What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 75 added, 69 removed, 283 unchanged (34% of the section changed)

1 unchanged sentence

The discussion and analysis of the financial condition and results of operations of Natural Gas Services Group, Inc.

(the “Company”, “NGS”, “Natural Gas Services Group”, “we,” “us” or “our”) for the periods ended June 30, 2025, and 2024 are based on, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024.

(the “Company”, “NGS”, “Natural Gas Services Group”, “we,” “us” or “our”) for the periods ended September 30, 2025, and 2024 are based on, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024.

The following discussion contains forward-looking statements that include risks and uncertainties.

1 unchanged sentence

All dollar amounts presented in the tables that follow are in thousands unless otherwise indicated.

References to “quarters” represent the three months ended June 30, 2025, or 2024, as applicable.

References to “quarters” represent the three months ended September 30, 2025, or 2024, as applicable.

Certain variances that represent results that are not meaningful are indicated as “NM.”

1 unchanged sentence

Substantially all of our compressor assembly is done by third-party contractors while a limited level of assembly work remains in-house at our Tulsa, Oklahoma facility.

We also provide an exchange and rebuild program for compressors and maintain an inventory of new and used compressors to facilitate this business.

We also provide an exchange and rebuild program for compressors and maintain an inventory of new and used compressors and parts to facilitate this business.

Our primary focus is on the rental of natural gas and electric compressors.

8 unchanged sentences

The following table summarizes our key operating statistics as of the dates or for the periods presented, as applicable:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

13 unchanged sentences

Rental revenues as a percent of total revenues 95.6 % 91.8 % 95.1 % 91.3 %

Of the total horsepower utilized as of June 30, 2025, 391,785 of horsepower was being rented under contracts expiring between 2025 and 2030 and 106,866 of horsepower was being rented on a month-to-month basis.

Of the total horsepower utilized as of September 30, 2025, 391,045 of horsepower was being rented under contracts expiring between 2025 and 2030 and 134,970 of horsepower was being rented on a month-to-month basis.

Our Performance Trends and Outlook

24 unchanged sentences

The following table calculates our gross margin, the most directly comparable GAAP financial measure, and reconciles it to Adjusted Gross Margin with further detail by revenue classification for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

26 unchanged sentences

The following table reconciles our net income, the most directly comparable GAAP financial measure, to Adjusted EBITDA for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 2025 2024

3 unchanged sentences

Depreciation and amortization 9,249 8,086 26,854 22,878

Impairments — 136 — 136

Inventory allowance — — 61 —

4 unchanged sentences

Results of Operations

Three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024.

Three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024.

We generate revenue primarily from renting, maintaining and servicing compressors to our customers under contractual arrangements.

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The following table summarizes the revenues, costs, adjusted gross margin and related operating statistics with respect to our rentals of compressors for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

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Units utilization 65.3 % 64.4 % 0.9 % 65.3 % 64.4 % 0.9 %

Customers under contract 63 73 (10) (13.7) % 63 73 (10) (13.7) %

Rental revenue increased for the three and six months ended June 30, 2025, as compared to the corresponding periods in 2024 due primarily to an increase in rented horsepower despite a decrease in the number of units rented and a decrease in total customers.

The increase in revenue reflects a continuing trend of growing demand for our higher horsepower units (400 horsepower and greater) which provide for higher rental rates and realized adjusted gross margins.

Our utilized horsepower increased marginally during the second quarter of 2025 as compared to the prior year period which reflects the continued addition of high horsepower compressor units to our fleet consistent with our emphasis on larger units over the past few years, as well as the retirement of certain older medium and small horsepower units from the fleet partially offset by the return of lower horsepower units to the fleet by certain customers at the end of their lease terms.

Through June 30, 2025, we placed into service a total 181 newly set units, including 166 from our existing fleet and 15 new units.

Of those sets, a total of 48 were high horsepower units and 15 of those were new units to the fleet.

The decline in customers is primarily attributable to E&P industry consolidation as well as the acquisition of existing producing oil and gas properties among E&P companies;

however, it has not resulted in any meaningful decrease in our level of business activity.

