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Our primary business objective is to grow our operations and create value for stockholders through organic growth opportunities and accretive acquisitions.
−Removed: Our suite of services includes infrastructure services, pressure pumping services, natural sand proppant services, drilling services and other services, which includes coil tubing, equipment rental, full service transportation, crude oil hauling, remote accommodations, oilfield equipment manufacturing and infrastructure engineering and design services.
+Added: Our suite of services includes infrastructure services, well completion services, natural sand proppant services, drilling services and other services, which includes aviation, equipment rental, crude oil hauling, remote accommodations, equipment manufacturing and infrastructure engineering and design services.
Our infrastructure services division provides construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
−Removed: Our pressure pumping services division provides hydraulic fracturing, sand hauling and water transfer services.
+Added: Our well completion services division provides hydraulic fracturing, sand hauling and water transfer services.
Our natural sand proppant services division mines, processes and sells natural sand proppant used for hydraulic fracturing.
−Removed: Our drilling services division currently provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling as well as rig moving services.
−Removed: In addition to these service divisions, we also provide coil tubing services, pressure control services, equipment rentals, full service transportation, crude oil hauling services, remote accommodations, oilfield equipment manufacturing and infrastructure engineering and design services.
+Added: Our drilling services division currently provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling.
+Added: In addition to these service divisions, we also provide aviation services, equipment rentals, crude oil hauling services, remote accommodations, equipment manufacturing and infrastructure engineering and design services.
We believe that the services we offer play a critical role in maintaining and improving electrical infrastructure as well as in increasing the ultimate recovery and present value of production streams from unconventional resources.
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Our transformation towards an industrial based company is ongoing.
−Removed: During the fourth quarter of 2019, we began infrastructure engineering operations focused on the transmission and distribution industry and also commenced oilfield equipment manufacturing operations.
−Removed: The startup of oilfield equipment manufacturing operations provides us with the ability to repair much of our existing equipment in-house, as well as the option to manufacture certain new equipment we may need in the future.
−Removed: The oilfield equipment manufacturing operations will initially serve our internal needs for our water transfer and equipment rental businesses, but we expect to expand into third party sales in the future.
+Added: During the fourth quarter of 2019, we began infrastructure engineering operations focused on the transmission and distribution industry and also commenced equipment manufacturing operations.
+Added: Our equipment manufacturing operations provide us with the ability to repair much of our existing equipment in-house, as well as the option to manufacture certain new equipment we may need in the future.
+Added: The equipment manufacturing operations have initially served the internal needs for our water transfer, equipment rental and infrastructure businesses, but we expect to expand into third party sales in the future.
We are continuing to explore other opportunities to expand our business lines as we shift to a broader industrial focus.
−Removed: Our facilities and service centers are strategically located in Ohio, Texas, Oklahoma, Wisconsin, Minnesota, West Virginia, Kentucky, California, Colorado, Florida and Alberta, Canada primarily to serve the following areas:
+Added: Our facilities and service centers are strategically located in Ohio, Texas, Oklahoma, Wisconsin, West Virginia, Kentucky, California, Colorado and Alberta, Canada primarily to serve the following areas:
• The Utica Shale in Eastern Ohio;
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• The Eagle Ford Shale in Texas;
+Added: • Southern California;
• The oil sands in Alberta, Canada.
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They bring valuable expertise and long-term customer relationships to our business.
−Removed: We provide our infrastructure services to private utilities, public investor owned utilities, or IOUs, and cooperatives, or Co-Ops, and our pressure pumping, natural sand proppant and other services to a diversified range of both public and private independent oil and natural gas producers.
−Removed: Our top five customers for the year ended December 31, 2019 , representing 53% of our revenue, were Gulfport Energy Corporation, or Gulfport, the Puerto Rico Electric Power Authority, or PREPA, Montage Resources Corporation, or Montage Resources, HG Energy LLC, or HG Energy, and American Electric Power Company, Inc, or American Electric Power.
−Removed: For the year ended December 31, 2018 , our top five customers, representing 77% of our revenue, were PREPA, Gulfport, Roan Resources LLC, or Roan Resources, Blue Ridge Mountain Resources, Inc., or Blue Ridge, and HG Energy.
−Removed: For the year ended December 31, 2017 , our top five customers, representing 71% of our revenue, were Gulfport, PREPA, Newfield Exploration Company, or Newfield, Rice Energy, Inc., or Rice Energy, and Surge Operating LLC, or Surge Operating.
+Added: We provide our infrastructure services to private utilities, public investor owned utilities, or IOUs, and cooperatives, or Co-Ops, and our well completion, natural sand proppant, drilling and other services to a diversified range of both public and private independent oil and natural gas producers.
+Added: For the years ended December 31, 2020 and 2019, our top five customers represented 50% and 53%, respectively, of our revenue.
+Added: Recent Developments
+Added: Impact of the Ongoing COVID-19 Pandemic and Volatility in Commodity Prices
+Added: On March 11, 2020, the World Health Organization characterized the global spread of the novel strain of coronavirus, COVID-19, as a “pandemic.” To limit the spread of COVID-19, governments have taken various actions including the issuance of stay-at-home orders and social distancing guidelines, causing some businesses to suspend operations and a reduction in demand for many products from direct or ultimate customers.
+Added: While many of the stay-at-home orders have expired and certain restrictions on conducting business have been lifted, the COVID-19 pandemic has resulted in a widespread health crisis and a swift and unprecedented reduction in international and U.S.
+Added: economic activity which, in turn, has adversely affected, and continues to adversely affect, the demand for oil and natural gas and caused significant volatility and disruption of the capital and financial markets.
+Added: In March and April 2020, concurrent with the spread of COVID-19 and quarantine orders in the U.S.
+Added: and worldwide, oil prices dropped sharply to below zero for the first time in history due to factors including significantly reduced demand and a shortage of storage facilities.
+Added: While OPEC members and certain other nations agreed in April 2020 to cut production and subsequently extended such production cuts through December 2020, which helped to reduce a portion of the excess supply in the market and improve crude oil prices, they agreed to increase production by 500,000 barrels per day beginning in January 2021.
+Added: As a result, downward pressure on commodity prices could continue for the foreseeable future.
+Added: We cannot predict if, or when, commodity prices will stabilize and at what price points and when global inventories will return to normalized levels.
+Added: Beginning in early March 2020, in response to the ongoing COVID-19 pandemic and the depressed commodity prices, many exploration and production companies, including our customers, immediately began to substantially reduce their capital expenditure budgets.
+Added: As a result, demand for our oilfield services, which was already under considerable pressure from reductions in our customers' capital expenditure budgets in 2019, declined further at the end of the first quarter of 2020 and continued to decline further throughout the remainder of 2020.
+Added: Demand for both gasoline and oil rebounded to some extent toward the end of the second quarter of 2020 and stabilized to some degree throughout the second half of 2020, but remained below historical levels.
+Added: As a result, depressed levels of oilfield service activity are expected to continue for the foreseeable future.
+Added: The ongoing COVID-19 pandemic, the broad reduction in economic activity, the current conditions in the energy industry and the adverse macroeconomic conditions have also had, and are likely to continue to have, an adverse effect on both pricing and utilization for our oilfield services.
+Added: We have taken, and continue to take, responsible steps to protect the health and safety of our employees during the COVID-19 pandemic.
+Added: We are also actively monitoring the impact of the COVID-19 pandemic and the adverse industry and market conditions and have taken mitigating steps to preserve liquidity, reduce costs and lower capital expenditures.
+Added: These actions have included reducing headcount, adjusting pay and limiting spending.
+Added: We will continue to take further actions that we deem to be in the best interest of the Company and our stockholders if the current conditions continue, do not improve or worsen.
+Added: Given the dynamic nature of these events, we are unable to predict the ultimate impact of the COVID-19 pandemic, the depressed commodity markets, the reduced demand for oil and oilfield services and adverse macroeconomic conditions on our business, financial condition, results of operations, cash flows and stock price or the pace or extent of any subsequent recovery.
Our revenues, operating (loss) income and identifiable assets are primarily attributable to four reportable segments:
−Removed: infrastructure services, pressure pumping services, natural sand proppant services and drilling services.
−Removed: For the year ended December 31, 2018, we identified three reportable segments consisting of infrastructure services, pressure pumping services and natural sand proppant services.
−Removed: Based on our assessment of FASB ASC 280, Segment Reporting , guidance at December 31, 2019 , we changed our reportable segment presentation in 2019 to include drilling services, which includes Bison Drilling and Field Services, LLC, Bison Trucking LLC, Panther Drilling Systems LLC, Mako Acquisitions LLC and White Wing Tubular LLC, as its own reportable segment.
−Removed: The results for the years ended December 31, 2018 and 2017 have been retroactively adjusted to reflect this change in reportable segments.
−Removed: For additional information, see Note 21 to our consolidated financial statements included elsewhere in this annual report.
+Added: infrastructure services, well completion services, natural sand proppant services and drilling services.
Infrastructure Services
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We currently have agreements in place with private utilities, public IOUs and Co-Ops.
−Removed: Since we commenced operations in this line of business, substantially all of our infrastructure revenue has been generated from storm restoration work, primarily from PREPA, due to damage caused by Hurricane Maria.
−Removed: On October 19, 2017, Cobra Acquisitions LLC, or Cobra, and PREPA entered into an emergency master services agreement for repairs to PREPA’s electrical grid.
+Added: Since we commenced operations in this line of business, a substantial portion of our infrastructure revenue has been generated from storm restoration work, primarily from the Puerto Rico Electric Power Authority, or PREPA, due to damage caused by Hurricane Maria.
+Added: October 19, 2017, Cobra Acquisitions LLC, or Cobra, and PREPA entered into an emergency master services agreement for repairs to PREPA’s electrical grid.
The one-year contract, as amended, provided for payments of up to $945 million.
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As of December 31, 2020, PREPA owed us approximately $227 million for services we performed, excluding $74 million of interest charged on these delinquent balances as of December 31, 2020.
