
Benefit from reversal of valuation allowance— 0.6 — 1.2 
Repurchase of Class A Common Stock— (0.3)(3.1)(0.3)
Balance, end of period$190.6 $202.5 $190.6 $202.5 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

(in millions)
Nine Months Ended September 30,
Cash Flows from Operating Activities
Net income (loss)$(11.8)$4.5 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization26.8 25.9 
Equity based compensation2.8 2.4 
Gain on debt retirement(2.1) 
Other costs, net3.0 1.8 
Changes in operating assets and liabilities
Accounts receivable20.4 (3.5)
Contract assets0.3 (1.1)
Inventory0.9 2.4 
Prepaid expenses3.4 0.2 
Other assets(0.6)0.9 
Accounts payable(5.6)(6.0)
Accrued expenses(9.9)8.0 
Operating lease, right-of-use obligations(1.4) 
Other long-term liabilities1.1 0.8 
Net cash provided by operating activities27.3 36.3 
Cash Flows from Investing Activities
Purchase of property and equipment(6.4)(19.6)
Proceeds from disposal of property and equipment0.8 0.6 
Net cash used in investing activities(5.6)(19.0)
Cash Flows from Financing Activities
Borrowings under Credit Facility35.9 25.5 
Principal payments on Credit Facility(42.9)(26.0)
Principal payments on Encina Master Financing Agreement(7.5)(7.3)
Principal payments on ESCO Note Payable(3.6) 
Principal payments on financing lease obligations(3.7)(3.5)
Repurchase of Class A Common Stock(3.1)(0.3)
Shares withheld on equity transactions(0.3)(0.3)
Net cash used in financing activities(25.2)(11.9)
Decrease in Cash and Cash equivalents(3.5)5.4 
Cash and Cash Equivalents, Beginning of Period6.9 2.6 
Cash and Cash Equivalents, End of Period$3.4 $8.0 
Supplemental Cash Flow Information
Interest paid$2.3 $3.5 
Supplemental Disclosure of Non-cash Investing and Financing Activities
Capital expenditures$0.1 $(2.3)
Additions to fixed assets through financing leases$(1.0)$(2.0)
Early termination of financing leases$1.3 $ 
Initial operating lease right-of-use asset additions$ $(8.3)
Issuance of Class A Common Stock to related party$ $3.0 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Note 1 — Organization and Business Operations
Ranger Energy Services, Inc. (“Ranger, Inc.,” “Ranger,” or the “Company”) is a provider of onshore high specification (“high-spec”) well service rigs and complementary services in the United States. The Company also provides an extensive range of well site services to leading U.S. exploration and production (“E&P”) companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.
The Company offers services that consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:
High Specification Rigs. Provides high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.
Completion and Other Services. Provides wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of a well.
Processing Solutions. Provides proprietary, modular equipment for the processing of natural gas.
The Company’s operations take place in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.
Ranger, Inc. was incorporated as a Delaware corporation in February 2017. Ranger, Inc. is a holding company, and its sole material assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”). Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”) and Torrent Energy Services, LLC (“Torrent Services”), the subsidiaries through which it operates its assets. Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services and Torrent Services’ business and consolidates the financial results of Ranger Services and Torrent Services and their subsidiaries.
Recent Events
The outbreak of the novel coronavirus (“COVID-19”) in the first quarter of 2020 and its continued spread across the globe in the second and third quarters of 2020 has resulted, and is likely to continue to result, in significant economic disruption and has, and is likely to continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas. Federal, state and local governments mobilized to implement containment mechanisms to minimize impacts to their populations and economies. Various containment measures, which includes the quarantining of cities, regions and countries, while aiding in the prevention of further outbreak, have resulted in a severe drop in general economic activity and a resulting decrease in energy demand. In addition, the global economy has experienced a significant disruption to global supply chains. The extent of the COVID-19 outbreak on the Company’s operational and financial performance will continue to depend on certain developments, including the duration and spread of the outbreak and its continued impact on customer activity and third-party providers. The direct impact to the Company’s operations began to take effect at the close of the first quarter ended March 31, 2020, and continued through the issuance of these condensed consolidated financial statements. The full extent to which the COVID-19 outbreak may affect the Company’s financial conditions, results of operations or liquidity subsequent to the issuance of these condensed consolidated financial statements is uncertain. At the time of this filing, cases of COVID-19 in the U.S. remain high, including in Texas, where we conduct significant operations.
The severe drop in economic activity, travel restrictions and other restrictions due to COVID-19 have had a significant negative impact on the demand for oil and gas. In addition to the impact of the COVID-19 outbreak, in March 2020, OPEC, Russia and certain other oil producing states, commonly referred to as “OPEC Plus,” failed to agree on a plan to cut production of oil and natural gas. Subsequently, Saudi Arabia announced plans to increase production to record levels and reduce the prices at which they sell oil and, in turn, Russia responded with threats to also increase production. Collectively, these events created an unprecedented global oil and natural gas supply and demand imbalance, reduced global oil and natural gas storage capacity, caused oil prices to decline significantly and resulted in continued volatility in oil, natural gas and NGLs prices into the third quarter of 2020. On April 12, 2020, OPEC Plus agreed to cut oil production by 9.7 million barrels per day in May and June

