Basis of Presentation and Nature of Operations Basis of Presentation The accompanying unaudited consolidated financial statements of Basic Energy Services, Inc. and subsidiaries (Basic or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. Certain information relating to our organization and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in this Quarterly Report on Form 10-Q in accordance with GAAP and financial statement requirements promulgated by the U.S. Securities and Exchange Commission (SEC). The notes to the consolidated financial statements (unaudited) should be read in conjunction with the notes to the consolidated financial statements contained in the Companys Annual Report on Form 10-K for the year ended December 31, 2017. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation have been made in the accompanying unaudited financial statements. Liquidity and Capital Resources As of September 30, 2018, our primary capital resources were cash flows from operations, utilization of capital leases and borrowings under our accounts receivable securitization facility (the Prior ABL Facility) which had aggregate commitments of $150.0 million as of September 30, 2018. As of September 30, 2018, we had $90.0 million in borrowings under the Prior ABL Facility compared to $64.0 million at December 31, 2017. At September 30, 2018, we had unrestricted cash and cash equivalents of $30.8 million compared to $38.5 million as of December 31, 2017. An additional amount of $45.0 million of our cash was classified as restricted cash as of September 30, 2018. For further discussion see Note 5, "Long-Term Debt and Interest Expense". On October 2, 2018, the Company issued in a private placement offering $300.0 million aggregate principal amount of 10.75% senior secured notes due 2023 (the Senior Notes) at 99.042% of par and entered into a new $150.0 million senior secured revolving credit facility (the New ABL Facility). In connection with the closing of the Senior Notes, the Company repaid the balances outstanding under the Prior ABL Facility and our Amended and Restated Term Loan Credit Agreement ( the "Term Loan Agreement") in their entirety and terminated both facilities. The term loan repayment was made prior to the maturity date defined in the Term Loan Agreement, and the Company incurred repayment penalties of approximately $17.5 million associated with the term loan repayment. For additional information regarding our New ABL Facility and Senior Notes, see Note 5, Long-Term Debt and Interest Expense. Nature of Operations Basic provides a wide range of well site services in the United States to oil and natural gas drilling and producing companies, including well servicing, water logistics, completion and remedial services and contract drilling. These services are primarily provided using Basics fleet of equipment. Basics operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, North Dakota, Wyoming, Montana, Arkansas, Kansas, Louisiana, California and Colorado. Principles of Consolidation The accompanying consolidated financial statements include the accounts of our wholly owned subsidiaries and our variable interest entity for which we hold a majority voting interest. All intercompany transactions and balances have been eliminated. Estimates, Risks and Uncertainties Preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, and expenses. Critical accounting estimates are those in which significant judgment is used, and the impact of any changes in estimates would have a significant effect on our consolidated financial statements. Actual results and outcomes may vary from management's estimates and assumptions. Areas where critical accounting estimates are made by management include litigation and self-insured risk reserves.