What changed in this filing

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Item 1A. Risk Factors

2025-11-21 compared with 2024-11-13 · 83 added, 189 removed, 463 unchanged (37% of the section changed)

An investment in our securities involves a variety of risks.

In addition to the other information included and incorporated by reference in this Form 10-K and the risk factors discussed elsewhere in this Form 10-K, the following risk factors should be carefully considered, as they could have a material adverse effect on our business, financial condition and results of operations.

In addition to the other information included and incorporated by reference in this Form 10-K and the risk factors discussed elsewhere in this Form 10-K, the following risk factors should be carefully considered and read in conjunction with the other information in this Form 10-K, as they could have a material adverse effect on our business, financial condition and results of operations.

There may be other additional risks, uncertainties and matters not presently known to us or that we believe to be immaterial that could nevertheless have a material adverse effect on our business, financial condition and results of operations.

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Oil prices are particularly sensitive to actual and perceived threats to geopolitical stability, global economic conditions, and to changes in production from OPEC+ member states.

For example, the ongoing armed conflicts between (i) Russia and Ukraine and (ii) the conflicts in Israel and the continuation of, or any escalation in the severity of, these conflicts, has led and may continue to lead to an increase in the volatility of global oil and gas prices, which could have a corresponding negative impact on the capital expenditure of oil and gas companies as a result of the higher perceived risk.

For example, the ongoing armed conflicts between (i) Russia and Ukraine and (ii) the conflicts in the Middle East and the continuation of, or any escalation in the severity of, these conflicts, has led and may continue to lead to an increase in the volatility of global oil and gas prices, which could have a corresponding negative impact on the capital expenditure of oil and gas companies as a result of the higher perceived risk.

Oil and natural gas prices and production levels, as well as market expectations regarding such prices and production levels, have been volatile, which has had, and may in the future have, adverse effects on our business and operations.

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• the worldwide economy;

• expectations about future oil and natural gas prices and production levels;

• expectations about future oil and natural gas prices and production levels (including as a result of certain economic initiatives, such as those related to artificial intelligence);

• local and international political, economic, health and weather conditions, especially in oil and natural gas producing countries, including, for example, the impacts of local and international pandemics and other disasters;

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• the continued development of shale plays which may influence worldwide supply and prices;

• tax policies of the United States and other countries involved in global energy markets;

• tax, trade and tariff policies of the United States and other countries involved in global energy markets;

• political and military conflicts, hostilities or perceived hostilities in oil producing regions or other geographical areas or acts of terrorism in the United States or elsewhere;

• technological advances that are related to oil and natural gas recovery or that affect the global demand for energy;

• technological advances that are related to oil and natural gas recovery or that affect the global demand or supply for energy;

• the development, exploitation and market acceptance of alternative energy sources as part of a transition to a lower carbon economy;

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• increased focus by the investment community on sustainability practices in the oil and natural gas industry;

• focus by the investment community on sustainability practices in the oil and natural gas industry;

• legal and other limitations or restrictions on exportation and/or importation of oil and natural gas;

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Furthermore, challenging economic conditions may result in certain of our customers experiencing bankruptcy or otherwise becoming unable to pay vendors, including us.

In the past, global economic conditions, and expectations for future global economic conditions, have sometimes experienced significant deterioration in a relatively short period of time and there can be no assurance that global economic conditions or expectations for future global economic conditions will recover in the near term or not quickly deteriorate again due to one or more factors.

In the past, global economic conditions, and expectations for future global economic conditions, have sometimes significantly deteriorated in a relatively short period of time and there can be no assurance that global economic conditions or expectations for future global economic conditions will recover in the near term or not quickly deteriorate again due to one or more factors.

These conditions could have a material adverse effect on our business, financial condition and results of operations.

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In addition, development of new drilling technology by competitors has increased in recent years, which could negatively affect our ability to differentiate our services.

We periodically seek to increase the prices on our services to offset rising costs, earn returns on our capital investment and otherwise generate higher returns for our stockholders.

However, we operate in a very competitive industry and we are not always successful in raising or maintaining our existing prices.

We operate in a very competitive industry, and we are not always successful in raising or maintaining our existing prices.

From time to time we are able to increase our prices, but we may not be able to do so at a rate that is sufficient to offset rising costs.

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As of September 30, 2025, 132 of our available rigs were not under contract.

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Further, as a result of any significant reduction in the demand for oil and natural gas services, certain of our competitors may engage in bankruptcy proceedings, debt refinancing transactions, management changes, or other strategic initiatives in an attempt to reduce operating costs to maintain a position in the market.

This could result in such competitors emerging with stronger or healthier balance sheets and in turn an improved ability to compete with us in the future.

We may also see corporate consolidations among our competitors and customers, which could significantly alter industry conditions and competition within the industry, and have a material adverse effect on our business, financial condition and results of operations.

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Consolidation in our industry may impact our results of operations.

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We are not fully insured against all of these risks and our contractual indemnity provisions may not fully protect us.

Our operations are subject to many hazards inherent in the business in which we operate, including inclement weather, unplanned power outages, blowouts, explosions, well fires, loss of well control, equipment failure, computer system disruptions, pollution, and reservoir damage.

Our operations are subject to many hazards inherent in the business in which we operate, including inclement weather, natural disasters, unplanned power outages, blowouts, explosions, well fires, loss of well control, equipment failure, computer system disruptions, pollution, and reservoir damage.

These hazards could cause significant environmental and reservoir damage, personal injury and death, suspension of operations, serious damage or destruction of equipment and property and substantial damage to producing formations and surrounding lands and waters.

