What changed in this filing

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Item 1A. Risk Factors

2024-02-09 compared with 2023-02-10 · 62 added, 84 removed, 417 unchanged (26% of the section changed)

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You should carefully consider each of the risks described below in conjunction with other information including the financial statements and related notes provided in this Annual Report and in our other public disclosures.

The risks described below highlight potential events, trends or other circumstances that could adversely affect our business, financial condition, results of operations, cash flows, liquidity or access to sources of financing, and consequently, the market value of our Class A Common Stock.

These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance.

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These rules have been the subject of ongoing legal challenges.

In January 2021, President Biden issued an executive order that called for issuance of proposed rules by no later than September 2021 that would restore rules for methane standards applicable to new, modified, and reconstructed sources and establish new methane and volatile organic compound standards applicable to existing oil and gas operations, including the production, transmission, processing and storage segments.

On November 2021, the EPA proposed such a rule and in November 2022, EPA issued a proposal that updates and expands on the November 2021 proposal.

If adopted, such a rule could make it significantly more difficult and/or costly to drill and operate oil and gas wells.

As a result, such rule, if adopted, could result in a decline in the completion of new oil and gas wells or the recompletion of existing wells, which could negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the demand for our services.

Most recently, in December 2022, the EPA finalized additional methane rules for new and existing petroleum operations.

The EPA rules could make it more difficult and/or costly to drill and operate oil and gas wells.

These rules may result in a decline in the completion of new oil and gas wells or the recompletion of existing wells, which could negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the demand for our services.

In addition to federal regulatory actions, legislation has been introduced, but not enacted, in Congress to provide for further federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the hydraulic fracturing process.

Moreover, many states and local governments have adopted regulations that impose more stringent permitting, disclosure, disposal and well-construction requirements on hydraulic fracturing operations, including states where we or our customers operate, such as Texas, Colorado and North Dakota.

Moreover, many states and local governments have adopted, or are considering, regulations that impose new or more stringent permitting, disclosure, disposal and well-construction requirements on hydraulic fracturing operations, including states where we or our customers operate, such as Texas, Colorado and North Dakota.

States could also elect to place prohibitions on hydraulic fracturing, as several states have already done.

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In response, a reconstituted Colorado Oil and Gas Conservation Commission modified its rules to address the requirements of the legislation, adopting increased setback requirements, provisions for assessing alternative sites for well pads to minimize environmental impacts, and consideration to cumulative impacts, among other provisions.

The Colorado Department of Public Health and the Environment also finalized rules related to the control of emissions from certain pre-production activities.

In Texas, there has been increased pressure on the Railroad Commission (“RRC”) to impose more stringent limitations on the flaring of gas from wells to prevent waste and because of increased concerns related to the environmental effects of flaring.

The RRC continues to approve flaring permits, but at least one lawsuit has been filed by a pipeline operator challenging the RRC’s flaring approval practices.

Environmental groups, local citizens groups and others continue to seek to use a variety of means to force action on additional restrictions on hydraulic fracturing and oil and gas development generally.

Additionally, in July 2021, a non-governmental organization issued a report that raised concerns that chemicals used in hydraulic fracturing could be within the class of chemicals known as per- and polyfluoroalkylated substances (“PFAS”) or precursors to such substances.

PFAS is the subject of intense federal and state regulatory scrutiny.

Should PFAS be in hydraulic fracturing chemicals, this could open up a new front for the regulation of hydraulic fracturing.

Additionally, some states have enacted legislation limiting PFAS usage in certain products or limiting PFAS usage generally.

For example, Colorado has banned the use of PFAS in oil and gas products including hydraulic fracturing fluids, drilling fluids and proppants.

Should PFAS be in hydraulic fracturing chemicals, this could open up a new front for the regulation of hydraulic fracturing and result in additional exposure to liability for contamination resulting from the use or release of hydraulic fracturing chemicals.

Some states in which we operate require the disclosure of some or all of the chemicals used in our hydraulic fracturing operations.