−Removed: Summary of Significant
−Removed: Accounting Policies-Accounts Receivable to our consolidated financial statements included elsewhere in this annual report.
−Removed: PREPA is subject to bankruptcy proceedings, which were filed in July 2017 and are currently pending in the U.S.
−Removed: District Court for the District of Puerto Rico.
−Removed: As a result, PREPA's ability to meet its payment obligations under the contracts is largely dependent upon funding from the Federal Emergency Management Agency or other sources.
−Removed: On September 30, 2019, we filed a motion with the U.S.
−Removed: District Court for the District of Puerto Rico seeking recovery of the amounts owed to us by PREPA.
−Removed: This motion has been stayed by the court until a status conference scheduled to be held on June 17, 2020.
−Removed: For more information regarding this action as well as other legal actions and governmental investigations related to our work for PREPA, see Item 1A.
−Removed: “Risk Factors—Risks Related to Our Business and the Industries We Serve” and Note 20.
−Removed: Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
−Removed: Upon the completion of our work in Puerto Rico on March 31, 2019, we focused on right-sizing our infrastructure operations and performing required maintenance on our equipment, which had been subjected to harsh working conditions.
−Removed: This process, with its associated costs, was completed during the fourth quarter of 2019.
−Removed: Demand for our infrastructure services in the continental United States has increased since we began operations in 2017.
−Removed: We had a total of approximately 140 transmission and distribution crews as of December 31, 2019 , as compared to approximately 105 at December 31, 2018 and approximately 50 at December 31, 2017.
+Added: Summary of Significant Accounting Policies—Accounts Receivable and Note 20.
+Added: Commitments and Contingencies to our consolidated financial statements and Item 1A.
+Added: “Risk Factors—Risks Related to Our Business and the Industries We Serve” included elsewhere in this annual report for more information regarding these delinquent balances as well as other legal actions and governmental investigations related to our work for PREPA.
+Added: Demand for our infrastructure services in the continental United States remains steady, and our crew count remained stable at approximately 115 crews throughout 2020.
+Added: The COVID-19 pandemic and resulting economic conditions have not had a material impact on demand or pricing for our infrastructure services.
Transmission crew size varies based upon the scope of the project and factors such as voltage, structure type, number of conductors and type of foundation.
Each distribution crew generally consists of five employees.
−Removed: These transmission and distribution crews are working for multiple utilities primarily across the northeastern, midwestern and southwestern portions of the United States.
−Removed: We recently hired a new president for our infrastructure division and have added experienced industry personnel to key management positions.
+Added: These transmission and distribution crews work for multiple utilities primarily across the northeastern, midwestern and southwestern portions of the United States.
+Added: During the fourth quarter of 2019, we hired a new president for our infrastructure division and have added experienced industry personnel to key management positions.
+Added: Our infrastructure management team also has both solar and wind projects and we believe that this experience, combined with our vertically integrated service offering positions us well to compete and win renewable projects.
With this team in place, we believe we will be able to grow our customer base and increase our revenues in the continental United States over the coming years.
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and overseas.
−Removed: Pressure Pumping Services
+Added: Well Completion Services
Pressure Pumping .
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We currently own six fleets of pressure pumping equipment.
−Removed: As of February 26, 2020, three of the fleets were staffed and providing services in the northeast.
+Added: As of December 31, 2020, one of the fleets was staffed and providing services in the northeast.
Our pressure pumping services include high-pressure hydraulic fracturing services.
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As of December 31, 2020, our pressure pumping business included six high pressure fleets consisting of an aggregate 117 high pressure fracturing units with pump nameplate capacity of 291,750 horsepower.
−Removed: We are currently in the process of converting a portion of our pressure pumping fleet to include dynamic gas blending, or DGB, capabilities to meet recent shifts in customer demand, with the initial converted units expected to be field tested in the coming weeks.
+Added: During 2020, we converted ten of our units to include dynamic gas blending, or DGB, capabilities to meet recent shifts in customer demand and are currently in the process of converting additional units.
We refer to the group of fracturing units, other equipment and vehicles necessary to perform a typical fracturing job as a “fleet” and the personnel assigned to each fleet as a “crew.” We usually operate on a 24-hour-per-day basis and we typically staff three crews per fleet.
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As of December 31, 2020, we owned a fleet of 41 trucks.
−Removed: Additionally, we had 28 owner operator drivers providing sand hauling services as of December 31, 2019 .
Water Transfer .
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Master Services Agreements .
−Removed: We contract with most of our pressure pumping customers under master service agreements, or MSAs.
+Added: We contract with most of our well completion customers under master service agreements, or MSAs.
Generally, our MSAs, including those relating to our hydraulic fracturing services, specify payment terms, audit rights and insurance requirements and allocate certain operational risks through indemnity and similar provision.
−Removed: In October 2014, we entered into a long-term contract with Gulfport to provide pressure pumping services.
+Added: In October 2014, we entered into a long-term contract with Gulfport Energy Corporation, or Gulfport, to provide pressure pumping services.
As amended and restated, this contract has a term ending on December 31, 2021.
Gulfport is seeking to terminate this contract.
+Added: Further, on November 13, 2020 Gulfport, one of our largest customers, filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
For additional information regarding Gulfport's action, see Note 20.
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We contract with third party providers to transport our frac sand products to railroad facilities for delivery to our customers.
−Removed: We currently lease or have access to origin transloading facilities on the Canadian National Railway Company (CN), Union Pacific (UP), Burlington Northern Santa Fe
−Removed: (BNSF) and the Canadian Pacific (CP) rail systems and use an in-house railcar fleet that we lease from various third parties to deliver our frac sand products to our customers.
+Added: We currently lease or have access to origin
+Added: transloading facilities on the Canadian National Railway Company (CN), Union Pacific (UP), Burlington Northern Santa Fe (BNSF) and the Canadian Pacific (CP) rail systems and use an in-house railcar fleet that we lease from various third parties to deliver our frac sand products to our customers.
Origin transloading facilities on multiple railways allow us to provide predictable and efficient loading and shipping of our frac sand products.
We also utilize a destination transloading facility in Yorkville, Ohio, to serve the Utica Shale, and utilize destination transloading facilities located in other North American resource plays, including the Montney Shale, to meet our customers’ delivery needs.
+Added: Pursuant to its contract with Gulfport, Muskie Proppant LLC, one of our subsidiaries, which we refer to as Muskie, has agreed to sell and deliver specified amounts of sand to Gulfport.
+Added: In September 2020, Muskie filed a lawsuit against Gulfport to recover delinquent payments due under this agreement.
+Added: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
+Added: For additional information regarding Gulfport's action, see Note 20.
+Added: Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
Drilling Services
−Removed: During the periods discussed in this report, we offered contract land and directional drilling services as well as rig moving services.
+Added: During certain of the periods discussed in this report, we offered contract land and directional drilling services as well as rig moving services.
+Added: Due to market conditions, we temporarily shut-down our contract land drilling operations beginning in December 2019.
+Added: We continue to monitor market conditions to determine if and when we will recommence these services.
Contract Drilling .
As part of our contract drilling services, we provided both vertical and horizontal drilling services to customers in the Permian Basin of West Texas.
−Removed: However, due to current market conditions, we have temporarily shut down our contract land drilling operations beginning in December 2019.
−Removed: We will monitor market conditions to determine if and when we will re-commence our contract land drilling services.
As of December 31, 2020, we owned 12 land drilling rigs, ranging from 800 to 1,600 horsepower, eight of which are specifically designed for drilling horizontal and directional wells.
−Removed: A land drilling rig generally consists of engines, a hoisting system, a rotating system, a drawworks, a mast, pumps and related equipment to circulate the drilling fluid under various pressures, blowout preventers, drill string and related equipment.
−Removed: The engines power the different pieces of equipment, including a rotary table or top drive that turns the drill pipe, or drill string, causing the drill bit to bore through the subsurface rock layers.
−Removed: Drilling rigs use long strings of drill pipe and drill collars to drill wells.
−Removed: Drilling rigs are also used to set heavy strings of large-diameter pipe, or casing, inside the borehole.
−Removed: Because the total weight of the drill string and the casing can exceed 500,000 pounds, drilling rigs require significant hoisting and braking capacities.
−Removed: Generally, a drilling rig’s hoisting system is made up of a mast, or derrick, a drilling line, a traveling block and hook assembly and ancillary equipment that attaches to the rotating system, a mechanism known as the drawworks.
−Removed: The drawworks mechanism consists of a revolving drum, around which the drilling line is wound, and a series of shafts, clutches and chain and gear drives for generating speed changes and reverse motion.
−Removed: The drawworks also houses the main brake, which has the capacity to stop and sustain the weights used in the drilling process.
−Removed: When heavy loads are being lowered, a hydromatic or electric auxiliary brake assists the main brake to absorb the great amount of energy developed by the mass of the traveling block, hook assembly, drill pipe, drill collars and drill bit or casing being lowered into the well.
−Removed: The rotating equipment from top to bottom consists of a swivel, the kelly bushing, the kelly, the rotary table, drill pipe, drill collars and the drill bit.
−Removed: We refer to the equipment between the swivel and the drill bit as the drill stem.
−Removed: The swivel assembly sustains the weight of the drill stem, permits its rotation and affords a rotating pressure seal and passageway for circulating drilling fluid into the top of the drill string.
−Removed: The swivel also has a large handle that fits inside the hook assembly at the bottom of the traveling block.
−Removed: Drilling fluid enters the drill stem through a hose, called the rotary hose, attached to the side of the swivel.
−Removed: The kelly is a triangular, square or hexagonal piece of pipe, usually 40 feet long, that transmits torque from the rotary table to the drill stem and permits its vertical movement as it is lowered into the hole.
−Removed: The bottom end of the kelly fits inside a corresponding triangular, square or hexagonal opening in a device called the kelly bushing.
−Removed: The kelly bushing, in turn, fits into a part of the rotary table called the master bushing.
−Removed: As the master bushing rotates, the kelly bushing also rotates, turning the kelly, which rotates the drill pipe and thus the drill bit.
