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Recent Events
−Removed: The outbreak of COVID-19 has spread across the globe and has been declared a public health emergency by the WHO and a National Emergency by the President of the United States.
−Removed: The extent of the impact of the COVID-19 outbreak on our operational and financial performance will significantly depend on certain developments, including the duration and spread of the outbreak and its continued impact on customer activity and third-party providers.
−Removed: The direct impact to our operations began to take affect at the close of the first quarter ended March 31, 2020, and has continued through September 30, 2022, however the extent to which the COVID-19 outbreak may further affect our financial condition or results of operations is uncertain.
−Removed: For more information, please see “Item 2.
−Removed: Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Events and Outlook”.
+Added: We continue to expect business opportunities and financial results to show mild increases as the global economy continues to slowly stabilize and improve.
+Added: The International Energy Agency stated that global oil demand is set to rise by 1.9 million barrels per day in 2023 where the U.S.
+Added: ranks as the world’s leading source of supply growth.
+Added: Commodity pricing reached over $130 per barrel with a low of $70 per barrel during 2022 and is expected to remain at approximately $80 to $85 per barrel during 2023 as global oil inventories increase.
+Added: However, this increased demand could prove to be a challenge as OPEC+ announced additional reductions of approximately 1.2 million barrels per day.
+Added: Additionally, we believe the geopolitical events will continue to have an impact on the macroeconomic backdrop of our industry, specifically surrounding China as COVID-19 restrictions are lifted and uncertainty regarding Russia’s oil supply while under sanctions.
Russia invaded neighboring Ukraine and these events have and continue to impact commodity prices, which could have a material effect on our earnings, cash flows, and financial condition.
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In addition, the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months.
−Removed: The direct impact to our operations began to take affect at the close of the first quarter ended March 31, 2022, and has continued through September 30, 2022, however the extent to which the invasion may further affect our financial condition or results of operations is uncertain.
−Removed: For more information, please see “Item 2.
−Removed: Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Events and Outlook”.
−Removed: Heightened levels of inflation and the potential worsening of macro-economic conditions, including the possibility of recession, may present a risk for our business, our suppliers and the stability of the broader oil and gas industry.
−Removed: In addition, the U.S.
−Removed: inflation rate has been steadily increasing since 2021 and into 2022.
−Removed: The direct impact to our operations began to take affect at the close of the second quarter ended June 30, 2022, and has continued through September 30, 2022, however the extent to which the heightened levels of inflation may further affect our financial condition or results of operations is uncertain.
+Added: The direct impact to our operations began to take affect at the close of the first quarter ended March 31, 2022, and has continued through March 31, 2023, however the extent to which the invasion may further affect our financial condition or results of operations is uncertain.
For more information, please see “Item 2.
−Removed: Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Events and Outlook”.
+Added: Management’s Discussion and Analysis of Results of Operations and Financial Condition — Business Outlook”.
Interest Rate Risk
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For a complete discussion of our interest rate risk, see our Annual Report.
−Removed: As of September 30, 2022, we had $24.9 million outstanding under our Revolving Credit Facility, with a weighted average interest rate of 5.9%.
−Removed: As of September 30, 2022, the aggregate principal balance outstanding under the M&E Term Loan was $11.0 million, with a weighted average interest rate of 9.0%.
+Added: As of March 31, 2023, we had a $1.6 million Letter of Credit, with a weighted average interest rate of 4.5%.
+Added: As of March 31, 2023, the aggregate principal balance outstanding under the M&E Term Loan was $9.8 million, with a weighted average interest rate of 12.6%.
A hypothetical 1.0% increase or decrease in the weighted average interest rate would increase or decrease interest expense by less than $0.2 million per year.
+Added: We do not currently hedge out interest rate exposure.
We do not engage in derivative transactions for speculative or trading purposes.
The majority of our trade receivables have payment terms of 30 days or less.
−Removed: As of September 30, 2022, the top three trade receivable balances represented approximately 15%, 11%, and 8%, respectively, of consolidated net accounts receivable.
+Added: As of March 31, 2023, the top three trade receivable balances represented approximately 12%, 9%, and 7%, respectively, of consolidated net accounts receivable.
Within our High Specification Rig segment, the top three trade receivable balances represented 19%, 13% and 12%, respectively, of total High Specification Rig net accounts receivable.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.