−Removed: We are an integrated, growth-oriented company serving both the electric utility and oil and gas industries in North America.
+Added: We are an integrated, growth-oriented energy services company focused on the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses.
+Added: We also provide products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserves.
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, 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.
−Removed: Our infrastructure services division provides construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
+Added: Our suite of services includes infrastructure services, well completion services, natural sand proppant services, drilling services and other services.
+Added: Our infrastructure services division provides engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
Our well completion services division provides hydraulic fracturing, sand hauling and water transfer services.
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Our drilling services division currently provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling.
−Removed: 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.
+Added: In addition to these service divisions, we also provide aviation services, equipment rentals, remote accommodations and equipment manufacturing.
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 equipment manufacturing operations.
+Added: We offer infrastructure engineering services focused on the transmission and distribution industry and also have equipment manufacturing operations and offer fiber optic services.
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.
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.
+Added: Our fiber optic services include the installation of both aerial and buried fiber.
We are continuing to explore other opportunities to expand our business lines as we shift to a broader industrial focus.
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• The Cana Woodford and Woodford Shales and the Cleveland Sand in Oklahoma;
−Removed: • The Eagle Ford Shale in Texas;
• Southern California;
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Impact of the Ongoing COVID-19 Pandemic and Volatility in Commodity Prices
−Removed: 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.
−Removed: 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.
−Removed: 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.
In March and April 2020, concurrent with the spread of COVID-19 and quarantine orders in the U.S.
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.
−Removed: 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.
−Removed: As a result, downward pressure on commodity prices could continue for the foreseeable future.
−Removed: We cannot predict if, or when, commodity prices will stabilize and at what price points and when global inventories will return to normalized levels.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: As a result, depressed levels of oilfield service activity are expected to continue for the foreseeable future.
−Removed: 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: Beginning in March 2020, in response to the COVID-19 pandemic and the depressed commodity prices, many exploration and production companies, including our customers, substantially reduced their capital expenditure budgets.
+Added: As a result, demand for our oilfield services declined at the end of the first quarter of 2020 and continued to decline further throughout the remainder of 2020.
+Added: Exploration and production companies set their 2021 budgets based on the prevailing prices for oil and gas at the time.
+Added: Although demand for oil and natural gas and commodity prices increased during the fourth quarter of 2021, these budgets for the publicly traded exploration and production companies remained relatively unchanged throughout 2021 with any excess cash flows used for debt repayment or shareholder returns rather than to increase production, as has been the case in the past.
+Added: Although activity levels for exploration and production companies increased during the fourth quarter of 2021 and early 2022 due to the improvement in the U.S.
+Added: and global economic activity, easing of the COVID-19 pandemic related restrictions, availability of vaccines and treatments and rising energy use and commodity prices, the emergence of the Delta COVID-19 variant in the latter part of 2021 and the subsequent surge of the highly transmissible Omicron variant continued to drive economic and pricing volatility and a cautious production outlook for 2022.
+Added: On July 18, 2021, the OPEC+ reached an agreement to phase out 5.8 million Bbl per day of oil production cuts by September 2022 as prices of crude oil reached their highest levels in more than two years.
+Added: Coordinated increases in oil supply by OPEC+ began in August 2021, increasing overall oil production by 400,000 Bbl per day on a monthly basis from that point forward.
+Added: Further, on January 4, 2022, OPEC+ agreed to continue to raise its output target by 400,000 Bbl per day in February 2022, which is expected to further boost oil supply in response to rising demand.
+Added: In its report issued on February 10, 2022, OPEC noted its expectation that world oil demand will rise by 4.15 million Bbl per day in 2022, as the global economy continues to post a strong recovery from the COVID-19 pandemic.
+Added: Although this demand outlook is expected to underpin oil prices, which have already seen a seven-year high in early 2022, we cannot predict the impact of these events on commodity prices and expect a competitive market for oilfield services for the foreseeable future.
We have taken, and continue to take, responsible steps to protect the health and safety of our employees during the COVID-19 pandemic.
−Removed: 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.
−Removed: These actions have included reducing headcount, adjusting pay and limiting spending.
−Removed: 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.
−Removed: 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.
+Added: We are continue to monitor the adverse industry and market conditions resulting from the COVID-19 pandemic and have taken mitigating steps in an effort to preserve liquidity, reduce costs and lower capital expenditures.
+Added: For additional information, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations".
Our revenues, operating (loss) income and identifiable assets are primarily attributable to four reportable segments:
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Infrastructure Services
−Removed: Our infrastructure services business provides construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
−Removed: We offer a broad range of services on electric transmission and distribution, or T&D, networks and substation facilities, which include construction, upgrade, maintenance and repair of high voltage transmission lines, substations and lower voltage overhead and underground distribution systems.
+Added: Our infrastructure services business provides engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
+Added: We offer a broad range of services on electric transmission and distribution, or T&D, networks and substation facilities, which include engineering, design, construction, upgrade, maintenance and repair of high voltage transmission lines, substations and lower voltage overhead and underground distribution systems.