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Such an accident or other event and subsequent crisis management efforts could cause us to incur substantial expenses in connection with investigation and remediation as well as cause lasting damage to our reputation, loss of customers and an inability to obtain insurance.

Our Offshore Gulf of Mexico operations are also subject to potentially significant risks and liabilities attributable to or resulting from adverse environmental conditions, including pollution of offshore waters and related negative impact on wildlife and habitat, adverse sea conditions and platform damage or destruction due to collision with aircraft or marine vessels.

Our Offshore Gulf of Mexico operations may also be negatively affected by a blowout or an uncontrolled release of oil or hazardous substances by third parties whose offshore operations are unrelated to our operations.

We operate several platform rigs in the Gulf of Mexico.

The Gulf of Mexico experiences hurricanes and other extreme weather conditions on a frequent basis, which may increase in frequency and severity as a result of climate change.

Our Offshore Solutions operations are also subject to potentially significant risks and liabilities attributable to or resulting from adverse environmental conditions, including pollution of offshore waters and related negative impact on wildlife and habitat, adverse sea conditions and platform damage or destruction due to collision with aircraft or marine vessels.

Our Offshore Solutions operations may also be negatively affected by a blowout or an uncontrolled release of oil or hazardous substances by third parties whose offshore operations are unrelated to our operations.

We operate several platform rigs in the Gulf of America.

The Gulf of America experiences hurricanes and other extreme weather conditions on a frequent basis, which may increase in frequency and severity as a result of climate change.

See below “—The physical effects of climate change and the regulation of greenhouse gases and climate change could have a negative impact on our business.” Damage caused by high winds and turbulent seas could potentially curtail operations on our platform rigs for significant periods of time until the damage can be repaired.

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No assurance can be given that insurance coverage will continue to be available at rates considered reasonable or that our coverage will respond to a specific loss.

In addition, our insurance may not cover losses associated with pandemics such as the COVID-19 pandemic.

Further, we may experience difficulties in collecting from our insurers or our insurers may deny all or a portion of our claims for insurance coverage.

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or loss or damage to our data delivery systems or other cybersecurity and infrastructure systems, including our property and equipment.

In 2021, the Company introduced full-time or part-time remote work as a permanent option for select employees and a significant number of our employees now work remotely.

In addition, a significant number of our employees now work remotely.

Remote work relies heavily on the use of remote networking and online conferencing services that enable employees to work outside of our corporate infrastructure and, in some cases, use their own personal devices, which exposes the Company to additional cybersecurity risks.

This risk is exacerbated with the advancement of technologies like artificial intelligence, which malicious third parties are using to create new, sophisticated and more frequent attacks.

Furthermore, geopolitical tensions or conflicts, such as the ongoing armed conflicts between Russia and Ukraine and the conflicts in Israel, may further heighten the risk of cybersecurity attacks.

Furthermore, geopolitical tensions or conflicts, such as the ongoing armed conflicts between Russia and Ukraine and the conflicts in the Middle East, may further heighten the risk of cybersecurity attacks.

Our information technology systems and those of our third party vendors are also subject to disruptions due to occurrences other than cybersecurity incidents, such as natural disasters or power outages.

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We continually seek opportunities to maximize efficiency and value through various transactions, including purchases or sales of assets, businesses, investments, or joint venture interests.

For example, in 2024 we entered into the Purchase Agreement related to the Acquisition (see below “KCA Deutag Acquisition Related Risks” for a description of additional risks specific to the Acquisition).

These strategic transactions, among others, are intended to (but may not) result in access to new markets, the realization of savings, the creation of efficiencies, the offering of new products or services, the generation of cash or income, or the reduction of risk and the failure to achieve such intended benefits could have a material adverse effect on our business.

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If we experience future negative changes in our business climate or our results of operations such that we determine that goodwill or intangible assets are impaired, we will be required to record impairment charges with respect to such assets.

We may be unable to successfully integrate KCA Deutag’s business or achieve the anticipated benefits of the acquisition, or the anticipated benefits attributable to the acquisition may vary from our expectations.

Our ability to achieve the anticipated benefits of the acquisition will depend in part upon whether we can integrate KCA Deutag's business into our existing business in an efficient and effective manner.

We may not be able to accomplish this integration process successfully.

The integration process may be subject to delays or changed circumstances, and we can give no assurance that our expectations with respect to integration or cost savings as a result of the acquisition will materialize or that KCA Deutag's assets will perform in accordance with our expectations.

For example, subsequent to the announcement of the Acquisition in July 2024, KCA Deutag and the Company received notifications of contract suspensions for a number of rigs operating in Saudi Arabia.

The success of the acquisition will depend, in significant part, on the Company’s ability to successfully integrate the acquired business, grow the revenue of the Company and realize the anticipated strategic benefits from the acquisition.

Additionally, the integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the acquisition that were not discovered in the course of performing due diligence.

The integration may also require significant time and focus from management following the acquisition which may disrupt the Company’s business and results of operations.

The Company believes that the addition of KCA Deutag will complement its strategy and provide operational and financial scale.

This growth and the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected.

Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated.

If the Company is not able to achieve or realize the anticipated benefits expected from the acquisition within the anticipated timing or at all, its business and operating results may be adversely affected.

Prior to its acquisition, KCA Deutag was a private company and not required to maintain a system of internal controls over financial reporting that would meet the standards of a public company, including the requirements under the Sarbanes-Oxley Act of 2002.

We are in the process of integrating KCA Deutag into our system of internal controls over financial reporting and implementing additional internal controls where appropriate.

As we continue to integrate and improve the operations of KCA Deutag, we may need to implement additional internal controls and procedures.