Rental revenue increased for the three and nine months ended September 30, 2025, as compared to the corresponding periods in 2024 due primarily to an increase in rented horsepower and units despite a decrease in total customers.

The increase in revenue reflects a continuing trend of growing demand for our large horsepower units (400 horsepower and greater) which provide for higher rental rates and realized adjusted gross margins.

Our utilized horsepower increased during the third quarter of 2025 as compared to the prior year period which reflects the continued addition of large horsepower units to our fleet consistent with our emphasis on larger units over the past several years, as well as the retirement of certain older medium and small horsepower units from the fleet partially offset by the return of small horsepower units to the idle fleet by certain customers at the end of their lease terms.

Through September 30, 2025, we placed into service a total of 229 newly set units, including 188 from our existing fleet and 41 new units.

Of those unit sets, a total of 78 were large horsepower units and 41 of those were new units to the fleet.

The cost of rentals increased on an absolute basis due to the effects of supporting a larger quantity of utilized horsepower and inflationary pressures primarily in labor and parts costs.

An expanding portion of our rented compressor units utilize our proprietary System Management and Recovery Technology (“SMART”) and telemetry software which reduces unplanned shutdowns and increases productivity.

Despite inflationary pressure associated with our primary cost components, the SMART and telemetry technology allows us to streamline and manage our maintenance activities more efficiently and thereby mitigating the costs to a manageable extent.

As a result of these factors, our adjusted gross margin increased on both an absolute basis as well as a percentage of revenues for the three and six months ended June 30, 2025, compared to the comparable periods in 2024.

As a result of these factors, our adjusted gross margin increased on both an absolute basis as well as a percentage of revenues for the three and nine months ended September 30, 2025, compared to the comparable periods in 2024.

We generate revenue from the sale of assembled compressors and parts, as well as exchange/rebuilding customer owned compressors and the sale of used rental equipment.

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The following table summarizes the revenues, costs and adjusted gross margin with respect to our sales of compressors, parts and equipment and repair/overhaul services for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

4 unchanged sentences

Percent of total company revenues 1.1 % 4.5 % (3.4) % 2.5 % 5.7 % (3.2) %

Sales revenue declined for the three and six months ended June 30, 2025, compared to the corresponding periods in 2024.

Sales revenue declined for the three and nine months ended September 30, 2025, compared to the corresponding periods in 2024.

Sales are subject to fluctuations in the timing of industry activity related to our customers’ capital projects and, as such, can vary substantially between periods.

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While the costs to support our sales revenues declined on an absolute basis, primarily reflecting a lower volume of business, the gross margins declined to negative values due primarily to indirect labor and fixed overhead costs that are not otherwise subject to capitalization at our assembly, repair and overhaul facilities, as well as severance and other continuing costs primarily at the location in Midland, Texas which we closed at the end of March 2025.

Sales represented an insignificant portion of our gross margin in the three and six months ended June 30, 2025, and 2024, respectively.

Sales represented an insignificant portion of our gross margin in the three and nine months ended September 30, 2025, and 2024, respectively.

Aftermarket Service

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The following table summarizes the revenues, costs and adjusted gross margin with respect to our aftermarket services for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

4 unchanged sentences

Percent of total company revenues 3.3 % 3.7 % (0.4) % 2.4 % 3.0 % (0.6) %

Third party aftermarket services revenues and costs declined for the three months ended June 30, 2025, compared to the corresponding periods during 2024;

Third party aftermarket services revenues and costs declined for the three and nine months ended September 30, 2025, compared to the corresponding periods during 2024;

however, the absolute gross margins and percentages both improved over the prior periods in 2024.

The decline in revenue and costs is primarily attributable to a marginally lower volume of unit commissioning work performed during the 2025 periods compared to 2024 as well as the effect of lower freight costs.

Aftermarket services represented an insignificant portion of our gross margin in the three and six months ended June 30, 2025, and 2024, respectively.

Aftermarket services represented an insignificant portion of our gross margin in the three and nine months ended September 30, 2025, and 2024, respectively.