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• political and economic conditions in oil and natural gas producing countries;

• actions by the members of the Organization of Petroleum Exporting Countries and other oil exporting nations with respect to oil production levels and potential changes in such levels;

• actions by the members of the Organization of Petroleum Exporting Countries and other oil exporting nations (“OPEC+”) with respect to oil production levels and potential changes in such levels;

• global weather conditions and natural disasters;

• worldwide political, military and economic conditions;

• worldwide political, military and armed conflict, and economic conditions;

• the cost of producing and delivering oil and natural gas;

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During the year 2023, the posted WTI price traded at an average of $77.58 per barrel (“Bbl”), as compared to the 2022 average of $94.90 per Bbl and the 2021 average of $68.13 per Bbl.

During the fourth quarter of 2022, WTI oil prices averaged $82.79 compared to $93.06 in the third quarter of 2022 and $77.33 in the fourth quarter of 2021.

During this three-year period, the WTI price fluctuated between a high of $123.64 per Bbl and a low of $47.47 per Bbl.

If the prices of oil and natural gas remain or become more volatile, our operations, financial condition, cash flows and level of expenditures may be materially and adversely affected.

Delays or restrictions in obtaining permits by us for our operations or by our customers for their operations could impair our business.

In most states, our operations and the operations of our oil and natural gas producing customers require permits from one or more governmental agencies in order to perform drilling and completion activities, secure water rights, or other regulated activities.

In most states, our hydraulic fracturing services, our natural gas compression and CNG delivery operations, and the operations of our oil and natural gas producing customers require permits from one or more governmental agencies in order to perform drilling and completion activities, secure water rights, or other regulated activities.

Such permits are typically issued by state agencies, but federal and local governmental permits may also be required.

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Moreover, the imposition of new environmental regulations and other regulatory initiatives could include increased restrictions on our producing customers’ ability to dispose of flowback and produced water generated in hydraulic fracturing or other fluids resulting from E&P activities.

Applicable laws impose restrictions and strict controls regarding the discharge of pollutants into waters of the United States and require that permits or other approvals be obtained to discharge pollutants to such waters.

Additionally, in 2016 EPA adopted a pretreatment standard that prohibits the discharge of wastewater pollutants from onshore unconventional oil and gas extraction facilities to publicly owned treatment works.

Applicable laws impose restrictions and strict controls regarding the discharge of

pollutants into waters of the United States and require that permits or other approvals be obtained to discharge pollutants to such waters.

Additionally, in 2016, the EPA adopted a pretreatment standard that prohibits the discharge of wastewater pollutants from onshore unconventional oil and gas extraction facilities to publicly owned treatment works.

Further, regulations implemented under both federal and state laws prohibit the discharge of produced water and sand, drilling fluids, drill cuttings and certain other substances related to the natural gas and oil industry into coastal waters.

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At the 27th Conference of the Parties in 2022, President Biden reinforced these commitments and emphasized efforts to reduce methane emissions from the oil and gas sector.

At the 28 th Conference of the Parties (the “COP28”) in 2023, the United States announced a new rule on requiring reductions in methane and other air pollutants from oil and natural gas industry.

Programs addressing climate change may limit the ability to produce crude oil and natural gas, require stricter limits on the release of methane or other GHGs, increase reporting and/or other compliance obligations associated with GHG emissions, limit the ability to explore in new areas, limit the construction of pipelines and related equipment or may make it more expensive to produce, any of which may decrease the demand for our services and our revenues.

Incentives to conserve energy or use alternative energy sources, which can be part of climate change programs, may increase the competitiveness of alternative energy sources (such as wind, solar, geothermal, tidal and biofuels) or increase the focus on reducing the use of combustion engines in transportation (such as governmental mandates that ban the sale of new gasoline-powered automobiles).

At COP28, the parties adopted a statement calling for “transitioning away from fossil fuels” and an increased focus on renewable energy capacity and energy efficiency.

These actions could, in turn, reduce demand for hydrocarbons and therefore for our services, which would lead to a reduction in our revenues.

Additionally, on January 26, 2024, the Biden Administration announced a temporary pause on pending decisions regarding exports of liquified natural gas until the U.S.

Department of Energy can update the underlying analyses for authorization.

An increased societal and governmental focus on ESG and climate change issues may adversely impact our business, impact our access to investors and financing, and decrease demand for our services.

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Furthermore, the SEC has announced proposed rules that, among other matters, will establish a framework for reporting climate related risks.

To the extent that any proposed rules impose additional reporting obligations, we could face increased

To the extent that any proposed rules impose additional reporting obligations, we could face increased costs.