−Removed: Drilling fluid is pumped through the kelly on its way to the bottom.
−Removed: The rotary table, equipped with its master bushing and kelly bushing, supplies the necessary torque to turn the drill stem.
−Removed: The drill pipe and drill collars are both steel tubes through which drilling fluid can be pumped.
−Removed: Drill pipe comes in 30-foot sections, or joints, with threaded sections on each end.
−Removed: Drill collars are heavier than drill pipe and are also threaded on the ends.
−Removed: Collars are used on the bottom of the drill stem to apply weight to the drill bit.
−Removed: At the end of the drill stem is the bit, which chews up the formation rock and dislodges it so that drilling fluid can circulate the fragmented material back up to the surface where the circulating system filters it out of the fluid.
−Removed: Drilling fluid, often called drilling mud, is a mixture of clays, chemicals and water or oil, which is carefully formulated for the particular well being drilled.
−Removed: Bulk storage of drilling fluid materials, the pumps and the mud-mixing equipment are placed at the start of the circulating system.
−Removed: Working mud pits and reserve storage are at the other end of the system.
−Removed: Between these two points the circulating system includes auxiliary equipment for drilling fluid maintenance and equipment for well pressure control.
−Removed: Within the system, the drilling mud is typically routed from the mud pits to the mud pump and from the mud pump through a standpipe and the rotary hose to the drill stem.
−Removed: The drilling mud travels down the drill stem to the bit, up the annular space between the drill stem and the borehole and through the blowout preventer stack to the return flow line.
−Removed: It then travels to a shale shaker for removal of rock cuttings, and then back to the mud pits, which are usually steel tanks.
−Removed: The reserve pits, usually one or two fairly shallow excavations, are used for waste material and excess water around the location.
−Removed: There are numerous factors that differentiate drilling rigs, including their power generation systems, horsepower, maximum drilling depth and horizontal drilling capabilities.
−Removed: The actual drilling depth capability of a rig may be less than or more than its rated depth capability due to numerous factors, including the size, weight and amount of the drill pipe on the rig.
−Removed: The intended well depth and the drill site conditions determine the amount of drill pipe and other equipment needed to drill a well.
Our drilling rigs have rated maximum depth capabilities ranging from 12,500 feet to 20,000 feet.
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Contract terms generally depend on the complexity and risk of operations, the on-site drilling conditions, the type of equipment used, the anticipated duration of the work to be performed and market conditions.
−Removed: Daywork Contracts .
−Removed: Under daywork drilling contracts, we provided equipment and labor and perform services under the direction, supervision and control of our customers.
−Removed: We were paid a specified operating daywork rate from the time the drilling unit is rigged up at the drilling location and is ready to commence operations.
−Removed: Additionally, the daywork drilling contracts typically provide for fees and/or a daywork rates for mobilization, demobilization, moving, standby time and for any continuous period that normal operations are suspended or cannot be carried on because of force majeure conditions.
−Removed: The daywork drilling contracts also generally provide that the customer has the right to designate the points at which casing will be set and the manner of setting, cementing and testing.
−Removed: Such specifications include hole size, casing size, weight, grade and approximate setting depth.
−Removed: Furthermore, the daywork drilling contracts specify the equipment, materials and services to be separately furnished by us and our customer.
−Removed: Under these contracts, liability is typically allocated so that our customer is solely responsible for the following:
−Removed: (i) damage to our surface equipment as a result of certain corrosive elements;
−Removed: (ii) damage to customer’s equipment;
−Removed: (iii) damage to our in-hole equipment;
−Removed: (iv) damage or loss to the hole;
−Removed: (v) damage to the underground;
−Removed: and (vi) costs and damages associated with a wild well.
−Removed: We remain responsible for any damage to our surface equipment (except for damage resulting from the presence of certain corrosive elements) and for pollution or contamination from spills of materials that originate above the surface, are wholly in our control and are directly associated with our equipment.
−Removed: Daywork drilling contracts generally allow the customer to terminate the contract prior to drilling to a specified depth.
−Removed: This right, however, is generally subject to early termination compensation, the amount of which depends on when the termination occurs.
Directional Drilling .
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Currently, we perform our directional drilling services in the Utica Shale, Anadarko Basin, Arkoma Basin, Powder River Basin and Permian Basin.
−Removed: We provide rig moving services in the Permian Basin.
+Added: We provided rig moving services in the Permian Basin.
+Added: Due to market conditions, we temporarily shut-down our rig moving operations beginning in April 2020.
As of December 31, 2020, we owned 16 trucks specifically tailored to move rigs and seven cranes to assist us in moving rigs.
Other Services
−Removed: We also offer a variety of other energy services including coil tubing services, pressure control services, equipment rental services, crude oil hauling services, full service transportation, remote accommodation services, oilfield equipment manufacturing and infrastructure engineering services.
−Removed: Additionally, during certain of the periods discussed in this report, we offered flowback services, cementing services and acidizing services.
−Removed: Due to market conditions, we temporarily shut down our flowback, cementing and acidizing operations beginning in July 2019.
+Added: We also offer a variety of other services including aviation services, equipment rental services, crude oil hauling services, remote accommodation services, equipment manufacturing and infrastructure engineering services.
+Added: Additionally, during certain of the periods discussed in this report, we offered coil tubing services, pressure control services, flowback services, cementing services and acidizing services.
+Added: Due to market conditions, we temporarily shut down our flowback, cementing and acidizing operations beginning in July 2019 and our coil tubing and full service transportation operations beginning in July 2020.
We continue to monitor market conditions to determine if and when we will recommence these services.
−Removed: Coil Tubing .
−Removed: Coiled tubing services involve injecting coiled tubing into wells to perform various well-servicing and workover operations.
−Removed: Coiled tubing is a flexible steel pipe with a diameter of typically less than three inches and manufactured in continuous lengths of thousands of feet.
−Removed: It is wound or coiled on a truck-mounted reel for onshore applications.
−Removed: Due to its small diameter in certain iterations, coiled tubing can be inserted into existing production tubing and used to perform a variety of services to enhance the flow of oil or natural gas without using a larger, more costly workover rig.
−Removed: The principal advantages of using coiled tubing in a workover include the ability to (i) continue production from the well without interruption, thus reducing the risk of formation damage, (ii) move continuous coiled tubing in and out of a well significantly faster than conventional pipe in the case of a workover rig, which must be jointed and unjointed, (iii) direct fluids into a wellbore with more precision, allowing for improved stimulation fluid placement, (iv) provide a source of energy to power a downhole mud motor or manipulate down-hole tools and (v) enhance access to remote fields due to the smaller size and mobility of a coiled tubing unit.
−Removed: As of December 31, 2019 , we had one coiled tubing unit capable of running 25,000 feet of two and five eighths inch coil rated at 15,000 pounds per square inch, or psi, two coiled tubing units capable of running 23,500 feet of two and three eighths inch coil rated at 15,000 psi, one coiled tubing unit capable of running 24,500 feet of two inch coil rated at 15,000 psi, two coiled tubing units capable of running over 22,000 feet of two inch coil rated at 10,000 psi and one coiled tubing unit capable of running 20,500 feet of two and three eighths inch coil rated at 15,000 psi in service.
−Removed: Pressure Control .
−Removed: Our pressure control services consist of nitrogen and fluid pumping services.
−Removed: Our pressure control services equipment is designed to support activities in unconventional resource plays with the ability to operate under high pressures without having to delay or cease production during completion operations.
−Removed: Ceasing or suppressing production during the completion phase of an unconventional well could result in formation damage impacting the overall recovery of reserves.
−Removed: Our pressure control services help operators minimize the risk of such damage during completion activities.
−Removed: As of December 31, 2019 , we had a total of four nitrogen pumping units and seven fluid pumping units.
−Removed: We provide pressure control services in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
−Removed: Nitrogen Services.
−Removed: Nitrogen services involve the use of nitrogen, an inert gas, in various pressure pumping operations.
−Removed: When provided as a stand-alone service, nitrogen is used in displacing fluids in various oilfield applications.
−Removed: As of December 31, 2019 , we had a total of four nitrogen pumping units capable of pumping at a rate of up to 3,000 standard cubic feet per minute with pressures up to 10,000 psi.
−Removed: Pumping at these rates and pressures is typically required for the unconventional oil and natural gas resource plays we serve.
−Removed: Fluid Pumping Services.
−Removed: Fluid pumping services consist of maintaining well pressure, pumping down wireline tools, assisting coiled tubing units and the removal of fluids and solids from the wellbore for clean-out operations.
−Removed: As of December 31, 2019 , we had seven fluid pumping units.
−Removed: Five of these units are coiled tubing double pump units capable of output of up to eight barrels per minute, and are rated for pressures up to 15,000 psi.
−Removed: Two of these units are quintuplex pump units capable of output of up to 15 barrels per minute, and are rated for pressures up to 15,000 psi.
+Added: Aviation Services.
+Added: Our aviation services include leasing helicopters to customers for use primarily in the electrical utility industry.
+Added: Additionally, we provide helicopter training and response services.
+Added: As of December 31, 2020, we owned four helicopters.
Equipment Rentals .
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As of December 31, 2020, we had a fleet of 47 crude oil hauling trucks.
−Removed: Full Service Transportation .
−Removed: During 2019, we expanded our trucking operations to include brokering and hauling of general freight.
−Removed: We are currently operating this business out of South Florida and hauling freight throughout the United States.
−Removed: As of December 31, 2019 , we had a fleet of 19 trucks dedicated to hauling general freight.
Remote Accommodations.
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As of December 31, 2020, 63 of our rooms were utilized.
−Removed: Oilfield Equipment Manufacturing.
−Removed: During the fourth quarter of 2019, we commenced oilfield equipment manufacturing operations at our facility located in Oklahoma.
−Removed: These operations will initially serve our internal needs for our water transfer and equipment rental businesses, but we intend to expand into third party sales in the future.
+Added: Equipment Manufacturing.