Selling, General and Administrative Expenses

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In addition, SG&A includes non-personnel costs, such as occupancy costs, IT support costs, professional fees and other supporting corporate expenses including public company compliance costs.

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

3 unchanged sentences

SG&A expenses as a percent of total revenues 13.5 % 13.4 % 0.1 % 13.2 % 13.1 % 0.1 %

SG&A expenses increased during the three and six months ended June 30, 2025, as compared to the corresponding periods in 2024.

SG&A expenses increased during the three and nine months ended September 30, 2025, as compared to the corresponding periods in 2024.

In general, the increase in our total SG&A expenses reflects a higher level of cost to appropriately scale our administrative function.

The marginal increase in primary SG&A expenses during the three months ended June 30, 2025 as compared to 2024 reflects (i) higher information technology support costs of $0.2 million, (ii) higher public company costs of $0.1 million and (iii) higher occupancy and office costs of $0.1 million which were substantially offset by (i) lower credit loss expenses of $0.1 million, (ii) lower compensation costs of $0.1 million and (iii) lower professional fees of $0.1 million.

The increase in primary SG&A expenses during the six months ended June 30, 2025 compared to 2024 was impacted by (i) higher information technology support costs of $0.4 million in support of our growth initiatives, (ii) higher salaries and benefits of $0.2 million reflecting support staff growth (iii) higher public company costs of $0.1 million and (iv) marginally higher occupancy and office costs of $0.1 million.

These increases were partially offset by $0.1 million of lower professional fees and credit loss expense on a combined basis.

The increase in primary SG&A expenses during the three months ended September 30, 2025 as compared to 2024 reflects (i) higher information technology support costs of $0.3 million, (ii) higher occupancy and office costs of $0.2 million and (iii) higher salaries and benefits costs of $0.1 million which were partially offset by (i) lower credit loss expenses of $0.1 million and (ii) lower commissions of $0.2 million.

The increase in primary SG&A expenses during the nine months ended September 30, 2025 as compared to 2024 was impacted by (i) higher information technology support costs of $0.7 million in support of our growth initiatives, (ii) higher salaries and benefits of $0.7 million reflecting support staff growth (iii) higher public company costs of $0.2 million and (iv) higher occupancy and office costs of $0.2 million.

These increases were partially offset by (i) lower commissions of $0.6 million and (ii) lower credit loss expenses of $0.2 million .

Our equity classified stock-based compensation increased during both periods in 2025 over 2024 due primarily to a higher mix of performance-based share unit awards, or PSUs, for our executive officers in the 2025 period.

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The following table summarizes the components of our depreciation and amortization expenses for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

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Depreciation and amortization as a percent of total revenues 21.3 % 19.9 % 1.4 % 21.3 % 19.7 % 1.6 %

Depreciation and amortization expense increased for the three and six months ended June 30, 2025, as compared to the corresponding periods in 2024, due primarily to depreciation expense associated with the high horsepower units placed in service during the second half of 2024 continuing through June 30, 2025.

Depreciation and amortization expense increased for the three and nine months ended September 30, 2025, as compared to the corresponding periods in 2024, due primarily to depreciation expense associated with the high horsepower units placed in service during the second half of 2024 continuing through September 30, 2025.

These higher horsepower unit additions, which began in earnest during 2023, are reflective of our strategic plans to concentrate our business development on these higher margin applications.

We assess our long-lived assets for impairment on an annual basis or when indicators of impairment are present.

An impairment loss is recognized if the future undiscounted cash flows associated with the asset (or asset group) and the estimated fair value of the asset are less than the asset’s carrying value.

The following table indicates the charges incurred for impairments for the periods presented:

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

Impairments $ — $ 136 $ (136) NM $ — $ 136 $ (136) NM

During the third quarter of 2024, we fully impaired certain information technology assets for which we terminated plans to develop and utilize the associated applications.