Separately, the SEC has also announced that it is scrutinizing existing climate change related disclosure in public filings, increasing the potential for enforcement if the SEC were to allege our existing climate disclosures are misleading or deficient.

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Should plan investors decide to not invest in us based on ESG factors, our business and access to capital may be negatively impacted.

In 2023, the State of California enacted legislation that will require large U.S.

companies doing business in California to make broad-based climate-related disclosures starting as early as 2026, and other jurisdictions, domestically and internationally, are also considering various climate change disclosure requirements.

In addition, ESG and climate change issues may cause consumer preference to shift toward other alternative sources of energy, lowering demand for oil and natural gas and consequently lowering demand for our services.

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Trucking services can be adversely impacted by traffic congestion, shortage of drivers and weather delays which could hinder our service levels.

During 2021 and into 2022 there has been a shortage of available trucking services in the United States due to the industry not having enough qualified drivers, which has impacted our field operations at times.

During 2021 and into 2022 there was a shortage of available trucking services in the United States due to the industry not having enough qualified drivers, which impacted our field operations at times.

In addition, our field employees are generally required to have a commercial driver’s license (“CDL”) so they can drive trucks and move our frac pumps and other equipment from location to location.

Obtaining employees with CDLs can be challenging during times when the trucking industry has driver shortages, as competition for qualified employees is often more intense.

If we are unable

to obtain trucking services on a timely basis or the services of a sufficient number of field employees with CDLs, it could have a material adverse impact on our financial condition, results of operations and cash flows.

If we are unable to obtain trucking services on a timely basis or the services of a sufficient number of field employees with CDLs, it could have a material adverse impact on our financial condition, results of operations and cash flows.

In addition, potential liability and unfavorable publicity associated with accidents in the trucking industry can be severe and occurrences are unpredictable.

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and the issuance of orders enjoining performance of some or all of our operations in a particular area.

In addition to civil and other penalties associated with enforcement activities regarding compliance with occupational health and safety laws, our operations may be subject to abatement obligations that could require significant modifications to existing operations to achieve compliance.

In addition to civil and other penalties associated

with enforcement activities regarding compliance with occupational health and safety laws, our operations may be subject to abatement obligations that could require significant modifications to existing operations to achieve compliance.

Our business activities present risks of incurring significant environmental costs and liabilities, including costs and liabilities resulting from our handling of oilfield and other wastes, because of air emissions and wastewater discharges related to our operations, and due to historical oilfield industry operations and waste disposal practices.

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Some environmental laws and regulations may impose strict liability, which means that in some situations we could be exposed to liability as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties.

Remedial and abatement costs and other damages arising as a result of environmental and occupational health and safety laws and costs

associated with changes in these laws and regulations could be significant and have a material adverse effect on our liquidity, consolidated results of operations and financial condition.

Remedial and abatement costs and other damages arising as a result of environmental and occupational health and safety laws and costs associated with changes in these laws and regulations could be significant and have a material adverse effect on our liquidity, consolidated results of operations and financial condition.

Laws and regulations protecting the environment generally have become more stringent in recent years and are expected to continue to do so, which could lead to material increases in costs for future environmental compliance and remediation.

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Department of the Interior and the FWS alleging that they have unlawfully delayed protection of the dunes sagebrush.

In July 2023, the FWS proposed to list the dunes sagebrush lizard as endangered.

If the dunes sagebrush lizard is listed as an endangered or threatened species, our operations and the operations of our customers in any area that is designated as the dunes sagebrush lizard’s habitat may be limited, delayed or, in some circumstances, prohibited, and we and our customers could be required to comply with expensive mitigation measures intended to protect the dunes sagebrush lizard and its habitat.

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Limits on our ability to effectively use or implement new technologies may have a material adverse effect on our business, financial condition and results of operations.

The ability or willingness of OPEC and other oil exporting nations to set and maintain production levels and/or the impact of sanctions on Russia related to the war in Ukraine may have a significant impact on natural gas commodity prices.

The Organization of Petroleum Exporting Countries and their allies (collectively, OPEC+), is an intergovernmental organization that seeks to manage the price and supply of oil on the global energy market.

Actions taken by OPEC+ members, including those taken alongside other oil exporting nations, have a significant impact on global oil supply and pricing.