+Added: During 2019, we commenced equipment manufacturing operations at our facility located in Oklahoma.
+Added: These operations have initially served our internal needs for our water transfer, equipment rental and infrastructure businesses, but we intend to expand into third party sales in the future.
Infrastructure Engineering.
−Removed: During the fourth quarter of 2019, we began infrastructure engineering operations focused on the transmission and distribution industry.
−Removed: We currently have offices in California and Colorado.
−Removed: As mentioned above, we also provided flowback and cementing and acidizing services.
−Removed: Due to market conditions, we temporarily shut-down our flowback, cementing and acidizing operations beginning in July 2019.
+Added: During 2019, we began infrastructure engineering operations focused on the transmission and distribution industry.
+Added: We are currently providing these services from offices in California, Colorado and Washington.
+Added: In December 2020, we were awarded a contract by a major utility to provide engineering and design services.
+Added: The three-year contract is expected to generate up to approximately $40 million in revenue over the contract term.
+Added: As mentioned above, we also offered coil tubing services, pressure control services, flowback services, cementing services and acidizing services.
+Added: Due to market conditions, we temporarily shut down our flowback, cementing and acidizing operations beginning in July 2019 and our coil tubing and full service transportation operations beginning in July 2020.
We continue to monitor market conditions to determine if and when we will recommence these services.
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Cementing and Acidizing .
−Removed: We provide cementing and acidizing services in the Permian Basin.
+Added: We provided cementing and acidizing services in the Permian Basin.
Due to market conditions, we temporarily shut-down our cementing and acidizing operations beginning in July 2019.
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Acidizing services involve pumping acid into a wellbore to improve productivity or injectivity.
−Removed: As of December 31, 2019 , we owned 13 twin cementers and associated equipment and seven acidizing pumps.
+Added: As of December 31, 2020, we owned 10 twin cementers and associated equipment and four acidizing pumps.
+Added: Coil Tubing .
+Added: We provided coil tubing services in Eagle Ford Shale and Permian Basin.
+Added: Due to market conditions, we temporarily shut-down our coil tubing operations beginning in July 2020.
+Added: Coiled tubing services involve injecting coiled tubing into wells to perform various well-servicing and workover operations.
+Added: Coiled tubing is a flexible steel pipe with a diameter of typically less than three inches and manufactured in continuous lengths of thousands of feet.
+Added: It is wound or coiled on a truck-mounted reel for onshore applications.
+Added: Due to its small diameter in certain iterations, coiled tubing can be inserted into existing production tubing and used to perform a variety of services to enhance the flow of oil or natural gas without using a larger, more costly workover rig.
+Added: The principal advantages of using coiled tubing in a workover include the ability to (i) continue production from the well without interruption, thus reducing the risk of formation damage, (ii) move continuous coiled tubing in and out of a well significantly faster than conventional pipe in the case of a workover rig, which must be jointed and unjointed, (iii) direct fluids into a wellbore with more precision, allowing for improved stimulation fluid placement, (iv) provide a source of energy to power a downhole mud motor or manipulate down-hole tools and (v) enhance access to remote fields due to the smaller size and mobility of a coiled tubing unit.
+Added: As of December 31, 2020, we had one coiled tubing unit capable of running 25,000 feet of two and five eighths inch coil rated at 15,000 pounds per square inch, or psi, two coiled tubing units capable of running 23,500 feet of two and three eighths inch coil rated at 15,000 psi, one coiled tubing unit capable of running 24,500 feet of two inch coil rated at 15,000 psi, two coiled tubing units capable of running over 22,000 feet of two inch coil rated at 10,000 psi and one coiled tubing unit capable of running 20,500 feet of two and three eighths inch coil rated at 15,000 psi in service.
+Added: Pressure Control .
+Added: Our pressure control services consisted of nitrogen and fluid pumping services.
+Added: Due to market conditions, we temporarily shut-down our pressure control operations beginning in July 2020.
+Added: Our pressure control services equipment is designed to support activities in unconventional resource plays with the ability to operate under high pressures without having to delay or cease production during completion operations.
+Added: Ceasing or suppressing production during the completion phase of an unconventional well could result in formation damage impacting the overall recovery of reserves.
+Added: Our pressure control services help operators minimize the risk of such damage during completion activities.
+Added: As of December 31, 2020, we had a total of four nitrogen pumping units and seven fluid pumping units.
+Added: We have provided pressure control services in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
+Added: • Nitrogen Services.
+Added: Nitrogen services involve the use of nitrogen, an inert gas, in various pressure pumping operations.
+Added: When provided as a stand-alone service, nitrogen is used in displacing fluids in various oilfield applications.
+Added: As of December 31, 2020, we had a total of four nitrogen pumping units capable of pumping at a rate of up to 3,000 standard cubic feet per minute with pressures up to 10,000 psi.
+Added: Pumping at these rates and pressures is typically required for the unconventional oil and natural gas resource plays we serve.
+Added: • Fluid Pumping Services.
+Added: Fluid pumping services consist of maintaining well pressure, pumping down wireline tools, assisting coiled tubing units and the removal of fluids and solids from the wellbore for clean-out operations.
+Added: As of December 31, 2020, we had seven fluid pumping units.
+Added: Five of these units are coiled tubing double pump units capable of output of up to eight barrels per minute, and are rated for pressures up to 15,000 psi.
+Added: Two of these units are quintuplex pump units capable of output of up to 15 barrels per minute, and are rated for pressures up to 15,000 psi.
+Added: Full Service Transportation .
+Added: During 2019, we expanded our trucking operations to include brokering and hauling of general freight throughout the United States.
+Added: Due to market conditions, we temporarily shut-down our full service transportation operations beginning in July 2020.
+Added: As of December 31, 2020, we had a fleet of six trucks.
Our Industries
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Certain barriers to entry exist in the markets in which we operate, including adequate financial resources, technical expertise, high safety ratings and a proven track record of operational success.
−Removed: We compete based upon our industry experience, technical expertise, financial and operational resources, geographic presence, industry reputation, our safety record and customer service.
−Removed: While we believe our customers consider a number of factors when selecting a service provider, they
−Removed: generally award most of their work through a bid process.
+Added: We compete based upon our industry experience, technical expertise, financial and operational resources, geographic presence, industry reputation, safety record and customer service.
+Added: While we believe our customers consider a number of factors when selecting a service provider, they generally award most of their work through a bid process.
Consequently, price is often a principal factor in determining which service provider is selected.
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The oil and natural gas industry is also impacted by general domestic and international economic conditions, political instability in oil producing countries, government regulations (both in the United States and elsewhere), levels of customer demand, the availability of pipeline capacity and other conditions and factors, including global and national health concerns, that are beyond our control.
+Added: See “Recent Developments—Impact of the Ongoing COVID-19 Pandemic and Volatility in Commodity Prices” above.
Demand for most of our oil and natural gas products and services depends substantially on the level of expenditures by companies in the oil and natural gas industry.
The levels of capital expenditures of our customers are predominantly driven by the prices of oil and natural gas.
−Removed: Over the past decade, commodity prices, particularly oil, has seen significant volatility with pricing ranging from a high of $110.53 per barrel on September 6, 2013 to a low of $26.19 per barrel on February 11, 2016.
−Removed: Throughout 2019, oil prices fluctuated between a low of $45.41 on January 1, 2019 and a high of $66.30 on April 23, 2019, and averaged $57.03 per barrel for the year.
−Removed: Certain factors related to world politics and major oil producers caused fluctuations in the oil price during 2019.
−Removed: However, overall, the price of oil was relatively stable throughout the year.
−Removed: We anticipate demand for our oil and natural gas services and products will continue to be dependent on the level of expenditures by companies in the oil and natural gas industry and, ultimately, commodity prices.
−Removed: We experienced a weakening in demand for our oilfield services beginning in the third quarter of 2019, which continued throughout the fourth quarter of 2019 as a result of budget exhaustion and capital discipline from our customers.
−Removed: In addition, other factors, including access to capital and the need to refinance or repay maturing debt, have had a significant influence on some of our customers capital budgets and activity levels.
−Removed: While we still expect commodity prices to be the primary driver of capex spending and industry activity levels in the future, other factors may play a significant role in the ultimate level of capex spending by the companies that use our completion and production, natural sand proppant and contract land and directional drilling businesses.
−Removed: Although the ongoing volatility and depressed levels of activity are expected to persist until supply and demand for oil and natural gas come into balance, we believe that the following trends in our industry should benefit our operations and our ability to achieve our primary business objective when commodity prices recover:
−Removed: Increased U.S.
−Removed: Petroleum field Production.
−Removed: According to the U.S.
−Removed: Energy Information Administration, or EIA, U.S.
−Removed: average petroleum field production was approximately 12.2 million barrels per day during 2019, an increase of 11.4% from 2018, with December 2019 average production of approximately 12.9 million barrels per day.
−Removed: average petroleum field production has grown at a compound annual growth rate of 9.2% over the period from 2009 through 2019 due to production gains primarily from unconventional reservoirs.
−Removed: We expect continued growth from unconventional reservoirs in the future will result in increased demand for our services due to higher decline rates from these reservoirs, resulting in increased activity levels.
−Removed: Increased use of horizontal drilling to develop unconventional resource plays.
−Removed: According to Baker Hughes, the horizontal rig count on December 27, 2019 was 703, or approximately 87% of the total U.S.
−Removed: onshore rig count.
−Removed: The horizontal rig count as a percentage of the overall onshore rig count has increased every year since 2007 when horizontal rigs represented only approximately 25% of the total U.S.
−Removed: onshore rig count at year-end.
−Removed: As a result of improvements in drilling and production enhancement technologies, oil and natural gas companies are increasingly developing unconventional resources such as tight sands and shales.
−Removed: Successful and economic production of these unconventional resource plays frequently requires horizontal drilling, fracturing and stimulation services.
−Removed: Drilling related activity for unconventional resources is typically done on tighter acre spacing and thus requires that more wells be drilled relative to conventional resources.