The costs that we may incur to implement such controls and procedures may be substantial, and we could encounter unexpected delays and challenges in this implementation.

Our future success will depend, in part, on our ability to manage our expanded business by, among other things, integrating the assets, operations and personnel of KCA Deutag in an efficient and timely manner, consolidating systems, internal controls and management controls and successfully integrating relationships with customers, vendors and business partners.

Failure to successfully manage the combined operations may have an adverse effect on our business, reputation, financial condition and results of operations.

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Technology disputes and limitations on our ability to protect or enforce our intellectual property rights could negatively impact our costs, revenues, and any competitive advantage we hold.

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As a result, any technology disputes involving us or our customers or supplying vendors or limitations on our ability to protect or enforce our intellectual property rights could have a material adverse impact on our business, financial condition and results of operations.

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Unexpected events could disrupt our business and adversely affect our results of operations.

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The loss of one or a number of our large customers could have a material adverse effect on our business, financial condition and results of operations.

In fiscal year 2024, we received approximately 58.2 percent of our consolidated operating revenues from our ten largest drilling services and solutions customers and approximately 27.3 percent of our consolidated operating revenues from our three largest customers (including their affiliates).

If one or more of our larger customers terminated their contracts, failed to renew existing contracts with us, or refused to award us with new contracts, it could have a material adverse effect on our business, financial condition and results of operations.

In fiscal year 2025, we received approximately 54.0 percent of our consolidated operating revenues from our ten largest drilling services and solutions customers (including their affiliates) and approximately 25.6 percent of our consolidated operating revenues from our three largest drilling services and solutions customers (including their affiliates).

If one or more of our larger customers terminated their contracts, failed to renew existing contracts with us, suspended active contracts for a prolonged period or refused to award us with new contracts, it could have a material adverse effect on our business, financial condition and results of operations.

Further, consolidation among oil and natural gas exploration and production companies may reduce the number of available customers.

See “—Consolidation in our industry may impact our results of operations” for additional disclosure regarding consolidations in our industry.

Our current backlog of drilling services and solutions revenue may decline and may not be ultimately realized as fixed‑term contracts and may, in certain instances, be terminated without an early termination payment.

Fixed‑term drilling contracts customarily provide for a termination by the customer for convenience, default, or extended force majeure.

An “early termination payment” is typically paid to us if a contract is terminated prior to the expiration of the fixed term.

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Our current backlog of drilling services and solutions revenue may decline and may not be fully realized as fixed‑term contracts and, in certain instances, these contracts can be terminated without an early termination payment or suspended without standby or force majeure compensation.

Fixed‑term drilling contracts typically allow customers to terminate the agreement early for convenience, default, or extended force majeure events.

An “early termination payment” is usually owed to us if a contract is terminated prior to expiration of the fixed term.

However, in the event of default, such as destruction of a drilling rig, our bankruptcy, sustained unacceptable performance by us or delivery of a rig beyond certain grace and/or liquidated damage periods, no early termination payment would be paid to us.

Even if an early termination payment is owed to us, during depressed market conditions or due to other factors, a customer may be unable or may refuse to pay the early termination payment and may seek to suspend, negotiate, or terminate the contract.

Regardless of the reason for an early termination or suspension of a contract, such termination or suspension may result in a drilling rig being idle for an extended period of time if we are unable to secure new contracts on a timely basis and on substantially similar terms, which could have a material adverse effect on our business, financial condition and results of operations.

Even in cases where such payment is owed, customers may be unable or unwilling to pay it during depressed market conditions and may seek to suspend, negotiate, or terminate the contract instead.

Additionally, some drilling contracts within our recently acquired KCA Deutag subsidiary do not include provisions for early termination payments or compensation for drilling suspension.

Regardless of the reason for an early termination or suspension of a contract, such termination or suspension can lead to a drilling rig being idle for an extended period if we cannot promptly secure new contracts on substantially similar terms, which could have a material adverse effect on our business, financial condition and results of operations.

As of September 30, 2025, our drilling services backlog was approximately $4.8 billion for future revenues under firm commitments.

Our drilling services backlog may decline over time as existing contract term coverage may not be offset by new term contracts or price modifications for existing contracts, as a result of any number of factors, such as low or declining oil prices and capital spending reductions by our customers.

Our inability or the inability of our customers to perform under our or their contractual obligations may have a material adverse impact on our business, financial condition and results of operations.

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Our drilling services backlog may decline over time if existing contract term coverage is not replaced by new term contracts or price modifications for existing contracts.

Factors, such as low or declining oil prices and reduced capital spending by our customers can contribute to this decline.

Our inability or the inability of our customers to meet contractual obligations may have a material adverse impact on our business, financial condition and results of operations.

Our contracts with NOCs may expose us to greater risks than we normally assume in contracts with non-governmental customers.

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The terms of these contracts may contain non-negotiable provisions and may expose us to greater commercial, political, operational, and other risks than we assume in other contracts.

Foreign contracts may expose us to materially greater environmental liability and other claims for damages (including consequential damages) and personal injury related to our operations, or the risk that the contract may be terminated by our customer without cause on short-term notice, contractually or by governmental action, or under certain conditions that may not provide us with an early termination payment.

Foreign contracts may expose us to materially greater environmental liability and other claims for damages (including consequential damages) and personal injury related to our operations, or the risk that the contract may be terminated or suspended by our customer without cause on short-term notice, contractually or by governmental action, or under certain conditions that may not provide us with an early termination payment or standby compensation.

We can provide no assurance that increased risk exposure will not have an adverse impact on our future operations or that we will not increase the number of rigs contracted, or the amount of technology deployed, to national oil companies with commensurate additional contractual risks.