Inventory Allowance

2 unchanged sentences

The following table indicates the charges incurred for inventory allowance for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

1 unchanged sentence

During three months ended March 31, 2025 , we recorded a nominal increase to the allowance for obsolescence primarily attributable to the transfer of inventory that remains useful from our former Midland, Texas facility, in connection with its closing in March 2025, to our other operating facilities.

All of remaining inventory from the Midland, Texas facility that was subject to the allowance for obsolescence was written off during the three months ended March 31, 2025.

As of June 30, 2025, we had an inventory obsolescence balance of $2.5 million as compared to $5.9 million as of December 31, 2024.

All of the remaining inventory from the Midland, Texas facility that was subject to the allowance for obsolescence was written off during the three months ended March 31, 2025.

As of September 30, 2025, we had an inventory obsolescence balance of $2.5 million as compared to $5.9 million as of December 31, 2024.

Please see Note 4 ( “ Inventory ” ) to our Condensed Consolidated Financial Statements for additional information regarding the inventory allowance.

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The following table indicates the charges incurred for the retirement of rental equipment for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

Retirement of rental equipment $ — $ — $ — NM $ 728 $ 5 $ 723 NM

We retired certain small and medium horsepower compressor units during the six months ended June 30, 2025 with only those units retired during the three months ended March 31, 2025 and 2024 having any remaining carrying value .

We retired certain small and medium horsepower compressor units during the nine months ended September 30, 2025 with only those units retired during the three months ended March 31, 2025 and 2024 having any remaining carrying value .

Such retirements were minimal during the comparable periods during 2024.

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The following table presents the gains recognized upon the sale of assets for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

Gain on the disposition of assets, net $ 46 $ 246 $ (200) NM $ 224 $ 475 $ (251) NM

Gains recognized during the three and six months ended June 30, 2025 are primarily attributable to the sales of trucks after the completion of their useful lives.

Gains recognized during the three and nine months ended September 30, 2025 and 2024 are primarily attributable to the sales of trucks after the completion of their useful lives.

Interest Expense

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The following table presents the components of our interest expense for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

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Weighted-average outstanding borrowings $ 202,129 $ 163,000 $ 39,129 $ 184,826 $ 167,095 $ 17,731

Interest expense increased for the three and six months ended June 30, 2025, as compared to the corresponding periods in 2024 , due primarily to the effect of $0.8 million and $1.3 million lower capitalized interest, respectively, due primarily to the volume and timing of the completion of certain compressor assembly projects in the 2025 periods.

In addition, amortization of debt issue costs increased during the three and six months ended June 30, 2025, as compared to the comparable periods in 2024 due primarily to the amortization of costs associated with certain amendments to the Credit Facility that took place in June of 2024 as well as the the Fourth Amendment to the Amended and Restated Credit Agreement (the “Fourth Amendment”) that was completed in April 2025.

While the average borrowings outstanding under our Credit Facility have increased during the three and six months ended June 30, 2025, as compared to the comparable periods in 2024, we experienced lower average interest rates consistent with the Federal Reserve interest rate reductions implemented in the second half of 2024 as well as the lower interest rates attributable to the Fourth Amendment.

Interest expense increased for the three and nine months ended September 30, 2025, as compared to the corresponding periods in 2024 , due primarily to the effect of $0.4 million and $1.7 million lower capitalized interest, respectively, due primarily to the volume and timing of the completion of certain compressor assembly projects in the 2025 periods.

In addition, amortization of debt issue costs increased during the three and nine months ended September 30, 2025, as compared to the comparable periods in 2024 due primarily to the amortization of costs associated with certain amendments to the Credit Facility that took place in June of 2024 as well as the the Fourth Amendment to the Amended and Restated Credit Agreement (the “Fourth Amendment”) that was completed in April 2025.

While the average borrowings outstanding under our Credit Facility have increased during the three and nine months ended September 30, 2025, as compared to the comparable periods in 2024, we experienced lower average interest rates consistent with the Federal Reserve interest rate reductions implemented in the second halves of 2024 and 2025 as well as the lower interest rates attributable to the Fourth Amendment.