−Removed: We believe that all of these characteristics will drive the demand for our services in an improved commodity price environment.
−Removed: Tight oil production growth is expected to continue to be the primary driver of U.S.
−Removed: oil production growth.
−Removed: According to the EIA, U.S.
−Removed: tight oil production grew from approximately 430,000 barrels per day in 2007 to over 8.2 million barrels per day in 2019, representing approximately 63% of total U.S.
−Removed: crude oil production in 2019.
−Removed: A majority of this increase came from the Eagle Ford play in South Texas, the SCOOP/STACK plays in the mid-continent of Oklahoma, the Bakken Shale in the Williston Basin of North Dakota and Montana, and the Permian Basin in West Texas.
−Removed: believe the Utica Shale and the Permian Basin, our primary business locations, will be key drivers of U.S.
−Removed: tight oil and natural gas production as those plays are developed further in the coming years.
−Removed: Horizontal wells are heavily dependent on oilfield services.
−Removed: According to Baker Hughes, as of December 27, 2019, horizontal rigs accounted for approximately 87% of all rigs drilling in the United States, up from 25% at year-end 2007.
−Removed: The scope of services for a horizontal well are greater than for a conventional well.
−Removed: Industry analysts report that the average horsepower, length of the lateral and number of fracture stages has continued to increase since 2008.
−Removed: We believe our commitment to provide services in unconventional plays, such as the Utica Shale and the Permian Basin, provide us the opportunity to compete in those regional markets where the majority of total footage is drilled each year in the United States.
−Removed: New and emerging unconventional resource plays.
−Removed: In addition to the development of existing unconventional resource plays such as the Permian, Utica, Bakken, Eagle Ford, SCOOP/STACK, Barnett, Fayetteville, Cotton Valley, Haynesville, Marcellus and Woodford Shales, exploration and production companies continue to find new unconventional resources.
−Removed: These include oil and liquids-based shales in the Cana Woodford, Granite Wash and Powder River Basin resource plays.
−Removed: In certain cases, exploration and production companies have acquired vast acreage positions in these plays that require them to drill and produce hydrocarbons to hold the leased acreage.
−Removed: We believe these unconventional resource plays will increasingly drive demand for our services as they typically require the use of extended reach horizontal drilling, multiple stage fracture stimulation and high pressure completion capabilities.
−Removed: Need for additional drilling activity to maintain production levels.
−Removed: With the increased maturity of the onshore conventional and, in many cases, unconventional resource plays, oil and natural gas production may be characterized as having steeper initial decline curves.
−Removed: Given average decline rates and the substantial reduction in activity over the past year, we believe that the number of wells drilled is likely to increase in coming years to maintain and grow current production levels.
−Removed: Once a well has been drilled, it requires recurring production and completion services, which we believe will also drive demand for our services.
+Added: We experienced a weakening in demand for our oilfield services during 2019 as a result of reductions in our customers' capital expenditure budgets.
+Added: The sharp decline in oil prices beginning in March 2020 further reduced the utilization and pricing of our oilfield services.
+Added: In response to market conditions, we temporarily shut down our cementing and acidizing operations and flowback operations beginning in July 2019, our contract drilling operations beginning in December 2019, our rig hauling operations beginning in April 2020 and our coil tubing and full service transportation operations beginning in July 2020.
+Added: We continue to monitor the market to determine if and when we can recommence these services.
+Added: Further, we are currently only operating one of our six pressure pumping fleets.
+Added: Based on current feedback from our exploration and production customers, they are taking a cautious approach to activity levels for 2021 given the recent volatility in oil prices and investor sentiment calling for activities to remain within or below cash flows.
+Added: Market fundamentals are challenging for our oilfield businesses and we expect this trend to continue for at least the first half of 2021.
+Added: Although we believe the reported retirement of equipment across the industry may, at some point, help the market, pricing and utilization for our oilfield services are expected to remain depressed for the foreseeable future.
+Added: While the oilfield portion of our service offerings continue to experience significant challenges, we expect to be ready to ramp up our oilfield service offerings when oilfield demand, pricing and margins strengthen.
+Added: We intend to closely monitor our cost structure in response to market conditions and pursue cost savings where possible.
+Added: Further, a significant portion of our revenue from our pressure pumping business has been derived from Gulfport pursuant to a contract that expires in December 2021.
+Added: On December 28, 2019, Gulfport filed a lawsuit alleging our breach of this contract and seeking to terminate the contract and recover damages for alleged overpayments, audit costs and legal fees.
+Added: Gulfport has not made the payments owed to us under this contract for any periods subsequent to its alleged December 28, 2019 termination date.
+Added: We believe Gulfport's actions are without merit and are vigorously defending the lawsuit.
+Added: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
+Added: Gulfport may take action in its chapter 11 proceeding to terminate its agreement with us and/or seek to reduce our claims for services and damages to which we may be entitled.
+Added: We cannot assure you of the outcome of our claims in Gulfport’s chapter 11 proceeding, what our recovery on those claims might be or whether we will be able to preserve, extend or renew our contract with Gulfport on favorable terms and conditions or at all.
+Added: Likewise, we cannot assure you that we would be able to obtain replacement long-term contracts with other customers sufficient to continue providing the level of services that we currently provide to Gulfport.
+Added: termination of our relationship or nonrenewal of our contract with Gulfport, or one or more of our other customers, would have a material adverse effect on our business, financial condition, results of operations and cash flows.
Natural Sand Proppant Industry
−Removed: Demand growth for frac sand and other proppants is primarily driven by advancements in oil and natural gas drilling and well completion technology and techniques, such as horizontal drilling and hydraulic fracturing, as well as overall industry activity growth.
−Removed: These advancements have made the extraction of oil and natural gas increasingly cost-effective in formations that historically would have been unprofitable to develop, resulting in a greater number of wells being drilled.
−Removed: We believe that demand for proppant will grow over the long-term, primarily driven by the increase in the average amount of proppant consumed per horizontal rig and as a result of the following demand drivers:
−Removed: improvements in drilling rig productivity (from, among other things, pad drilling), resulting in more wells drilled per rig per year;
−Removed: increases in the number of wells drilled per acre;
−Removed: increases in the length of the typical horizontal wellbore;
−Removed: increases in the number of fracture stages per lateral foot in the typical completed horizontal wellbore;
−Removed: increases in the volume of proppant used per fracturing stage;
−Removed: recurring efforts to offset steep production declines in unconventional oil and natural gas reservoirs, including the drilling of new wells and secondary hydraulic fracturing of existing wells.
In 2018 and 2019, several new and existing suppliers completed planned capacity additions of frac sand supply, particularly in the Permian Basin.
−Removed: The industry expansion, coupled with increased capital discipline and budget exhaustion, caused the frac sand market to become oversupplied, particularly in finer grades, during the second half of 2019.
−Removed: With the frac sand market oversupplied, pricing for certain grades has fallen significantly from the peaks experienced throughout 2018 and the first half of 2019.
−Removed: This oversupply has resulted in several industry participants idling and closing high cost mines in the recent months.
−Removed: As these closures continue and the number of industry participants decline, we expect the imbalance between supply and demand to narrow.
−Removed: Nevertheless, demand for our sand declined significantly in the second half of 2019 as a result of increased capital discipline by our customers and budget exhaustion, among other factors.
+Added: The industry expansion, coupled with increased capital discipline, budget exhaustion and the impact on oil demand from the COVID-19 pandemic, caused the frac sand market to become oversupplied, particularly in finer grades.
+Added: With the frac sand market oversupplied, pricing for all grades has fallen significantly from the peaks experienced throughout 2018 and during the first half of 2019.
+Added: This oversupply resulted in several industry participants idling and closing high cost mines in an attempt to restore the supply and demand balance.
+Added: Nevertheless, demand for our sand declined significantly in the second half of 2019 and throughout 2020 as a result of completion activity falling due to lower oil demand and pricing as discussed above, increased capital discipline by our customers and budget exhaustion, among other factors.
We cannot predict if and when demand and pricing will recover sufficiently to return our natural sand proppant services segment to profitability.
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We believe that the coarseness, conductivity, sphericity, acid-solubility, and crush-resistant properties of our Northern White sand reserves and our facilities’ connectivity to rail and other transportation infrastructure afford us a cost advantage over many of our competitors and make us one of a select group of sand producers capable of delivering high volumes of frac sand that is optimal for oil and natural gas production to all major unconventional resource basins currently producing throughout North America.
+Added: A portion of our revenue from our natural sand proppant business is derived from Gulfport pursuant to a contract that expires in December 2021.
+Added: Gulfport has not made the payments owed to us under this contract for any periods subsequent to May 2020.
+Added: In September 2020, we filed a lawsuit seeking to recover delinquent payments owed to us under this contract.
+Added: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
+Added: Gulfport may take action in its chapter 11 proceeding to terminate its agreement with us and/or seek to reduce our claims for services and damages to which we may be entitled.
+Added: We cannot assure you of the outcome of our claims in Gulfport’s chapter 11 proceeding, what our recovery on those claims might be or whether we will be able to preserve, extend or renew our contract with Gulfport on favorable terms and conditions or at all.
+Added: The termination of our relationship or nonrenewal of our contract with Gulfport, or one or more of our other customers, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our Strengths
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We believe that the following strengths position us well to capitalize on activity in unconventional resource plays and achieve our primary business objective:
−Removed: Long-term contractual and other regional relationships with a stable customer base.
−Removed: We are party to two long-term contracts with Gulfport to provide pressure pumping services and natural sand proppant services through December 2021, although Gulfport is seeking to terminate the pressure pumping contract.
−Removed: Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
−Removed: In addition, our operational division heads and field managers have formed long-term relationships with our customer base.
−Removed: We believe these contractual and other relationships help provide us a more stable and growth-oriented client base in the unconventional shale markets as well as the infrastructure markets that we currently serve.
−Removed: Strategic geographic positioning, including primary presence in the Utica Shale, the SCOOP/STACK and the Permian Basin.
