Parker Wellbore Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Property Plant and Equipment

Property Plant and Equipment

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

The components of our property, plant and equipment balance are as follows:



	December 31,
Dollars in Thousands	2017		2016
Property, Plant and Equipment, at cost:
Drilling Equipment	$	1,228,443	$	1,306,641
Rental Tools	552,461		516,144
Building, Land and Improvements	60,309		54,799
Other	115,910		111,142
Construction in Progress	11,753		25,357
Total Property, Plant and Equipment, at cost	1,968,876		2,014,083
Less: Accumulated Depreciation and Amortization	1,343,105		1,320,644
Property, Plant, and Equipment, Net	$	625,771	$	693,439

Depreciation expense was $119.6 million, $136.3 million and $151.9 million for the years ended December 31, 2017, 2016, and 2015, respectively.

Provision for Reduction in Carrying Value of an Asset

Asset impairment evaluations are, by nature, highly subjective. They involve expectations about future cash flows generated by our assets and reflect management’s assumptions and judgments regarding future industry conditions and their effect on future utilization levels, dayrates and costs. The use of different estimates and assumptions could result in materially different carrying values of our assets. We review the carrying amounts of long-lived assets for potential impairment when events occur, or circumstances change, which indicate the carrying values of such assets may not be recoverable.

Although no impairment of our asset groups was identified during the year ended December 31, 2017, we recorded a provision of $1.9 million for reduction in carrying value of assets. This provision was related to certain assets in the International & Alaska Drilling segment that were deemed to be excess and functionally obsolete unless significant costs were incurred to refurbish them.

Disposition of Assets

During the normal course of operations, we periodically sell equipment deemed to be excess, obsolete, or not currently required for operations. Net losses recorded on asset disposition were $2.9 million and $1.6 million for the years ended December 31, 2017 and December 31, 2016, respectively. The net loss for 2017 was primarily related to the sale of one rig located in Papua New Guinea. Activity in both periods included equipment retirements.