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Item 1A. Risk Factors

2026-02-19 compared with 2025-02-20 · 248 added, 211 removed, 318 unchanged (59% of the section changed)

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Our business and financial performance depends on the historically cyclical oil and natural gas industry and particularly on the level of capital spending and E&P activity within the United States and in the Permian Basin, and a decline in prices for oil and natural gas may cause fluctuation in operating results or otherwise have an adverse effect on our revenue, cash flows, profitability and growth.

Demand for most of our services depends substantially on the level of capital expenditures in the Permian Basin by companies in the oil and natural gas industry.

As a result, our operations are dependent on the levels of capital spending and activity in oil and gas exploration, development and production.

Demand for our services is largely dependent on oil and natural gas prices, and our customers’ well completion budgets and rig count.

Prolonged low oil and gas prices would generally depress the level of oil and natural gas exploration, development, production, and well completion activity and would result in a corresponding decline in the demand for the completion services that we provide.

Demand for most of our services depends substantially on the level of capital expenditures in the Permian Basin by companies in the oil and natural gas industry Activity levels and spending by our customers and, correspondingly, demand for our services, is largely dependent on oil and natural gas prices, our customers’ well completion budgets and rig count.

Prolonged low oil and natural gas prices would generally depress the level of oil and natural gas exploration, development, production, and well completion activity and would result in a corresponding decline in the demand for the completion services that we provide.

Historically, oil prices and markets have been extremely volatile.

Prices are affected by many factors beyond our control.

The average WTI oil price per barrel was approximately $76 , $78 and $94 for the years ended December 31, 2024, 2023, and 2022, respectively.

In 2023, the volatility and overall decline in oil and natural gas prices caused a reduction in our customers’ spending and associated drilling and completion activities, which has had and may continue to have an adverse effect on our revenue and cash flows, if the WTI oil price remains highly volatile or declines in the future.

The average WTI oil price per barrel was approxi mately $65, $76 and $78 for the years ended December 31, 2025, 2024, and 2023, r espectively.

In 2025, price volatility continued and crude oil prices generally declined, contributing to reductions in our customers’ spending and associated drilling and completion activities, which has had and may continue to have an adverse effect on our revenue and cash flows, if the WTI oil price remains highly volatile or declines further in the future.

Such trends are expected to continue in 2026.

In addition, such volatility and reduction in our customers’ spending and associated drilling and completion activities could also reduce the prices we receive for our services and impact the number of fleets that we are able to deploy, which would also have an adverse effect on our revenue and cash flows.

See “The cyclical nature of the oil and natural gas industry may cause our operating results to fluctuate.”

Many factors over which we have no control affect the supply of, and demand for our services, and our customers’ willingness to explore, develop and produce oil and natural gas, and therefore, influence prices for our services, including:

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• the domestic and foreign supply of, and demand for, oil and natural gas;

• the level of prices, and expectations about future prices, of oil and natural gas;

• the level of prices, and expectations about future prices, of oil and natural gas, including a potential increase in Venezuelan oil supply and any related impact on global oil prices and domestic oil production;

• the level of global oil and natural gas E&P;

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• domestic and foreign tax policy;

• domestic and foreign governmental approvals and regulatory requirements and conditions, including tighter emissions standards in the energy industry and proposed tariffs;

• the result of the U.S presidential election;

• domestic and foreign governmental approvals and regulatory requirements and conditions, including tighter emissions standards in the energy industry and proposed or existing tariffs;

• the continued threat of terrorism and the impact of military and other action, including military action in the Middle East;

• political or civil unrest in the United States or elsewhere, including the Russia-Ukraine war and the conflict in the Israel-Gaza region and related instability in the Middle East, including from Houthi rebels in Yemen, and tensions with Iran;

• technical advances affecting energy consumption;

intervention in Venezuela;

• technical advances affecting energy consumption, including resulting from artificial intelligence (“AI”);

• the proximity and capacity of oil and natural gas pipelines and other transportation facilities;

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These factors and the volatility of the energy markets make it extremely difficult to predict future oil and natural gas price movements with any certainty.

In 2022, Russia launched a large-scale invasion of Ukraine, leading to armed hostilities and imposition of sanctions on Russian economic trades.

Since October 2023, an ongoing conflict between Israel and Palestinian militants in the Israel-Gaza region has led to armed hostilities.

These events, which have impacted economic activity and disrupted global supply chain dynamics, have contributed to the unpredictable nature of crude oil prices.

The cyclical nature of the oil and natural gas industry may cause our operating results to fluctuate.

We derive our revenues from companies in the oil and natural gas E&P industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices.

We derive substantially all of our revenues from companies in the oil and natural gas E&P industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices.

We have experienced, and may in the future experience, significant fluctuations in operating results as a result of the reactions of our customers to changes in oil and natural gas prices.

For example, a decline in oil and gas prices, combined with adverse changes in the capital and credit markets, could cause many E&P companies to significantly reduce their 2020 and 2021 capital budgets and drilling activity.

This could result in a significant decline in demand for energy services and could adversely impact the prices energy service companies can charge for their services.

These factors have materially and adversely affected our business, results of operations and financial condition.

In addition, a majority of the service revenue we earn is based upon a charge for a relatively short period of time (for example, a day, a week or a month) for the actual period of time the service is provided to our customers.

By contracting services on a short‑term basis, we are exposed to the risks of a rapid reduction in market prices and utilization and resulting volatility in our revenues.

For example, during 2025 and into early 2026, price volatility has continued and crude oil prices have generally declined.

If such prices do not improve or decline further, E&P companies may reduce their capital budgets and drilling activity.

This could result in a significant decline in demand for energy services and could adversely impact the prices we can charge for our services and impact the number of fleets that we are able to deploy.

These factors have in the past materially and adversely affected our business, results of operations and financial condition and may do so in the future.

In addition, a material portion of the service revenue we earn is based upon a charge for a relatively short period of time (for example, a day, a week or a month) for the actual period of time our service is provided to our customers.

Across our businesses, we consider contracts with term length of twelve months or more to be long-term contracts.

We occasionally obtain longer-term contractual arrangements for certain of our hydraulic fracturing services and our PROPWR SM business line typically contracts for services on a long-term basis.

Many of our power generation services involve long sales cycles.

The sales cycle for our power generation services, from initial contact with potential customers to the commencement of field deployment, may be lengthy.

Customers generally consider a wide range of solutions before making a decision to contract for power generation services.

Before a customer commits to a contract for power generation services, it often requires a significant technical review, assessment of competitive offerings and approval at a number of management levels within its organization.

During the time our customers are evaluating our offerings, we may incur substantial sales and marketing, engineering and research and development expenses, which we may ultimately be unable to offset with recognized profits.

Our PROPWR SM business line exposes us to the significant risks and uncertainties associated with establishment of a new line of business, and such business line may not achieve the results we anticipate.

The mobile power business is developing and evolving rapidly, and we and others are seeking to procure equipment and enter into contracts with customers for the deployment of such equipment.

Procurement of mobile power equipment requires that we make long lead-time commitments to purchase such equipment from the manufacturer and a corresponding increased capital expenditure commitment.

Customer demand for our power equipment may be lower than we project, which could result in an inability or delay in deploying equipment, less growth in such business than we are projecting and reduced financial returns from such business.

In addition, changes in customer demand or an excess supply of mobile power equipment could result in a supply and demand imbalance that depresses prices.

There are limited manufacturers of mobile power equipment, and we may experience delays or difficulties in procuring the specialized equipment required to support this business line.

Such delays or difficulties in procuring equipment could be caused by increasing demand and orders by our competitors and limitations on the manufacturers’ ability to timely deliver such equipment.

In addition, such equipment requires the expenditure of significant capital, much of which we have in the past and will in the future obtain through debt or other financing structures.

Such financing may not be available at all or on attractive terms.

In addition, financing the procurement of such equipment exposes us to the risks associated with greater financial leverage on our business.

See “—Our indebtedness and liquidity needs could restrict our operations and adversely affect our financial condition.”

In addition, market prices for the products or services offered in this new business line may decline due to competitive pressures, technological changes or other factors, any of which would reduce our projected growth in the power business and our financial returns.

The mobile power equipment we acquire could fail to meet customer expectations or become obsolete due to competition, such as from the installation of utility power, changing customer preferences or the introduction of new technologies.

Additionally, our PROPWR SM business could fail to meet operational requirements in contracts with customers in the field.

The failure of our PROPWR SM business to become established and grow as we are projecting for any of the foregoing reasons, or for reasons we cannot currently anticipate, could materially and adversely affect our financial condition and results of operations.

The majority of our operations are located in the Permian Basin, making us vulnerable to risks associated with operating in one major geographic area.

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For the years ended December 31, 2025, 2024 and 2023, approximately 100.0%, 98.5% and 98.1%, respectively, of our revenues were attributable to our operations in the Permian Basin.

As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in the Permian Basin caused by significant governmental regulation, processing or transportation capacity constraints, market limitations, curtailment of production or interruption of the processing or transportation of oil and natural gas produced from the wells in these areas.

As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from or drilling and completions activity with respect to wells in the Permian Basin caused by weather, significant governmental regulation, processing or transportation capacity constraints, market limitations, curtailment of production or interruption of the processing or transportation of oil and natural gas produced from the wells in these areas.

For example, winter weather conditions in January 2026 across the Permian Basin have resulted in a multi-day suspension of substantially all of our operations, which may negatively impact our results of operations in the first quarter of 2026.