−Removed: We currently operate facilities and service centers to support our operations in major unconventional resource plays in the United States, including the Utica Shale in Eastern Ohio, the Permian Basin in West Texas, the SCOOP/STACK in Oklahoma, the Marcellus Shale in West Virginia, the Granite Wash in Oklahoma and Texas, the Cana Woodford Shale in Oklahoma, the Eagle Ford Shale in South Texas and the oil sands in Alberta, Canada.
+Added: • Strategic geographic positioning.
+Added: We currently operate infrastructure facilities and service centers to support our infrastructure operations in the northeast, southwest and midwest portions of the United States.
+Added: We currently operate facilities and service centers to support our oilfield service operations in major unconventional resource plays in the United States, including the Utica Shale in Eastern Ohio, the Permian Basin in West Texas, the SCOOP/STACK in Oklahoma, the Marcellus Shale in West Virginia, the Granite Wash in Oklahoma and Texas, the Cana Woodford Shale in Oklahoma, the Eagle Ford Shale in South Texas and the oil sands in Alberta, Canada.
We believe our geographic positioning within active oil and natural gas liquids resource plays will benefit us strategically as activity increases in these unconventional resource plays.
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In addition, our field managers have expertise in the areas in which they operate and understand the challenges that our customers face.
−Removed: We believe their knowledge of our industries and
−Removed: business lines enhances our ability to provide innovative, client-focused and basin-specific customer service, which we also believe strengthens our relationships with our customers.
−Removed: Young fleet of hydraulic fracturing equipment designed for horizontal wells .
−Removed: Our service fleet is predominantly comprised of equipment designed to optimize recovery from unconventional wells.
+Added: We believe their knowledge of our industries and business lines enhances our ability to provide innovative, client-focused and basin-specific customer service, which we also believe strengthens our relationships with our customers.
+Added: • Young fleet of equipment .
+Added: Our infrastructure service fleet is predominantly comprised of equipment designed to construct and repair electric transmission and distribution lines and our oilfield service fleet is predominantly comprised of equipment designed to optimize recovery from unconventional wells.
Three of our pressure pumping fleets with total combined horsepower of 132,500 were built in 2017.
−Removed: We believe that our fleet of quality equipment will allow us to provide a high level of service to our customers and capitalize on future growth in the unconventional resource plays that we serve.
−Removed: In addition, we are currently in the process of converting a portion of our pressure pumping fleet to include DGB capabilities to meet recent shifts in customer demand, with the initial converted units expected to be field tested in the coming weeks.
+Added: We believe that our fleet of quality equipment will allow us to provide a high level of service to our customers.
+Added: In addition, during 2020 we converted ten of our pressure pumping units to include DGB capabilities to meet recent shifts in customer demand and expect to convert ten more units during the first quarter of 2021.
Our Business Strategy
We intend to achieve our primary business objective in connection with our infrastructure services by the successful execution of our business plan to strategically deploy equipment and personnel to provide infrastructure services across the United States.
−Removed: In the case of our oilfield services, we intend to achieve our primary business objective by the successful execution of our business plan to strategically deploy our equipment and personnel to provide pressure pumping services, natural sand proppant services and other energy services in unconventional resource plays, including the Utica Shale in Ohio, the SCOOP/STACK in Oklahoma and the Permian Basin in West Texas.
+Added: In the case of our oilfield services, we intend to achieve our primary business objective by the successful execution of our business plan to strategically deploy our equipment and personnel to provide well completion services, natural sand proppant services and other energy services in unconventional resource plays, including the Utica Shale in Ohio, the SCOOP/STACK in Oklahoma and the Permian Basin in West Texas.
We believe our infrastructure services optimize our customers’ ability to maintain, improve and expand their infrastructure and that our oil and natural gas services optimize our customers’ ultimate resources recovery and present value of hydrocarbon reserves.
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Our infrastructure services division provides construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
−Removed: Our pressure pumping services division provide hydraulic fracturing services for unconventional wells as well as sand hauling services and water transfer services.
+Added: Our well completion services division provide hydraulic fracturing services for unconventional wells as well as sand hauling services and water transfer services.
Our natural sand proppant services division mines, processes and sells natural sand proppant for hydraulic fracturing.
−Removed: Our drilling services division provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling as well as rig moving services.
−Removed: Additionally, we provide coil tubing services, pressure control services, equipment rentals, crude oil hauling, full service transportation, remote accommodations, oilfield equipment manufacturing and infrastructure engineering services.
+Added: Additionally, we provide directional drilling services, equipment rentals, crude oil hauling, remote accommodations, equipment manufacturing and infrastructure engineering services.
We intend to leverage our existing customer relationships and operational track record to cross sell our services and increase our exposure and product offerings to our existing customers, broaden our customer base and expand opportunistically to other geographic regions in which our customers have operations, as well as to create operational efficiencies for our customers.
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Industry analysts have reported that spending in the T&D industry will exceed $60 billion each year through 2022.
−Removed: We consistently monitor market conditions and intend to expand the
−Removed: capacity and scope of our energy infrastructure services as demand warrants in geographic areas in which we currently operate, as well as in new geographic areas.
+Added: We consistently monitor market conditions and intend to expand the capacity and scope of our energy infrastructure services as demand warrants in geographic areas in which we currently operate, as well as in new geographic areas.
• Leverage our experienced operational management team expertise.
4 unchanged sentences
Our oil and natural gas service equipment is designed to provide a broad range of services for unconventional wells, and our operations are strategically located in major unconventional resource plays.
−Removed: During 2019, oil prices fluctuated between a low of $45.41 on January 1, 2019 and a high of $66.30 on April 23, 2019, and averaged $57.03 per barrel for the year.
−Removed: Certain factors related to world politics and major oil producers caused fluctuations in the oil price during 2019.
−Removed: However, overall, the price of oil was relatively stable throughout the year.
−Removed: If commodity prices stabilize at current levels or improve, we expect to experience increases in demand for our services and products.
−Removed: We will seek to capitalize on any increase in activity in these markets and diversify our operations across additional unconventional resource basins.
+Added: During 2020, oil prices fluctuated between a low of ($37.63) on April 20, 2020 and a high of $63.27 on January 6, 2020, and averaged $39.59 per barrel for the year.
+Added: This extreme price volatility reduced the demand for our oilfield services.
+Added: We cannot predict if or when commodity prices will stabilize and at what levels, but we will seek to capitalize on any increase in activity in our existing markets and diversify our operations across additional unconventional resource basins as opportunities arise.
Our core operations are currently focused in the Utica Shale in Ohio, the SCOOP/STACK in Oklahoma and the Permian Basin in West Texas.
−Removed: We intend to continue to strategically deploy assets to these and other unconventional resource basins and will look to capitalize on further growth in emerging unconventional resource plays as they develop.
Marketing and Customers
Our customers consist primarily of private utilities, IOUs, Co-Ops, independent oil and natural gas producers and land-based drilling contractors in North America.
−Removed: For the years ended December 31, 2019 and 2018 , we had approximately 590 and 460 customers, respectively, including Gulfport, PREPA, Montage Resources, HG Energy and American Electric Power.
+Added: For the years ended December 31, 2020, 2019 and 2018, we had approximately 530, 590 and 460 customers, respectively, including Gulfport, Jefferson Davis Electric Co-op, Inc., American Electric Power Company, Inc, HG Energy LLC and Liberty Oilfield Services Inc.
Our top five customers accounted for approximately 50%, 53% and 77%, respectively, of our revenue for the years ended December 31, 2020, 2019 and 2018.
−Removed: During the year ended December 31, 2019 , Gulfport and PREPA accounted for 20% and 15% , respectively, of our revenue.
−Removed: For the year ended December 31, 2018 , PREPA and Gulfport accounted for 60% and 8% , respectively, of our revenue.
+Added: During the year ended December 31, 2020, Gulfport accounted for 16% of our revenue.
For the year ended December 31, 2019, Gulfport and PREPA accounted for 20% and 15%, respectively, of our revenue.
+Added: For the year ended December 31, 2018, Gulfport and PREPA accounted for 8% and 60%, respectively, of our revenue.
Although we believe we have a broad customer base and wide geographic coverage of operations, it is likely that we will continue to derive a significant portion of our revenue from a relatively small number of customers in the future.
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Our services for PREPA ended in the first quarter of 2019 and we are currently involved in a lawsuit with Gulfport in which Gulfport is seeking to terminate our pressure pumping contract with it and receive certain alleged damages.
+Added: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
−Removed: Infrastructure Services Backlog
−Removed: Estimated backlog for our infrastructure services represents the amount of revenue we expect to realize over the next 36 months from future work on uncompleted construction projects, including new contracts under which work has not begun.
−Removed: Our estimated backlog also includes amounts payable to us under master service and other service agreements.
−Removed: Estimated infrastructure services backlog for work under master service and other service agreements is determined based on historical trends, experience from similar projects and estimates of customer demand based on communications with our customers.
−Removed: As of December 31, 2019 , our infrastructure services backlog was $490 million, all of which is attributable to operations in the continental United States.
−Removed: In 2020, we expect to realize approximately $148 million of our backlog.
−Removed: Approximately $479 million of our infrastructure services backlog as of December 31, 2019 is attributable to amounts under master service or other service agreements pursuant to which our customers are not contractually committed to purchase a minimum amount of services.
−Removed: Most of these agreements can be canceled on short or no advance notice.
−Removed: Timing of revenue for our infrastructure services backlog can be subject to change as a result of our delays, customer delays, regulatory delays or other factors.
−Removed: These changes could cause estimated revenue to be realized in periods later than originally expected, or not at all.
−Removed: We occasionally experience postponements, cancellations and reductions in expected future work from master service agreements or other service agreements due to changes in our customers’ spending plans, market volatility, governmental funding and regulatory factors.
−Removed: There can be no assurance as to our customers’ requirements or the accuracy of our estimates.
−Removed: As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.
−Removed: Backlog is not a term recognized under accounting principles generally accepted in the United States;
−Removed: however, it is a common measurement used in the infrastructure industry.