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Accordingly, a decline in revenue due to lower dayrates and/or utilization may not be offset by a corresponding decrease in drilling services and solutions expense, which could have a material adverse impact on our business, financial condition and results of operations.

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Shortages of drilling equipment, supplies or other key materials could adversely affect our operations.

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However, if we are not able to effectively manage these disruptions and delays in the future, they could have a material adverse effect on our business, financial condition and results of operations.

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Continuing inflation and cost increases may impact our sales margins and profitability.

Increases in the cost of labor, materials, parts, equipment, global transportation and logistics costs and other operational components has the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our services.

Increases in the cost of labor, materials, parts, equipment, global transportation and logistics costs and other operational components have the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our services.

In addition, our customers are also affected by inflation and the rising costs of goods and services used in their businesses, which could negatively impact their ability to purchase our services, which could adversely impact our revenue and profitability.

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Further, our responses to any union organizing efforts could negatively impact our reputation and have adverse effects on our business, financial condition and results of operations.

The impact and effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic, could have a material adverse effect on our business, financial condition and results of operations.

Public health crises, pandemics and epidemics, such as the COVID-19 pandemic, and fear of such events have adversely impacted and may in the future again adversely impact our operations, the operations of our customers and the global economy, including worldwide demand for oil and natural gas and the level of demand for our services.

Such public health crises, pandemics and epidemics are continuously evolving, and we are not able to enumerate all potential risks to our business from such events;

however, we believe that in addition to the impacts described above, other current and potential impacts include, but are not limited to:

significant volatility and disruption of the global financial markets;

continued volatility of crude oil prices and related uncertainties around OPEC+ production;

disruption of our operations, including suspension of drilling activities;

impact to costs;

loss of workers;

labor shortages;

supply chain disruptions or equipment shortages;

logistics constraints;

customer demand for our services and industry demand generally;

capital spending by oil and gas companies;

our liquidity;

the price of our securities and trading markets with respect thereto;

our ability to access capital markets;

asset impairments and other accounting changes;

certain of our customers experiencing bankruptcy or otherwise becoming unable to pay vendors, including us;

and employee impacts from illness, travel restrictions, including border closures and other community response measures.

The impact and effects of public health crises, pandemics and epidemics could have a material adverse effect on our business, financial condition and results of operations.

Public health crises, pandemics and epidemics and fear of such events have adversely impacted and may in the future again adversely impact our operations, the operations of our customers and the global economy, including worldwide demand for oil and natural gas and the level of demand for our services.

We are not able to enumerate all potential risks to our business from such events.

The full extent of the impact of public health crises, pandemics and epidemics on our business operations and financial results will depend largely on future developments and various factors beyond our control, such as the duration, severity and sustained geographic spread, and the impact and effectiveness of governmental actions to contain and treat such outbreaks, including government policies and restrictions;

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Our business and results of operations may be adversely affected by foreign political, economic and social instability risks, foreign currency restrictions and devaluation, and various local laws associated with doing business in certain foreign countries.

We currently have drilling operations in South America (primarily Argentina and Colombia), the Middle East and Australia.

We expect the Acquisition to increase the geographic reach of our operations.

We currently have drilling operations in South America (primarily Argentina and Colombia), the Middle East, Europe, Africa and Australia.

In the future, we may further expand the geographic reach of our operations.

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dollar exchange rate.

During fiscal years 2024 and 2023, we entered into Blue Chip Swap transactions, which resulted in $7.1 million and $12.2 million losses on investments recorded in Gain on investment securities within our Consolidated Statements of Operations.

As a result of the Blue Chip Swap transactions, $13.8 million and $9.8 million of net cash was repatriated to the U.S.

during fiscal years 2024 and 2023, respectively.

As a result of the KCA Deutag acquisition, we have also recently expanded operations into Europe and Africa and have increased our presence in the Middle East.

Certain aspects related to operating in these new regions may present new obstacles including a less familiar geopolitical landscape, new customers with whom we have less established relationships, pressure from local governments to hire local employees, use local suppliers or to direct business to nationalized companies, unfamiliar operating conditions and a distinct regulatory environment.

Additionally, there can be no assurance that there will not be changes in local laws, regulations and administrative requirements or the interpretation thereof, which could have a material adverse effect on the profitability of our operations or on our ability to continue operations in certain areas.

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The physical and regulatory effects of climate change and a global transition to a low carbon economy could have a negative impact on our operations, our customers’ operations and the overall demand for our customers' products and services.

There has been an increasing focus of international, national, state, regional and local regulatory bodies on emissions of certain gases, commonly referred to as “greenhouse gases” (“GHGs”) including carbon dioxide and methane, and climate change issues.

Legislation to regulate GHG emissions has periodically been introduced in the U.S.

Congress and such legislation may be proposed or adopted in the future.

In recent years, international, national, state, regional and local regulatory bodies have focused on emissions of certain gases, commonly referred to as “greenhouse gases” (“GHGs”) including carbon dioxide and methane, and climate change issues.

Legislation to regulate GHG emissions has periodically been introduced, and such legislation may be proposed or adopted in the future.

These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting, tracking programs, attestation requirements and regulations that directly limit GHG emissions from certain sources.

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Those reductions could be costly and difficult to implement.

The United States is currently a member of the “Paris Agreement” that requires member countries to review and “represent a progression” in their intended nationally determined GHG contributions, which set many new goals, including GHG emission reduction goals every five years beginning in 2020.

In 2023, the United States joined the international community at the 28th Conference of the Parties (COP28), where the U.S.

and nearly 200 other countries renewed their commitment to deliver on the aims of the 2015 Paris Agreement.