2020; however, on July 15, 2020, OPEC Plus agreed to increase production by 1.6 million barrels per day starting in August 2020. With the combined effects of the increased production levels earlier in 2020, the recent increase in production and the reduction in demand caused by COVID-19, the global oil and natural gas supply and demand imbalance persists and continues to have a significant adverse effect on the oil and gas industry. OPEC Plus is scheduled to meet again in the fourth quarter of 2020 and it is possible OPEC Plus may decide to further production increases.
Due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the current oversupply of oil and natural gas in the market, available storage and capacity for the Company’s customers’ production may be limited or completely unavailable in the future, which may further negatively impact the price of oil.
The Company cannot predict whether, or when, the global supply and demand imbalance will be resolved or whether, or when, oil and natural gas production and economic activities will return to normalized levels. In the absence of additional reductions to global production, oil, natural gas and NGLs prices could remain at current levels, or decline further, for an extended period of time.
Factors deriving from the COVID-19 response, as well as the oil oversupply, that have and may continue to negatively impact sales, liquidity and gross margins in the future include, but are not limited to: limitations on the ability of the Company’s customers to conduct business, which would result in a decrease in demand for services and lower utilization of the Company’s assets; limitations on the ability of suppliers to provide materials or equipment, limitations on the ability of the Company’s employees to perform their work due to illness caused by the pandemic or local, state or federal orders requiring employees to remain at home; reduction of capital expenditures and discretionary spend; and limitations on the ability of customers to pay us on a timely basis. If prolonged, such factors may also negatively affect the carrying values of the Company’s property and equipment and intangible assets. At the close of the first quarter, the Company initiated cost reductions throughout the organization, including a reduction in the workforce and salary reductions. Additionally, various other operational, travel and organizational expense reductions will continue to manage costs to preserve liquidity through the downturn. We believe these actions will provide sufficient liquidity to finance our operations for twelve months post issuance of these consolidated financial statements. We will continue to actively monitor the situation and may take further actions that alter business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of the Company’s employees, customers and stakeholders.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements and the unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain notes and other information have been condensed or omitted. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results of operations for the interim periods. These interim financial statements should be read in conjunction with the consolidated financial statements and related notes for the years ended December 31, 2019 and 2018, included in the Annual Report filed on Form 10-K for the year ended December 31, 2019 (the “Annual Report”). Interim results for the periods presented may not be indicative of results that will be realized for future periods.
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report. There have been no changes in such policies or the application of such policies during the nine months ended September 30, 2020.

Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management uses historical and other pertinent information to determine these estimates. Actual results could differ from such estimates. Areas where critical accounting estimates are made by management include:
Depreciation and amortization of property and equipment and intangible assets;
Impairment of property and equipment and intangible assets;
Revenue recognition;
Income taxes; and
Equity-based compensation.
Emerging Growth Company Status and Smaller Reporting Company Status
The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. The Company will remain an emerging growth company until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of its initial public offering (“IPO”), (b) in which its total annual gross revenue is at least $1.07 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, or (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. The Company has irrevocably opted out of the extended transition period and, as a result, the Company will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
The Company is also a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as Amended. Smaller reporting company means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that has (i) market value of common stock held by non-affiliates of less than $250 million; or (ii) annual revenues of less than $100 million and either no common stock held by non-affiliates or a market value of common stock held by non-affiliates of less than $700 million. Smaller reporting company status is determined on an annual basis.
New Accounting Pronouncements
Recently Issued Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses, which replaces the incurred loss impairment methodology to reflect expected credit losses. The amendment requires the measurement of all expected credit losses for financial assets held at the reporting date to be performed based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the effect of this accounting standard on its consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for accounting contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference the London Interbank Offering Rate (“LIBOR”) or another reference rate expected to be discontinued due to the reference rate reform. ASU 2020-04 became effective as of March 12, 2020 and can be applied through December 31, 2022. The Company has not made any contract modifications as of the date of this report to transition to a different reference rate, however it will consider this guidance as future modifications are made.
With the exception of the standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s condensed consolidated financial statements.

Note 3 — Property and Equipment, Net
Property and equipment, net include the following (in millions):
Estimated Useful Life
September 30, 2020December 31, 2019
High specification rigs
$127.2 $127.2 
High specification rigs machinery and equipment
5 - 10
41.8 38.3 
Completion and other services machinery and equipment
5 - 10
55.9 55.8 
Processing solutions machinery and equipment
3 - 30
45.9 40.8 
3 - 15
21.5 25.9 
Other property and equipment
5 - 25
10.6 10.1 
Property and equipment302.9 298.1 
Less: accumulated depreciation(106.9)(85.5)
Construction in progress1.9 6.3 
Property and equipment, net$197.9 $218.9 
Depreciation expense was $8.2 million and $8.9 million for the three months ended September 30, 2020 and 2019, respectively, and $26.2 million and $25.4 million for the nine months ended September 30, 2020 and 2019, respectively.
Note 4 — Intangible Assets
Definite lived intangible assets are comprised of the following (in millions):
Estimated Useful Life
September 30, 2020December 31, 2019
Customer relationships
$11.4 $11.4 
Less: accumulated amortization(2.7)(2.1)
Intangible assets, net$8.7 $9.3 
Amortization expense was $0.2 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively and $0.6 million and $0.5 million for the nine months ended September 30, 2020 and 2019, respectively. Amortization expense for the future periods is expected to be as follows (in millions):
For the twelve months ending September 30,Amount
Note 5 — Accrued Expenses
Accrued expenses include the following (in millions):
September 30, 2020December 31, 2019
Accrued payables$3.2 $8.3 
Accrued compensation3.7 6.3 
Accrued taxes1.4 1.8 
Accrued insurance0.2 2.0 
Accrued expenses$8.5 $18.4 

Note 6 — Leases
Operating Leases
The Company has operating leases, primarily for real estate and equipment, with terms that vary from 12 months to seven years, included in operating lease costs in the table below. The operating leases are included in operating leases, right-of-use assets, other current liabilities and operating leases, right-of-use obligations in the Condensed Consolidated Balance Sheets.
Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations. Lease costs and other information related to operating leases for the three and nine months ended September 30, 2020 and 2019, are as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
Short-term lease costs$0.3