−Removed: As such, our methodology for determining backlog may not be comparable to the methodologies used by others.
Operating Risks and Insurance
8 unchanged sentences
In addition to the property damage, personal injury and other losses from these accidents, the frequency and severity of these incidents affect our operating costs and insurability and our relationships with customers, employees, regulatory agencies and other parties.
−Removed: Any significant increase in the frequency or severity of these incidents, or the general level of compensation awards, could adversely affect the cost of, or our ability to obtain, workers’ compensation and other forms of insurance, and could have other material adverse effects on our financial condition and results of operations.
+Added: Any significant increase in the frequency or severity of these incidents, or the general level of compensation awards, could adversely affect the cost of, or our ability to obtain, workers’
+Added: compensation and other forms of insurance, and could have other material adverse effects on our financial condition and results of operations.
We maintain commercial general liability, workers’ compensation, business auto, commercial property, motor truck cargo, umbrella liability, in certain instances, excess liability, and directors and officers insurance policies providing coverages of risks and amounts that we believe to be customary in our industry.
7 unchanged sentences
In the energy services industry, an important competitive factor in establishing and maintaining long-term customer relationships is having an experienced and skilled workforce.
−Removed: Many of our large customers place an emphasis not only on pricing, but also on safety records and quality management systems of contractors.
+Added: Many of our larger customers place an emphasis not only on pricing, but also on safety records and quality management systems of contractors.
We have committed resources toward employee safety and quality management training programs.
15 unchanged sentences
and EMCOR Group, Inc.
−Removed: Our major competitors in pressure pumping services include Halliburton Company, U.S.
−Removed: Well Services, LLC, Schlumberger Limited, NexTier Oilfield Solutions, Inc., RPC Incorporated, Liberty Oilfield Services, Inc.
+Added: Our major competitors in well completion services include Halliburton Company, U.S.
+Added: Well Services, LLC, NexTier Oilfield Solutions, Inc., RPC Incorporated, Liberty Oilfield Services, Inc.
and FTS International, Inc.
−Removed: Our major competitors in our natural sand proppant services business are Badger Mining Corporation, Covia Holdings Corporation, Hi-Crush Partners LP, Preferred Proppants LLC, Smart Sand, Inc., Emerge Energy Services LP and U.S.
+Added: Our major competitors in our natural sand proppant services business are Badger Mining Corporation, Covia Holdings Corporation, Hi-Crush Partners LP, Smart Sand, Inc.
Silica Holdings Inc.
We believe that the principal competitive factors in the market areas that we serve are quality of service and products, reputation for safety, technical proficiency, availability and price.
−Removed: While we must be competitive in our pricing, we believe our customers select our services and products based on the local leadership and expertise that our field management and operating personnel use to deliver quality services and products.
+Added: While we must be competitive in our pricing, we believe our
+Added: customers select our services and products based on the local leadership and expertise that our field management and operating personnel use to deliver quality services and products.
We operate under the jurisdiction of a number of regulatory bodies that regulate worker safety standards, permitting and inspection requirements applicable to construction projects, building and electrical codes regulations, government project regulations, the handling of hazardous materials, the transportation of explosives, the protection of human health and the environment and driving standards of operation.
4 unchanged sentences
• licensing, permitting and inspection requirements applicable to contractors, electricians and engineers;
+Added: • regulations governing environmental and conservation matters;
• regulations relating to worker safety;
40 unchanged sentences
Waste Handling .
−Removed: We handle, transport, store and dispose of wastes that are subject to the federal Resource Conservation and Recovery Act, as amended, or RCRA, and comparable state statutes and regulations promulgated thereunder, which affect our activities by imposing requirements regarding the generation, transportation, treatment, storage, disposal and
−Removed: cleanup of hazardous and non-hazardous wastes.
+Added: We handle, transport, store and dispose of wastes that are subject to the federal Resource Conservation and Recovery Act, as amended, or RCRA, and comparable state statutes and regulations promulgated thereunder, which affect our activities by imposing requirements regarding the generation, transportation, treatment, storage, disposal and cleanup of hazardous and non-hazardous wastes.
With federal approval, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.
10 unchanged sentences
Under CERCLA and comparable state statutes, persons deemed “responsible parties” are subject to strict liability, that, in some circumstances, may be joint and several for the costs of removing or remediating previously disposed substances (including substances disposed of or released by prior owners or operators) or property contamination (including groundwater contamination), for damages to natural resources and for the costs of certain health studies.
−Removed: In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.
+Added: In addition, it is not uncommon for neighboring landowners and other third parties to file claims for
+Added: personal injury and property damage allegedly caused by the hazardous substances released into the environment.
In the course of our operations, we use materials that, if released, would be subject to CERCLA and comparable state statutes.
10 unchanged sentences
However, on October 22, 2019, the agencies published a final rule to repeal the 2015 rules.
−Removed: The 2015 rule and the 2019 repeal are subject to several ongoing legal challenges.
−Removed: Also, on February 14, 2019, the EPA and the Corps published a proposed rule that would replace the 2015 rule, and significantly reduce the waters subject to federal regulation under the Clean Water Act.
−Removed: Such proposal is currently subject to public review and comment, after which additional legal challenges are anticipated.
−Removed: Further, on April 23, 2019, the EPA published an interpretive statement and request for comment, clarifying that the Clean Water Act’s permitting program for pollutant discharges does not apply to releases of pollutants to groundwater.
+Added: The 2015 rules and the 2019 repeal are subject to several ongoing legal challenges.
+Added: Also, on April 21, 2020, the EPA and the Corps published a final rule replacing the 2015 rules, and significantly reducing the waters subject to federal regulation under the Clean Water Act.
+Added: Several state and environmental groups have challenged the replacement rule and, on January 20, 2021, the Biden Administration directed the EPA and the Corps to review the rule.
As a result of such recent developments, substantial uncertainty exists regarding the scope of waters protected under the Clean Water Act.
17 unchanged sentences
Almost one-half of the states have already taken measures to reduce emissions of GHGs primarily through the development of GHG emission inventories and/or regional GHG cap-and-trade programs.
+Added: Also, states have imposed increasingly stringent requirement related to the venting or flaring of gas during oil and
+Added: gas operations.
While we are subject to certain federal GHG monitoring and reporting requirements, our operations currently are not adversely impacted by existing federal, state and local climate change initiatives.
3 unchanged sentences
The Paris Agreement establishes a framework for the parties to cooperate and report actions to reduce GHG emissions.
−Removed: However, on June 1, 2017, President Trump announced that the United States would withdraw from the Paris Agreement, and begin negotiations to either re-enter or negotiate an entirely new agreement with more favorable terms for the United States.
−Removed: The Paris Agreement sets forth a specific exit process, whereby a party may not provide notice of its withdrawal until three years from the effective date, with such withdrawal taking effect one year from such notice.
−Removed: On November 4, 2019, the Trump Administration submitted its formal notification of withdrawal to the United Nations.
−Removed: It is not clear what steps, if any, will be taken to negotiate a new agreement, or what terms would be included in such an agreement.
−Removed: In response to the announcement, many state and local leaders have stated their intent to intensify efforts to uphold the commitments set forth in the international accord.
+Added: Although the United States withdrew from the Paris Agreement effective November 4, 2020, President Biden issued an executive order on January 20, 2021 to rejoin the Paris Agreement, which went into effect on February 19, 2021.
+Added: The United States has indicated its plan to announce in advance of an April 22, 2021 climate summit, its nationally determined contribution, or its commitment to reduce its national greenhouse gas emissions to meet this objective.
+Added: Furthermore, many state and local leaders have stated their intent to intensify efforts to uphold the commitments set forth in the international accord.
Restrictions on emissions of methane or carbon dioxide that may be imposed could adversely affect the oil and natural gas industry by reducing demand for hydrocarbons and by making it more expensive to develop and produce hydrocarbons, either of which could have a material adverse effect on future demand for our services.
5 unchanged sentences
As a result, private individuals or public entities may seek to enforce environmental laws and regulations against certain energy companies and could allege personal injury, property damages or other liabilities.
−Removed: While our business is not a party to any such
−Removed: litigation, we could be named in actions making similar allegations.
+Added: While our business is not a party to any such litigation, we could be named in actions making similar allegations.
An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.
5 unchanged sentences
The ESA provides broad protection for species of fish, wildlife and plants that are listed as threatened or endangered in the U.S.
−Removed: Similar protections are offered to migratory birds under the Migratory Bird Treaty Act, though, in December 2017, the U.S.
−Removed: Fish and Wildlife Service provided guidance limiting the reach of the Act.
+Added: Similar protections are offered to migratory birds under the Migratory Bird Treaty Act.
Federal agencies are required to insure that any action authorized, funded or carried out by them is not likely to jeopardize the continued existence of listed species or modify their critical habitat.
18 unchanged sentences
In particular, on May 12, 2016, the EPA amended the NSP standards to impose new standards for methane and VOC emissions for certain new, modified and reconstructed equipment, processes and activities across the oil and natural gas sector.
−Removed: However, in a March 28, 2017 executive order, President Trump directed the EPA to review the 2016 regulations and, if appropriate, to initiate a rulemaking to rescind or revise them consistent with the stated policy of promoting clean and safe development of the nation’s energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production.
−Removed: On June 16, 2017, the EPA published a proposed rule to stay for two years certain
−Removed: requirements of the 2016 regulations, including fugitive emission requirements.
−Removed: Also, on October 15, 2018, the EPA published a proposed rule to significantly reduce regulatory burdens imposed by the 2016 regulations, including, for example, reducing the monitoring frequency for fugitive emissions and revising the requirements for pneumatic pumps at well sites.
−Removed: In addition, on August 28, 2019, the EPA proposed amendments to the 2012 and 2016 New Source Performance standards to ease regulatory burdens, including rescinding standards applicable to transmission or storage segments and eliminating methane requirements altogether.
−Removed: Legal challenges are anticipated and thus substantial uncertainty exists regarding the scope of New Source Performance standards for oil and natural gas operations.
+Added: However, in a March 28, 2017 executive order, the Trump Administration directed the EPA to review the 2016 regulations and, if appropriate, to initiate a rulemaking to rescind or revise them consistent with the stated policy of promoting clean and safe development of the nation’s energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production.
+Added: Accordingly, on August 13, 2019, the EPA issued amendments to the 2012 and 2016 New Source Performance standards to ease regulatory burdens, including rescinding standards applicable to transmission or storage segments and eliminating methane requirements altogether.
+Added: Various state, municipal and environmental groups have challenged the amendments, and, on January 20, 2021, President Biden issued an executive order directing the EPA to review the amendments consistent with several policy objectives, including reducing greenhouse gas emissions.
+Added: Thus, substantial uncertainty exists regarding the scope of New Source Performance standards for oil and natural gas operations.
The New Source Performance standards, to the extent implemented, as well as any future laws and their implementing regulations, may require us to obtain pre-approval for the expansion or modification of existing facilities or the construction of new facilities expected to produce air emissions, impose stringent air permit requirements, or mandate the use of specific equipment or technologies to control emissions.
5 unchanged sentences
The rule also clarifies when operators owe the government royalties for flared gas.
−Removed: On March 28, 2017, President Trump signed an executive order directing the BLM to review the above rules and, if appropriate, to initiate a rulemaking to rescind or revise them.
+Added: On March 28, 2017, the Trump Administration issued an executive order directing the BLM to review the above rules and, if appropriate, to initiate a rulemaking to rescind or revise them.
Accordingly, on December 29, 2017, the BLM published a final rule to rescind the 2015 hydraulic fracturing rule.
−Removed: however, a coalition of environmentalists, tribal advocates and the State of California filed lawsuits challenging the rule rescission.
−Removed: Also, on April 4, 2018, a federal district court stayed certain provisions of the waste prevention rule and, on September 28, 2018, the BLM finalized revisions to the rule to reduce “unnecessary compliance burdens.” The States of California and New Mexico have challenged the scaled-back rule.
+Added: A coalition of environmentalists, tribal advocates and the State of California filed lawsuits challenging the rule rescission.
+Added: Also, on September 28, 2018, the BLM finalized revisions to the waste prevention
+Added: rule to reduce “unnecessary compliance burdens”.
+Added: However, a federal court struck down the scaled-back rule on July 15, 2020, and shortly thereafter, on October 8, 2020, another federal court struck down the 2016 waste prevention rule.
At this time, it is uncertain when, or if, the rules will be implemented, and what impact they would have on our operations.
41 unchanged sentences
The effect of these regulations may be to limit the amount of oil and natural gas that may be produced from wells and to limit the number of wells or locations our customers can drill.
−Removed: The Ohio Department of Natural Resources, or the ODNR, has enacted a comprehensive set of rules to regulate the construction of well pads.
−Removed: Under these new rules, operators must submit detailed horizontal well pad site plans certified by a professional engineer for review by the ODNR Division of Oil and Gas Resources Management prior to the construction of a well pad.
+Added: In 2015, the Ohio Department of Natural Resources, or the ODNR, enacted a comprehensive set of rules to regulate the construction of well pads.
+Added: Under these rules, operators must submit detailed horizontal well pad site plans certified by a professional engineer for review by the ODNR Division of Oil and Gas Resources Management prior to the construction of a well pad.
These rules have resulted in increased construction costs for operators.
−Removed: Also, on November 20, 2018, Ohio EPA announced that it intends to develop new rules that would cover air pollution emissions associated with non-conventional oil and gas facilities.
+Added: On November 20, 2018, the Ohio EPA announced that it intends to evaluate current rules that cover air pollution emissions associated with non-conventional oil and gas facilities.
+Added: The Ohio EPA is considering changes to its regulations on air quality at hydraulic fracturing and natural gas drilling sites to include compressor sites and production sites.
The petroleum industry is also subject to compliance with various other federal, state and local regulations and laws.
9 unchanged sentences
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are made available free of charge on the Investor Relations page of our website at www.mammothenergy.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
−Removed: Information contained on our website, or on other websites that may be linked to our website, is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this report or any other filing that we make with the SEC.
+Added: Information contained on our website, or on other websites that may be linked to our website, is not incorporated by reference into this annual report on Form 10-K and should not be considered part of this report or any other filing that we make with the Securities and Exchange Commission (the “SEC”) .
+Added: Risk Factors Summary
+Added: The following is a summary of the principal risks that could adversely affect our business, operations and financial results.
+Added: Please refer to Item 1A “Risk Factors” of this Form 10-K below for additional discussion of the risks summarized in this Risk Factors Summary.
+Added: Risks Related to Our Business and the Industries We Serve
+Added: • Our business and operations have been and will likely continue to be adversely affected by the COVID-19 pandemic.
+Added: • Our customer base is concentrated and the loss of one or more of our significant customers, or their failure to pay the amounts they owe us, could cause our revenue to decline substantially.
+Added: • Failure by PREPA to pay the amounts owed to our infrastructure subsidiary Cobra for services performed would materially and adversely affected our financial condition, results of operations and cash flows.
+Added: • Our largest 2020 customer Gulfport may take actions in its pending voluntary Chapter 11 proceeding to terminate its agreements with us and/or seek to reduce our claims for services and damages.
+Added: • We may experience losses in excess of our recorded reserves for receivables.
+Added: • The outcomes of investigations and litigation relating to our contracts with PREPA may have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: • Our revolving credit facility imposes, and any of our future credit facilities may impose, restrictions on us that may affect our ability to successfully operate our business.
+Added: • Our failure to receive payment for contract change orders or adequately recover on claims brought by us against customers related to payment terms and costs could materially and adversely affect our business.
+Added: • We may not accurately estimate the costs associated with infrastructure services provided under fixed price contracts, which could adversely affect our business, financial condition and cash flows.
+Added: • We may be unable to obtain sufficient bonding capacity to support certain service offerings, and the need for performance and surety bonds could reduce availability under our credit facility.
+Added: • The nature of our infrastructure services business exposes us to potential liability for warranty claims and faulty engineering, which may reduce our profitability.
+Added: • Delays and reductions in government appropriations can negatively impact energy infrastructure construction, maintenance and repair projects and may impair the ability of our energy infrastructure customers to timely pay for products or services provided or result in their insolvency or bankruptcy.
+Added: • Continued volatility in the oil and natural gas markets have negatively impacted, and are likely to continue to negatively impact, our oilfield services.
+Added: • Our business depends upon our ability to obtain specialized equipment and parts from third-party suppliers, and we may be vulnerable to delayed deliveries and future price increases.
+Added: • Future performance of our natural sand proppant services business will depend on our ability to appropriately react to potential fluctuations in the demand for and supply of frac sand.
+Added: • Increasing transportation and related costs could have a material adverse effect on our business.
+Added: • Diminished access to water and inability to secure or maintain necessary permits may adversely affect operations of our frac sand processing plants.
+Added: • Development of permanent infrastructure in the Canadian oil sands region or other locations where we locate our remote accommodations could negatively impact our remote accommodations business.
+Added: • In the course of our business, we may become subject to lawsuits, indemnity or other claims, which could materially and adversely affect our business, results of operations and cash flows.
+Added: • We rely on a few key employees and skilled and qualified workers whose absence or loss could adversely affect our business.
+Added: • Our operations may be limited or disrupted in certain parts of the continental U.S.
+Added: and Canada during severe weather conditions.
+Added: • Our operations require substantial capital and we may be unable to obtain needed capital or financing on satisfactory terms or at all, which could limit our ability to grow.
+Added: • We may have difficulties in identifying and financing suitable, accretive acquisition opportunities and integrating businesses, assets and personnel.
+Added: • Our liquidity needs could restrict our operations and make us more vulnerable to adverse economic conditions.
+Added: • Our revolving credit facility provides, and any future credit facilities may provide, for fluctuating interest rates, which may increase or decrease our interest expense.
+Added: • Our operations are subject to hazards inherent in the oil and natural gas and energy infrastructure industries, which could expose us to substantial liability and cause us to lose customers and substantial revenue.
+Added: • We are subject to extensive environmental, health and safety laws, trucking and other regulations that may subject us to increased costs and/or substantial liability.
+Added: • Our operations in our natural sand proppant services business are dependent on our rights and ability to mine our properties and on our having renewed or received the required permits and approvals from governmental authorities and other third parties.
+Added: • Changes in tax laws and regulations or adverse outcomes resulting from examination of our tax returns may adversely affect our business, results of operations, financial condition and cash flow.
+Added: • A cyber incident could occur and result in information theft or other loss, data corruption, operational disruption and/or financial loss.
+Added: Risks Inherent to Our Common Stock
+Added: • Our two largest stockholders control a significant percentage of our common stock, and their interests may conflict with those of our other stockholders.
+Added: • A significant reduction by Wexford of its ownership interests in us could adversely affect us.
+Added: • Sales of shares of our common stock by two of our largest stockholders or sales of substantial amounts of our common stock by other stockholders could adversely affect the market price of our common stock.
+Added: • The corporate opportunity provisions in our certificate of incorporation could enable Wexford, Gulfport or other affiliates of ours to benefit from corporate opportunities that might otherwise be available to us.
+Added: • We have engaged and expect to continue to engage in transactions with our affiliates, the terms of which and the resolution of any conflicts thereunder may not always be in our or our stockholders’ best interests.
+Added: • If our operating results do not meet expectations of securities and financial analysts, the price of our common stock could decline.
+Added: • We may issue preferred stock adversely affecting the voting power or value of our common stock.
+Added: • Provisions in our certificate of incorporation and bylaws and Delaware law make it more difficult to effect a change in control of the company, which could adversely affect the price of our common stock.
+Added: • The exclusive forum provisions of our certificate of incorporation could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
+Added: • The declaration of dividends on our common stock is within the discretion of our board of directors, and there is no guarantee that we will pay any dividends in the future or at levels anticipated by our stockholders.
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.