It is not possible at this time to predict the timing and effect of climate change or the extent and contents of any additional GHG legislation, regulations or other measures adopted at the federal, state or local levels.

However, more aggressive efforts by governments and non-governmental organizations to reduce GHG emissions have occurred and may continue based on the findings set forth in the IPCC Reports and any such future laws and regulations could result in increased compliance costs, reduce our return on investment, or additional operating restrictions or affect the demand for our customers' products and, accordingly, our services.

In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions.

As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring mitigation of the effects of climate change.

For example, a coalition of over 20 governors of U.S.

states formed the United States Climate Alliance to advance the objectives of the Paris Agreement, and several U.S.

cities have committed to advance the objectives of the Paris Agreement at the state or local level as well.

If we are unable to recover or pass through a significant level of our costs or are required to change our practices related to complying with climate change regulatory requirements imposed on us, it could have a material adverse impact on our business, financial condition and results of operations.

In recent years, the United States has twice entered into and withdrawn from the “Paris Agreement” that requires member countries to review and “represent a progression” in their intended nationally determined GHG contributions.

Recent changes in, and resulting uncertainty around, the United States' approach to climate change and GHG regulation further complicate efforts to prepare for future policy changes.

It is not possible at this time to fully predict the timing and effect of climate change or the extent and contents of any additional GHG legislation, regulations or other measures adopted by governments that may impact our business.

However, more aggressive efforts by governments and non-governmental organizations to reduce GHG emissions have occurred and may continue based on the findings set forth in the IPCC Reports and any such future laws and regulations could result in increased compliance costs, reduced returns on investment, or additional operating restrictions.

They may also affect the demand for our customers' products and, accordingly, our services.

In addition, increasing attention to the risks of climate change has resulted in an increased possibility of litigation, legislation, or investigations brought by public and private entities against oil and gas companies in connection with their GHG emissions.

As a result, we or our customers may become subject to court orders compelling a reduction of GHG emissions or requiring financial, actual, or other mitigation of the effects of climate change.

If we are unable to recover or pass through a significant level of our costs or are required to change our practices related to complying with climate change-related regulatory requirements imposed on us, it could have a material adverse impact on our business, financial condition and results of operations.

Further, to the extent financial markets view climate change and GHG emissions as a financial risk, this could negatively impact our cost of or access to capital.

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An increased focus by the public on the reduction of GHG emissions as well as the results of the physical impacts of climate change could affect the demand for our customers’ products and have a negative effect on our business.

The federal government and certain state governments have enacted, and are expected to continue to enact, laws and regulations that mandate or provide economic incentives for the development of technologies and sources of energy other than oil and gas, such as wind and solar.

Governments have enacted, and may continue to enact, laws and regulations that mandate or provide economic incentives for the development of technologies and sources of energy other than oil and gas, such as wind and solar.

Such legislation incentivizes the development, use and investment in these technologies and alternative energy sources and could accelerate the shift away from traditional oil and gas.

For example, the Inflation Reduction Act ("IRA") of 2022 contains tax inducements and other provisions that incentivize investment, development, and deployment of alternative energy sources and technologies.

Also, in 2022, California mandated that all new passenger cars and light trucks sold in the state be electric vehicles or other emissions-free models by 2035, and other jurisdictions have adopted or considered adopting similar measures.

If these future laws and regulations result in customers reducing their production of oil and gas, they could ultimately have an adverse effect on our business and prospects.

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Congress are analyzing, and a number of federal agencies have historically been requested to review, and, under the current or future administrations, may be requested to review again, a variety of environmental issues associated with hydraulic fracturing and the possibility of more stringent regulation.

At September 30, 2024, we had approximately 25 rigs placed on federal land and four rigs in federal waters.

At September 30, 2025, we had approximately 37 rigs placed on federal land and three rigs in federal waters.

Any new laws, regulations or permitting requirements regarding hydraulic fracturing could negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the services we provide.

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In addition, standards for tracking and reporting on sustainability matters, including climate-related matters, have not been harmonized and continue to evolve.

Our processes and controls for reporting sustainability matters may not always comply with evolving and disparate standards for identifying, quantifying, and reporting such metrics, including sustainability-related disclosures that may be required of public companies by the SEC or in-scope companies under U.S.

state regulations, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

state or federal regulations, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

Future acquisitions or dispositions may also impact our reporting, process, and progress on such goals.

Our business may also face increased scrutiny from investors and other stakeholders, including from parties that oppose ESG initiatives, related to our sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for pursuing them.

If our sustainability practices do not meet investor or other stakeholder expectations and standards, which continue to evolve, our reputation, our ability to attract or retain employees or customers, and our attractiveness as an investment or business partner could be negatively affected.

Our sustainability practices cannot meet all investor or other stakeholder expectations and standards, which continue to evolve, and our reputation, our ability to attract or retain employees or customers, and our attractiveness as an investment or business partner could be negatively affected.

Similarly, our failure or perceived failure to pursue or fulfill our sustainability-focused goals, targets, and objectives, to comply with ethical, environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.

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Complying with these obligations could cause us to incur costs and shift our business practices in a manner that does not align with our business objectives.

The CCPA/CPRA provides for civil penalties of up to $7,500 per intentional violation and $2,500 per unintentional violation.

Additionally, California residents whose personal data has been impacted by a cybersecurity incident as a result of the entity’s failure to implement and maintain reasonable security procedures and practices have been granted a private right of action, which could result in damages of up to $750 per incident where the entity failed to encrypt or redact personal data.

These significant financial penalties for noncompliance may materially adversely affect our business, results of operations and revenue.

