Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Sep. 30, 2016
Other [Abstract]  

Note 11 - Other

Operating leases

As of September 30, 2016, the Company had contracts for two horizontal drilling rigs (the “Cactus 1 Rig” and “Cactus 2 Rig”). The contract terms of the Cactus 1 Rig and Cactus 2 Rig will end in July 2018 and August 2018, respectively. The rig lease agreements include early termination provisions that obligate the Company to pay reduced minimum rentals for the remaining term of the agreement. These payments would be reduced assuming the lessor is able to re-charter the rig and staffing personnel to another lessee. In January 2016, the Company placed its Cactus 1 Rig on standby and was required to pay a “standby” day rate of $15,000 per day, pursuant to the terms of the agreement, allowing the Company to retain the option to return the rig to service under the contract terms. In August 2016, the Company returned its Cactus 1 Rig to service.

Subsequent event

In October 2016 the Company entered into a contract for a horizontal drilling rig (the “Cactus 3 Rig”). The contract term will begin January 2017 through June 2017 with a day rate of $16,000 per day.