The ability or willingness of OPEC+ and other oil exporting nations to set and maintain production levels and/or the impact of sanctions and global conflicts may have a significant impact on natural gas commodity prices.

OPEC+ is an intergovernmental organization that seeks to manage the price and supply of oil on the global energy market.

Actions taken by OPEC+ members, including those taken alongside other oil exporting nations, have a significant impact on

global oil supply and pricing.

For example, OPEC+ and certain other oil exporting nations have previously agreed to take measures, including production cuts, to support crude oil prices.

In March 2020, members of OPEC+ considered extending and potentially increasing these oil production cuts, however these negotiations were unsuccessful.

As a result, Saudi Arabia announced an immediate reduction in export prices and Russia announced that all previously agreed oil production cuts expired on April 1, 2020.

These actions led to an immediate and steep decrease in oil prices.

Conversely, sanctions imposed on Russia in the last few months have increased prices.

In 2020, largely as a result of the COVID-19 pandemic, oil prices decreased dramatically, and OPEC+ agreed to historic production cuts in an effort to support prices.

Conversely, sanctions imposed on Russia as a result of the Russia-Ukraine conflict in 2022 increased prices.

In October 2022, OPEC+ again determined to reduce production of oil, by approximately 2 million barrels per day.

At its meeting on December 4, 2022, OPEC+ agreed to keep its current policy unchanged as the oil markets struggle to assess the impact of a slowing Chinese economy on demand, and the Group of Seven Nations agreed on a price cap on Russian oil supply.

There can be no assurance that OPEC+ members and other oil exporting nations will agree to future production cuts or other actions to support and stabilize oil prices, nor can there be any assurance that sanctions or other global conflicts will not further impact oil prices.

Uncertainty regarding future sanctions or actions to be taken by OPEC+ members or other oil

exporting countries could lead to increased volatility in the price of oil and natural gas, which could adversely affect our business, future financial condition and results of operations.

In June 2023, OPEC+ members announced they would extend crude oil production cuts through 2024, limiting global crude oil supplies.

In November 2023, OPEC+ agreed to cut production by an additional 1 million barrels per day beginning in January 2024.

Uncertainty regarding future sanctions or actions to be taken by OPEC+ members or other oil exporting countries could lead to increased volatility in the price of oil and natural gas, which could adversely affect our business, future financial condition and results of operations.

Risks Related to the TRAs

The Company is required to make payments under the TRAs for certain tax benefits that it may claim, and the amounts of such payments could be significant.

In connection with the Company’s initial public offering (the “IPO”), on January 17, 2018, the Company entered into two Tax Receivable Agreements (the “TRAs”) with R/C Energy IV Direction Partnership, L.P.

and the then-existing owners of Liberty Oilfield Services Holdings LLC (“Liberty Holdings”) that continued to own Liberty LLC Units (each such person and any permitted transferee, a “TRA Holder”).

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The TRA Holders will not reimburse us for any payments previously made under the TRAs if any tax benefits that have given rise to payments under the TRAs are subsequently disallowed in an audit, except that excess payments made to any TRA Holder will be netted against payments that would otherwise be made to such TRA Holder, if any, after our determination of such excess.

As a result, in such circumstances the Company could make payments that are greater than its actual cash tax savings, if any, and may not be able to recoup those payments, which could adversely affect the Company’s liquidity.

As a result, in such circumstances the Company could make payments that are greater than its actual cash tax savings, if any, and may not be able

to recoup those payments, which could adversely affect the Company’s liquidity.

Furthermore, the payments under the TRAs will not be conditioned upon a holder of rights under each of the TRAs having a continued ownership interest in the Company or Liberty LLC.

For further details of the TRAs, see Note 12 —Income Taxes to the consolidated financial statements included in “Item 8.

Financial Statements and Supplementary Data.”

For further details of the TRAs, see Note 12 —Income Taxes to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

General Risks Related to our Business

COVID-19 has had in the past, and may in the future have, a material adverse effect on the demand for our services, our operations, business and financial results.

The COVID-19 pandemic created significant uncertainty and economic disruption, as well as heightened volatility in the prices of oil and natural gas.

Although government response measures to COVID-19 have generally relaxed, the ultimate impact of this pandemic is uncertain and subject to change.