In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic oil and natural gas producing areas such as the Permian Basin, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions.

Due to the concentrated nature of our operations, we could experience any of the same conditions at the same time, resulting in a relatively greater impact on our revenue than they might have on other companies that have more geographically diverse operations.

The IRA 2022 could accelerate the transition to a low carbon economy and could impose new costs on our customers’ operations.

The IRA 2022, signed into law in August 2022, provides for hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

If not modified, repealed or revoked by the current administration, these incentives could further accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for oil and gas and consequently adversely affect the business of our customers, thereby reducing demand for our services.

In addition, the IRA 2022 imposes the first ever federal fee on the emission of GHG through a methane emissions charge.

The IRA 2022 amends the federal CAA to impose a fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the offshore and onshore petroleum and natural gas production and gathering and boosting source categories.

The methane emissions charge began in calendar year 2024 at $900 per ton of methane, increased to $1,200 in 2025, and will be set at $1,500 for 2026 and each year after.

Calculation of the fee is based on certain thresholds established in the IRA 2022.

We cannot predict whether how or when the current administration might take action to revise or repeal the methane emissions charge.

Additionally, Congress may take actions to repeal or revise the IRA 2022, including with respect to the methane emissions charge, which timing or outcome similarly cannot be predicted.

To the extent that the methane emissions charge is implemented as originally promulgated, it could increase our customers’ operating costs and adversely affect their businesses, thereby reducing demand for our services.

Our business may be adversely affected by a deterioration in general economic conditions or a weakening of the broader energy industry.

A prolonged economic slowdown or recession in the United States, adverse events relating to the energy industry or regional, national and global economic conditions and factors, particularly a further slowdown in the E&P industry, could negatively impact our operations and therefore adversely affect our results.

A prolonged economic slowdown or recession in the United States, adverse events relating to the energy industry or regional, national and global economic conditions and factors, particularly a slowdown in the E&P industry, could negatively impact our operations and therefore adversely affect our results.

The risks associated with our business are more acute during periods of economic slowdown or recession because such periods may be accompanied by decreased exploration and development spending by our customers, decreased demand for oil and natural gas and decreased prices for oil and natural gas.

For example, decreases in prices of oil and natural gas and/or our customers’ spending and activity levels could reduce the prices we receive for our services and impact the number of fleets that we are able to deploy, which would have an adverse effect on our revenue, cash flows, profitability and growth.

New technology may cause us to become less competitive.

The energy service industry is subject to the introduction of new drilling and completion techniques and services using new technologies including artificial intelligence, some of which may be subject to patent or other intellectual property protections.

The energy service industry is subject to the introduction of new drilling and completion techniques and services using new technologies, including AI, some of which may be subject to patent or other intellectual property protections.

As competitors and others use or develop new or comparable technologies in the future, we may lose market share or be placed at a competitive disadvantage.

For example, many E&P companies, including our customers, are transitioning to a lower emissions operating environment and may require us to invest in equipment with lower emissions profiles.

The transition to lower emissions equipment is capital intensive and could require us to convert all our conventional Tier II equipment to lower emissions equipment.

If we are unable to quickly transition to lower emissions equipment, the demand for our services could be adversely impacted.

For example, many E&P companies, including our customers, are transitioning to a lower emissions operating environment and may require us to invest in equipment with lower emissions profiles.

Further, we may face competitive pressure to develop, implement or acquire and deploy certain technology improvements at a substantial cost, such as our FORCE ® electric-powered hydraulic fracturing fleets deployed in 2023, or the cost of implementing or purchasing a technology like FORCE ® may be substantially higher than anticipated, and we may not be able to successfully implement the technologies we may purchase.

In 2024, we recorded a property and equipment impairment charge of $188.6 million on our conventional Tier II diesel-only hydraulic fracturing pumping units and associated conventional assets, (the "Tier II Units") because we determined that the marketability of our Tier II Units had declined due to decreasing customer demand for and related pricing pressures on such equipment, among other factors.

In 2022, we recorded a property and equipment impairment charge of $57.5 million on our DuraStim ® electric-powered equipment because they did

not meet our expectations.

Further, we may face competitive pressure to further develop, implement or acquire and deploy certain technology improvements at a substantial cost, such as additional FORCE ® electric-powered hydraulic fracturing fleets.

The cost of deploying additional FORCE ® fleets may be substantially higher than anticipated, and we may not be able to successfully implement the technologies.

In fiscal year 2024, we recorded a property and equipment impairment charge of $188.6 million on our conventional Tier II diesel-only hydraulic fracturing pumps and associated conventional assets (“Tier II Units”) because we determined that the marketability of our Tier II Units had declined due to decreasing customer demand for and related pricing pressures on such equipment, among other factors.

Some of our competitors have greater financial, technical and personnel resources that may allow them to enjoy technological advantages and develop and implement new products on a timely basis or at an acceptable cost.

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The energy service industry is capital intensive.

In conducting our business and operations, we have made, and expect to continue to make, substantial capital expenditures.

In conducting our business and operations, we have made, and expect to continue to make, substantial capital expenditures, including capital expenditures to maintain our fleet and costs related to purchase options under certain leases.

Our total capital expenditures incurred were approximately $281.2 million, $133.4 million and $310.0 million during the years ended December 31, 2025, 2024, and 2023.

Moreover, our PROPW R SM business has required us to make substantial capital expenditures for new power generation units, and these expenditures are expected to increase as we order and deploy additional units, among other business related expenditures.

During the year ended December 31, 2025, we incurred approximately $198.4 million of capital expenditures for our PROPWR SM business.

We have historically financed capital expenditures primarily with funding from cash on hand, cash flow from operations, equipment and vendor financing and borrowings under our credit facility.

We may be unable to generate sufficient cash from operations and other capital resources to maintain planned or future levels of capital expenditures which, among other things, may prevent us from acquiring new equipment (including equipment with a lower emissions profile) or properly maintaining our existing equipment.

Approximately $81.1 million of our PROPWR SM capital expenditures incurred in fiscal year 2025 were financed through vendor financing.

We may be unable to generate sufficient cash from operations and other capital resources to maintain planned or future levels of capital expenditures which, among other things, may prevent us from acquiring new equipment (including power generation equipment or hydraulic fracturing equipment with a lower emissions profile) or properly maintaining our existing equipment.

Any disruptions or volatility in the global financial markets may lead to an increase in interest rates or a contraction in credit availabil ity impacting our ability to finance our operations.

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This could put us at a competitive disadvantage or interfere with our growth plans.

Further, our actual capital expenditures could exceed our capital expenditure budget.

Further, our actual capital expenditures incurred could exceed our capital expenditure budget.

In the event our capital expenditure requirements at any time are greater than the amount of liquidity we have available, we could be required to seek additional sources of capital, which may include debt financing, joint venture partnerships, sales of assets, offerings of debt or equity securities or other means.

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Concerns over general economic, business or industry conditions may have a material adverse effect on our results of operations, liquidity and financial condition.

Concerns over global economic conditions, geopolitical issues (including the Russia-Ukraine war and conflicts in the Middle East, including tensions with Iran), public health crises, interest rates, inflation, the availability and cost of credit in the United States, foreign financial markets and potential changes in U.S trade policy, including the imposition of tariffs and the resulting consequences have contributed to increased economic uncertainty and diminished expectations for the global economy.

trade policy, including the imposition of tariffs and the resulting consequences, have contributed to increased economic uncertainty and diminished expectations for the global economy.

These factors, combined with volatility in commodity prices, business and consumer confidence and unemployment rates, could precipitate an economic slowdown.

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In addition, there is currently significant uncertainty about the future relationship between the United States and various other countries, including changes arising as a result of the current presidential administration, with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations.

T he historically unpredictable nature of oil and natural gas prices, and particularly the volatility over the past two years have caused a reduction in our customers’ spending and associated drilling and completion activities, which had and may continue to have an adverse effect on our revenue and cash flows.

The historically unpredictable nature of oil and natural gas prices, and particularly the volatility over the past two years have caused a reduction in our customers’ spending and associated drilling and completion activities, which had and may continue to have an adverse effect on our revenue and cash flows.

For example, decreases in commodity prices and/or our customers’ spending and activity levels could reduce the prices we receive for our services and impact the number of fleets that we are able to deploy, which would have an adverse effect on our revenue, cash flows, profitability and growth.

If the economic climate in the United States or abroad deteriorates or remains uncertain, worldwide demand for petroleum products could diminish, which could impact the price at which oil, natural gas and natural gas liquids can be sold, which could affect the ability of our customers to continue operations and adversely impact our results of operations, liquidity and financial condition.

Changes in U.S.

trade policy and the impact of tariffs and other trade measures may have a material adverse effect on our business and results of operations.

Our business and results of operations may be adversely affected by uncertainty and changes in U.S.

trade policies, including tariffs, trade agreements or other trade restrictions imposed by the United States or other governments.

For example, on March 12, 2025, the U.S.

government imposed a 25% tariff on steel imports, and on April 2, 2025, the U.S.

government announced a 10% tariff on product imports from almost all foreign countries and individualized higher tariffs on certain other countries.

Additionally, tariffs have been placed on the import of certain materials.

Several tariff announcements have been followed by announcements of limited exemptions and temporary pauses.

These actions are unprecedented, have caused substantial uncertainty and volatility in financial markets and may result in retaliatory measures on U.S.

