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What changed in KLX Energy Services Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of KLX Energy Services Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+339 added−354 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-13)

Top changes in KLX Energy Services Holdings, Inc.'s 2025 10-K

339 paragraphs added · 354 removed · 248 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+13 added−39 removed128 unchanged
Biggest changeSeparately, these and other enhanced climate related disclosure requirements could lead to reputational or other harm with customers, regulators, investors or other stakeholders and could also increase our litigation risks relating to alleged climate-related damages resulting from our operations, statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future disclosures we may make regarding reported emissions, particularly given the inherent uncertainties and estimations with respect to calculating and reporting GHG emissions. 20 Litigation risks are also increasing as a number of states, municipalities and other plaintiffs have sought to bring suit against the largest oil and natural gas E&P companies in state or federal court alleging, among other things, that such energy companies created public nuisances by producing fuels that contributed to global warming effects, such as rising sea levels, and therefore, are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors by failing to adequately disclose those impacts.
Biggest changeLitigation risks are also increasing as a number of states, municipalities and other plaintiffs have sought to bring suit against the largest oil and natural gas E&P companies in state or federal court alleging, among other things, that such energy companies created public nuisances by producing fuels that contributed to global warming effects, such as rising sea levels, and therefore, are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors by failing to adequately disclose those impacts.
Available Information Our filings with the SEC, including this Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Proxy Statement, Current Reports on Form 8-K and amendments to any of those reports are available free of charge on our website, https://www.klx.com, as soon as reasonably practicable after they are filed with, or furnished to, the SEC.
Available Information Our filings with the SEC, including this Annual Report, our Quarterly Reports on Form 10-Q, our Proxy Statement, Current Reports on Form 8-K and amendments to any of those reports are available free of charge on our website, https://www.klx.com, as soon as reasonably practicable after they are filed with, or furnished to, the SEC.
The key elements include: 12 • 24 hours a day, seven days a week operations; • recognized industry leading technicians in our principal service and product lines; • responsiveness to our customers’ requirements for ready-to-deploy American Petroleum Institute certified equipment and a “can do” philosophy; • technical interface with customers via product line management personnel; and • client relationship building.
The key elements include: • 24 hours a day, seven days a week operations; • recognized industry leading technicians in our principal service and product lines; • responsiveness to our customers’ requirements for ready-to-deploy American Petroleum Institute certified equipment and a “can do” philosophy; • technical interface with customers via product line management personnel; and • client relationship building.
Each of the acquired businesses was regional in nature and brought one or two specific service capabilities to KLX Energy Services. We were incorporated in Delaware on June 28, 2018, and on September 14, 2018, we completed our spin-off from KLX Inc. and became an independent, publicly traded company. See Item 7.
Each of the acquired businesses was regional in nature and brought one or two specific service capabilities to KLX Energy Services. We became incorporated in Delaware on June 28, 2018, and on September 14, 2018, we completed our spin-off from KLX Inc. and became an independent, publicly traded company. See Item 7.
To be successful, a company must provide services that meet the specific needs of oil and natural gas E&P companies and drilling, completions, production and intervention service contractors at competitive prices. We provide our services across the United States and we compete against different companies in each service and product line we offer.
To be successful, a company must provide services that meet the specific needs of oil and 12 natural gas E&P companies and drilling, completions, production and intervention service contractors at competitive prices. We provide our services across the United States and we compete against different companies in each service and product line we offer.
However, efforts have been made from time to time to remove this exclusion and thus it is possible that certain E&P waste now classified as non-hazardous waste and excluded from treatment as hazardous wastes may in the future be designated as “hazardous wastes” under RCRA or other applicable statutes.
However, efforts have been made from time to time to remove this exclusion and 15 thus it is possible that certain E&P waste now classified as non-hazardous waste and excluded from treatment as hazardous wastes may in the future be designated as “hazardous wastes” under RCRA or other applicable statutes.
Given the unique geology and operating characteristics of each well, no two complications are the same, yet each complication our customers experience results in substantial disruption to their well operation and economics. As a result, 10 resolution is “mission critical” to our customers and superior outcomes can support premium pricing.
Given the unique geology and operating characteristics of each well, no two complications are the same, yet each complication our customers experience results in substantial disruption to their well operation and economics. As a result, resolution is “mission critical” to our customers and superior outcomes can support premium pricing.
Our sales and earnings are influenced by our ability to successfully introduce new or improved products and services to the market. Although in the aggregate our patents and licenses are important to us, we do not regard any single patent, license or strategic relationship as critical or essential to our business as a whole.
Our sales and 13 earnings are influenced by our ability to successfully introduce new or improved products and services to the market. Although in the aggregate our patents and licenses are important to us, we do not regard any single patent, license or strategic relationship as critical or essential to our business as a whole.
In addition, we may have liabilities or obligations in the future if we discover any environmental contamination or liability relating to our facilities or operations. 14 The following is a summary of some of the existing laws, rules and regulations, as amended from time to time, to which we or our customers are subject.
In addition, we may have liabilities or obligations in the future if we discover any environmental contamination or liability relating to our facilities or operations. The following is a summary of some of the existing laws, rules and regulations, as amended from time to time, to which we or our customers are subject.
The Biden Administration pursued various legislative and regulatory initiatives to restrict hydraulic fracturing activities on federal lands. These or similar actions, if taken in the future, could impose additional hydraulic fracturing limitations on our customers that could ultimately result in decreased demand for our products and services.
The Biden Administration pursued various legislative and regulatory initiatives to restrict hydraulic fracturing activities on federal lands. These or similar actions, if taken in the future, could 21 impose additional hydraulic fracturing limitations on our customers that could ultimately result in decreased demand for our products and services.
Customers are identified as targets based on their drilling and completion activity, geographic location and economic viability. Direction of the sales team is conducted through weekly meetings and daily 11 communication. Our marketing activities are performed internally.
Customers are identified as targets based on their drilling and completion activity, geographic location and economic viability. Direction of the sales team is conducted through weekly meetings and daily communication. Our marketing activities are performed internally.
These MSAs delineate our and our customers’ respective warranty and indemnification obligations with respect to the services we provide. We endeavor to negotiate MSAs with our customers that provide, among other things, that we and our customers assume (without regard to fault) liability for damages to our respective personnel and property.
These MSAs delineate our and our customers’ respective warranty and indemnification obligations with respect to the 14 services we provide. We endeavor to negotiate MSAs with our customers that provide, among other things, that we and our customers assume (without regard to fault) liability for damages to our respective personnel and property.
Hydraulic Fracturing 21 Our businesses are dependent on our customers’ hydraulic fracturing and horizontal drilling activities. Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from tight formations, including shales.
Hydraulic Fracturing Our businesses are dependent on our customers’ hydraulic fracturing and horizontal drilling activities. Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from tight formations, including shales.
This allows us to offer our customers in all of our geographic regions discrete, comprehensive and differentiated services that leverage both the technical expertise of our skilled engineers and our in-house R&D team. 7 Industry Overview Demand for our services and products is cyclical and substantially dependent upon activity levels in the oil and gas industry, particularly our customers’ willingness to spend capital on the exploration for and development of oil and natural gas.
This allows us to offer our customers in all of our geographic regions discrete, comprehensive and differentiated services that leverage both the technical expertise of our skilled engineers and our in-house R&D team. 8 Industry Overview Demand for our services and products is cyclical and substantially dependent upon activity levels in the oil and gas industry, particularly our customers’ willingness to spend capital on the exploration for and development of oil and natural gas.
In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities.
In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of 18 facilities.
In particular, in recent years many of our large customers have placed 13 an increased emphasis on the safety records of their service providers.
In particular, in recent years many of our large customers have placed an increased emphasis on the safety records of their service providers.
Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending and investment practice that favors "clean" power sources, such as wind and solar, making those sources more attractive, and some of them may elect not to provide funding for fossil fuel energy companies.
Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending and investment practice that favors “clean” power sources, such as wind and solar, making those sources more attractive, and some of them may elect not to provide funding for fossil fuel energy companies.
The Federal Motor Carrier Safety Administration regulates and provides safety oversight of commercial motor vehicles, the EPA establishes requirements to protect human health and the environment, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") establishes requirements for the safe use and storage of explosives, and the federal Nuclear Regulatory Commission establishes requirements for the protection against ionizing radiation.
The Federal Motor Carrier Safety Administration regulates and provides safety oversight of commercial motor vehicles, the EPA establishes requirements to protect human health and the environment, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) establishes requirements for the safe use and storage of explosives, and the federal Nuclear Regulatory Commission establishes requirements for the protection against ionizing radiation.
In December 2023, the EPA issued a final rule and establishing more stringent methane regulations for new, modified, and reconstructed facilities in the oil and gas sector, known as Quad Ob, as well as standards for existing sources for the first time ever, known as Quad Oc.
Previously, in December 2023, the EPA had issued a final rule and establishing more stringent methane regulations for new, modified, and reconstructed facilities in the oil and gas sector, known as Quad Ob, as well as standards for existing sources for the first time ever, known as Quad Oc.
We deliver mission critical oilfield services to primarily independent major oil and gas companies focused on drilling, completion, production and intervention activities for technically demanding wells from over 50 service facilities located in the United States.
We deliver mission critical oilfield services to primarily independent major oil and gas companies focused on drilling, completion, production and intervention activities for technically demanding wells from over 60 service facilities located in the United States.
We are not dependent on any single source of supply for those parts, supplies, materials or equipment and, as of December 31, 2024, no single supplier accounted for more than 10% of our total supply and procurement costs.
We are not dependent on any single source of supply for those parts, supplies, materials or equipment and, as of December 31, 2025, no single supplier accounted for more than 10% of our total supply and procurement costs.
Occupational Safety and Health Administration ("OSHA") hazard communication standard, the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require maintenance of information about hazardous materials used or 16 produced in operations and provision of this information to employees, state and local government authorities and citizens.
Occupational Safety and Health Administration (“OSHA”) hazard communication standard, the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require maintenance of information about hazardous materials used or produced in operations and provision of this information to employees, state and local government authorities and citizens.
Concerns over silicosis and other potential adverse health effects, as well as concerns regarding potential liability from the use of hydraulic fracturing sand, may have the effect of discouraging our customers' use of hydraulic fracturing sand. Transportation Safety and Compliance Operating a fleet of over 1,500 vehicles, we are subject to regulation as a motor carrier by the U.S.
Concerns over silicosis and 17 other potential adverse health effects, as well as concerns regarding potential liability from the use of hydraulic fracturing sand, may have the effect of discouraging our customers' use of hydraulic fracturing sand. Transportation Safety and Compliance Operating a fleet of over 1,400 vehicles, we are subject to regulation as a motor carrier by the U.S.
While these laws have been or are expected to be challenged, and neither are directly applicable to our business, they could result in significant financial obligations to our customers. Additionally, in October 2023, the Governor of California signed the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”) into law.
While these laws have been challenged, and neither are directly applicable to our business, they could result in significant financial obligations to our customers. Additionally, in October 2023, the Governor of California signed the Climate Corporate Data Accountability Act (“CCDAA”) and Climate-Related Financial Risk Act (“CRFRA”) into law.
Most of our sales are to major, large independent and regional oil and natural gas companies, and these sales have resulted in a diversified and geographically balanced portfolio of more than 610 customers within North America. Revenues from our five largest customers collectively represented approximately 31% of our revenues for the year ended December 31, 2024.
Most of our sales are to major, large independent and regional oil and natural gas companies, and these sales have resulted in a diversified and geographically balanced portfolio of more than 550 customers within North America. Revenues from our five largest customers collectively represented approximately 31% of our revenues for the year ended December 31, 2025.
Additionally, climate change and ESG policies may impact the Company or our customers’ access to capital. Certain shareholders and bondholders currently invested in fossil-fuel energy companies are concerned about the potential effects of climate change and may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors.
Additionally, climate change and sustainability policies may impact the Company or our customers’ access to capital. Certain shareholders and bondholders currently invested in fossil-fuel energy companies may be concerned about the potential effects of climate change and may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors.
Four of the 27 plug-and-perf units are our new Whisper™ Series units. These specialized units are electric/battery-powered and support 9 our and our customers' sustainability efforts by reducing carbon footprint and noise levels. Additionally, the significant fuel savings due to the units being electrically powered make these units more cost effective to operate.
Four of the 17 plug-and-perf units are our new Whisper™ Series units. These specialized units are electric/battery-powered and support 10 our and our customers' sustainability efforts by reducing carbon footprint and noise levels. Additionally, the significant fuel savings due to the units being electrically powered make these units more cost effective to operate.
Additional regulatory initiatives may be pursued relating to fuel quality, engine efficiency and GHG emissions, which could further increase our costs due to truck purchases and maintenance, impairment of equipment productivity, decreases in the residual value of vehicles, unpredictable fluctuations in fuel prices and increases in operating expenses.
Additional regulatory initiatives may be pursued relating to fuel quality, engine efficiency and greenhouse gas (“GHG”) emissions, which could further increase our costs due to truck purchases and maintenance, impairment of equipment productivity, decreases in the residual value of vehicles, unpredictable fluctuations in fuel prices and increases in operating expenses.
Our nitrogen pumping units provide a non-combustible environment downhole and are used in support of other pressure control or well-servicing applications. As of December 31, 2024, we had a fleet of 39 coiled tubing units, 21 of which are large diameter coiled tubing units, across our geographical regions.
Our nitrogen pumping units provide a non-combustible environment downhole and are used in support of other pressure control or well-servicing applications. As of December 31, 2025, we had a fleet of 39 coiled tubing units, 18 of which are large diameter coiled tubing units, across our geographical regions.
We intend to continue to re-deploy additional directional drilling capacity into 2025, as market conditions warrant. 8 Completion: Our completions activities are focused on services that help our customers complete and stimulate extended reach horizontal laterals and more technical wellbores.
We intend to continue to re-deploy additional directional drilling capacity into 2026, as market conditions warrant. 9 Completion: Our completions activities are focused on services that help our customers complete and stimulate extended reach horizontal laterals and more technical wellbores.
For example, both New York and Vermont have enacted "climate superfund" laws which seek to require compensatory payments from certain entities in the fossil fuel industry, including extractors and refiners, who are responsible for a certain amount of annual GHG emissions.
For example, both New York and Vermont have enacted “climate superfund” laws which seek to require compensatory payments from certain entities in the fossil fuel industry, including extractors and refiners, who are responsible for a certain amount of annual GHG emissions.
We cannot predict whether, how, or when the Trump Administration or a future Congress might take action to alter either of these rules. The methane emissions charge and GHG reporting revisions could increase our customers' operating or compliance costs and adversely affect their businesses, thereby reducing demand for our products and services.
We cannot predict whether, how, or when a future administration or a future Congress might take action to alter either of these rules, though implementation of the methane emissions fee and GHG reporting revisions could increase our customers’ operating or compliance costs and adversely affect their businesses, thereby reducing demand for our products and services.
NEPA requirements have been subject to or influenced by regulations and guidance from the Council on Environmental Quality (“CEQ”), and the CEQ’s requirements and guidance for such reviews have altered several times during the past few years under different administrations, and are likely to continue to change.
NEPA requirements have been subject to or influenced by regulations and guidance from the Council on Environmental Quality (“CEQ”), and the CEQ’s requirements and guidance for such reviews have altered several times during the past few years under different administrations.
Last year we continued to optimize the quality and performance of our magnesium alloy based line of dissolvable hydraulic fracturing plugs. Our proprietary dissolvable plugs deliver all the benefits of a traditional hydraulic fracturing plug but without the need for bottom hole intervention for removal.
We continue to optimize the quality and performance of our magnesium alloy based line of dissolvable hydraulic fracturing plugs. Our proprietary dissolvable plugs deliver all the benefits of a traditional hydraulic fracturing plug but without the need for bottom hole intervention for removal.
While we cannot predict the outcome of these or any other future proposed or finalized listings, or whether the Trump Administration may take action that would impact any currently listed species or otherwise change the compliance obligations under ESA implementing regulations, the designation of previously unidentified endangered or threatened species, or other agency actions aimed at species conservation could indirectly cause us to incur additional costs, cause our or our oil and natural gas E&P customers' operations to become subject to operating restrictions or bans, result in new difficulties obtaining permits or other authorizations, and limit future development activity in affected areas, which could reduce demand for our products and services to those customers.
While we cannot predict the outcome of these or any other future proposed or finalized listings, or whether the Trump Administration may take action that would impact any currently listed species or otherwise change the compliance obligations under ESA implementing regulations, the designation of previously unidentified endangered or threatened species, or other agency actions aimed at species conservation could indirectly cause us to incur additional costs, cause our or our oil and natural gas E&P customers' operations to become subject to operating restrictions or bans, result in new difficulties obtaining permits or other authorizations, and limit future development activity in affected areas, which could reduce demand for our products and services to those customers. 16 Similar protections are offered to migratory birds under the Migratory Bird Treaty Act (“MBTA”).
Our latest generation dissolvable frac plug, the PhantM™, has been deployed successfully across major U.S. oil and natural gas basins in now more than 1,200 wells by more than 70 customers.
Our latest generation dissolvable frac plug, the PhantM™, has been deployed successfully across major U.S. oil and natural gas basins in now more than 1,300 wells by more than 80 customers.
The Company has 62 wireline units in the fleet and 27, or 44%, are configured to run pump down or plug-and-perf operations. Our R&D organization also enables our operations to support our customers with cutting edge pump down operations that include greaseless wireline, addressable gun systems and addressable release tools, to provide our customers with high quality pump down services.
The Company has 48 wireline units in the fleet and 17, or 35%, are configured to run pump down or plug-and-perf operations. Our R&D organization also enables our operations to support our customers with cutting edge pump down operations that include greaseless wireline, addressable gun systems and addressable release tools, to provide our customers with high quality pump down services.
As of December 31, 2024, our market share of the U.S. onshore drilling market was 4.9%, as compared to 6.0% as of December 31, 2023, as measured by the number of rigs we have worked on during the year as a proportion of the total number of rigs published by Baker Hughes.
As of December 31, 2025, our market share of the U.S. onshore drilling market was 3.9%, as compared to 4.9% as of December 31, 2024, as measured by the number of rigs we have worked on during the year as a proportion of the total number of rigs published by Baker Hughes.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties, as 18 well as injunctive relief, for non-compliance with air permits or other requirements of the CAA and associated state laws and regulations. Climate Change The threat of climate change continues to attract considerable attention in the United States and around the world.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties, as well as injunctive relief, for non-compliance with air permits or other requirements of the CAA and associated state laws and regulations. Climate Change The threat of climate change has attracted considerable attention in the United States and around the world.
For example, in May 2024, the EPA adopted a final rule to list two PFAS (i.e., PFOA and PFOS) as CERCLA hazardous substances, which could result in additional remediation costs at certain properties in the future and could impose additional costs on some of our customers.
For example, in May 2024, the EPA adopted a final rule to list two PFAS (i.e., PFOA and PFOS) as CERCLA hazardous substances. This rule is currently subject to judicial challenge but could result in additional remediation costs at certain properties in the future and could impose additional costs on some of our customers.
While we cannot predict the ultimate impact of these legal challenges to the NEPA-implementing regulations or subsequent changes in the regulations, any restrictions or delays on our customers’ operations as a result of permitting or environmental impact analysis regulatory requirements could in turn adversely impact demand for our products and services.
While we cannot predict the ultimate impact of these recent changes, any restrictions or delays on our customers’ operations as a result of permitting or environmental impact analysis regulatory requirements could in turn adversely impact demand for our products and services.
Employees 22 As of December 31, 2024, we had approximately 1,726 employees. Approximately 89% of our employees are engaged in operations, quality and purchasing, 4% in sales and marketing and 7% in finance, human resources, IT, management and general administration. Our employees are not unionized, and we consider our employee relations to be good.
Employees As of December 31, 2025, we had approximately 1,548 employees. Approximately 88% of our employees are engaged in operations, quality and purchasing, 4% in sales and marketing and 8% in finance, human resources, IT, management and general administration. Our employees are not unionized, and we consider our employee relations to be good.
Although the President's action was challenged in court, to the extent funding disbursements under the IRA continue or any future similar legislation begins to provide such incentives, these incentives could accelerate the transition of the U.S. economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, reduce demand for our customers’ products, and thereby reduce demand for our services.
To the extent any future similar legislation begins to provide such incentives, these incentives could accelerate the transition of the U.S. economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, reduce demand for our customers’ products, and thereby reduce demand for our services.
Army Corps of Engineers ("Corps") or an analogous state agency. 17 There continues to be uncertainty on the federal government's applicable jurisdictional reach under the CWA over “waters of the United States”, including wetlands, as the EPA and the Corps under the Obama, Trump and Biden Administrations have pursued multiple rulemakings since 2015 in an attempt to define the scope of such reach.
There continues to be uncertainty on the federal government’s applicable jurisdictional reach under the CWA over “waters of the United States”, including wetlands, as the EPA and the Corps under recent presidential administrations have pursued multiple rulemakings since 2015 in an attempt to define the scope of such reach.
The discharge of pollutants into regulated waters, including jurisdictional wetlands, is prohibited, except in accordance with the terms of a permit issued by the EPA or U.S.
The discharge of pollutants into regulated waters, including jurisdictional wetlands, is prohibited, except in accordance with the terms of a permit issued by the EPA or U.S. Army Corps of Engineers (“Corps”) or an analogous state agency.
DXD Venturi Tool —The patent pending DXD (Debris Extraction Device) is an internally developed downhole tool that assists customers in removing unwanted debris from the wellbore. Utilizing fluid dynamics, the tool consists of a jet section that accelerates fluid across a nozzle. This increase in fluid velocity creates a pressure drop inside the tool, which draws fluid through an inlet.
DXD Venturi Tool —The patent pending DXD (Debris Extraction Device) is an internally developed downhole tool that assists customers in removing unwanted debris from the wellbore. Utilizing fluid dynamics, the tool 11 consists of a jet section that accelerates fluid across a nozzle.
The IRA also directed the EPA to revise GHG reporting requirements for segments of the oil and gas sector, including portions of our customer base, and in May 2024, the EPA finalized updates to the reporting requirements which will also impact the calculation of the methane emissions fee.
While we will not be required to pay this fee, some of our customers may. The IRA also directed the EPA to revise GHG reporting requirements for segments of the oil and gas sector, including portions of our customer base, and in May 2024, the EPA finalized updates to the reporting requirements.
The Inflation Reduction Act of 2022 (“IRA”) amends the CAA to impose a fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories.
For example, the IRA amended the CAA to impose a fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories. However, the OBBBA delayed the implementation of the methane emissions fee until 2034.
Absent clarification or revisions to the California laws, implementation may result in additional costs to comply with these disclosure requirements for us or our customers, as well as increased costs of and restrictions on access to capital for us or our customers.
Although the outcome of the legal challenges is uncertain at this time, implementation may result in additional costs to comply with these disclosure requirements for us or our customers, as well as increased costs of and restrictions on access to capital for us or our customers.
Since being deployed, SpectrA PDC has proven to be one of the most robust bearing packs available on the market, and its most recent enhancement is able to accommodate increased full flow through the bit.
The elegant design greatly reduces the operating cost of our thru-tubing motors and provides us with a significant differentiator in the thru-tubing space. Since being deployed, SpectrA PDC has proven to be one of the most robust bearing packs available on the market, and its most recent enhancement is able to accommodate increased full flow through the bit.
As the fluid is drawn into the system through the inlet, it picks up unwanted debris in the fluid flow, which is then caught in a series of chambers installed below the tool. The chambers then carry the debris out of the hole when the system is brought back to surface.
This increase in fluid velocity creates a pressure drop inside the tool, which draws fluid through an inlet. As the fluid is drawn into the system through the inlet, it picks up unwanted debris in the fluid flow, which is then caught in a series of chambers installed below the tool.
In addition to the reports filed or furnished with the SEC and provided on our website, we publicly disclose material information from time to time in our press releases, at annual meetings of stockholders and in publicly accessible conferences and Investor presentations primarily through our Investor Relations pages (https://investor.klx.com).
In addition to the reports filed or furnished with the SEC and provided on our website, we publicly disclose material information from time to time in our press releases, at annual meetings of stockholders and in publicly accessible conferences and Investor presentations primarily through our Investor Relations pages (https://investor.klx.com). 22 It should be noted that references to the Company's website in this Annual Report are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Annual Report.
Both the Dunes Sagebrush Lizard and the Greater Sage Grouse can be found in some areas where we and our customers operate.
Additionally, in April 2023, the FWS published a proposed rule to list the Greater Sage Grouse as threatened under the ESA. Both the Dunes Sagebrush Lizard and the Greater Sage Grouse can be found in some areas where we and our customers operate.
Some of our customers may be adversely affected by seasonal or permanent restrictions on drilling activities designed to protect various wildlife, which may limit our ability to operate in protected areas.
FWS has taken differing positions on the extent to which there is criminal liability under the MBTA for certain actions reacted to migratory birds, their nests, or their eggs. Some of our customers may be adversely affected by seasonal or permanent restrictions on drilling activities designed to protect various wildlife, which may limit our ability to operate in protected areas.
The listing of the Dunes 15 Sagebrush Lizard or designation of its habitat could impact the availability of frac sand used by our customers. Additionally, in April 2023, the FWS published a proposed rule to list the Greater Sage Grouse as threatened under the ESA.
Further, in May 2024, FWS listed the Dunes Sagebrush Lizard as an endangered species under the ESA. The listing of the Dunes Sagebrush Lizard or designation of its habitat could impact the availability of frac sand used by our customers.
SpectrA PDC Bearing Section— The patented SpectrA PDC bearing pack is an extremely reliable and robust thru-tubing motor that deploys the industry’s only all PDC (Polycrystalline Diamond Compact) bearing design - meaning no ball bearings. The elegant design greatly reduces the operating cost of our thru-tubing motors and provides us with a significant differentiator in the thru-tubing space.
The chambers then carry the debris out of the hole when the system is brought back to surface. SpectrA PDC Bearing Section— The patented SpectrA PDC bearing pack is an extremely reliable and robust thru-tubing motor that deploys the industry’s only all PDC (Polycrystalline Diamond Compact) bearing design - meaning no ball bearings.
Average oil prices and natural gas prices and activity subsequently decreased in 2023 and in 2024. Oil and natural gas prices have been, and may remain, volatile, which impacts demand for our business. Global supply and demand factors may continue to result in commodity price volatility.
In 2025, WTI prices dipped below $60/bbl amid oversupply from international producers, and finished the year on a downward trajectory. Oil and natural gas prices have been, and may remain, volatile, which impacts demand for our business. Global supply and demand factors may continue to result in commodity price volatility.
Under the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species’ habitat. The U.S. Fish and Wildlife Service (“FWS”) has the ability to designate additional species as protected by the ESA and alter the areas designated as habitat for such species.
Endangered Species Act and Migratory Bird Treaty Act The ESA and comparable state laws were established to protect endangered and threatened species. Under the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species’ habitat. The U.S.
For example, FWS recently published a rule listing two distinct population segments of the Lesser Prairie Chicken under the ESA, a species found in some states where we operate. Further, in May 2024, FWS listed the Dunes Sagebrush Lizard as an endangered species under the ESA.
Fish and Wildlife Service (“FWS”) has the ability to designate additional species as protected by the ESA and alter the areas designated as habitat for such species. For example, FWS recently published a rule listing two distinct population segments of the Lesser Prairie Chicken under the ESA, a species found in some states where we operate.
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. Endangered Species Act and Migratory Bird Treaty Act The ESA and comparable state laws were established to protect endangered and threatened species.
The EPA has also announced its intention to develop a framework to guide future hazardous substance designations under CERCLA. 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 addition, some states where we operate, such as New Mexico and Colorado, have also imposed new or more stringent methane emission regulations. The requirements of the EPA’s final methane rules and state methane emissions regulations could increase operating or compliance costs for our customers in these states and impact demand for our services.
Some states where we operate, such as New Mexico and Colorado, have also imposed new or more stringent methane emission regulations.
For example in 2015, the EPA lowered the National Ambient Air Quality Standard (“NAAQS”) for ground level ozone from 75 to 70 parts per billion.
For example in 2020, the EPA under the Trump Administration published a decision to retain the National Ambient Air Quality Standard (“NAAQS”) for ground level ozone that was set by the EPA in 2015.
As a result, the demand for our services and products is highly sensitive to current and expected commodity prices. The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the novel coronavirus (“COVID-19”) pandemic and increasing demand for oil and gas.
As a result, the demand for our services and products is highly sensitive to current and expected commodity prices. Since 2023, the oil and gas industry has been experiencing a slow decline in activity, as measured by US rig count, coupled with a decrease in oil prices.
The EPA's review remains ongoing and is not expected to be completed before the EPA's five-year cycle for NAAQS review in December 2025. More recently, in December 2024, the EPA issued a rule to revise the secondary NAAQS for sulfur oxides, but retained without revision the secondary standards for oxides of nitrogen and particulate matter.
Previously, in December 2024, the EPA issued a rule to revise the secondary NAAQS for sulfur oxides, but retained without revision the secondary standards for oxides of nitrogen and particulate matter. We cannot predict what further actions, if any, or on what timeline, the Trump Administration may take with respect to this standard.
The hang off tool allows an operator to easily hang the rod string in the wellhead and still gives them the ability to tie into the tubing, if need be, to monitor pressure or pump fluid. Intervention : Our intervention services consist of best-in-class technicians and equipment that are focused on providing customers engineered solutions to downhole complications.
The alternative is to “hot-tap” the tubing, which is a high-risk operation that most operators are not willing to employ. Intervention : Our intervention services consist of best-in-class technicians and equipment that are focused on providing customers engineered solutions to downhole complications.
Removed
We own a large line of valves serving the North American onshore oil and gas market. We have enhanced our hydraulic fracturing valve fleet line through the internal development of next generation technology, including our proprietary, patent pending hydraulic fracturing relief valve (“FRV”). Introduced in 2016, the FRV was built and designed to replace older “pop-off” systems.
Added
We own a large line of valves serving the North American onshore oil and gas market.
Removed
When tied into a hydraulic fracturing core (pumps), the FRV gives customers a safer and more reliable method for relieving surface pressure in the event of an unforeseen overpressure event. By doing this, we believe we minimize operational risk, as well as greatly reduce health, safety and environmental concerns that are associated with hydraulic fracturing operations.
Added
Following an Executive Order from President Trump, in February 2025, the CEQ released an interim final rule rescinding its regulations implementing NEPA. In May 2025, the Supreme Court issued its opinion in Seven County Infrastructure Coalition v. Eagle County, emphasizing the “substantial judicial deference” that courts must grant agencies when considering NEPA challenges.
Removed
The alternative is to “hot-tap” the tubing, which is a high-risk operation that most operators are not willing to employ. Hydraulic Fracturing Protect Rod Hang Off Tool —This tool is developed to give customers the ability to “hang off” a rod string rather than tripping it out of the hole and laying it down.
Added
Federal agencies have begun the process of preparing their own new or updated NEPA-implementing rules or guidelines. In September 2025, the CEQ issued new guidance to federal agencies implementing NEPA to encourage them to limit their NEPA reviews, rely more heavily on sponsor-prepared documents, and streamline the NEPA process.
Removed
The associated costs of tripping rods out of the hole coupled with the damage of laying them down and picking the string back, we believe, make this tool an excellent alternative option for customers.
Added
In September 2023, the EPA issued a final rule, the implementation of which varies by state due to ongoing litigation. However, in November 2025, the EPA and the Corps proposed a rule to further update and narrow the September 2023 definition of “waters of the United States,” guided by the Sackett v. EPA decision.
Removed
Similar protections are offered to migratory birds under the Migratory Bird Treaty Act (“MBTA”). FWS has taken differing positions on the extent to which there is criminal liability under the MBTA for certain actions reacted to migratory birds, their nests, or their eggs.
