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The Company is exposed to various market risks, including the effects of adverse changes in commodity prices and credit risk as described below.
−Removed: The Company continually monitors its market risk exposure, including the impact and developments related to the armed conflicts in Ukraine and Israel, increase in interest rate and inflation trends, which continued to have significant impact on volatility and uncertainties in the financial markets during 2023.
+Added: The Company continually monitors its market risk exposure, including the impact of regional and international political instability, new U.S.
+Added: presidential administration policies on various foreign and domestic issues and monetary policy addressing the interest rate and inflation trend, which continued to have significant impact on volatility and uncertainties in the financial markets.
Commodity Price Risk
−Removed: The results of the Company’s operations may be affected by the market prices of oil, NGLs and natural gas.
−Removed: A portion of the Company’s revenue is directly tied to local crude, natural gas, NGLs and condensate prices in the Permian Basin.
+Added: The results of the Company’s operations may be affected by the market prices of oil, natural gas and NGLs.
+Added: A portion of the Company’s revenue is directly tied to local crude, natural gas, NGLs and condensate prices in the Permian Basin and the U.S.
Fluctuations in commodity prices also impact operating cost elements both directly and indirectly.
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Commodity prices also affect industry activity and demand, thus indirectly impacting the cost of items such as labor and equipment rentals.
−Removed: Management regularly reviews the Company’s potential exposure to commodity price risk and may periodically enter into financial or physical arrangements intended to mitigate potential volatility.
+Added: Management regularly reviews the Company’s potential exposure to commodity price risk and uses financial or physical arrangements to mitigate potential volatility.
Refer to Note 13—Derivative and Hedging Activities in the Notes to our Consolidated Financial Statements in this Annual Report for additional discussion regarding our hedging strategies and objectives.
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As of December 31, 2024, the Company had interest bearing debt, net of deferred financing costs, with a principal amount of $3.50 billion.
−Removed: The interest rates for the Revolving Credit Facility and the Term Loan are variable, which exposes the Company to the risk of increased interest expense in the event of increases to short-term interest rates.
+Added: We are not exposed to changes in interest rates with respect to our senior unsecured notes due in 2028 and 2030 as these are fixed-rate obligations.
+Added: The interest rates for the Revolving Credit Facility, the Term Loan Credit Facility and the A/R Facility are variable, which exposes the Company to the risk of increased interest expense in the event of increases to interest rates.
Accordingly, results of operations, cash flows, financial condition and the ability to make cash distributions could be adversely affected by significant increases in interest rates.
−Removed: Upon closing of the First Amendment in December 2023, the Company terminated one existing interest rate swap contract and partially terminated another.
−Removed: As of December 31, 2023, the Company had two interest rate swap contracts with total notional amounts of $1.70 billion maturing on May 31, 2025 and paying a fixed rate ranging from 4.38% to 4.48% for the respective notional amounts.
+Added: A 1.0% increase or decrease in interest rates would change our annualized interest expense by approximately $17.0 million for the Revolving Credit Facility, the Term Loan Credit Facility and the A/R Facility, based on our outstanding borrowings at December 31, 2024.
+Added: To mitigate interest rate risk exposure, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.
+Added: As of December 31, 2024, the Company had two interest rate swap contracts with total notional amounts of $1.70 billion maturing on May 31, 2025 that pay a fixed rate ranging from 4.38% to 4.48% and four interest rate swap contracts with total notional amount of $0.30 billion maturing on December 31, 2025 that pays a fixed rate ranging from 3.02% to 4.06%.
Refer to Note 13—Derivative and Hedging Activities in the Notes to our Consolidated Financial Statements in this Annual Report for additional discussion regarding our hedging strategies and objectives.
−Removed: The Company also expects to maintain a 0.05% reduction to the effective interest rates of both the Revolving Credit Facility and the Term Loan during 2024 in relation to achieving sustainability adjustment features embedded in these facilities.
The Company is subject to credit risk resulting from nonpayment or nonperformance by, or the insolvency or liquidation of, third-party customers.
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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.