Any imposition of or increase in tariffs on imports of steel or other materials, as well as corresponding price increases for such materials available domestically, could increase our material input costs and our costs to maintain our assets.

It remains unclear to what extent, upon which countries, and upon which terms, tariffs may be levied.

There also remains uncertainty regarding the full scope of tariffs, if the tariffs will be increased, decreased or eliminated altogether.

To the extent that we are unable to pass all or any such cost increases on to our customers, such cost increases could adversely affect our returns on investment.

The imposition of further tariffs by the United States on a broader range of imports, or further retaliatory trade measures taken in response to additional tariffs or uncertainty regarding such potential impacts, could increase costs in our supply chain or reduce demand for our customers’ products, either of which could adversely affect our results of operations.

The ultimate impact of these trade measures on our business operations and financial results is uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, the amount, scope, or nature of such trade measures, and our ability to execute strategies to mitigate any negative impacts.

Our indebtedness and liquidity needs could restrict our operations and adversely affect our financial condition.

Our business is capital intensive and our existing and future indebtedness, whether incurred in connection with acquisitions, operations or otherwise, may adversely affect our operations and limit our growth, and we may have difficulty making debt service payments on such indebtedness as payments become due.

Our business is capital intensive and we are employing debt and other financing arrangements to fund many of our capital expenditures, particularly those associated with the expansion of our PROPWR SM business and the acquisition and deployment of our FORCE® electric fleets.

For example, we are a party to the Caterpillar Equipment Loan Agreement (as defined below), and we entered into an Interim Funding Agreement and Master Lease Agreement (together, the “Stonebriar Equipment Lease Facility”) with Stonebriar Commercial Finance LLC (“Stonebriar”) for the right, but not the obligation, to fund up to $350.0 million of purchases of power generator equipment and entered into an amendment to our revolving credit facility (as amended, the “ABL Credit Facility”) to increase the debt basket for capital leases, purchase money debt and other similar financing facilities to $425.0 million.

We expect the Caterpillar Equipment Loan Agreement, the Stonebriar Equipment Lease Facility, and the ABL Credit Facility to provide us with additional access to capital, if needed, to facilitate the growth of our PROPWR SM business line.

Our existing and future indebtedness, whether incurred to fund such capital expenditures or to fund acquisitions, operations or otherwise, may adversely affect our operations and limit our growth, and we may have difficulty making debt service payments on such indebtedness as payments become due.

Our level of indebtedness may affect our operations in several ways, including the following:

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Furthermore, interest rates on future indebtedness could be higher than current levels, causing our financing costs to increase accordingly.

Changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our shares, and a rising interest rate environment could have an adverse impact on the price of our shares, our ability to issue equity or incur debt.

Restrictions in our ABL Credit Facility and any future financing agreements may limit our ability to finance future operations or capital needs or capitalize on potential acquisitions and other business opportunities.

The operating and financial restrictions and covenants in our credit facility and any future financing agreements could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.

Restrictions in our ABL Credit Facility, our Caterpillar Equipment Loan Agreement, our Stonebriar Equipment Lease Facility, and any future financing agreements may limit our ability to finance future operations or capital needs or capitalize on potential acquisitions and other business opportunities.

The operating and financial restrictions and covenants in our credit facility, Caterpillar Equipment Loan Agreement, Stonebriar Equipment Lease Facility and any future financing agreements could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.

For example, our ABL Credit Facility restricts or limits our ability to:

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If we violate any of the restrictions, covenants, ratios or tests in our ABL Credit Facility, a significant portion of our indebtedness may become immediately due and payable and our lenders’ commitment to make further loans to us may terminate.

Further, our borrowing base, as redetermined monthly, has a borrowing base of the sum of 85.0% to 90.0% of eligible accounts receivable and 80% of eligible unbilled accounts (up to a maximum of 25% of the borrowing base), in each case, depending on the credit ratings of our accounts receivable counterparties, less customary reserves (the “Borrowing Base”).

Further, our borrowing base, as redetermined monthly, has a borrowing base of the sum of 85% to 90% of eligible accounts receivable and 80% of eligible unbilled accounts (up to a maximum of 25% of the

borrowing base), in each case, depending on the credit ratings of our accounts receivable counterparties and subject to certain customer concentration limits, less customary reserves (the “Borrowing Base”).

Changes to our operational activity levels or customer concentration levels have an impact on our total eligible accounts receivable, which could result in significant changes to our borrowing base and therefore our availability under our ABL Credit Facility.

If our customer activity declines in the future, our borrowing base could decline.

If our borrowing base is reduced below the amount of our outstanding borrowings, we will be required to re pay the excess borrowings immediately on demand by the lenders.

If our borrowing base is reduced below the amount of our outstanding borrowings, we will be required to repay the excess borrowings immediately on demand by the lenders.

We might not have, or be able to obtain, sufficient funds to make these accelerated payments.

Any subsequent replacement of our ABL Credit Facility or any new indebtedness could have similar or greater restrictions.

Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Credit Facility and Other Financing Arrangements.”

Our Master Loan and Security Agreement and our First Amendment to Master Loan and Security Agreement with Caterpillar Financial Services Corporation (collectively, the “Caterpillar Equipment Loan Agreement”) also contains certain operating and financial covenants.

Our ability to comply with such covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions.

If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.

If we violate any of the restrictions or covenants in our Caterpillar Equipment Loan Agreement, a significant portion of our indebtedness may become immediately due and payable, our lender’s commitments to make further loans to us may terminate, and our lender will be able to foreclose on the equipment that was financed through the Caterpillar Equipment Loan Agreement.

We might not have, or be able to obtain, sufficient funds to make these accelerated payments.

Any subsequent replacement of the Caterpillar Equipment Loan Agreement or any new financing agreements could have similar or greater restrictions.

The Stonebriar Equipment Lease Facility contains restrictions similar to those set forth in the Caterpillar Equipment Loan Agreement, and if we violate those restrictions, Stonebriar would be entitled to accelerate required lease payments and obtain control over the lease equipment, among other remedies.

We may record losses or impairment charges related to goodwill and long-lived assets including intangible assets.

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Significant impairment charges or losses from asset sales as a result of a decline in market conditions or otherwise could have a material adverse effect on our results of operations in future periods.

For example, in 2024, we recorded property and equipment impairment charges of $188.6 million in connection with our Tier II Units and $23.6 million in connection with the goodwill in our wireline operating segment.

In 2022, we recorded property and equipment impairment charges of $57.5 million in connection with our DuraStim ® electric powered hydraulic fracturing equipment .

For example, in fiscal year 2024, we recorded property and equipment impairment charges of $188.6 million in connection with our Tier II Units and $23.6 million in connection with the goodwill in our Wireline operating segment.

If oil and natural gas prices trade at depressed price levels, and our equipment remains idle or under-utilized, the estimated fair value of such equipment may decline, which will result in additional impairment expense in the future.

Our operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which we may not be adequately insured and which could cause us to lose customers and substantial revenue.

Our operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas and mobile power generation industries, for which we may not be adequately insured, and which could cause us to lose customers and substantial revenue.

Our operations are exposed to the risks inherent to our industry, such as equipment defects, vehicle accidents, worksite injuries to our or third-party personnel, fires, explosions, blowouts, surface cratering, uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards, such as oil spills and releases of, and exposure to, hazardous substances.

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The occurrence of any of these events could result in substantial losses to us due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigations and penalties or other damage resulting in curtailment or suspension of our operations or the loss of customers.

For example, in January 2025, we experienced an accident at a customer site that resulted in one fatality and injured two others, which temporarily halted operations and is subject to routine investigation by OSHA.

For example, in January 2025, we experienced an accident at a customer site that resulted in one fatality and injured two others, which temporarily halted operations and resulted in our being issued a citation by the Occupational Safety and Health Administration.

The cost of managing such risks may be significant.

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Our insurance may not be adequate to cover all losses or liabilities we may suffer.

We are also self-insured up to $10 million per occurrence for certain losses arising from or attributable to fire and/or explosion at wellsites that do not have qualified fire suppression measures.

We are also self-insured up to $10 million per occurrence for certain losses.

Furthermore, we may be unable to maintain or obtain insurance of the type and amount we desire at reasonable rates.

As a result of market conditions, premiums and deductibles for certain of our insurance policies have increased and could escalate further.

As a result of market conditions, premiums and deductibles for certain of our insurance policies have

increased and could escalate further.

In addition, sub‑limits have been imposed for certain risks.

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We could experience loss of business, delays or defaults in payments from payors or disruptions of fuel supplies and markets if pipelines, production facilities, processing plants, refineries or transportation facilities are direct targets or indirect casualties of an act of terror or war.

Such activities could reduce the overall demand for oil and natural gas, which, in turn, could also reduce the demand for our services.

Such activities could reduce the overall demand for oil and natural gas and power generation, which, in turn, could also reduce the demand for our services.

Terrorist activities, the threat of potential terrorist activities, political or civil unrest and any resulting economic downturn could adversely affect our results of operations, impair our ability to raise capital or otherwise adversely impact our ability to realize certain business strategies.

We may be subject to claims for personal injury and property damage, which could materially adversely affect our financial condition and results of operations.

We operate with most of our customers under master service agreements (“MSAs”).

Outside of our mobile power business, we operate with most of our customers under master service agreements (“MSAs”).

We endeavor to allocate potential liabilities and risks between the parties in the MSAs.