Significant financial penalties imposed by the CCPA/CPRA for noncompliance may materially adversely affect our business, results of operations and revenue.

Similar legislation has been adopted in a number of other states, and is being considered by others.

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In addition, during periods of depressed market conditions we may be subject to an increased risk of our customers, vendors, former employees and others initiating legal proceedings against us.

Further, actions or decisions we have taken or may take as a consequence of COVID-19 may result in investigations, litigation or legal claims against us.

Lawsuits or claims against us could have a material adverse effect on our business, financial condition and results of operations.

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Additional tax liabilities, limitations on our use of net operating losses and tax credits and/or our significant net deferred tax liability could affect our financial condition, income tax provision, net income, and cash flows.

We are subject to income taxes in the United States and numerous other jurisdictions.

We are subject to income taxes in the United States and numerous other foreign and state jurisdictions.

Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities.

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Additionally, our future effective tax rates could be adversely affected by changes in tax laws (including tax treaties) or their interpretation.

For example, the IRA, passed on August 16, 2022, included a 15 percent corporate minimum tax applicable to tax years beginning after December 31, 2022.

We do not believe the corporate minimum tax will materially impact our effective tax rate or tax liability.

Also, the Organization for Economic Co-operation and Development (“OECD”) released Pillar Two model rules defining a 15% global minimum tax rate for large multinational corporations.

The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Pillar Two Framework expected in the near future.

We have evaluated the potential impacts of Pillar Two and do not believe it will have a material adverse effect on our tax liability.

For example, the One Big Beautiful Bill Act signed into law on July 4, 2025, included many provisions such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modification to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in fiscal year 2025 and others implemented through fiscal year 2027.

Currently, the legislation should not have a material impact on our effective tax rate.

Our deferred tax liability associated with property, plant and equipment is significant, which could materially increase the amount of cash income taxes that we pay in the future and, thus, adversely affect our cash flows.

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Failure to comply with or changes to governmental and environmental laws could adversely affect our business.

Many aspects of our operations are subject to various laws and regulations in the jurisdictions where we operate, including those relating to drilling practices and comprehensive and frequently changing laws and regulations relating to the safety and to the protection of human health and the environment.

Environmental laws apply to the oil and gas industry including those regulating air emissions, discharges to water, and the transport, storage, use, treatment, disposal and remediation of, and exposure to, solid and hazardous wastes and materials.

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As an owner and operator of drilling rigs, we may be deemed to be a responsible party under these laws and regulations.

Additionally, certain actions by federal, state and local regulators relating to the protection of threatened or endangered species or critical habitats may result in limitations on exploration and production activities, thereby reducing demand for our services.

Additional legislation or regulation and changes to existing legislation and regulation may reasonably be anticipated, and the effect thereof on our operations cannot be predicted.

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We have paid a quarterly dividend for many years and commencing in fiscal 2023 paid a quarterly supplemental dividend in addition to the established base dividend as part of a supplemental capital allocation plan.

On July 25, 2024, we announced that we would suspend our supplemental dividend in fiscal year 2025 as a part of the Acquisition announced July 25, 2024.

On July 25, 2024, we announced that we would suspend our supplemental dividend in fiscal year 2025 as a part of the acquisition of KCA Deutag announced in July 25, 2024.

Our most recent quarterly base dividend declared was $0.25 per share.

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It is possible that a court could find these exclusive forum provisions inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, and we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board of Directors.

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Public and investor sentiment towards climate change, fossil fuels and other ESG matters could adversely affect our cost of capital and the price of our common stock.

There have been efforts within the investment community (including investment advisors, investment fund managers, sovereign wealth funds, public pension funds, universities and individual investors) to promote the divestment of, or limit investment in, the stock of companies in the oil and gas industry.

There have been efforts within the investment community (including by investment advisors, investment fund managers, sovereign wealth funds, public pension funds, universities and individual investors) to promote the divestment of, or limit investment in, the stock of companies in the oil and gas industry.

There has also been pressure on lenders and other financial services companies to limit or curtail financing of companies in the oil and gas industry.

Because we operate within the oil and gas industry, if these efforts continue or expand, our stock price and our ability to raise capital may be negatively impacted.

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Some members of the investment community have increased their focus on ESG practices and disclosures by public companies, including practices and disclosures related to climate change and sustainability, DE&I initiatives, and heightened governance standards.

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If we or our securities are unable to meet the ESG standards or investment criteria set by these investors and funds, we may lose investors or investors may allocate a portion of their capital away from us, our cost of capital may increase, and our stock price may be negatively impacted.

KCA DEUTAG ACQUISITION RELATED RISKS

We have incurred a substantial amount of additional debt to complete the Acquisition.

Our debt level may limit our financial and business flexibility.

We expect to fund the cash purchase price for the Acquisition, as well as the refinancing, prepayment, replacement, redemption, repurchase, discharge and/or defeasance of certain existing indebtedness of KCA Deutag and its subsidiaries, transaction expenses, general corporate expenses and working capital needs, with a combination of cash on hand and through the incurrence of approximately $1.65 billion of new indebtedness, including $1.25 billion aggregate principal amount of senior notes we issued in a private offering completed in September 2024 (collectively, the "Notes") and up to $400.0 million we may borrow under the Term Loan Credit Agreement.

Subject to the limitations contained in our existing and any future debt instruments, we may be able to incur additional debt from time to time to finance working capital, capital expenditures, investments or acquisition, or for other purposes.

If we do so, the risks related to our debt level could increase.

Our ability to repay all the forgoing obligations will depend on, among other things, our financial position and performance, as well as prevailing market conditions and other factors beyond our control.

Our increased indebtedness could have important consequences.