Other Income (Expense), net

This caption primarily reflects non-operating items of income and loss including non-cash gains and losses attributable to our corporate-owned life insurance (“COLI”) policies related to our deferred compensation plan.

The following table indicates our other income (expense) for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

Other income (expense), net $ 222 $ (15) $ 237 NM $ 325 $ 148 $ 177 NM

Other income (expense), net improved for the three months ended June 30, 2025 as compared to the corresponding period in 2024 due primarily to certain non-operating credits and unrealized gains attributable to our COLI policies associated with our deferred compensation plan while the six months ended June 30, 2025 declined as compared to the comparable period in 2024, due primarily to higher unrealized gains attributable to our COLI policies in the 2024 period.

Other income (expense), net improved for the three and nine months ended September 30, 2025 as compared to the corresponding periods in 2024 due primarily to certain non-operating credits and scrap asset sales as well as unrealized gains attributable to our COLI policies associated with our deferred compensation plan.

Provision for Income Taxes

3 unchanged sentences

The following table summarizes our income tax provision for the periods presented:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2025 2024 Change % 2025 2024 Change %

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The accordion feature is subject to certain conditions, including the absence of a default, the consent of new or existing lenders willing to provide additional commitments, and our pro forma compliance with the Credit Facility ’ s financial covenants.

As of June 30, 2025, the borrowing base under the Credit Facility was $354.3 million with $182.0 million of borrowings outstanding leaving $172.3 million of availability under the Credit Facility.

As of September 30, 2025, the borrowing base under the Credit Facility was $371.0 million with $208.0 million of borrowings outstanding leaving $163.0 million of availability under the Credit Facility.

Our cash flows from operating and investing activities are subject to a degree of volatility due primarily to (i) the consistency of our customers in remitting amounts owed to us for our services in full and on a timely basis and (ii) the timing of payments to our vendors and suppliers for capital projects which are often made well in advance of placing new compressor equipment into service.

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Cash From Operating Activitie s.

As of June 30, 2025, we had $0.3 million on hand and our cash provided by operating activities was $32.3 million for the six months ended June 30, 2025.

Our cash provided by operating activities was $49.1 million for the nine months ended September 30, 2025.

For additional information and an analysis of our historical cash flows from operating activities, see the “Cash Flows” discussion that follows.

Credit Facility Borrowings .

During the six months ended June 30, 2025, we borrowed $12.0 million, net of repayments, under the Credit Facility.

The following table summarizes our borrowing activity under the Credit facility for the period presented:

During the nine months ended September 30, 2025, we borrowed $38.0 million, net of repayments, under the Credit Facility.

The following table summarizes our borrowing activity under the Credit facility for the periods presented:

Borrowings Outstanding

End of Period Weighted-average Maximum Weighted-average Rate

Three months ended June 30, 2025 $ 182,000 $ 175,427 $ 182,000 7.46 %

Six months ended June 30, 2025 $ 182,000 $ 172,867 $ 182,000 7.68 %

Three months ended September 30, 2025 $ 208,000 $ 202,129 $ 208,000 7.08 %

Nine months ended September 30, 2025 $ 208,000 $ 184,826 $ 208,000 7.46 %

For additional information regarding the terms and covenants under the Credit Facility, see the “Capitalization” discussion that follows.

6 unchanged sentences

The following table summarizes our cash flows for the periods presented:

Six months ended June 30,

Nine months ended September 30,

Net cash provided by operating activities $ 49,062 $ 57,037

1 unchanged sentence

Net cash (used in) provided by financing activities 35,617 (2,692)

Net increase in cash and cash equivalents

$ (1,817) $ 870

Net decrease in cash and cash equivalents $ (2,142) $ (2,336)

Cash Flows from Operating Activities.

Our cash flows from operating activities increased by $1.1 million during the six months ended June 30, 2025, as compared to the comparable period in 2024.

From a broad perspective, cash flows improved due to:

(i) growth in accounts payable, (ii) substantial progress in improving our processes for billings and collections from certain customers and lowering our “days sales outstanding” statistics for accounts receivable and (iii) higher realized margins attributable to growth in our high horsepower unit rentals.