The collapse in the demand for oil during 2020 caused by this unprecedented global health and economic crisis, coupled with an oil oversupply, had a material adverse impact on the demand for our services and on our financial condition, results of operations and cash flows.

We are closely monitoring the continuing effects of the pandemic on our customers, operations, and employees.

Oil demand and the demand for our services have since recovered from the lows experienced during the onset of the pandemic.

The extent to which our operating and financial results will be affected by COVID-19 in the future will depend on various factors and consequences, such as the ultimate duration and scope of the pandemic, any additional actions by businesses and governments in response to the pandemic, and the speed and effectiveness of responses to combat the virus.

COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate the other risk factors that we identify herein.

COVID-19 may also materially adversely affect our operating and financial results in a manner that is not currently known to us or that we do not currently consider presenting significant risks to us.

We cannot predict the ultimate duration or scope of the COVID-19 pandemic or the response of the overall economy and the financial markets to the COVID-19 pandemic and response measures.

Accordingly, if the pandemic worsens or if actions taken by governments and businesses in response to the pandemic in 2020 are re-enacted, the demand for our services may fall again, which would have a material adverse impact on our financial condition, results of operations and cash flows.

We may be adversely affected by uncertainty in the global financial markets and the deterioration of the financial condition of our customers.

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This cyberattack disrupted certain non-financial aspects of our internal system for a period of less than one day, while limited and non-critical portions of our systems were kept offline for up to one week in order to properly evaluate the breach.

We determined that this cyberattack did not materially affect any of our operations.

We determined that this cyberattack did not materially affect us or any of our operations.

We engaged in extensive data evaluation for potential damage and concluded that minimal to no data loss had occurred as a result of this cyberattack.

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Furthermore, to the extent our contracts require us to purchase more materials, including proppant, than we ultimately require, we may be forced to pay for the excess amount under “take or pay” contract provisions.

We currently utilize two preferred assemblers and a limited number of suppliers for major equipment to both build new fleets and upgrade any fleets we acquire to our preferred specifications, and our reliance on these vendors exposes us to risks including price and timing of delivery.

We currently utilize two preferred assemblers and a limited number of suppliers for major equipment to both build our new fleets and upgrade any fleets we may acquire to our custom design.

We currently utilize a limited number of assemblers and suppliers for major equipment to both build new fleets and upgrade any fleets we acquire to our preferred specifications, and our reliance on these vendors exposes us to risks including price and timing of delivery.

We currently utilize a limited number of assemblers and suppliers for major equipment to both build our new fleets and upgrade any fleets we may acquire to our custom design.

If demand for hydraulic fracturing fleets or the components necessary to build such fleets increases or these vendors face financial distress or bankruptcy, these vendors may not be able to provide the new or upgraded fleets on schedule or at the current price.

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These regulatory authorities exercise broad powers over our equipment transportation operations, generally governing such matters as the authorization to engage in motor carrier operations, safety, equipment testing, driver requirements and specifications and insurance requirements.

The trucking industry is subject to possible regulatory and legislative changes that may impact our operations, such as changes in fuel emissions limits, hours of service regulations that govern the amount of time a driver may drive or work in any specific period and requiring onboard electronic logging devices or limits on vehicle weight and size.

time a driver may drive or work in any specific period and requiring onboard electronic logging devices or limits on vehicle weight and size.

As the federal government continues to develop and propose regulations relating to fuel quality, engine efficiency and greenhouse gasses emissions, we may experience an increase in costs related to truck purchases and maintenance, impairment of equipment productivity, a decrease in the residual value of vehicles, unpredictable fluctuations in fuel prices and an increase in operating expenses.

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Our current and future indebtedness could adversely affect our financial condition.

Effective January 23, 2023, using proceeds from borrowings on our ABL Facility, we repaid all amounts outstanding under the Term Loan Facility.

As of February 6, 2023, we had $284.0 million outstanding under our ABL Facility (defined herein), as well as a letter of credit in the amount of $2.6 million, with a borrowing base of $430.4 million.

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Agreements.”

Effective January 23, 2023, using proceeds from borrowings on our ABL Facility (as defined herein), we repaid all amounts outstanding under the Term Loan Facility (as defined herein).