Generally, under our MSAs, including those relating to our hydraulic fracturing services, we assume responsibility for, including control and removal of, pollution or contamination which originates above surface and originates from our equipment or services.

In our power business, we typically operate under power purchase agreements or power-as-a-service agreements and these agreements typically have liability allocation provisions that are similar to our MSAs.

Our customer assumes responsibility for, including control and removal of, all other pollution or contamination which may occur during operations, including that which may result from seepage or any other uncontrolled flow of drilling fluids.

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We are subject to cyber security risks.

A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss.

The oil and natural gas industry has become increasingly dependent on digital technologies to conduct certain processing activities.

A cyber incident could occur and result in information theft, data corruption, operational disruptions, reputational harm and/or financial loss.

Our and our customers’ businesses have become increasingly dependent on digital technologies to conduct certain processing activities.

For example, we depend on digital technologies to perform many of our services and process and record operational and accounting data.

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The frequency and magnitude of cybersecurity attacks is increasing and attackers have become more sophisticated.

Cybersecurity attacks are similarly evolving and include without limitation use of malicious software, surveillance, credential stuffing, spear phishing, social engineering, use of deepfakes (i.e., highly realistic synthetic media generated by artificial intelligence), attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential or otherwise protected information and corruption of data.

Cybersecurity attacks are similarly evolving and include, without limitation, use of malicious software, surveillance, credential stuffing, spear phishing, social engineering, use of deepfakes (i.e., highly realistic synthetic media generated by AI), attempts to

gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential, personally identifiable or otherwise protected information and corruption of data.

We may be unable to anticipate, detect or prevent future attacks, particularly as the methodologies used by attackers change frequently or are not identifiable until deployed.

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government has issued public warnings indicating that energy assets might be specific targets of cyber security threats.

Our technologies, systems and networks, and those of our vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary information, personal information and other data, or other disruption of our business operations.

Our technologies, systems and networks, and those of our vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of proprietary and confidential information, personally identifiable information and other data, or other disruption of our business operations.

In addition, certain cyber incidents, such as unauthorized surveillance, may remain undetected for an extended period.

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No security measure is infallible.

If we or the third parties with whom we interact were to experience a successful attack, the potential consequences to our business, workforce and the communities in which we operate could be significant, including financial losses, regulatory fines, loss of business, an inability to settle transactions or maintain operations, litigation costs, remediation costs, disruptions related to investigation, and significant damage to our reputation.

We may grow through acquisitions and/or internal expansions, and our failure to properly plan and manage such growth may adversely affect our performance.

We have completed and may in the future pursue, asset acquisitions or acquisitions of businesses.

We have internally expanded and may in the future expand into new lines of business.

Any acquisition of assets or businesses, or expansion into new lines of business involves potential risks, including the failure to realize expected profitability, growth or accretion;

If we or the third parties with whom we interact were to experience a successful attack, the potential consequences to our business, workforce and the communities in which we operate could be significant, including financial losses, regulatory fines or penalties, loss of business, an inability to settle transactions or maintain operations, litigation costs, compliance and remediation costs, disruptions related to investigation, and significant damage to our reputation.

We may pursue acquisitions, internal expansions or other strategic transactions, and our failure to properly plan and manage such growth may adversely affect our performance.

We have completed and may in the future pursue asset acquisitions, acquisitions of businesses or other strategic transactions.

We have internally expanded and may in the future expand into new lines of business, such as our new PROPWR SM business.

Any acquisition of assets or businesses, expansion into new lines of business or other strategic transactions involves potential risks, including the failure to realize expected profitability, growth or accretion;

environmental or regulatory compliance matters or liability;

title or permit issues;

the incurrence of significant charges, such as impairment of goodwill, property and equipment or intangible assets or restructuring charges;

the incurrence of significant charges, such as impairment of goodwill, property and equipment, intangible assets or restructuring charges;

and the incurrence of unanticipated liabilities and costs for which indemnification is unavailable or inadequate.

The process of upgrading acquired assets to our specifications and integrating acquired assets or businesses may also involve unforeseen costs and delays or other operational, technical and financial difficulties and may require a significant amount of time and resources and may divert management’s attention from existing operations or other priorities.

For example, in 2024, we acquired the assets and operations of AquaProp, and we are in the process of fully integrating all parts of the acquired business into our operations.

In late 2024, we also started a new line of business to provide power generation services to oil and gas producers and non-oil and gas applications such as general industrial projects and data centers.

This new line of business has not begun any revenue-generating activities yet.

We must plan and manage any acquisitions and expansions effectively to achieve revenue growth and maintain profitability in our evolving market.

Any failure to manage acquisitions and expansions effectively or integrate acquired assets or businesses into our existing operations successfully, or to realize the expected benefits from an acquisition or minimize any unforeseen operational difficulties, could have a material adverse effect on our business, financial condition, prospects or results of operations.

For example, since 2023, we acquired the assets and operations of Par Five Energy Services LLC and Aqua Prop, LLC, which required fully integrating all parts of the acquired business into our operations.

We must plan and manage any acquisitions, expansions or other strategic transactions effectively to achieve revenue growth and maintain profitability in our evolving market.

Any failure to manage acquisitions, expansions or other strategic transactions effectively or integrate acquired assets or businesses into our existing operations successfully, or to realize the expected benefits from such transactions or minimize any unforeseen operational difficulties, could have a material adverse effect on our business, financial condition, prospects or results of operations.

We may be adversely affected by the effects of inflation.

inflation rate steadily increased in 2021 and 2022 before decreasing to a moderate level in 2023 through 2024.

inflation rate steadily increased in 2022 before decreasing to a moderate level in 2023 through 2025.

Inflation in wages, materials, parts, equipment and other costs 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 products and services.

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Sustained levels of high inflation have likewise caused the U.S.

Federal Reserve and other central banks to increase interest rates in 2023 followed by decreases in 2024, and the U.S.

Federal Reserve may maintain high benchmark interest rates into 2025 in an effort to curb inflationary pressure on the costs of goods and services across the U.S., which could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt the financial and operating results of our business.

To the extent elevated inflation remains, and as a result potential changes in U.S trade policy, including the imposition of tariffs and the resulting consequences, we may experience further cost increases for our operations, including labor costs and equipment.

Federal Reserve and other central banks to increase interest rates in 2023 followed by decreases in 2024 and 2025, and the U.S.

Federal Reserve may maintain high benchmark interest rates throughout 2026 in an effort to curb inflationary pressure on the costs of goods and services across the U.S., which could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt the financial and operating results of our business.

To the extent elevated inflation remains, and as a result potential changes in U.S.

trade policy, including the imposition of tariffs and

the resulting consequences, we may experience further cost increases for our operations, including labor costs and equipment.

We cannot predict any future trends in the rate of inflation and a significant increase in inflation, to the extent we are unable to timely pass-through the cost increases to our customers, would negatively impact our business, financial condition and results of operations.

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It is likely that we will depend on a relatively small number of customers for a significant portion of our revenue in the future.

If a major customer fails to pay us, revenue would be impacted and our operating results and financial condition could be harmed.

Additionally, if we were to lose any material customer, we may not be able to redeploy our equipment at similar utilization or pricing levels and such loss could have an adverse effect on our business until the equipment is redeployed at similar utilization or pricing levels.

XTO Energy, Permian Resources and EOG Resources accounted for 19.7%, 14.9% and 10.6%, respectively, of our revenue for the year ended December 31, 2024.

If either of these customers were to significantly reduce or discontinue our services, it could have a material adverse effect on our financial condition, results of operations and cash flows.

There have been many recent mergers and acquisitions in the oil and gas industry.

In May 2024, Pioneer merged with and into a wholly owned subsidiary of ExxonMobil.

The Company currently provides pressure pumping, wireline and other services to ExxonMobil and previously provided such services to Pioneer.

If we cease to do work for a customer, our operating results and financial condition would be adversely affected unless we successfully redeploy the equipment.

Our inability to redeploy our equipment at similar utilization or pricing levels and such loss could have an adverse effect on our business until the equipment is redeployed at similar utilization or pricing levels.

Similarly, if a major customer fails to pay us, our revenue would be impacted and our operating results and financial condition could be harmed.

ExxonMobil, Occidental Petroleum Corporation, EOG Resources, Inc.

and Permian Resources Corporation accounted for 24.9%, 13.7%, 12.1%, and 11.2%, respectively, of our revenue for the year ended December 31, 2025.

Two o f our fleets that currently perform services for ExxonMobil’s subsidiary XTO are governed by an agreement that will expire in approximately late 2026.

At this time, we do not expect such agreement to be renewed or extended and, if we are not able to procure additional work from XTO, we will be required to redeploy the equipment associated with the affected fleets with other customers, exposing us to the risks described below associated with a delay or inability to redeploy our equipment.

Finally, there have been many recent mergers and acquisitions in the oil and gas industry.

Mergers and acquisitions involving our customers could negatively impact our future business with them or positively impact our business by providing us access to potential new customers.

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The amount of equipment available may exceed demand, which could result in active price competition.

In addition, some E&P companies have commenced completing their wells using their own hydraulic fracturing equipment and personnel.

Any increase in the development and utilization of in‑house fracturing capabilities by our customers could decrease the demand for our services and have a material adverse impact on our business.

In addition, from time to time, our customers and potential customers acquire equipment and utilize their own personnel to perform services similar or equivalent to the services we offer.

Any increase in the development and utilization of such in-house services by our customers or potential customers could decrease the demand for our services and have a material adverse impact on our business.

Pressure on pricing for our services resulting from the industry downturn has impacted, and may continue to impact, our ability to maintain utilization and pricing for our services or implement price increases.

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We cannot assure that we will be able to maintain our competitive position.

We expect to face significant competition in the future as the mobile and modular power industry evolves.

The power generation industry is evolving rapidly, driven by increased demand from numerous end-markets, including those in the data center, industrial, utility and energy businesses.

As a result, increased competition from within the mobile and modular power industry can likely be expected to occur.

Should this materialize, the portion of the total addressable market that we could capture with our power generation services could be lower than expected, which could translate to lower than expected revenues, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Our customers may not continue to outsource their power generation needs.

Our customers have a wide range of applications and equipment to address power generation needs.

As a result of the significant resources and expertise required to develop these systems, certain of these customers have chosen to outsource the provision of power generation to us.

To a significant extent, we will depend on customers continuing to outsource their power generation needs.

Customers may not continue to outsource as much or any of their power generation needs in the future or may seek alternative solutions.

We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our business, results of operations and financial condition.

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Our credit procedures and policies may not be adequate to fully eliminate customer credit risk.

If we fail to adequately assess the creditworthiness of existing or future customers or unanticipated deterioration in their creditworthiness, any resulting increase in nonpayment or nonperformance by them and our inability to re‑market or otherwise use the production could have a material adverse effect on our business, results of operations and financial condition.

If we fail to adequately assess the creditworthiness of existing or future customers or experience unanticipated deterioration in their creditworthiness, any resulting increase in nonpayment or nonperformance by them and our inability to re‑market or otherwise use the production could have a material adverse effect on our business, results of operations and financial condition.

In weak economic environments, we may experience increased delays and failures to pay due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to the credit markets or other sources of capital.

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If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have a material adverse effect on our liquidity, results of operations, and financial condition.

Our business depends upon the ability to obtain specialized equipment, parts and key raw materials, including sand and chemicals, from third‑party suppliers, and we may be vulnerable to delayed deliveries and future price increases.

We purchase specialized equipment, parts and raw materials (including, for example, power generation equipment, frac sand, chemicals and fluid ends) from third party suppliers and affiliates.

In some cases, our customers are responsible for supplying necessary raw materials (including frac sand), parts and/or equipment.

At times during the business cycle, there is a high

demand for hydraulic fracturing and other energy services and extended lead times to obtain equipment and raw materials needed to provide these services.

Our business depends upon the ability to obtain specialized equipment, parts and key raw materials, including power generation assets, balance of plant components, power distribution equipment and associated ancillary equipment, from third‑party suppliers.

We may be vulnerable to supply chain disruptions, delayed deliveries and future price increases, which could adversely impact our ability to provide our services.

We purchase specialized equipment, parts and raw materials (including, for example, power generation assets, balance of plant components, power distribution equipment, gas processing equipment and associated ancillary equipment) from third party suppliers and affiliates.

In some cases, our customers, particularly customers for our hydraulic fracturing services, are responsible for supplying necessary raw materials (including frac sand), parts and/or equipment.

Our power generation business, and the power generation industry in general, is especially dependent upon foreign supply chains and rare earth minerals as raw materials for power generation assets.

Our suppliers use multiple forms of transportation to bring their products to market, including truck, ocean and air-cargo shipments.

At times during the business cycle, there is a high demand for hydraulic fracturing, power generation and other energy services and extended lead times to obtain equipment and raw materials needed to provide these services.

For example, in 2021 and 2022, there was significant disruption in supply chains around the world caused by the COVID-19 pandemic that impacted our operations.

Should our current suppliers (or our customers’ suppliers where applicable) be unable or unwilling to provide the necessary equipment, parts or raw materials or otherwise fail to deliver the products timely and/or in the quantities required, any resulting delays in the provision of our services could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, future price increases for this type of equipment, parts and raw materials could negatively impact our ability to purchase new equipment, to update or expand our existing fleets, to timely repair equipment in our existing fleets or meet the current demands of our customers.

In addition, the ongoing war in Ukraine and conflicts in the Middle East, and related international sanctions and restrictions have impacted supply chains, and in some cases, global shipping routes.

required, whether as a result of a disruption to the timely supply of raw materials, parts and finished goods, or increases in the cost of transportation services (including due to general inflationary pressures, potential or increased tariffs, cost of fuel and labor, labor disputes, governmental regulation or restrictions), any resulting delays in the provision of our services could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, future price increases (including as a result of potential or increased tariffs) for this type of specialized equipment, parts and raw materials could negatively impact our ability to purchase new equipment, including new power generation assets, to update or expand our existing fleets, to timely repair equipment in our existing fleets or meet the current demands of our customers.

We may be required to pay fees to certain of our sand suppliers based on minimum volumes under long-term contracts regardless of actual volumes received.

We enter into purchase agreements with the Sand Suppliers to secure supply of sand in the normal course of our business.

The agreements with the Sand Suppliers require that we purchase minimum volume of sand, based primarily on a certain percentage of our sand requirements from our customers or in certain situations based on predetermined fixed minimum volumes, otherwise certain penalties (shortfall fees) may be charged.

The shortfall fee represents liquidated damages and is either a fixed percentage of the purchase price for the mi nimum volumes or a fixed price per ton of unpurchased volumes.

Our current agreements with Sand Suppliers expire at different times prior to December 31, 2025 .

Disruption of our supply chain could adversely impact our ability to provide our services.

Our suppliers use multiple forms of transportation to bring their products to market, including truck, ocean and air-cargo shipments.

Disruption to the timely supply of raw materials, parts and finished goods or increases in the cost of transportation services, including due to general inflationary pressures, cost of fuel and labor, labor disputes, governmental regulation or governmental restrictions limiting specific forms of transportation, could have an adverse effect on our ability to provide our services, which would adversely affect our results of operations, cash flows and financial position.

We enter into purchase agreements with our sand suppliers to secure supply of sand in the normal course of our business.

The agreements with the sand suppliers typically require that we purchase minimum volumes of sand, based primarily on a certain percentage of our sand requirements from our customers or in certain situations based on predetermined fixed minimum volumes, otherwise certain penalties (shortfall fees) may be charged.

The shortfall fee represents liquidated damages and is either a fixed percentage of the purchase price for the mi nimu m volumes or a fixed price per ton of unpurchased volumes.

Our existing agreements with sand suppliers expire on May 31, 2029.

We may be unable to adapt our power generation technologies to meet increasing customer needs and power loads, which could result in increased downtime of our power generation offering and disruptions to the power supply to our customers.

Demand for power has continued to significantly outpace available power generation supply from the grid, with the oil and natural gas industry requiring increasing amounts of power, as an example, exceeding existing generation capacity, requiring additional transmission and distribution infrastructure and straining aging power grids.

Further, the expanding use of AI has led to additional demand for electricity as a result of the expansion of existing data centers and plans for new data centers that support AI.

As we expand our power generation services, our current offering may not be able to effectively manage future power loads or otherwise satisfy evolving customer service demands, which could result in potential downtimes and disruptions for our customers and may lead to reputational damage and loss of customers.

In addition, we are typically required to commit and install more generating capacity than is required under our power supply contracts in order to meet the reliability standards under those contracts, which increases the capital cost to us of the installed equipment.

If we are unable to adapt our power generation technologies to meet future demand and customer needs as they evolve, or otherwise unable to meet their reliability requirements, our business and operating results may be adversely affected.

Distributed power generation services in some applications compete with access to the grid.

Distributed power generation services are an alternative for customers to consider when grid access is unavailable, costly or delayed.

Our distributed power generation services offering could be affected in the event that large-scale utility projects are completed and the associated transmission and distribution networks are established.

In this case, customers may only use our service offering as backup power or bridge power until line power is received.

Risks Related to Employees

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We are subject to environmental laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows.

The nature of our operations, including the handling, storing, transporting and disposing of a variety of fluids and substances, including hydraulic fracturing fluids, which can contain substances such as hydrochloric acid, and other regulated substances, air emissions, urea and ammonia, glycol, oil and coolant, consumables and wastewater discharges exposes us to some risks of environmental liability, including the release of pollutants from oil and natural gas wells and associated equipment to the environment, emissions or releases from our power generating equipment including air emissions, consumables which require disposal and contribute to waste storage with little to no recyclability, and potential spills from gas processing equipment.

The cost of compliance with these laws can be significant.

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Environmental laws and regulations have changed in the past, and they may change in the future and become more stringent.

For example, the prior administration made climate change a focus of its administration.

For more information, see our risk factor titled, “Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.” Separately, current and future claims and liabilities may have a material adverse effect on us because of potential adverse outcomes, defense costs, diversion of management resources, unavailability of insurance coverage and other factors.

Separately, current and future claims and liabilities may have a material adverse effect on us because of potential adverse outcomes, defense costs, diversion of management resources, unavailability of insurance coverage and other factors.

The ultimate costs of these liabilities are difficult to determine and may exceed any reserves we may have established.

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Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.

Numerous proposals regarding climate change have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing emissions of GHGs as well as to restrict or eliminate future GHG emissions.

As a result, our operations as well as the operations of our oil and natural gas E&P customers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs.

In the United States, no comprehensive climate change legislation has been implemented at the federal level, though recently passed laws such as the IRA 2022 advance numerous climate-related objectives.

Additionally, following the U.S.

Supreme Court finding that GHG emissions constitute a pollutant under the CAA, the EPA has adopted regulations that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, implement New Source Performance Standards directing the reduction of certain pollutants from certain new, modified, or reconstructed facilities in the oil and natural gas sector, and together with the DOT, implementing GHG emissions limits on vehicles manufactured for operation in the United States.

In December 2023, the EPA finalized a rule that established OOOOb more stringent new source and OOOOc first-time existing source standards of performance for methane and volatile organic compound emissions for oil and gas facilities.

Under the final rule, states will have two years to prepare and submit their plans to impose methane emissions controls on existing sources.

The presumptive standards under the final rule are generally the same for both new and existing sources, including enhanced leak detection using optical gas imaging and subsequent repair equipment, and reduction of emissions by 95% through capture and control systems.

The rule also revises requirements for fugitive emissions monitoring and repair as well as equipment leaks and the frequency of monitoring surveys, establishes a " super-emitter " response program to timely mitigate emissions events as detected by governmental agencies or qualified third parties, triggering certain investigation and repair requirements, and provides additional options for the use of advanced monitoring to encourage the deployment of innovative technologies to detect and reduce methane emissions.

However the EPA’s final rule is currently being challenged by 23 states and a coalition of industry groups in the U.S Circuit Court of Appeals for the D.C.

Additionally, at this time, it remains uncertain as to whether the current administration will repeal or modify this rule and the timing with respect to the same.

Notwithstanding this, failure to comply with these new methane rules may result in substantial fines and penalties for non-compliance, as well as injunctive relief.

Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas such as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.

At the international level, the United Nations-sponsored Paris Agreement, requires member states to submit non-

binding, individually-determined reduction goals known as NDCs every five years after 2020.

The United States rejoined the Paris Agreement in January 2021 and, in April 2021, established a goal of reducing economy-wide net GHG emissions 50-52% below 2005 levels by 2030.

However, in January 2025, the current President signed an Executive Order once again withdrawing the United States from the Paris Agreement and from any other commitments made under the United Nations Framework Convention on Climate Change.

The full impact of these recent developments is uncertain at this time.

Governmental, scientific, and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States.

For example, in January 2024 the government announced a temporary pause on pending decisions on liquefied natural gas exports to certain countries.

However, upon taking office, the current President signed an Executive Order resuming the processing of permit applications for such projects.

Litigation risks are also increasing as a number of parties have sought to bring suit against certain oil and natural gas companies operating in the United States in state or federal court, alleging among other things, that such companies created public nuisances by producing fuels that contributed to climate change or that such companies have been aware of the adverse effects of climate change but failed to adequately disclose those impacts to their investors or customers.

Additionally on January 26, 2024, the former president announced a temporary pause on pending decisions on new exports of LNG to countries that the United States does not have free trade agreements with, pending Department of Energy review of the underlying analyses for authorizations.

The pause was intended to provide time to integrate certain considerations, including potential energy cost increases for consumers and manufacturers and the latest assessment of the impact of GHG emissions, to ensure adequate guards against health risks.

The Department of Energy finalized its study in December 2024.

However, upon taking office, the current President signed an Executive Order resuming the processing of permit applications for such projects.

At this time, it is unclear what actions the Presidential Administration may take, if at all, with respect to the Department of Energy’s study.

There have also recent been increasing financial risks for companies in the fossil fuel sector as certain shareholders currently invested in fossil-fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel related sectors.

Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding for fossil fuel energy companies although this trend has waned recently and several high-profile banks and institutional investors have withdrawn from various associations that aim to limit financing of industries that emit significant GHG emissions.

Our operations as well as the operations of our oil and natural gas E&P customers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and, relatedly, emission of GHG.

Numerous proposals have been made and certain laws have been enacted at the international, national, and state level to monitor and limit GHG emissions.

Theses efforts have included consideration of GHG cap and trade programs, carbon taxes, climate-related financial risks and emissions reporting and tracking programs, and restriction of emissions.

These initiatives could increase our operating costs and lead to reputational harm to the extent our disclosures or efforts do not align with expectations of regulators, investors or other parties.

Further, certain laws, like the Inflation Reduction Act of 2022, include various incentives for lower carbon activities and impose a fee on excess methane emissions from certain oil and natural gas facilities, though Congress has taken action to delay implementation of this fee until 2034.

Additionally, notwithstanding the EPA’s recent final rule revoking the “Endangerment Finding”, which supports the majority of the EPA’s GHG-related regulations, the EPA under previous presidential administrations has adopted a number of regulations

aiming to reduce GHG emissions, including those from facilities in the oil and natural gas sector.

However, the EPA is currently in the process of attempting to repeal, revise, or otherwise take action with respect to many of its regulations involving GHG emissions and climate change.

As a result, there is significant uncertainty with respect to the future regulation of climate change at the federal level, and whether or how the current presidential administration will take further action with respect to climate change cannot be predicted at this time.

Litigation risks have also increased as a number of parties seek to bring suit against certain oil and natural gas companies operating in the United States in state or federal court, alleging among other things, that such companies created public nuisances by producing fuels that contributed to climate change or that such companies have been aware of the adverse effects of climate change but failed to adequately disclose those impacts to their investors or customers.

Consequently, we may also be exposed, directly or indirectly, to such increased litigation risks relating to alleged climate-related damages, reports, or disclosures.

Financial risks have also increased for companies in the fossil fuel sector as certain shareholders or institutional lenders that provide financing may limit their investments in fossil fuels companies, though this trend has waned in recent years.

Any limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.

Separately, the SEC released a final rule on climate-related disclosures on March 6, 2024, requiring the disclosure of certain climate-related risks and financial impacts, as well as GHG emissions, which was subsequently stayed by the U.S.

Court of Appeals for the Fifth Circuit.

The future of the rule remains uncertain at this time given the litigation;

however, on February 11, 2025, SEC Acting Chairman Mark T.

Uyeda released a public statement and notified the U.S.

Court of Appeals for the Eighth Circuit (where the challenges are consolidated) to hold off scheduling argument in the case to provide time for the SEC to further deliberate the final rule and determine next steps.

Relatedly, certain states have enacted or are otherwise considering disclosure requirements for certain climate-related risks.

Enhanced climate-related disclosure requirements could increase our operating costs and lead to reputational or other harm with customers, regulators, or other stakeholders to the extent our disclosures do not meet their own standards or expectations.

Consequently, we are also exposed to increased litigation risks relating to alleged climate-related damages resulting from our operations, statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future disclosures we may make regarding reported emissions, particularly given the inherent uncertainties and estimation required with respect to calculating and reporting GHG emissions.

We also cannot predict how financial institutions and investors might consider any information disclosed under any such requirements when making investment decisions, and as a result it is possible that we could face increases with respect to the costs of, or restrictions imposed on, our access to capital.

We also cannot predict how financial institutions and investors might consider any information disclosed under any state climate reporting requirements, and as a result it is possible that we could face increases with respect to the costs of, or restrictions imposed on, our access to capital.

Climate change may result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes in the meteorological and hydrological patterns, that could adversely impact us, our customers’ and our suppliers’ operations.

Such physical risks may result in damage to our customers’ facilities or otherwise adversely impact our operations, such as if facilities are subject to water use curtailments in response to drought, or demand for our customers’ products, such as to the extent warmer winters reduce the demand for energy for heating purposes, which may ultimately reduce demand for the products and services we provide.

Such physical risks may also impact our suppliers, which may adversely affect our ability to provide our products and services.

Extreme weather conditions can interfere with our operations and increase our costs, and damage resulting from extreme weather may not be fully insured.

Such physical risks may result in damage to our customers’ facilities or otherwise adversely impact our operations, our suppliers, or demand for our customers’ products, which may ultimately increase costs, affect our ability to provide our products and services or reduce the demand for them.

Federal and state legislative and regulatory changes relating to air permits could result in increased costs and additional operating restrictions or delays.

Our power generation equipment requires us to obtain air permits and we have assumed responsibility in obtaining such permits in some of our agreements.

We believe obtaining air permits has been a competitive advantage.

If the rules or regulations change that negatively affect our ability to obtain such permits or increase our costs, it could adversely impact our business.

Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.

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For example, the EPA has previously issued a series of rules under the CAA that establish new emission control requirements for emissions of volatile organic compounds and methane from certain oil and natural gas production and natural gas processing operations and equipment.

Separately, the BLM finalized a rule governing hydraulic fracturing on federal lands but this rule was subsequently rescinded.

Although several of these rulemakings have been rescinded, modified or subjected to legal challenges, new or more stringent regulations may be promulgated by the government.

For example, in March 2024 the BLM finalized a rule that requires operators to limit flaring from well sites on federal lands, and allows the delay or denial of permits if BLM finds that an operator’s methane waste minimization plan is insufficient.

The rule was challenged by various states in the District Court of North Dakota and, in September 2024, the court ordered that the rule cannot be enforced within the plaintiff states pending the outcome of the litigation.

Although the rule is currently being implemented in areas not covered by the order, the future of the rule is uncertain.

Additionally in January 2021, the president issued an executive order suspending new leasing activities, but not operations under existing leases, for oil and gas E&P on non-Native American federal lands pending completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practices that take into consideration potential climate and other impacts associated with oil and gas activities on such lands and waters.

Although the leasing pause was effectively halted by a permanent injunction in August 2022, in response to the executive order, the DOI issued a report recommending various changes to the federal leasing program, though many such changes would require Congressional action.

In April 2024, the BLM finalized a rule updating the fiscal terms of federal oil and gas leases, increasing fees, rents, royalties, and bonding requirements.

The rule also adds new criteria for BLM to consider when determining whether to lease nominated land, including the presence of important habitats or wetlands, the presence of historical properties or sacred sites, and recreational use of the land.

Any regulations that ban or effectively ban such operations may adversely impact demand for our products and services.

Further, legislation to amend the Safe Drinking Water Act to repeal the exemption for hydraulic fracturing (except when diesel fuels are used) from the definition of “underground injection” and require federal permitting and regulatory control of hydraulic fracturing, as well as legislative proposals to require disclosure of the chemical constituents of the fluids used in the fracturing process, have been proposed in previous sessions of Congress.

Several states and local jurisdictions in which we or our customers operate also have adopted or are considering adopting regulations that could restrict or prohibit hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition of hydraulic fracturing fluids.

Additionally, in April and May 2024, the U.S.

Bureau of Land Management (“BLM”) finalized two rules increasing royalty rates, rentals, and minimum bids, and updating the agency’s interpretation of its mandate that conservation is a use of federal land on par with mineral extraction and other uses (“Public Lands Rule”).

In September 2025, the U.S.

Department of the Interior announced its proposal to rescind the Public Lands Rule.

Further, in May 2025, the BLM announced a policy designed to expedite the oil and gas leasing process on public lands.

In addition, federal legislation to repeal the Safe Drinking Water Act exemption for hydraulic fracturing and require more stringent permitting of hydraulic fracturing has previously been proposed in Congress.

This federal legislation has not passed.

Elsewhere, several states and local jurisdictions in which we or our customers operate also have adopted or are considering adopting regulations that could restrict or prohibit hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition of hydraulic fracturing fluids.

Federal and state governments have also investigated whether the disposal of produced water into underground injection wells has caused increased seismic activity in certain areas.

In response to concerns regarding induced seismicity, regulators in some states have imposed, or are considering imposing, additional requirements in the permitting of produced water disposal wells or otherwise to assess any relationship between seismicity and the use of such wells.

For example, Oklahoma has issued rules for wastewater disposal wells in 2014 that imposed certain permitting and operating restrictions and reporting requirements on disposal wells in proximity to faults and also, from time to time, has implemented plans directing certain wells where seismic incidents have occurred to restrict or suspend disposal well operations.

In particular, the Oklahoma Corporation Commission released well completion seismicity guidelines for operators in the SCOOP and STACK require hydraulic fracturing operations to be suspended following earthquakes of certain magnitudes in the vicinity.

In addition, the Oklahoma Corporation Commission’s Oil and Gas Conservation Division has previously issued an order limiting future increases in the volume of oil and natural gas wastewater injected into the ground in an effort to reduce the number of earthquakes in the state.

The TRRC has adopted similar rules and, in September 2021, issued a notice to disposal well operators in the Gardendale Seismic Response Area near Midland, Texas to reduce daily injection volumes following multiple earthquakes above a 3.5 magnitude over an 18 month period.

The notice also required disposal well operators to provide injection data to TRRC staff to further analyze seismicity in the area.

Subsequently, the TRRC ordered the indefinite suspension of all deep oil and gas produced water injection wells in the area, effective December 31, 2021.

The Gardendale Seismic Response area has since been expanded in response to an additional earthquake in December 2022, covering 17 additional wells.

In December 2023, a further 23 deep disposal well permits were suspended in the Northern Culberson-Reeves Seismic Response Area.

In response to concerns regarding induced seismicity, regulators in some states, including Oklahoma and Texas, have imposed, or are considering imposing, additional requirements in the permitting of produced water disposal wells or otherwise to assess any relationship between seismicity and the use of such wells.

For example, the Texas Railroad Commission (“TRRC”) has suspended produced water handling permits and introduced injection

volume curtailment within the boundaries of certain seismic response areas.

While we cannot predict the ultimate outcome of these actions, any action that temporarily or permanently restricts the availability of disposal capacity for produced water or other oilfield fluids may increase our customers’ costs or require them to suspend operations, which may adversely impact demand for our products and services.

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Increasing trucking regulations may increase our costs and negatively impact our results of operations.

In connection with our business operations, including the transportation and relocation of our hydraulic fracturing equipment and shipment of frac sand, we operate trucks and other heavy equipment.

In connection with our business operations, including the transportation and relocation of our hydraulic fracturing and power generation equipment and shipment of frac sand, we operate trucks and other heavy equipment.

As such, we operate as a motor carrier in providing certain of our services and therefore are subject to regulation by the DOT and by various state agencies.

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The DOT periodically conducts compliance reviews and may revoke registration privileges based on certain safety performance criteria that could result in a suspension of operations.

Increased attention to ESG matters, conservation measures, commercial development and technological advances could reduce demand for oil and natural gas and our services.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, increased attention to climate change and other ESG-related matters, and technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas, resulting in reduced demand for energy services.

Increased attention to sustainability matters, conservation measures, commercial development and technological advances could reduce demand for oil and natural gas, power generation and our services.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, increased attention to climate change and other sustainability-related matters, and technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas, resulting in reduced demand for energy services.

The impact of the changing demand for oil and natural gas services and products may have a material adverse effect on our business, financial condition, results of operations and cash flows.

The commercial development of economically‑viable alternative energy sources and related products (such as electric vehicles, wind, solar, geothermal, tidal, fuel cells and biofuels) could have a similar effect.

The IRA 2022 appropriates significant federal funding for renewable energy initiatives, which could accelerate the use and commercial viability of alternative energy sources and decrease demand for oil and natural gas.

The IRA 2022 has incentivized the further development of and investment in clean energy through the use of tax credits, and future legislation could expand these benefits for alternative energy sources.

In addition, legislation has been previously proposed that would make changes to certain U.S.

federal income tax provisions currently applicable with respect to oil and natural gas exploration and development companies, including by eliminating the percentage depletion allowance for oil and natural gas properties.

While it remains to be seen if the current administration would modify or repeal some or all of the IRA 2022, any future decreases in the rate at which oil and natural gas reserves are discovered or developed, whether due to the passage of legislation, increased governmental regulation leading to limitations, or prohibitions on exploration and drilling activity, including hydraulic fracturing, or other factors, could have a material adverse effect on our business and financial condition, even in a stronger oil and natural gas price and regulatory environment.

Moreover, while we may create and publish voluntary disclosures regarding ESG-related matters from time to time, certain statements in those voluntary disclosures may be based on expectations and assumptions or hypothetical scenarios that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions or hypothetical scenarios are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established approach to identifying, measuring and reporting on many ESG matters.

Additionally, we may announce various targets or product and service offerings in an attempt to improve our ESG profile.

However, such targets are often aspirational and we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our ESG profile, including but not limited to as a result of unforeseen costs, consequences or technical difficulties associated with such targets or offerings.

Also, despite any voluntary actions, we may receive pressure from certain investors, lenders or other groups to adopt more aggressive climate or other ESG-related goals or policies, but we cannot guarantee that we will be able to pursue or implement such goals because of potential costs or technical or operational obstacles.

Additionally, certain statements or initiatives with respect to ESG-related matters that we may pursue or assert are increasingly subject to heightened scrutiny from the public and governmental authorities, as well as other parties.

For example, the SEC has recently taken enforcement action against companies for ESG-related misconduct, including alleged “greenwashing,” (i.e., the process of conveying misleading information or making false claims that overstate potential ESG benefits).

Certain regulators, such as the SEC and various state agencies, as well as nongovernmental organizations and other private actors have filed lawsuits under various securities and consumer protection laws alleging that certain ESG statements, goals or standards were misleading, false or otherwise deceptive.

Additionally, certain employment practices and social initiatives are the subject of scrutiny by both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

While we may create and publish voluntary or mandatory disclosures regarding sustainability-related matters from time to time, certain statements in those disclosures may be based on expectations and assumptions or hypothetical scenarios that are necessarily uncertain and may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Additionally, we may announce various targets or product and service offerings in an attempt to improve our sustainability profile.

However, such targets are often aspirational and we cannot guarantee that we will be able to meet or make progress against any such targets or that such targets or offerings will have the intended results on our sustainability profile, including but not limited to as a result of unforeseen costs, inaccurate forecasts, consequences or technical difficulties.

Also, despite any voluntary actions, we may receive pressure from certain investors, lenders or other groups to adopt more aggressive climate or other sustainability-related goals or policies, but we cannot guarantee that we will be able to pursue or implement such goals because of potential costs or technical or operational obstacles.

Additionally, certain statements or initiatives with respect to sustainability-related matters that we may pursue or assert are increasingly subject to heightened scrutiny from the public and governmental authorities, as well as other parties, who may allege that such statements or initiatives are misleading, false or otherwise deceptive (sometimes referred to as “greenwashing”).

Additionally, certain employment or business practices and social initiatives are the subject of scrutiny by

both those calling for the continued advancement of such policies, as well as those who believe they should be curbed, including government actors, and the complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

More recent political developments could mean that we face increasing criticism or litigation risks from certain “anti-ESG” parties, including various governmental agencies.

Such sentiment may focus on our environmental commitments (such as reducing GHG emissions) or our pursuit of certain employment practices or social initiatives that are alleged to be political or polarizing in nature or are alleged to violate laws based, in part, on changing priorities of, or interpretations by, federal agencies or state governments.

As a result, we may be subject to pressure in the media or through other means, such as governmental investigations, enforcement actions, or other proceedings, all of which could adversely affect our reputation, business, financial performance, market access and growth.

Such sentiment may focus on our environmental commitments (such as reducing GHG emissions) or our pursuit of certain employment or business practices or social initiatives that are alleged to be political or polarizing in nature or are alleged to violate laws based, in part, on changing priorities of, or interpretations by, federal agencies or state governments, which could adversely affect our reputation, business, financial performance, market access and growth.

Accordingly, there may be increased costs related to reviewing, implementing and managing such policies, as well as compliance and litigation risks based both on positions we do or do not take, or work we do or do not perform.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

While such ratings do not impact all investors’ investment or voting decisions, unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

Additionally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.

Furthermore, employment practices and social initiatives are also the subject of scrutiny by stakeholders, federal agencies, state governments, regulators and other third-parties.

The complex regulatory and legal frameworks applicable to such initiatives continue to evolve.

We cannot be certain of the impact of such regulatory, legal and other developments on our business.

To the extent any enforcement actions or other litigation is brought against us as a result of emerging viewpoints and legal interpretations, our business, financial condition and access to financing may be materially and adversely affected.

To the extent any enforcement actions or other litigation is brought against us a result of emerging viewpoints and legal interpretations, our business, financial condition and access to financing may be materially and adversely affected.

Certain of our completion services, particularly our hydraulic fracturing services, are substantially dependent on the availability of water.

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Our or our customers’ inability to obtain water from local sources or to effectively utilize flowback water could have an adverse effect on our financial condition, results of operations and cash flows.

Risks Related to our Tax Matters

Our ability to use our NOLs may be limited.

Certain aspects of our power generation services business are dependent on the availability of specific resources.

Inability to obtain those resources could adversely impact our business.

Several resources are essential components of certain aspects of our power generation services business.

For example, water and ammonia fluids are essential to reciprocating engines and turbines, respectively, which are utilized in exhaust systems to meet emissions regulations.

Glycol, which is utilized for gas processing equipment, is a consumable fluid used in heating baths, which regulate temperatures of other fluids used in power generation equipment, helping to ensure performance and uptime.

The inability to obtain these and other key resources in the future could result in decreased performance or the inability to perform our services and meet our obligations to our customers, which would adversely impact our business and results of operations.

Risks Related to Tax Matters

Our ability to use our net operating loss carryforwards (“NOLs”) may be limited.

As of December 31, 2025, we had approximately $138.0 million of U.S.

federal NOLs, all of which will have an unlimited carryforward.

As of December 31, 2024, our state net operating losses were approximately $42.8 million and will begin to expire in 2030.

federal NOLs, all of which have an unlimited carryforward.

As of December 31, 2025, our state NOLs were approximately $42.8 million, all of which are fully offset by valuation allowance.

Utilization of these NOLs depends on many factors, including our future income, which cannot be assured.

In addition, Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on the amount of taxable income that may be offset by NOLs when a corporation has undergone an “ownership change” (as determined under Section 382).

In addition, Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), generally imposes an annual limitation on the amount of taxable income that may be offset by U.S.

federal NOLs when a corporation has undergone an “ownership change” (as determined under Section 382).

Generally, a change of more than 50% in the ownership of a corporation’s stock, by value, over a three year period constitutes an ownership change for U.S.

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Any unused annual limitation may, subject to certain limitations, be carried over to later years.

We may experience future ownership changes, which may result in annual limitation under Section 382 determined by multiplying the value of our stock at the time of the ownership change by the applicable long‑term tax‑exempt rate as defined in Section 382, increased under certain circumstances as a result of recognizing built‑in gains in our assets existing at the time of the ownership change.

We may experience ownership changes in the future as a result of shifts in our stock ownership, which may result in an annual limitation under Section 382 determined by multiplying the value of our stock at the time of the ownership change by the applicable long term tax exempt rate as defined in Section 382, which may be increased under certain circumstances as a result of recognizing built in gains in our assets existing at the time of the ownership change.

Similar provisions of state tax law may also apply to limit our use of accumulated state NOLs.

The limitations arising from ownership changes may prevent utilization of our NOLs prior to their expiration.

Future ownership changes or regulatory changes could further limit our ability to utilize our NOLs.

Future ownership

changes or regulatory changes could further limit our ability to utilize our NOLs.

To the extent we are not able to offset our future income with our NOLs, this could adversely affect our operating results and cash flows if we attain profitability.

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Our business could be negatively affected as a result of the actions of activist shareholders.

Publicly traded companies have increasingly become subject to campaigns by investors seeking to increase shareholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases, sales of assets or even sale of the entire company.

Given our shareholder composition and other factors, it is possible such shareholders or future activist shareholders may attempt to effect such changes or acquire control over us.

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Additionally, perceived uncertainties as to our future direction as a result of shareholder activism or changes to the composition of the Board may lead to the perception of a change in the direction of our business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel.

If customers choose to delay, defer or reduce transactions with us or transact with our competitors instead of us because of any such issues, then our business, financial condition, revenues, results of operations and cash flows could be adversely affected.

If customers choose to delay,

defer or reduce transactions with us or transact with our competitors instead of us because of any such issues, then our business, financial condition, revenues, results of operations and cash flows could be adversely affected.

Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to pursue actions in another judicial forum for disputes with us or our directors, officers, employees or agents.

Our certificate of incorporation provides that, unless we consent 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 our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.

Our certificate of incorporation provides that, unless we consent 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 our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case, subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.

The exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

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The market price of our common stock is subject to volatility.

The market price of our common stock could be subject to wide fluctuations in response to, and the level of trading of our common stock may be affected by, numerous factors, many of which are beyond our control.

These factors include, among other things, our limited trading volume, the concentration of holdings or our common stock, actual or anticipated variations in our operating results and cash flow, the nature and content of our earnings releases, announcements or events that impact our products, customers, competitors or markets, business conditions in our markets and the general state of the securities markets, volatility in oil and gas prices and the market for energy-related stocks, as well as general economic and market conditions and other factors that may affect our future results, including those described in this report.

The stock markets in general, and particularly in the past year, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

As a result, the market price of our common stock could be subject to wide fluctuations in response to, and the level of trading of our common stock may be affected by, numerous factors, many of which are beyond our control.

These factors include, among other things, our limited trading volume, the concentration of holdings of our common stock, actual or anticipated variations in our operating results and cash flow, the nature and content of our earnings releases, announcements or events that impact our products, customers, competitors or markets, business conditions in our markets and the general state of the securities markets, volatility in oil and gas prices and the market for energy-related stocks, as well as general economic and market conditions and other factors that may affect our future results, including those described herein.

Significant sales of our common stock, or the expectation of these sales, by significant shareholders, officers or directors could materially and adversely affect the market price of our common stock.

Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities.

Such litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.

There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock.

We are not restricted from issuing additional common stock, including securities that are convertible into or exchangeable for, or that represent a right to receive, common stock.

In addition, we may issue common stock as consideration in future mergers and acquisitions, as we did in the Silvertip Acquisition.

In addition, we may issue common stock as consideration in future mergers and acquisitions, as we did in the acquisition of Silvertip.

Any issuance of additional shares of our common stock or convertible securities will dilute the ownership interest of our common stockholders.

Sales of a substantial number of shares of our common stock or other equity-related securities in the public market, or the perception that these sales could occur, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.

Sales of a substantial number of shares of our common stock or other equity-related securities in the public market, or the perception that these sales could occur, could

depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.

We cannot predict the effect that future sales of our common stock or other equity-related securities would have on the market price of our common stock.

We are a party to a registration rights agreement with a subsidiary of Exxon Mobil Corporation.

That agreement requires us to effect the registration of its shares of common stock in certain circumstances.

Any sales of shares of our common stock by such holder, or expectations thereof, could similarly have the effect of depressing the market price of our common stock.

There can be no assurance that we will purchase all the shares authorized under our share repurchase program or that such program will enhance the long-term value of our share price.

On April 24, 2024, our Board approved an increase and extension to the share repurchase program previously authorized on May 17, 2023.

The program permits the share repurchase of up to an additional $100.0 million of the Company’s common stock for a total of $200.0 million and extends the expiration date by one year to May 31, 2025.

In May 2025, our Board approved a further extension of the share repurchase program initially authorized on May 17, 2023.

As extended, the program permits the repurchase of up to an additional $200.0 million of the Company’s common stock through December 31, 2026.

There is no obligation for us to continue to repurchase or to repurchase any specific dollar amount of stock and the program may be suspended, modified or discontinued at any time without prior notice.

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In the past, there have been proposals to increase the amount of the U.S.

federal stock repurchase excise tax from 1% to 4%, however, it is unclear whether such a change in the amount of the excise tax will be enacted and, if enacted, how soon any such change could take effect.

federal stock repurchase excise tax from 1% to 4%;

however, it is unclear whether such a change in the amount of the excise tax will be enacted and, if enacted, how soon any such change could take effect.

If securities or industry analysts adversely change their recommendations regarding our common stock or if our operating results do not meet their expectations, our stock price could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.

If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Moreover, if one or more of the analysts who cover our company downgrades our common stock or if our operating results do not meet their expectations, our stock price could decline.

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