Our accounts receivable efforts arose from the negative impact on working capital during 2023 and into 2024 as our rental activities began to grow significantly.

We anticipate a continued focus on these efforts throughout 2025 as we concentrate on further improvements to our working capital performance statistics.

Our cash flows from operating activities decreased by $8.0 million during the nine months ended September 30, 2025, as compared to the comparable period in 2024.

From a broad perspective, cash flows declined in the 2025 period due primarily to the substantial progress made in the 2024 period for improving our processes for billings and collections from certain customers that had the effect of lowering our days sales outstanding (“DSO”) statistics for accounts receivable accounts.

While these efforts have continued with favorable DSO performance into 2025, the timing effect was more beneficial during the 2024 period while the 2025 period reflects a more normalized cash operating cycle.

In addition, we increased our maintenance parts inventory in the 2025 period in support of our growing fleet.

These working capital uses were partially offset by growth in accounts payable and the favorable effects of higher realized margins attributable to growth in our high horsepower unit rentals.

Cash Flows from Investing Activities.

For the six months ended June 30, 2025, and 2024, we invested approximately $45.1 million and $28.3 million, respectively, in rental equipment, property and other equipment.

Included in these totals for 2025 and 2024 were $41.2 million and $28.2 million in new equipment to our rental fleet and $3.9 million and less than $0.1 million in other property and equipment, respectively.

For the nine months ended September 30, 2025, and 2024, we invested approximately $86.9 million and $57.4 million, respectively, in rental equipment, property and other equipment.

Included in these totals for 2025 and 2024 were $82.3 million and $54.7 million in new equipment to our rental fleet and $4.7 million and $2.7 million in other property and equipment, respectively.

Our investment in rental equipment includes any changes to work-in-progress related to our rental fleet projects at the beginning of the year compared to the end of the year.

Cash Flows from Financing Activities.

During the six months ended June 30, 2025 we had net borrowings of $12.0 million and for the six months ended June 30, 2024, we had net repayments of $1.0 million under the Credit Facility.

During the nine months ended September 30, 2025 we had net borrowings of $38.0 million and for the nine months ended September 30, 2024, we had net repayments of $1.0 million under the Credit Facility.

We paid debt issuance costs that were $0.3 million higher in connection with the Fourth Amendment in the 2025 period as compared to the costs for amendments to the Credit Facility in 2024.

The 2025 period includes a payment of $1.3 million for our first common stock dividend.

Capitalization

The following table summarizes our total capitalization as of the dates presented:

June 30, December 31,

September 30, December 31,

Credit facility borrowings $ 208,000 $ 170,000

12 unchanged sentences

Please see Note 9 ( “ Long-Term Debt ” ) to our Condensed Consolidated Financial Statements for a thorough discussion of these matters regarding our Credit Facility.

As of June 30, 2025 we had $182.0 million outstanding under our Credit Facility with a weighted average interest rate of 7.23%.

As of June 30, 2025, we had approximately $172.3 million available for borrowing under the Credit Facility, subject to a borrowing base determination.

As of June 30, 2025, we were in compliance with all financial covenants in our Credit Facility.

As of September 30, 2025 we had $208.0 million outstanding under our Credit Facility with a weighted average interest rate of 7.04%.

As of September 30, 2025, we had approximately $163.0 million available for borrowing under the Credit Facility, subject to a borrowing base determination.

As of September 30, 2025, we were in compliance with all financial covenants in our Credit Facility.

Critical Accounting Estimates

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From time-to-time, we enter into off-balance sheet arrangements and transactions that can give rise to off-balance sheet obligations.

As of June 30, 2025, the off-balance sheet arrangements and transactions that we have entered into include purchase agreements for certain compressor unit components that are fully anticipated consistent with our capital expenditure plans.

As of September 30, 2025, the off-balance sheet arrangements and transactions that we have entered into include purchase agreements for certain compressor unit components that are fully anticipated consistent with our capital expenditure plans.

We do not believe that these arrangements are reasonably likely to materially affect our liquidity or availability of capital resources.

2 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis