What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-27 compared with 2022-02-28 · 66 added, 49 removed, 210 unchanged (35% of the section changed)

9 unchanged sentences

The documents referenced above are available in print at no cost to any stockholder who requests them from our Corporate Secretary.

TETRA Technologies, Inc., together with its consolidated subsidiaries, is a leading, industrial oil and gas products and services company operating on six continents, focused on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback and production well testing services.

TETRA Technologies, Inc., together with its consolidated subsidiaries, is a leading energy services and solutions company operating on six continents, focused on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback, and production well testing services.

We have two reportable segments - Completion Fluids & Products Division and Water & Flowback Services Division.

Our Completion Fluids & Products Division manufactures and markets clear brine fluids, additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East and Africa.

Our Completion Fluids & Products Division manufactures and markets clear brine fluids (“CBFs”), additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East, and Africa.

The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry, and markets TETRA PureFlow ® ultra-pure zinc bromide to several battery technology companies.

Our Water & Flowback Services Division provides onshore oil and gas operators with comprehensive water management services.

The Division also provides frac flowback, production well testing, and other associated services in many of the major oil and gas producing regions in the United States and Mexico, as well as in oil and gas basins in certain countries in Latin America, Europe, and the Middle East.

The Division also provides frac flowback, production well testing, and other associated services in many of the major oil and gas producing regions in the United States, as well as in oil and gas basins in certain countries in Latin America, Europe, and the Middle East.

We continue to pursue a long-term growth strategy that includes expanding our core businesses, domestically and internationally, through the introduction of new technology, organic growth and accretive acquisitions.

1 unchanged sentence

Completion Fluids & Products Division

Liquid calcium chloride, calcium bromide, zinc bromide, zinc calcium bromide, sodium bromide, and blends of such products manufactured by our Completion Fluids & Products Division are referred to as clear brine fluids (“CBFs”) in the oil and gas industry.

CBFs are salt solutions that have variable densities and are used to control bottom-hole pressures during oil and gas completion and workover operations.

The Division sells CBFs and various CBF additives to U.S.

and foreign oil and gas exploration and production companies and to other companies that service customers in the oil and gas industry.

The Division sells CBFs and various CBF additives to United States and international oil and gas exploration and production companies and to other companies that service customers in the oil and gas industry.

The Completion Fluids & Products Division provides both stock and custom-blended CBFs based on each customer’s specific needs and the proposed application.

It provides a broad range of associated CBF services, including:

It provides a broad range of associated CBF services,

on-site fluids filtration, handling and recycling;

1 unchanged sentence

custom fluids blending;

management services.

and fluid management services.

The Division’s flagship CBF technology, TETRA CS Neptune ® completion fluids, are high-density monovalent and divalent fluids that are free of undissolved solids, zinc, priority pollutants, and formate ions.

20 unchanged sentences

This facility also uses proprietary processes to manufacture calcium bromide and sodium bromide and to recondition and upgrade used CBFs that we have repurchased from our customers.

We are also pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets (including our approximately 31,100 net acres of brine leases in Arkansas) and technologies, and our leading calcium chloride production capabilities.

We are also pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets (including our approximately 40,000 gross acres of brine leases in Arkansas) and technologies, and our leading calcium chloride production capabilities.

In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree Chemicals Holdings, LLC (“CarbonFree”), a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.

During the one-year MOU period, both Companies will work towards a definitive agreement that may include investments by TETRA into CarbonFree, a joint venture, or other commercial arrangements.

Although the MOU expired in May 2022 at the end of its twelve-month term, we have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies.

In December 2021, we invested $5.0 million in a convertible note issued by CarbonFree.

2 unchanged sentences

In August 2021, we announced completion of a preliminary technical assessment by an independent geological consulting firm to assess lithium and bromine exploration targets in our Southwest Arkansas brine leases.

Bromine has been identified as a key mineral resource in zinc-bromide energy storage systems and our TETRA PureFlow™ high purity zinc bromide has been qualified by several battery technology companies.

battery market is a rapidly growing market, affording us the opportunity to participate in a meaningful way.

In December, 2021, we announced a strategic agreement with Eos Energy Enterprises, Inc.

Bromine is a key mineral component in zinc-bromide energy storage systems and our TETRA PureFlow ® ultra-pure zinc bromide has been qualified by several battery technology companies.

The lithium battery market is a rapidly growing market, affording us the potential opportunity to participate in a meaningful way.

In December, 2021, we

announced a strategic agreement with Eos Energy Enterprises, Inc.

("Eos") (NASDAQ:

involving a long-term supply and collaboration agreement to supply our high purity zinc bromide solution, TETRA PureFlow TM .

TETRA and Eos expect to collaborate for improved battery performance, cost and system life including an end-of-life solution using TETRA's extensive experience with reclaiming and recycling zinc bromide.

In addition, as of February 25, 2022, we are in the process of drilling an exploratory brine well on our dedicated acreage in the Smackover Formation in Arkansas.

The results of the well, which is expected to be completed in the first quarter of 2022, are expected to advance our exploratory target lithium and bromine assets to more refined resources targets.

We will assess the next steps towards determining whether we can develop these key minerals to augment our current global infrastructure and chemistry expertise, allowing us to further expand beyond the oil and gas market.

EOSE) involving a long-term supply and collaboration agreement to supply our, TETRA PureFlow ® ultra-pure zinc bromide.

TETRA and Eos expect to collaborate for improved battery performance, cost and system life including a solution for the end of a battery’s life using TETRA's extensive experience with reclaiming and recycling zinc bromide.

We are committed to pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets and technologies, and our leading calcium chloride production capabilities.

During 2022, we completed the maiden inferred bromine and lithium brine resource estimation report for our leased acreage in the Smackover Formation in Southwest Arkansas, as well as a front end engineering and design study for the design of a brine to bromine processing plant, pipeline and related assets.

We are in the final stages of a reservoir analysis to further assess TETRA’s bromine and lithium assets in Arkansas.

Completion of this front end engineering and design study and reservoir analysis were incremental steps for TETRA to complete an initial and preliminary economic analysis.

Further steps are required before making a decision to develop the bromine assets, which may include drilling an additional well or wells, further studies to mature the resource and completion of a pre-feasibility and/or feasibility study.

Bromine is a key mineral component in zinc-bromide energy storage systems and our TETRA PureFlow ® high purity zinc bromide has been qualified by several battery technology companies.

The lithium battery market is a rapidly growing market, so we believe we are well positioned to meaningfully participate in that market.

Water & Flowback Services Division

5 unchanged sentences

These systems include the TETRA SwiftWater Automated Treatment (SWAT™) system that chemically treats produced water through a clarification process and the TETRA Oil Recovery After Production Technology (Orapt™) mobile oil separation system that recovers oil from produced water.

Automation has also been deployed throughout 2020 and 2021 across the TETRA water management portfolio, and across TETRA flowback services in 2021, to reduce health, safety and environmental risks and enhance reliability and cost-effectiveness.

Automation has also been deployed across the TETRA water management portfolio, and across TETRA flowback services, to reduce health, safety and environmental risks and enhance reliability and cost-effectiveness.

Our Water & Flowback Services Division also provides frac flowback services, early production facilities and services, production well testing services, and other associated services, including well flow management and evaluation services that enable operators to quantify oil and gas reserves, optimize oil and gas production and minimize oil and gas reservoir damage.

5 unchanged sentences

This Division maintains one of the largest fleets of high-pressure production testing equipment in the United States, including equipment designed to work in environments where high levels of hydrogen sulfide gas are present.

The Division has domestic operating locations in Colorado, Louisiana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, West Virginia, and Wyoming.

The Division has domestic operating locations in Louisiana, New Mexico, Oklahoma, Pennsylvania, and Texas.

The Division also has locations in certain countries in Latin America, Europe, and the Middle East.

3 unchanged sentences

Through one of our former wholly-owned subsidiaries, CSI Compressco GP LLC (f/k/a CSI Compressco GP Inc.) (the “general partner”), we managed and controlled CSI Compressco, and accordingly, we consolidated CSI Compressco’s results of operations in our consolidated results of operations through January 31, 2021.

On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners, LP and Energy Holdco, LLC (together, “Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the incentive distribution rights (“IDRs”) in CSI Compressco and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, in exchange for a combination of $13.9 million in cash and $3.1 million in contingent consideration in the form of cash and/or CSI Compressco common units if CSI Compressco achieves certain financial targets on or before December 31, 2022.

As of December 31, 2022, we retained an interest in CSI Compressco consisting of approximately 3.7% of the outstanding common units.

7 unchanged sentences

The underground reserves of this brine are deemed adequate to supply our foreseeable need for calcium chloride at those plants.

The Division also purchases liquid and dry calcium chloride from a number of U.S.

and foreign chemical manufacturers.

The Division also purchases liquid and dry calcium chloride from a number of United States and foreign chemical manufacturers.

The Completion Fluids & Products Division’s primary sources of hydrochloric acid are co-product streams obtained from chemical manufacturers.

4 unchanged sentences

We have a long-term supply agreement with LANXESS, AG (“LANXESS”) under which the Completion Fluids & Products Division purchases its requirements of raw material bromine from LANXESS’ Arkansas bromine production facilities.

The Completion Fluids & Products Division also owns a calcium bromide manufacturing plant near Magnolia, Arkansas, which was constructed in 1985.

This plant was acquired in 1988 and is not operable.

We currently lease over 31,100 net acres of brine leases in the vicinity of this plant, which contain bromine and lithium.

See our disclosures titled “Bromine and Lithium Exploration Targets” set forth in Item 2 of this Annual Report.

While this plant is designed to produce calcium bromide, it could be modified to produce elemental bromine or select bromine compounds.

Development of the brine field, construction of necessary pipelines and reconfiguration of the plant would require a substantial capital investment.

The long-term Lanxess bromine supply agreement discussed above provides a secure supply of bromine to support the Division’s current operations.

We do, however, continue to evaluate our strategy related to the Magnolia, Arkansas, assets and their future development.

Lanxess has certain rights to participate in future development of the Magnolia, Arkansas assets.

The supply agreement with LANXESS is under arbitration.

See Part I “Item 3.

Legal Proceedings” and Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in this Annual Report for further information.

We have not historically directly purchased any significant volumes of raw materials from Russia nor from Ukraine.

Additionally, we have not historically sold any significant volumes of product to Russia or to Ukraine.

However, one of our raw material providers sourced one of their raw materials from Russia or Ukraine.

Because of the ongoing conflict between Russia and Ukraine, during early 2022, our primary European supplier of certain raw materials advised us of supply constraints with one of their suppliers of a key raw material used in their manufacturing process.

This raw material is a widely used, global commodity but the disruption to the current supply chain has caused some impact on their production which in turn has caused a reduction in delivered volumes of certain raw materials to our plant in Finland where we manufacture calcium chloride, which has decreased our calcium chloride production volumes and had some impact on our margins during the first half of 2022.

Our supplier has sourced their material from an alternative location and resumed supplying increased volumes to us during the third quarter of 2022 and returned to meet current customer demand levels in the fourth quarter of 2022.

The magnitude of any future financial impact resulting from further supply chain disruptions is difficult to quantify at this time.

We are also continuing to work with secondary and tertiary raw material providers on options to address the

situation and mitigate the financial impact.

Our Board of Directors is continuing to monitor the situation and assess any current or future risk to our financial condition and results of operations.

We currently lease over 40,000 gross acres of brine leases near Magnolia, Arkansas, which contain bromine and lithium.

See our disclosures titled “Bromine and Lithium Inferred Resources” set forth in Part I, “Item 2.

Properties” of this Annual Report.

The long-term LANXESS bromine supply agreement discussed above provides a secure supply of bromine to support a majority of the Division’s current manufacturing levels.

We do, however, continue to evaluate our strategy related to the Arkansas assets and their future development.

LANXESS has certain rights to participate in future development of these Arkansas assets.

In addition, we are party to agreements with Standard Lithium Ltd.

4 unchanged sentences

Market Overview and Competition

Our operations are highly dependent upon the demand for, and production of, natural gas and oil in the various domestic and international locations in which we operate, and were significantly affected by the unprecedented impact of the COVID-19 pandemic in 2020.

Demand for products and services of our Completion Fluids & Products Division remained resilient despite pandemic impacts on commodity prices in 2020 and experienced significant recoveries during the second half of 2021.

West Texas Intermediate oil prices improved from an average of $39.16 per barrel during 2020 to an average of $77.33 per barrel during the fourth quarter of 2021.

Our operations are highly dependent upon the demand for, and production of, natural gas and oil in the various domestic and international locations in which we operate.

Demand for products and services of our Completion Fluids & Products Division remained resilient despite pandemic impacts on commodity prices in 2020.

Prices have experienced significant recoveries beginning in the second half of 2021 and continuing through 2022.

West Texas Intermediate oil prices continued to improve from an average of $68.14 in 2021 to an average of $94.90 per barrel during 2022.

Completion Fluids & Products Division

12 unchanged sentences

Non-energy market segments where these products are used include water treatment, industrial, food processing, road maintenance, ice melt, agricultural, and consumer products.

As part of our low carbon solutions, we produce and provide end users with zinc bromide, used in zinc-bromine batteries and energy storage.

We also sell sodium bromide into industrial water treatment markets as a biocide under the BioRid ® tradename.

8 unchanged sentences

Competition in the U.S.

water management markets includes Select Energy and various regional companies, while competition in onshore U.S.

water management markets includes Select Energy Services, Inc.

and various regional companies, while competition in onshore U.S.

production testing markets is primarily dominated by numerous small, privately owned operators.

3 unchanged sentences

No single customer provided 10% or more of our total consolidated revenues during the years ended December 31, 2022, 2021 or 2020.

One customer provided more than 10% of our total consolidated revenues during the year ended December 31, 2019.

Other Business Matters

1 unchanged sentence

We collaborate as a team to execute for each other, our customers, and our shareholders.

As of December 31, 2021, we had approximately 1,100 people worldwide.

As of December 31, 2022, we employed approximately 1,300 people worldwide.

None of our U.S.

19 unchanged sentences

To ensure our work remains safe and of the highest quality, the Company has a comprehensive HSEQ Management System and program designed to improve the capacity of the organization by controlling worksite risks, developing proper work practices and procedures, and empowering employees with stop-work authority if they observe unsafe conditions, omissions, errors, or actions that could result in safety or environmental incidents, or product and service quality issues.

If an incident takes place, we investigate all serious occurrences to root causes and implement corrective actions to ensure we expand our capacity to operate safely.

If an incident takes place, we investigate all serious occurrences to determine root causes and implement corrective actions to ensure we expand our capacity to operate safely.

Driving is one of the highest exposure activities that we undertake in our day-to-day operations.

22 unchanged sentences

Compliance with such laws and regulations may expose us to significant costs and liabilities, and cause us to incur significant capital expenditures in our operations.

Failure to comply with these laws and regulations or associated permits may result in the assessment of administration, civil or criminal fines and penalties, the imposition of other corrective action obligations or other injunctive relief, or both.

Failure to comply with these laws and regulations or associated permits may result in the assessment of administrative, civil or criminal fines and penalties, the imposition of other corrective action obligations or other injunctive relief, or both.

Our operations in the United States are subject to various evolving environmental laws and regulations that are enforced by the U.S.

18 unchanged sentences

Hydrocarbons or hazardous and nonhazardous wastes may have been released during our operations, by third parties on wellhead sites where we provide services or store our equipment, or on or under other locations where wastes have been taken for disposal.

Although most wastes associated with the exploration, development and production of oil and

natural gas are currently exempt from the more stringent hazardous waste regulations under RCRA and its state analogs, it is possible that some of the material we handle now or may handle in the future may be subject to regulation under RCRA as a hazardous waste.

Although most wastes associated with the exploration, development and production of oil and natural gas are currently exempt from the more stringent hazardous waste regulations under RCRA and its state analogs, it is possible that some of the material we handle now or may handle in the future may be subject to regulation under RCRA as a hazardous waste.

Additionally, we cannot assure you that such materials will not be subject to more stringent requirements or characterized as hazardous wastes in the future.

10 unchanged sentences

Operators of affected facilities will have to comply with specific standards of performance to include leak detection using optical gas imaging and subsequent repair requirement, and reduction of emissions by 95% through capture and control systems.

EPA plans to issue a supplemental proposal in 2022 containing additional requirements not included in the November 2021 proposed rule and anticipates the issuance of a final rule by the end of the year.

The EPA issued a supplemental proposal in November 2022, which, among other items, sets forth specific revisions strengthening the first nationwide emission guidelines for states to limit emissions from existing oil and gas facilities.

The proposal also revises requirements for fugitive emissions monitoring and repair and as well as equipment leaks and the frequency of monitoring surveys, establishes a “super-emitter” response program to timely mitigate emissions events, and provides additional options for the use of advanced monitoring to encourage the deployment of innovative technologies to detect and reduce methane emissions.

We cannot predict the scope of any final methane regulatory requirements or the cost to comply with such requirements.

However, additional or more stringent regulations could impose new air permitting or pollution control requirements on our equipment that could require us to incur material costs.

However, additional or more stringent regulations could impose new air permitting or pollution control requirements on our equipment that could require us

to incur material costs.

For more information, see our risk factor titled “Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.”

In accordance with Section 402 of the Clean Water Act, the EPA is authorized to issue National Pollutant Discharge Elimination System (“NPDES”) General Permits to regulate offshore discharges in the Gulf of Mexico which includes Treatment, Completion and Workover (“TCW”) fluids.

Our operations include providing services and materials to oil and gas operators for the use of TCW fluids in the Gulf of Mexico.

The EPA’s current NPDES permit for oil and gas operations in the federal waters of the Gulf of Mexico expires on September 30, 2022.

The EPA’s current NPDES permits for Region 6 and Region 4 for oil and gas operations in the federal waters of the Gulf of Mexico expired on September 30, 2022 and January 19, 2023, respectively.

As of October 1, 2022, the permits remain in administratively continued status pending finalization of a new NPDES General Permit.

While the terms of any subsequent NPDES General Permit applicable to our customers’ operations are uncertain at this time, any additional restrictions on oil and gas operation in the Gulf of Mexico under the Clean Water Act, could have an indirect effect on us.

5 unchanged sentences

The listing of any new species, the relisting of a species from threatened to endangered, or the designation of critical habitat for any such species may cause us or our customers to incur additional costs or become subject to operating restrictions or bans at certain times or in certain areas.

Separately, regulators at both the federal and state levels have spent increasing attention on matters related to oil and gas operations, particularly hydraulic fracturing and the emission of greenhouse gases (“GHGs”).

our customers operate could result in operating restrictions or delays in the completion of oil and gas wells that may reduce demand for our services.”

Separately, regulators at both the federal and state levels have placed increasing attention on matters related to oil and gas operations, particularly hydraulic fracturing and the emission of greenhouse gases (“GHGs”).

For more information, see our risk factors titled “Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change” and “Regulatory initiatives related to hydraulic fracturing in the countries where we and our customers operate could result in operating restrictions or delays in the completion of oil and gas wells that may reduce demand for our services.”

We maintain various types of insurance intended to reimburse us for certain costs in the event of an accident, including an explosion or similar event, involving our onshore and offshore operations.

2 unchanged sentences

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

What changed 10-K

Item 1. Business