• we may be required to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases;

• we may not be able to generate sufficient cash flow to meet our substantial debt service obligations or to fund our other liquidity needs.

If this occurs, we may have to take actions such as selling assets, selling equity, or reducing or delaying capital expenditures, strategic acquisitions, investments and joint ventures, or restructuring our debt;

• as a result of the amount of our outstanding indebtedness and the restrictive covenants to which we are or may become subject, if we determine that we require additional financing to fund future working capital, capital investments, or other business activities, we may not be able to obtain such financing on commercially reasonable terms, or at all;

• our flexibility in planning for, or reacting to, changes in our business and industry may be limited, thereby placing us at a competitive disadvantage compared with our competitors that have less indebtedness.

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The Acquisition is subject to a number of conditions, which, if not fulfilled, or not fulfilled in a timely manner, may delay or reduce the anticipated benefits of the Acquisition, result in additional expenditures of money and resources, or result in termination of the Purchase Agreement.

The Purchase Agreement contains a number of conditions to the consummation of the Acquisition.

We may not be able to consummate the Acquisition on the terms contemplated, or at all, if the applicable regulatory approvals are not obtained and/or other customary closing conditions are not satisfied.

If any of these conditions are not satisfied or waived prior to October 25, 2025, it is possible that the Purchase Agreement may be terminated.

Additionally, under certain circumstances, including failure to consummate the Acquisition on or before October 25, 2025 (or such later date as we may agree to extend the “Long Stop Date” under the Purchase Agreement), we will be required to redeem the Notes at a special mandatory redemption price equal to 101% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon.

Further, satisfying the conditions to and the consummation of the Acquisition may take longer and could cost more than we expect.

Many of the conditions to the consummation of the Acquisition are not within the parties’ control, and the parties cannot predict when or if these conditions will be satisfied.

Any delay in completing the Acquisition may adversely affect the cost savings and other benefits that we expect to achieve if the Acquisition and the integration of KCA Deutag’s business are completed within the expected timeframe.

There can be no assurance that the conditions to the closing of the Acquisition will be satisfied or waived or that the Acquisition will be completed.

Any difficulties with respect to the consummation of the Acquisition may adversely affect our business, financial condition or results of operations.

In addition, failure to consummate the Acquisition on the terms contemplated may adversely affect our intended strategy of geographic expansion and may impact management’s focus on such strategy.

If the Acquisition is consummated, we may be unable to successfully integrate KCA Deutag’s business or achieve the anticipated benefits of the Acquisition, or the anticipated benefits attributable to the Acquisition may vary from our expectations.

Our ability to achieve the anticipated benefits of the Acquisition will depend in part upon whether we can integrate KCA Deutag's business into our existing business in an efficient and effective manner.

We may not be able to accomplish this integration process successfully.

The integration process may be subject to delays or changed circumstances, and we can give no assurance that KCA Deutag’s assets will perform in accordance with our expectations or that our expectations with respect to integration or cost savings as a result of the Acquisition will materialize.

The success of the Acquisition will depend, in significant part, on the Company’s ability to successfully integrate the acquired business, grow the revenue of the Company and realize the anticipated strategic benefits from the Acquisition.

Additionally, the integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the Acquisition that were not discovered in the course of performing due diligence.

The integration may also require significant time and focus from management following the Acquisition which may disrupt the Company’s business and results of operations.

The Company believes that the addition of KCA Deutag will complement its strategy and provide operational and financial scale.

This growth and the anticipated benefits of the Acquisition may not be realized fully or at all or may take longer to realize than expected.

Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated.

If the Company is not able to achieve or realize the anticipated benefits expected from the Acquisition within the anticipated timing or at all, its business and operating results may be adversely affected.

Potential difficulties in realizing the anticipated benefits of the Acquisition include, but are not limited to:

(i) disruptions of relationships with customers, distributors, suppliers, vendors and other business partners as a result of uncertainty associated with the Acquisition;

(ii) difficulties integrating KCA Deutag’s operations with our own in a manner that permits us to achieve the full revenue and cost savings anticipated from the transaction;

(iii) complexities associated with managing a larger and more complex business, including difficulty addressing possible inconsistencies in standards, controls or operational philosophies and the challenge of integrating complex systems, technology, networks and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;

(iv) difficulties integrating personnel, vendors and business partners;

(v) loss of key employees who are critical to our future operations due to uncertainty about their roles within the Company following the Acquisition or other concerns regarding the Acquisition;

(vi) potential unknown liabilities and unforeseen expenses;

(vii) performance shortfalls at one or more of the companies as a result of the diversion of management’s attention to integration efforts;

and (viii) disruption of, or the loss of momentum in, each company’s ongoing business.

Moreover, our guidance or projections with respect to the combined company speak only as of the date made and subsequent events, including suspension of rigs or increased operating costs, may cause actual results to be worse than those previously projected.

Our future success will depend, in part, on our ability to manage our expanded business by, among other things, integrating the assets, operations and personnel of KCA Deutag in an efficient and timely manner, consolidating systems and management controls and successfully integrating relationships with customers, vendors and business partners.

Failure to successfully manage the combined operations may have an adverse effect on our business, reputation, financial condition and results of operations.

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Our business relationships may be subject to disruption due to uncertainty associated with the Acquisition, which could have a material adverse effect on our results of operations, cash flows and financial position pending and following the Acquisition.

Parties with which we do business may experience uncertainty associated with the Acquisition, including with respect to current or future business relationships with us.

Our business relationships may be subject to disruption as customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners may attempt to delay or defer entering into new business relationships, negotiate changes in existing business relationships or consider entering into business relationships with parties other than us or KCA Deutag.

These disruptions could have a material adverse effect on our results of operations, cash flows and financial position, regardless of whether the Acquisition is completed, as well as a material adverse effect on our ability to realize the expected cost savings and other benefits of the Acquisition.

The risk and adverse effect of any disruption could be exacerbated by a delay in completion of the Acquisition or the termination of the Purchase Agreement.

Uncertainties associated with the Acquisition may cause a loss of management personnel and other key employees, which could adversely affect our future business and operations.

We are dependent on the experience and industry knowledge of our officers and other key employees to execute our business plans.

Our success after the Acquisition will depend in part upon our ability to retain key management personnel and other key employees.

Current and prospective employees may experience uncertainty about their roles within the combined company or other concerns regarding the timing and completion of the Acquisition or the operations of the combined company following the Acquisition, any of which may have an adverse effect on our ability to retain or attract key management and other key personnel.

In addition, the loss of key personnel could diminish the anticipated benefits of the Acquisition and the integration of the companies may be more difficult.

Furthermore, we may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of each of the companies.

No assurance can be given that we will be able to retain or attract key management personnel and other key employees of KCA Deutag to the same extent that we have previously been able to retain or attract our own employees.

Failure to complete the Acquisition could negatively impact our stock price and have a material adverse effect on our results of operations, cash flows and financial position.

If the Acquisition is not completed for any reason, including as a result of failure to obtain all requisite regulatory approvals, our ongoing business may be materially adversely affected and, without realizing any of the benefits of having completed the Acquisition, we would be subject to a number of risks, including the following:

(i) we may experience negative reactions from the financial markets, including negative impacts on our stock price;

(ii) we may experience negative reactions from our customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners;

(iii) we will still be required to pay certain significant costs relating to the Acquisition, such as legal, accounting, consulting, financial advisor and printing fees;

(iv) matters relating to the Acquisition (including integration planning) requires substantial commitments of time and resources by our management, which may have resulted in the distraction of our management from ongoing business operations and pursuing other opportunities that could have been beneficial to us;

and (v) litigation related to any failure to complete the Acquisition or related to any enforcement proceeding commenced against us to perform our obligations pursuant to the Purchase Agreement.

If the Acquisition is not completed, these risks may materialize and they may have a material adverse effect on our results of operations, cash flows, financial position and stock price.

We will incur significant transaction costs in connection with the Acquisition.

We have incurred and are expected to continue to incur a number of non-recurring costs associated with the Acquisition, combining the operations of KCA Deutag with ours and realizing the expected benefits of the transaction.

A substantial majority of non-recurring expenses will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors.

Some of these costs are payable by us regardless of whether the Acquisition is completed.

There are also a large number of processes, policies, procedures, operations, technologies and systems that may or must be integrated in connection with the Acquisition and the integration of operations with ours.

While we have assumed that a certain level of expenses would be incurred in connection with the Acquisition, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses.

Although we expect that the elimination of duplicative costs, as well as the realization of expected benefits related to the integration of KCA Deutag’s assets, should allow us to offset these transaction costs over time, this net benefit may not be achieved in the near term or at all.

There may also be additional unanticipated significant costs in connection with the Acquisition that we may not recoup.

These costs and expenses could reduce the realization of efficiencies, strategic benefits and additional income we expect to achieve from the Acquisition.

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The Acquisition represents an expansion outside of our current geographic regions, and we may encounter new obstacles operating in different geographic regions.

Our operations have historically focused on North America and the Offshore Gulf of Mexico, and we also have existing operations internationally in Argentina, Bahrain, Colombia, the U.A.E.

and Australia.

The Acquisition represents an expansion into Europe and Africa and a broader presence in the Middle East.

Certain aspects related to operating in these new regions may not be as familiar to us as our current operating regions.

As a result, we may encounter obstacles that may cause us not to achieve the expected results of the Acquisition.

These obstacles may include a less familiar geopolitical landscape, new customers with whom we have no established relationship, pressure from local governments to hire local employees, use local suppliers or to direct business to nationalized companies, unfamiliar operating conditions and a distinct regulatory environment.

Our future success will depend, in part, upon our ability to manage this expanded business, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and geographies and associated increased costs and complexity.

We may also face increased scrutiny from governmental authorities as a result of the increase in the size of our business.

Additionally, KCA Deutag has significant operations in developing countries and other nations which are high on the Corruptions Perceptions Index published by Transparency International.

Such operations inherently pose a heightened risk of potential violations of anti-corruption laws, which violations could subject us to civil and criminal penalties or other sanctions, which could have a material adverse impact on our business, financial condition and results of operations.

Any adverse conditions, regulations or developments related to our expansion into or within these regions may have a negative impact on our business, financial condition and results of operations.

The pendency of the Acquisition could adversely affect the Company’s business, results of operations and financial condition.

The pendency of the Acquisition could cause disruptions in the Company’s business, which could have an adverse effect on the Company’s business, results of operations and financial condition.

In particular, the attention of the Company’s management may be directed towards the Acquisition, including obtaining required approvals and other transaction-related considerations and may be diverted from the day-to-day business operations of the Company and matters related to the Acquisition may require commitments of time and resources that could otherwise have been devoted to other opportunities that might have been beneficial to the Company.

Any of these matters could adversely affect the businesses of, or harm the results of operations, financial condition or cash flows of the Company before and even after the Acquisition is consummated.

Likewise, others in the investment community (and some regulators) have expressed opposition to certain ESG initiatives, including by advancing "anti-ESG" policies.

This divergence in stakeholder expectations may increase legal and compliance costs, expose us to political or reputational risks, and potentially disrupt relationships with certain stakeholders.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors