What changed in this filing

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Item 1A. Risk Factors

2020-10-23 compared with 2020-07-28 · 62 added, 15 removed, 67 unchanged (53% of the section changed)

5 unchanged sentences

To the extent COVID-19 continues or worsens, governments may impose additional similar restrictions.

The COVID-19 pandemic has resulted, and is likely to continue to result, in significant economic disruption and has, and will likely continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas and a significant oversupply of crude oil.

Many E&P companies have announced significant cuts in capital spending and production in response to reduced demand and declining prices.

There has been a general slowdown in E&P company activity due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the current oversupply of oil and natural gas in the market.

The direct impact to the Company’s operations began to take affect at the close of the first quarter ended March 31, 2020, and have continued through the second quarter ended June 30, 2020, however, the extent to which the COVID-19 outbreak impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

Many exploration and production (“E&P”) companies have announced significant cuts in capital spending and production in response to reduced demand and declining prices.

There has been a general slowdown in E&P company activity due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the oversupply of oil and natural gas in the market.

The direct impact to the Company’s operations began to take affect at the close of the first quarter ended March 31, 2020, and have continued through the third quarter ended September 30, 2020, however, the extent to which the COVID-19 outbreak impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

At the time of this filing, cases of COVID-19 in the U.S.

6 unchanged sentences

This negative pricing resulted from the holders of expiring front month oil purchase contracts being unable or unwilling to take physical delivery of crude oil and accordingly forced to make payments to purchasers of such contracts in order to transfer the corresponding purchase obligations.

As a result of continued or further storage and/or transportation shortages, our customers could be forced to shut in some or all of their production or delay or discontinue drilling plans and commercial production following a discovery of hydrocarbons while they construct or purchase their own facilities or system.

As a result of any further storage and/or transportation shortages, our customers could be forced to shut in some or all of their production or delay or discontinue drilling plans and commercial production following a discovery of hydrocarbons while they construct or purchase their own facilities or system.

If our customers are forced to shut in production, it would result in decreased demand for our services and lower utilization of our assets.

7 unchanged sentences

During the year ended December 31, 2019, the posted Henry Hub price for natural gas has ranged from a low of $2.07 per Million British Thermal Units (“MMbtu”) in August 2019 to a high of $3.59 per MMbtu in January 2019.

For the period from January 1, 2020 through July 22, 2020, however, price for oil and natural gas declined significantly, reaching to lows of a negative $37.63 per Bbl.

For the period from January 1, 2020 through October 21, 2020 , however, price for oil and natural gas declined significantly, with the price of oil reaching to lows of a negative $37 per Bbl.

2 unchanged sentences

Subsequently, Saudi Arabia announced plans to increase production to record levels and reduce the prices at which they sell oil and, in turn, Russia responded with threats to also increase production.

Collectively, these events created an unprecedented global oil and natural gas supply and demand imbalance, reduced global oil and natural gas storage capacity, caused oil prices to decline significantly and resulted in continued volatility in oil, natural gas and NGLs prices into the second quarter of 2020.

On April 12, 2020, OPEC Plus agreed to cut oil production by 9.7 million barrels per day in May and June 2020;

however, on July 15, 2020, OPEC Plus agreed to increase production by 1.6 million barrels per day starting in August 2020.

OPEC Plus is scheduled to meet again in the fourth quarter of 2020 and it is possible OPEC Plus may decide to further production increases.

In May 2020, the Texas Railroad Commission decided against imposing oil production cuts, however, waived fees related to new crude oil storage projects.

30 unchanged sentences

These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our Credit Facility.

Our senior unsecured revolving credit facility (the “Credit Facility”) subjects us to significant financial and other restrictive covenants, including, but not limited to, restrictions on incurring additional debt and certain distributions.

Our ability to comply with these financial condition tests can be affected by events beyond our control and we may not be able to comply.

Our Credit Facility subjects us to significant financial and other restrictive covenants, such that our ability to comply with financial condition tests can be affected by events beyond our control, including economic, financial and industry conditions.

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

Further, the borrowing base of our Credit Facility is dependent upon our receivables, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services.

Changes to our operational activity 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 Credit Facility.

If we are unable to remain in compliance with the financial covenants of our Credit Facility, then amounts outstanding thereunder may be accelerated and become due immediately.

Any such acceleration could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

In the event that we are unable to access sufficient capital to fund our business and planned capital expenditures, we may be required to curtail potential acquisitions, strategic growth projects, portions of our current operations and other activities.

A lack of capital could result in a decrease in our operations, subject us to claims of breach under customer and supplier contracts and may force us to sell some of our assets or issue additional equity on an untimely or unfavorable basis, each of which could adversely affect our business, financial condition, results of operations and cash flows.

Our Credit Facility contains certain financial and other restrictive covenants, including a certain minimum fixed charge coverage ratio during certain testing periods.

3 unchanged sentences

When the Company is subject to dominion, for 30 consecutive days it is required to either (a) maintain excess availability in excess of the greater of $6.25 million and 12.5% of the lesser of (x) the maximum revolver amount and (y) the borrowing base as of such date of determination and no event of default has occurred and is continuing or (b) have no revolver drawings and available cash of at least $20.0 million for dominion to revert back to the Company.

The Credit Facility is scheduled to mature on August 16, 2022.During the three months ended March 31, 2020, the Company borrowed against the Credit Facility causing dominion to revert to the Administrative Agent, however after the 30 consecutive day period, as defined above, dominion reverted back to the Company in April 2020.

The borrowings under the Credit Facility, and related issuance costs, were included in long-term debt, net in the Condensed Consolidated Balance Sheets as of June 30, 2020, as the Company was not subject to dominion.

The Credit Facility is scheduled to mature on August 16, 2022.

During the three months ended March 31, 2020, the Company borrowed against the Credit Facility causing dominion to revert to the Administrative Agent, however, after the 30 consecutive day period, as defined above, dominion reverted back to the Company in April 2020.

The borrowings under the Credit Facility, and related issuance costs, were included in long-term debt, net in the Condensed Consolidated Balance Sheets as of September 30, 2020, as the Company was not subject to dominion.

Please see “Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation —Liquidity and Capital Resources —Working Capital.”

If we are unable to remain in compliance with the financial covenants of our Credit Facility, then amounts outstanding thereunder may be accelerated and become due immediately.

Any such acceleration could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.

The following exhibits are filed as part of this Quarterly Report.

INDEX TO EXHIBITS

Number Description

2.1† Amended and Restated Asset Purchase Agreement dated as of July 31, 2017, by and among ESCO Leasing, LLC, Ranger Energy Services, LLC and Tim Hall (incorporated by reference to Exhibit 2.3 to the Registrant’s Form S-1 (File No.

333-218139) filed with the Commission on August 1, 2017).

3.1 Amended and Restated Certificate of Incorporation of Ranger Energy Services, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8‑K (File No.

001-38183) filed with the Commission on August 22, 2017)

3.2 Amended and Restated Bylaws of Ranger Energy Services, Inc.

(incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K (File No.

001‑38183) filed with the Commission on August 22, 2017)

4.1 Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8‑K (File No.

001‑38183) filed with the Commission on August 22, 2017)

4.2 Stockholders’ Agreement (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8‑K (File No.

001‑38183) filed with the Commission on August 22, 2017)

31.1* Certification of Chief Executive Officer Pursuant to Rule 13a‑14(a)/15d‑14(a) of the Securities Exchange Act of 1934

31.2* Certification of Chief Financial Officer Pursuant to Rule 13a‑14(a)/15d‑14(a) of the Securities Exchange Act of 1934

32.1** Certifications of Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2** Certifications of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.CAL* iXBRL Calculation Linkbase Document

101.DEF* iXBRL Definition Linkbase Document

101.INS* iXBRL Instance Document

101.LAB* iXBRL Labels Linkbase Document

101.PRE* iXBRL Presentation Linkbase Document

101.SCH* iXBRL Schema Document

104* Cover page interactive data file (formatted in iXBRL and contained in Exhibit 101)

* Filed as an exhibit to this Quarterly Report on Form 10-Q.

** Furnished as an exhibit to this Quarterly Report on Form 10-Q.

† Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

The registrant will furnish a supplemental copy of any omitted schedule or similar attachment to the SEC upon request.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Ranger Energy Services, Inc.

Brandon Blossman October 23, 2020

Brandon Blossman Date

Chief Financial Officer

(Principal Financial Officer)

Hernandez October 23, 2020

Hernandez Date

Chief Accounting Officer

(Principal Accounting Officer)

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

What changed 10-Q

Item 1A. Risk Factors