As of February 5, 2024, the Company had $159.0 million outstanding under our ABL Facility, in addition to letters of credit in the amount of $7.4 million, with $235.1 million of remaining availability.

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Moreover, subject to the limits contained in our ABL Facility, we may incur substantial additional debt from time to time.

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The exploration activities of our customers may also be affected during such periods of adverse weather conditions.

Additionally, extended drought conditions in our operating regions could impact our ability or our customers’ ability to source sufficient water or

increase the cost for such water.

Additionally, extended drought conditions in our operating regions could impact our ability or our customers’ ability to source sufficient water or increase the cost for such water.

As a result, a natural disaster or inclement weather conditions could severely disrupt the normal operation of our business and adversely impact our financial condition and results of operations.

Furthermore, if the area in which we operate or the market demand for oil and natural gas is affected by a public health crisis, such as the coronavirus, or other similar catastrophic event outside of our control, our business and results of operations could suffer.

Furthermore, if the area in which we operate or the market demand for oil and natural gas is affected by a public health crisis, such as the COVID-19 pandemic, or other similar catastrophic event outside of our control, our business and results of operations could be adversely impacted.

The sand mining operations are subject to a number of risks relating to the proppant industry.

In connection with the OneStim Acquisition, we acquired two state-of-the-art sand mines in the Permian Basin.

We operate two sand mines in the Permian Basin.

Sand mining operations are subject to risks normally encountered in the proppant industry.

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however, federal regulatory authorities and analogous state agencies may continue to propose changes in their regulations regarding workplace exposure to crystalline silica, such as permissible exposure limits, required controls and personal protective equipment.

We may not be able to comply with any new laws and regulations that are adopted, and any new laws and regulations could have a material adverse effect on our operating results by requiring us to modify or cease our operations.

We may not be able to comply with any new laws and regulations that are adopted, and any new

laws and regulations could have a material adverse effect on our operating results by requiring us to modify or cease our operations.

In addition, the inhalation of respirable crystalline silica is associated with the lung disease silicosis.

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Furthermore, we may incur additional costs with respect to purchasing specialized equipment designed to reduce exposure to crystalline silica in connection with our operations or invest capital in new equipment.

We are subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on numerous aspects of its operations.

We are subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on certain aspects of our operations.

Our operations are subject to the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006, which imposes stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including the training of personnel, operating procedures, operating equipment, and other matters.

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Our Amended and Restated Certificate of Incorporation (as amended, the “Charter”) provides that unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Charter or the Company’s bylaws, or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine, in each such case subject to Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.

Our Second Amended and Restated Bylaws (the “Bylaws”) further provide that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933 (the “Securities Act”).

Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Under the Securities Act, federal and

state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

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Our share repurchase program may be modified, suspended, extended or terminated by the Company at any time and without notice.

Risks Related to the OneStim Acquisition

The Company's results may suffer if it does not effectively manage its expanded operations following the OneStim Acquisition.

Since the OneStim Acquisition, the size of the Company’s business has increased significantly.

In addition, we now own and operate two sand mines.

While we have retained qualified personnel to operate the mines, we have not undertaken mining operations in the past.

The Company’s future success will depend, in part, on the Company’s ability to manage this expanded business, which poses numerous risks and uncertainties.

Following the OneStim Acquisition, we expanded our operations to Canada and may be subject to increased business and economic risks.

The Company has historically owned and operated its assets exclusively within the United States.

In connection with the OneStim Acquisition, we acquired certain Canadian assets and liabilities, which marked our entry into a new geographical territory where we had limited experience in owning and operating assets and providing our services.

As a result, we are subject to a variety of risks inherent in doing business internationally, including:

risks related to the legal and regulatory environment in foreign jurisdictions;

fluctuations in currency exchange rates;

complying with multiple tax jurisdictions;

difficulties in staffing and managing international operations and the increased travel, infrastructure and compliance costs associated with international locations and employees;

regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash;

complying with statutory equity requirements;

and complying with the U.S.

Foreign Corrupt Practices Act and the Corruption of Foreign Public Officials Act (Canada) and other similar laws in Canada.

If we fail to manage our operations in Canada successfully, our business may suffer.

Unresolved Staff Comments

Information regarding our properties is contained in “Item 1.

Business” and is incorporated by reference herein.

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