Our commercial services include the installation, maintenance and repair of commercial wiring.
We also provide storm repair and restoration services in response to storms and other disasters.
−Removed: We provide infrastructure services primarily in the northeast, southwest and midwest portions of the United States.
+Added: We provide infrastructure services primarily in the northeast, southwest, midwest and western portions of the United States.
We currently have agreements in place with private utilities, public IOUs and Co-Ops.
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.
−Removed: 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: 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.
The one-year contract, as amended, provided for payments of up to $945 million.
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“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.
−Removed: Demand for our infrastructure services in the continental United States remains steady, and our crew count remained stable at approximately 115 crews throughout 2020.
−Removed: The COVID-19 pandemic and resulting economic conditions have not had a material impact on demand or pricing for our infrastructure services.
−Removed: 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.
−Removed: Each distribution crew generally consists of five employees.
−Removed: These transmission and distribution crews work for multiple utilities primarily across the northeastern, midwestern and southwestern portions of the United States.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We also believe that the skill sets and experience of our crews will afford us enhanced bidding opportunities in both the U.S.
−Removed: and overseas.
+Added: Our crew count declined from approximately 100 crews as of December 31, 2020 to approximately 82 crews as of December 31, 2021.
+Added: Although the COVID-19 pandemic and resulting economic conditions have not had a material impact on demand or pricing for our infrastructure services, revenues for our infrastructure services have declined in 2021 as a result of certain management changes throughout the year, which resulted in crew departures, and a decline in storm restoration activities.
+Added: During the third quarter of 2021, we made leadership changes in our infrastructure group.
+Added: We are focused on cutting costs and enhancing accountability across the division, and we saw improvement in both areas throughout the fourth quarter of 2021.
+Added: Funding for projects in the infrastructure space remains strong with added opportunities expected in the second half of 2022 and into 2023 as a result of the Infrastructure Investment and Jobs Act, which was signed into law on November 15, 2021.
+Added: We continue to pursue opportunities within this sector as we strategically structure our service offerings for growth, intending to increase our infrastructure services activity and expand both our geographic footprint and depth of projects.
+Added: In late 2021, we were awarded a fiber installation contract which is expected to generate an aggregate of approximately $4.5 million in revenue over the next year.
+Added: Additionally, we were awarded a multi-year electric vehicle charging station engineering contract, which could generate up to $5.0 million in revenue and will run into 2024.
+Added: Both of these projects are currently in process.
+Added: We work for multiple utilities primarily across the northeastern, southwestern, midwestern and western portions of the United States.
+Added: We believe that we are well-positioned to compete for new projects due to the experience of our infrastructure management team, combined with our vertically integrated service offerings.
+Added: We are seeking to leverage this experience and our service offerings to grow our customer base and increase our revenues in the continental United States over the coming years.
Well Completion Services
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We provide pressure pumping services, also known as hydraulic fracturing, to exploration and production companies.
−Removed: These services are intended to optimize hydrocarbon flow paths during the completion phase of horizontal shale wellbores.
−Removed: Currently, we provide pressure pumping services in the Utica Shale of Eastern Ohio and the mid-continent region in Oklahoma.
−Removed: We currently own six fleets of pressure pumping equipment.
−Removed: As of December 31, 2020, one of the fleets was staffed and providing services in the northeast.
−Removed: Our pressure pumping services include high-pressure hydraulic fracturing services.
Fracturing services are performed to enhance the production of oil and natural gas from formations having low permeability such that the flow of hydrocarbons is restricted.
We have significant expertise in multistage fracturing of horizontal oil and natural gas producing wells in shale and other unconventional geological formations.
+Added: Currently, we provide pressure pumping services in the Utica Shale of Eastern Ohio and the mid-continent region in Oklahoma.
The fracturing process consists of pumping a fracturing fluid into a well at sufficient pressure to fracture the formation.
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As a result of the fracturing process, production rates are usually enhanced substantially, thus increasing the rate of return for the operator.
−Removed: We own and operate fleets of mobile hydraulic fracturing units and other auxiliary heavy equipment to perform fracturing services.
−Removed: Our hydraulic fracturing units consist primarily of a high pressure hydraulic pump, an engine, a transmission and various hoses, valves, tanks and other supporting equipment that are typically mounted to a flat-bed trailer.
−Removed: 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: 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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Our customers are responsible for the disposal of the fracturing fluid that flows back out of the well as waste water.
−Removed: The customers remove the water from the well using a controlled flow-back process, and we are generally not involved in that process or in the disposal of the fluid.
+Added: customers remove the water from the well using a controlled flow-back process, and we are generally not involved in that process or in the disposal of the fluid.
+Added: We own and operate fleets of mobile hydraulic fracturing units and other auxiliary heavy equipment to perform fracturing services.
+Added: Our hydraulic fracturing units consist primarily of a high-pressure hydraulic pump, an engine, a transmission and various hoses, valves, tanks and other supporting equipment that are typically mounted to a flat-bed trailer.
+Added: As of December 31, 2021, 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.
+Added: Currently, two of the fleets are staffed and providing services in the northeast and midcontinent regions.
+Added: Over the past two years, we have converted 20 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 an additional 10 units.
Sand Hauling .
−Removed: Our sand hauling services provide last-mile trucking and logistics services for proppant used in completion activities in the Utica Shale, Permian Basin and SCOOP/STACK.
+Added: Our sand hauling services provide last-mile trucking and logistics services for proppant used in completion activities in the Utica Shale and SCOOP/STACK.
As of December 31, 2021, we owned a fleet of 40 trucks.
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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 Energy Corporation, or Gulfport, to provide pressure pumping services.
−Removed: As amended and restated, this contract has a term ending on December 31, 2021.
−Removed: Gulfport is seeking to terminate this contract.
−Removed: Further, on November 13, 2020 Gulfport, one of our largest customers, filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
−Removed: For additional information regarding Gulfport's action, see Note 20.
−Removed: Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
Natural Sand Proppant Services
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unconventional oil and natural gas producing basins, including those in which we operate.
−Removed: At our Barron County and Jackson County, Wisconsin plants, we mine and process sand into premium monocrystalline sand (also known as frac sand), a specialized mineral that is used as a proppant.
−Removed: We can also purchase raw or washed sand and process it at our indoor sand processing plant located in Pierce County, Wisconsin, however, this facility has been temporarily idled since September 2018 due to market conditions.
+Added: At our Barron County and Jackson County, Wisconsin plants, we mine and process sand into premium monocrystalline sand, a specialized mineral that is used as frac sand.
+Added: We can also purchase raw or washed sand and process it at our indoor sand processing plant located in Pierce County, Wisconsin;
+Added: however, this facility has been temporarily idled since September 2018 due to market conditions.
We sell sand to our customers for use in their hydraulic fracturing operations to enhance recovery rates from unconventional wells.
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Our indoor processing plant in Pierce County, Wisconsin is designed for year-round continuous wet and dry plant operation.
−Removed: Our processing plants in Barron County and Jackson County, Wisconsin have indoor dry plants designed to operate year-round and outdoor wet plants that generally operate eight months per year.
+Added: Our multi-environment processing plants in Barron County and Jackson County, Wisconsin have indoor dry plants designed to operate year-round and outdoor wet plants that generally operate eight months per year.
We also provide logistics solutions to facilitate delivery of our frac sand products to our customers.
Our frac sand products are primarily shipped by rail to our customers in the Utica Shale, SCOOP/STACK, DJ Basin, Permian Basin and the Montney Shale in British Columbia and Alberta, Canada.
−Removed: Our logistics capabilities in this regard are important to our customers, who focus on both the reliability and flexibility of product delivery.
−Removed: Because our customers generally find it impractical to store frac sand in large quantities near their job sites, they typically prefer product to be delivered where and as needed, which requires predictable and efficient loading and shipping capabilities.
+Added: Our logistics capabilities are important to our customers, who focus on both the reliability and flexibility of product delivery.
+Added: Because our customers generally find it impractical to store frac sand in large quantities near their well completion sites, they typically prefer product to be delivered where and as needed, which requires predictable and efficient loading and shipping capabilities.
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
−Removed: 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.
+Added: We currently lease or have access to origin 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.
−Removed: 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.
−Removed: In September 2020, Muskie filed a lawsuit against Gulfport to recover delinquent payments due under this agreement.
−Removed: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
−Removed: For additional information regarding Gulfport's action, see Note 20.
−Removed: Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
Drilling Services
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Our employees perform periodic maintenance and minor repair work on our drilling rigs.
−Removed: Prior to our temporary shut down of these services in December 2019, we obtained our contracts for drilling oil and natural gas wells either through competitive bidding or through direct negotiations with customers.
+Added: Prior to our temporary shutdown of these services in December 2019, we obtained our contracts for drilling oil and natural gas wells either through competitive bidding or through direct negotiations with customers.
We typically entered into drilling contracts that provided for compensation on a daywork basis.
−Removed: Occasionally, we entered into drilling contracts that provided for compensation on a footage basis, however, a majority of such footage drilling contracts also provided for daywork rates for work outside core drilling activities contemplated by such footage contracts and under certain other circumstances.
+Added: Occasionally, we entered into drilling contracts that provided for compensation on a footage basis;
+Added: however, a majority of such footage drilling contracts also provided for daywork rates for work outside core drilling activities contemplated by such footage contracts and under certain other circumstances.
We have not historically entered into turnkey contracts;
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Our personnel are involved in all aspects of a well from the initial planning of a customer’s drilling program to the management and execution of the horizontal or directional drilling operation.
−Removed: As of December 31, 2020, we owned ten MWD kits and three EM kits used in vertical, horizontal and directional drilling applications, 89 mud motors, 16 air motors and an inventory of related parts and equipment.
+Added: As of December 31, 2021, we owned five MWD kits and one EM kit used in vertical, horizontal and directional drilling applications, 89 mud motors, 16 air motors and an inventory of related parts and equipment.
Currently, we perform our directional drilling services in the Utica Shale, Anadarko Basin, Arkoma Basin, Powder River Basin and Permian Basin.
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Other Services
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We continue to monitor market conditions to determine if and when we will recommence these services.
+Added: We also offer a variety of other services including aviation services, equipment rental services, remote accommodation services and equipment manufacturing services.
+Added: Additionally, during certain of the periods discussed in this report, we offered coil tubing services, pressure control services, flowback services, crude oil hauling services, cementing services and acidizing services.
Aviation Services.
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As of December 31, 2021, we owned 18 water transfer pumps, 30 miles of layflat hose and ten miles of poly pipe for use in our water transfer operations.
−Removed: Crude Oil Hauling .
−Removed: We provide crude transportation services in the Permian Basin and mid-continent region.
−Removed: As of December 31, 2020, we had a fleet of 47 crude oil hauling trucks.
Remote Accommodations.
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As of December 31, 2021, we had a capacity of 878 rooms, 612 of which are at Sand Tiger Lodge, our camp in northern Alberta, Canada, and 266 of which are available to be leased as rental equipment to a third party.
−Removed: As of December 31, 2020, 63 of our rooms were utilized.
+Added: On average, 90 rooms were utilized per night during the year ended December 31, 2021.
Equipment Manufacturing.
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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.
−Removed: Infrastructure Engineering.
−Removed: During 2019, we began infrastructure engineering operations focused on the transmission and distribution industry.
−Removed: We are currently providing these services from offices in California, Colorado and Washington.
−Removed: In December 2020, we were awarded a contract by a major utility to provide engineering and design services.
−Removed: The three-year contract is expected to generate up to approximately $40 million in revenue over the contract term.
−Removed: As mentioned above, we also offered coil tubing services, pressure control services, 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 and our coil tubing and full service transportation operations beginning in July 2020.
+Added: We also offered coil tubing services, pressure control services, flowback services, crude oil hauling services, cementing services and acidizing services during certain of the periods discussed in this report.
+Added: Due to market conditions, we temporarily shut down our flowback, cementing and acidizing operations beginning in July 2019, our coil tubing, pressure control and full service transportation operations beginning in July 2020 and our crude oil hauling operations beginning in July 2021.
We continue to monitor market conditions to determine if and when we will recommence these services.
Our flowback services consisted of production testing, solids control, hydrostatic testing and torque services.
−Removed: Due to market conditions, we temporarily shut-down our flowback operations beginning in July 2019.
Flowback involves the process of allowing fluids to flow from the well following a treatment, either in preparation for an impending phase of treatment or to return the well to production.
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We provided cementing and acidizing services in the Permian Basin.
−Removed: Due to market conditions, we temporarily shut-down our cementing and acidizing operations beginning in July 2019.
Cementing services involve preparing and pumping cement into place in a wellbore to support and protect well casings and help achieve zonal isolation.
Acidizing services involve pumping acid into a wellbore to improve productivity or injectivity.
−Removed: As of December 31, 2020, we owned 10 twin cementers and associated equipment and four acidizing pumps.
+Added: As of December 31, 2021, we owned two twin cementers and associated equipment and four acidizing pumps.
Coil Tubing .
We provided coil tubing services in Eagle Ford Shale and Permian Basin.
−Removed: Due to market conditions, we temporarily shut-down our coil tubing operations beginning in July 2020.
Coiled tubing services involve injecting coiled tubing into wells to perform various well-servicing and workover operations.
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Our pressure control services consisted of nitrogen and fluid pumping services.
−Removed: Due to market conditions, we temporarily shut-down our pressure control operations beginning in July 2020.
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.
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During 2019, we expanded our trucking operations to include brokering and hauling of general freight throughout the United States.
−Removed: Due to market conditions, we temporarily shut-down our full service transportation operations beginning in July 2020.
As of December 31, 2021, we had a fleet of six trucks.
+Added: Crude Oil Hauling .
+Added: We provide crude transportation services in the Permian Basin and mid-continent region.
+Added: As of December 31, 2021, we had a fleet of 14 crude oil hauling trucks.
Our Industries
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IOUs, private utilities and Co-Ops.
−Removed: Demand for our services is driven by the construction of transmission lines, substations and distribution networks and is determined by the level of expenditures of utility companies.
+Added: Demand for our services is driven by the repair and construction of transmission lines, substations and distribution networks and is determined by the level of expenditures of utility companies.
While expansion of the electrical grid is occurring, the majority of capital expenditures spent in recent years has surrounded the repair and maintenance of existing networks.
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We believe that the age of the existing infrastructure across the United States and the spending trends in North America will benefit our operations and our ability to achieve our business objectives.
+Added: Funding for projects in the infrastructure space remains strong with added opportunities expected from the Infrastructure Investment and Jobs Act, which was signed into law on November 15, 2021.
Oil and Natural Gas Industry
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The levels of capital expenditures of our customers are predominantly driven by the prices of oil and natural gas.
−Removed: We experienced a weakening in demand for our oilfield services during 2019 as a result of reductions in our customers' capital expenditure budgets.
−Removed: The sharp decline in oil prices beginning in March 2020 further reduced the utilization and pricing of our oilfield services.
−Removed: 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: 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: Beginning in March 2020, in response to the COVID-19 pandemic and the depressed commodity prices, many exploration and production companies, including our customers, substantially reduced their capital expenditure budgets.
+Added: As a result, demand for our oilfield services declined at the end of the first quarter of 2020 and continued to decline further throughout the remainder of 2020.
+Added: Exploration and production companies set their 2021 budgets based on the prevailing prices for oil and gas at the time.
+Added: Although demand for oil and natural gas and commodity prices increased during the fourth quarter of 2021, these budgets for the publicly traded exploration and production companies remained relatively unchanged throughout 2021 with any excess cash flows used for debt repayment or shareholder returns rather than to increase production, as has been the case in the past.
+Added: Activity levels for exploration and production companies, however, increased during the fourth quarter of 2021 and early 2022 due to the recent improvement in the U.S.
+Added: and global economic activity, easing of the COVID-19 pandemic related restrictions, availability of vaccines and treatments and rising energy use and commodity prices, the emergence of the Delta COVID-19 variant in the latter part of 2021 and the subsequent surge of the highly transmissible Omicron variant continued to contribute to the economic and pricing volatility and a cautious production outlook for 2022.
+Added: On July 18, 2021, the OPEC+ reached an agreement to phase out 5.8 million barrels per day of oil production cuts by September 2022 as prices of crude oil reached their highest levels in more than two years.
+Added: Coordinated increases in oil supply by OPEC+ began in August 2021, increasing overall oil production by 400,000 barrels per day on a monthly basis from that point forward.
+Added: Further, on January 4, 2022, OPEC+ agreed to continue to raise its output target by 400,000 Bbl per day in February 2022, which is expected to further boost oil supply in response to rising demand.
+Added: In its report issued on February 10, 2022, OPEC noted its expectation that world oil demand will rise by 4.15 million Bbl per day in 2022, as the global economy continues to post a strong recovery from the COVID-19 pandemic.
+Added: Although this demand outlook is expected to underpin oil prices, which have already seen a seven-year high in early 2022, we cannot predict the impact of these events on commodity prices and expect a competitive market for oilfield services for the foreseeable future.
+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, our coil tubing, pressure control and full service transportation operations beginning in July 2020 and our crude oil hauling operations beginning in July 2021.
We continue to monitor the market to determine if and when we can recommence these services.
−Removed: Further, we are currently only operating one of our six pressure pumping fleets.
−Removed: 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.
−Removed: Market fundamentals are challenging for our oilfield businesses and we expect this trend to continue for at least the first half of 2021.
−Removed: 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.
−Removed: 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.
−Removed: We intend to closely monitor our cost structure in response to market conditions and pursue cost savings where possible.
−Removed: 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.
−Removed: 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.
−Removed: Gulfport has not made the payments owed to us under this contract for any periods subsequent to its alleged December 28, 2019 termination date.
−Removed: We believe Gulfport's actions are without merit and are vigorously defending the lawsuit.
−Removed: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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
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This oversupply resulted in several industry participants idling and closing high cost mines in an attempt to restore the supply and demand balance.
−Removed: 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.
+Added: Despite such attempts, demand for our sand declined significantly in the second half of 2019 and throughout 2020 as a result of the factors discussed above.
+Added: As well drilling and completions began ramping back up in 2021, overall demand for frac sand increased from the 2020 levels, reaching approximately 93 million tons in 2021, although the Northern White silica sand that we produce continued to face strong competition with Texas frac sand.
+Added: We have seen a recent uptick in activity in Canada, which we currently expect to continue throughout 2022.
+Added: However, rail constraints persist, causing shipping delays and adversely impacting the recovery of the
+Added: Northern White frac sand market.
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.
−Removed: A portion of our revenue from our natural sand proppant business is derived from Gulfport pursuant to a contract that expires in December 2021.
−Removed: Gulfport has not made the payments owed to us under this contract for any periods subsequent to May 2020.
−Removed: In September 2020, we filed a lawsuit seeking to recover delinquent payments owed to us under this contract.
−Removed: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
−Removed: 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.
−Removed: 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.
−Removed: 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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• Strategic geographic positioning.
−Removed: We currently operate infrastructure facilities and service centers to support our infrastructure operations in the northeast, southwest and midwest portions of the United States.
−Removed: 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.
+Added: We currently operate infrastructure facilities and service centers to support our infrastructure operations in the northeast, southwest, midwest and western 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 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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We believe that our fleet of quality equipment will allow us to provide a high level of service to our customers.
−Removed: 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.
+Added: In addition, over the past two years we have converted 20 of our pressure pumping units to include DGB capabilities to meet recent shifts in customer demand and expect to convert 10 more units during 2022.
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 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.
+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 seek to create cost efficiencies for our customers by providing a suite of complementary services designed to address a wide range of our customers’ needs.
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We offer a complementary suite of services and products.
−Removed: Our infrastructure services division provides construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
+Added: Our infrastructure services division provides engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry.
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: Additionally, we provide directional drilling services, equipment rentals, crude oil hauling, remote accommodations, equipment manufacturing and infrastructure engineering services.
+Added: Additionally, we provide directional drilling services, equipment rentals, remote accommodations and equipment manufacturing.
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.
−Removed: • Expand through selected, accretive acquisitions.
−Removed: To complement our organic growth, we intend to actively pursue selected, accretive acquisitions of businesses and assets, primarily related to our infrastructure services, completion and production services and industrial based companies, that can meet our targeted returns on invested capital and enhance our portfolio of products and services, market positioning and/or geographic presence.
−Removed: We believe this strategy will facilitate the continued expansion of our customer base, geographic presence and service offerings.
−Removed: We also believe that our industry contacts and those of Wexford Capital LP, or Wexford, our largest stockholder, may be helpful to facilitate the identification of acquisition opportunities.
−Removed: We may use our common stock as consideration for accretive acquisitions.
+Added: • Expand our energy infrastructure business.
+Added: On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act into law.
+Added: This is expected to bring new opportunities in the infrastructure industry, including new fiber-related projects.
+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.
• Maintain a conservative balance sheet.
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If we perceive unmet demand in our principal geographic locations for different service lines, we will seek to expand our current service offerings to meet that demand.
−Removed: • Expand our energy infrastructure business unit.
−Removed: 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 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.
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We intend to leverage these relationships and our operational management team’s expertise to deliver innovative, client focused and services to our customers.
+Added: • Expand through selected, accretive acquisitions.
+Added: To complement our organic growth, we intend to pursue selected, accretive acquisitions of businesses and assets, primarily related to our infrastructure services, completion and production services and industrial based companies, that can meet our targeted returns on invested capital and enhance our portfolio of products and services, market positioning and/or geographic presence.
+Added: We believe this approach will help facilitate the strategic expansion of our customer base, geographic presence and service offerings.
+Added: We also believe that our industry contacts and those of Wexford Capital LP, or Wexford, our largest stockholder, may help us identify acquisition opportunities.
+Added: We may use our common stock as consideration for accretive acquisitions.
• Capitalize on activity in the unconventional resource plays.
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 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: During 2021, oil prices fluctuated between a low of $47.62 on January 4, 2021 and a high of $84.65 on October 26, 2021, and averaged $68.17 per barrel for the year.
This extreme price volatility reduced the demand for our oilfield services.
−Removed: 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.
−Removed: Our core operations are currently focused in the Utica Shale in Ohio, the SCOOP/STACK in Oklahoma and the Permian Basin in West Texas.
+Added: We cannot predict if or when commodity prices will stabilize and at what levels,
+Added: 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.
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, 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.
+Added: For the years ended December 31, 2021, 2020 and 2019, we had approximately 480, 530 and 590 customers, respectively, including American Electric Power Company, Gulfport, Liberty Oilfield Services Inc., Hilcorp Energy and Arsenal Resources.
Our top five customers accounted for approximately 35%, 50% and 53%, respectively, of our revenue for the years ended December 31, 2021, 2020 and 2019.
−Removed: During the year ended December 31, 2020, Gulfport accounted for 16% of our revenue.
−Removed: For the year ended December 31, 2019, Gulfport and PREPA accounted for 20% and 15%, respectively, of our revenue.
+Added: During the years ended December 31, 2021 and 2020, Gulfport accounted for 7% and 16%, respectively, of our revenue.
For the year ended December 31, 2019, Gulfport and PREPA accounted for 20% and 15%, respectively, of our revenue.
+Added: Our services for PREPA and Gulfport have ended.
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.
If a major customer decides not to continue to use our services and is not replaced by new or existing customers, our revenue would decline and our operating results and financial condition would be harmed.
−Removed: 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.
−Removed: Further, on November 13, 2020, Gulfport filed petitions for voluntary relief under chapter 11 of the Bankruptcy Code.
−Removed: Commitments and Contingencies to our consolidated financial statements included elsewhere in this annual report.
Operating Risks and Insurance
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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’
−Removed: 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’ 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.
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To be successful, a company must provide services and products that meet the specific needs of oil and natural gas exploration and production companies, drilling services contractors, private utilities, IOUs and Co-Ops at competitive prices.
−Removed: We provide our services and products across the United States and in Alberta, Canada and we compete against different companies in each service and product line we offer.
+Added: We provide our services and products across the United States and in Alberta, Canada and we compete against different companies in each geographic area and service and product line we offer.
Our competition includes many large and small energy service companies, including the largest integrated oilfield services companies and energy infrastructure companies.
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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, Smart Sand, Inc.
+Added: Our major competitors in our natural sand proppant services business are Badger Mining Corporation, Covia Holdings Corporation, Hi-Crush Partners LP, Capital Sand Proppants LLC and U.S.
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
−Removed: 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 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.
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These laws and regulations may require the acquisition of a permit before commencing operations, restrict the types, quantities and concentrations of various substances that can be released into the environment in connection with our operations, limit or prohibit construction or drilling activities on certain lands lying within wilderness, wetlands, ecologically or seismically sensitive areas and other protected areas, require action to prevent or remediate pollution from current or former operations, such as plugging abandoned wells or closing pits, result in the suspension or revocation of necessary permits, licenses and authorizations, require that additional pollution controls be installed and impose substantial liabilities for pollution resulting from our operations or related to our owned or operated facilities.
−Removed: Liability under such laws and regulations is strict (i.e., no showing of “fault” is required) and can be joint and several.
+Added: Liability under such laws and regulations is strict (i.e., no
+Added: showing of “fault” is required) and can be joint and several.
Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances, hydrocarbons or other waste products into the environment.
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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
−Removed: 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 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.
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The Clean Water Act and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by a permit issued by the U.S.
−Removed: Army Corps of Engineers, which we refer to as the Corps.
+Added: Army Corps of Engineers, which we refer to as the
+Added: The scope of waters regulated under the CWA has fluctuated in recent years.
On June 29, 2015, the EPA and the Corps jointly promulgated final rules redefining the scope of waters protected under the Clean Water Act.
−Removed: However, on October 22, 2019, the agencies published a final rule to repeal the 2015 rules.
−Removed: The 2015 rules and the 2019 repeal are subject to several ongoing legal challenges.
−Removed: 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.
−Removed: 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.
+Added: However, on October 22, 2019, the agencies published a final rule to repeal the 2015 rules, and then, 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: On August 30, 2021, a federal court struck down the replacement rule and, on December 7, 2021, the EPA and the Corps published a proposed rule that would put back into place the pre-2015 definition of "waters of the United States," updated to reflect Supreme Court decisions, while the agencies continue to consult with stakeholders on future regulatory actions.
As a result of such recent developments, substantial uncertainty exists regarding the scope of waters protected under the Clean Water Act.
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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.
−Removed: Also, states have imposed increasingly stringent requirement related to the venting or flaring of gas during oil and
−Removed: gas operations.
+Added: Also, states have imposed increasingly stringent requirement related to the venting or flaring of gas during oil and 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.
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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.
−Removed: 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.
−Removed: Furthermore, many state and local leaders have stated their intent to intensify efforts to uphold the commitments set forth in the international accord.
−Removed: 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.
+Added: On April 21, 2021, the United States announced that it was setting an economy-wide target of reducing its greenhouse gas emissions by 50 to 52 percent below 2005 levels in 2030.
+Added: In November 2021, in connection with the 26th Conference of the Parties in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce greenhouse gas emission, including reducing global methane emissions by at least 30% by 2030 to meet this objective.
+Added: Furthermore, many state and local leaders have stated their intent to intensify efforts to support the international commitments.
+Added: 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,
+Added: either of which could have a material adverse effect on future demand for our services.
At this time, it is not possible to accurately estimate how potential future laws or regulations addressing GHG emissions would impact our business.
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Specifically, the EPA’s rule package includes New Source Performance standards, which we refer to as NSP standards, to address emissions of sulfur dioxide and volatile organic compounds and a separate set of emission standards to address hazardous air pollutants frequently associated with oil and natural gas production and processing activities.
−Removed: The final rules seek to achieve a 95% reduction in volatile organic compounds emitted by requiring the use of reduced emission completions or “green completions” on all hydraulically-fractured wells constructed or refractured after January 1, 2015.
+Added: The final rules seek to achieve a 95% reduction in volatile organic compounds emitted by requiring the use of reduced emission completions or “green completions” on all hydraulically-fractured
+Added: wells constructed or refractured after January 1, 2015.
The rules also establish specific new requirements regarding emissions from compressors, controllers, dehydrators, storage tanks and other production equipment.
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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, 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.
−Removed: 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.
−Removed: 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.
−Removed: Thus, substantial uncertainty exists regarding the scope of New Source Performance standards for oil and natural gas operations.
−Removed: 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.
+Added: However, on August 13, 2019, in response to an executive order by former President Trump to review and revise unduly burdensome regulations, the EPA amended 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: On June 30, 2021, President Biden signed into law a joint resolution of Congress disapproving the 2020 amendments (with the exception of some technical changes) thereby reinstating the 2012 and 2016 New Source Performance standards.
+Added: Additionally, on November 15, 2021, the EPA published a proposed rule that would expand and strengthen emission reduction requirements for both new and existing sources in the oil and natural gas industry by requiring increased monitoring of fugitive emissions, imposing new requirements for pneumatic controllers and tank batteries and prohibiting venting of natural gas in certain situations.
+Added: These new 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.
We cannot predict the final regulatory requirements or the cost to comply with such requirements with any certainty.
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A coalition of environmentalists, tribal advocates and the State of California filed lawsuits challenging the rule rescission.
−Removed: Also, on September 28, 2018, the BLM finalized revisions to the waste prevention
−Removed: rule to reduce “unnecessary compliance burdens”.
+Added: Also, on September 28, 2018, the BLM finalized revisions to the waste prevention rule to reduce “unnecessary compliance burdens”.
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.
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These ongoing or proposed studies, depending on their degree of pursuit and whether any meaningful results are obtained, could spur initiatives to further regulate hydraulic fracturing, and could ultimately make it more difficult or costly for us to perform fracturing and increase our costs of compliance and doing business.
−Removed: Several states and local jurisdictions in which we or our customers operate have adopted or are considering adopting regulations that could restrict or prohibit hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition of hydraulic fracturing fluids.
−Removed: Any increased regulation of hydraulic fracturing could reduce the demand for our services and materially and adversely affect our reserves and results of operations.
+Added: Several states and local jurisdictions in which we or our customers operate have adopted or are considering adopting regulations that could restrict or prohibit hydraulic fracturing in certain circumstances, impose more stringent operating standards, require the disclosure of the composition of hydraulic fracturing fluids and/or impose restrictions on the use of produced water from hydraulic fracturing activities or moratoriums on new produced water well permits in an effort to control induced seismicity.
+Added: Any increased regulation of hydraulic fracturing or related activities could reduce the demand for our services and materially and adversely affect our reserves and results of operations.
There has been increasing public controversy regarding hydraulic fracturing with regard to the use of fracturing fluids, induced seismic activity, impacts on drinking water supplies, use of water and the potential for impacts to surface water, groundwater and the environment generally.
A number of lawsuits and enforcement actions have been initiated across the country implicating hydraulic fracturing practices.
−Removed: If new laws or regulations that significantly restrict hydraulic fracturing are adopted, such laws could make it more difficult or costly for us to perform fracturing to stimulate production from tight formations as well as make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater.
+Added: If new laws or regulations that significantly restrict hydraulic fracturing are
+Added: adopted, such laws could make it more difficult or costly for us to perform fracturing to stimulate production from tight formations as well as make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater.
In addition, if hydraulic fracturing is further regulated at the federal, state or local level, our customers’ fracturing activities could become subject to additional permitting and financial assurance requirements, more stringent construction specifications, increased monitoring, reporting and recordkeeping obligations, plugging and abandonment requirements and also to attendant permitting delays and potential increases in costs.
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The states in which we or our customers operate regulate the drilling for, and the production and gathering of, oil and natural gas, including through requirements relating to the method of developing new fields, the spacing and operation of wells and the prevention of waste of oil and natural gas resources.
−Removed: States may also regulate rates of production and may establish maximum daily production allowables from oil and natural gas wells based on market demand or resource conservation, or both.
+Added: States may also regulate rates of production and may establish maximum daily production allowable from oil and natural gas wells based on market demand or resource conservation, or both.
States do not regulate wellhead prices or engage in other similar direct economic regulation, but they may do so in the future.
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Risks Related to Our Business and the Industries We Serve
−Removed: • Our business and operations have been and will likely continue to be adversely affected by the COVID-19 pandemic.
+Added: • Failure by PREPA to pay the amounts owed to our infrastructure subsidiary Cobra for services performed would materially and adversely affect our financial condition, results of operations and cash flows.
• 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.
−Removed: • 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.
−Removed: • 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.
• We may experience losses in excess of our recorded reserves for receivables.
+Added: • Our business and operations have been and will likely continue to be adversely affected by the COVID-19 pandemic.
• 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.
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• The nature of our infrastructure services business exposes us to potential liability for warranty claims and faulty engineering, which may reduce our profitability.
−Removed: • 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.
−Removed: • Continued volatility in the oil and natural gas markets have negatively impacted, and are likely to continue to negatively impact, our oilfield services.
+Added: • Delays and reductions in government appropriations can negatively impact energy infrastructure engineering, design, 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: • Volatility in the oil and natural gas markets has negatively impacted our business in the past, and could negatively impact our oilfield services business in the future.
+Added: • Governmental laws, policies, regulations and subsidies, including initiatives to promote the use of renewable energy sources could create commodity volatility and negatively impact our oilfield services business.
+Added: • A transition of the global energy sector from primarily a fossil fuel-based system to renewable energy sources could affect our customers ’ level of expenditures.
• 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.
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and Canada during severe weather conditions.
−Removed: • 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: • 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 or conduct our business.
• We may have difficulties in identifying and financing suitable, accretive acquisition opportunities and integrating businesses, assets and personnel.
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Risks Inherent to Our Common Stock
−Removed: • Our two largest stockholders control a significant percentage of our common stock, and their interests may conflict with those of our other stockholders.
−Removed: • A significant reduction by Wexford of its ownership interests in us could adversely affect us.
+Added: • Our largest stockholder controls a significant percentage of our common stock, and its interests may conflict with those of our other stockholders.
+Added: • A significant reduction by our largest stockholder, Wexford of its ownership interests in us could adversely affect us.
• 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.
−Removed: • 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: • The corporate opportunity provisions in our certificate of incorporation could enable Wexford or other affiliates of ours to benefit from corporate opportunities that might otherwise be available to us.
• 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.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.