Added
Congress has not adopted comprehensive climate change legislation, though certain federal laws, such as the Inflation Reduction Act of 2022 (“IRA”), have been enacted to advance numerous climate-related objectives. However, certain of these initiatives have been paused, repealed or otherwise modified due to the passage of the One Big Beautiful Bill Act (“OBBBA”) in July 2025.
Removed
For example, in January 2023 the CEQ issued new guidance on consideration of greenhouse gas ("GHG") emissions and climate change in NEPA environmental reviews.
Added
In September 2025, however, the EPA issued a proposed rule to delay GHG reporting for the oil and gas sector until 2034.
Removed
The guidance followed the publication of a final rule in April 2022 revoking some modifications made to the regulations under the first Trump Administration and reincorporating consideration of direct, indirect, and cumulative effects of major federal actions. It is uncertain to what extent the Trump Administration may take action to revise or revoke existing NEPA guidance.
Added
However, the Trump Administration has taken steps to reduce or eliminate certain incentives, including those for zero-emission vehicles, and the OBBBA eliminates electric 19 vehicle credits previously available for new and used electric and commercial fleets. We cannot predict whether or not these regulatory repeals will ultimately be successful or if future administrations may seek to restore related incentives.
Removed
In May 2024, the CEQ finalized a rule that revises the implementing regulations of the procedural provisions of NEPA and implements the amendments to NEPA included in the Fiscal Responsibility Act of 2023. The final rule is being challenged by various states in the U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Relating to Third Parties Shortages or increases in the costs of the equipment we use in our operations could adversely affect our operations in the future. We generally do not have specialized tools, trucks or long-term contracts in place that provide for the delivery of equipment, including, but not limited to, replacement parts and other equipment.
Biggest changeWe generally do not have specialized tools, trucks or long-term contracts in place that provide for the delivery of equipment, including, but not limited to, replacement parts and other equipment. We could experience delays in the delivery of the equipment that we have ordered and its placement into service due to factors that are beyond our control.
The 2030 Senior Notes Indenture (as defined below) permits us to incur additional pari passu indebtedness up to $150.0 within twelve months of the Refinancing (as defined below) to, among other things, consummate permitted acquisitions and investments, subject to the terms and conditions contained therein.
The 2030 Senior Notes Indenture permits us to incur additional pari passu indebtedness of up to $150.0 within twelve months of the Refinancing (as defined below) to, among other things, consummate permitted acquisitions and investments, subject to the terms and conditions contained therein.
Increasing attention to climate change, increasing societal expectations on companies to address climate change, and potential consumer use of substitutes to fossil-fuel energy commodities may result in increased costs, reduced demand for our customers’ hydrocarbon products and our products and services, reduced profits, increased governmental investigations and private litigation against us, and negative impacts on our stock price and access to capital markets.
Increased attention to climate change, increasing societal expectations on companies to address climate change, and potential consumer use of substitutes to fossil-fuel energy commodities may result in increased costs, reduced demand for our customers’ hydrocarbon products and our products and services, reduced profits, increased governmental investigations and private litigation against us, and negative impacts on our stock price and access to capital markets.
Our amended and restated bylaws provide that, unless we otherwise consent in writing to selection of an alternative forum, the Court of Chancery in the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of KLX Energy Services, any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of KLX Energy Services to KLX Energy Services or KLX Energy Services’ stockholders, any action asserting a claim arising pursuant to any provision of the DGCL, KLX Energy Services’ certificate of incorporation or the bylaws, or any action asserting a claim governed by the internal affairs doctrine.
Our amended and restated bylaws provide that, unless we otherwise consent in writing to selection of an alternative forum, the Court of Chancery in the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of KLX Energy Services, any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of KLX Energy Services to KLX Energy Services or KLX Energy Services’ stockholders, any action asserting a claim arising pursuant to any 47 provision of the DGCL, KLX Energy Services’ certificate of incorporation or the bylaws, or any action asserting a claim governed by the internal affairs doctrine.
The 2030 Senior Notes Indenture contains certain financial covenants that include (i) a maximum total net leverage ratio of not greater than 4.50 to 1.0 for the test periods ending March 31, 2025 through December 31, 2025, stepping down to 4.00 to 1.0 for the test periods ending March 31, 2026 through December 31, 2026, 3.50 to 1.0 for the test periods ending March 31, 2027 through December 31, 2027, 3.00 to 1.0 for the 33 test periods ending March 31, 2028 through December 31, 2028, and 2.50 to 1.0 for each test period thereafter and (ii) restrictions on making net capital expenditures in any test period in excess of the greater of (x) $65.0 in the aggregate or (y) 7% of revenues during such test period.
The 2030 Senior Notes Indenture contains certain financial covenants that include (i) a maximum total net leverage ratio of not greater than 4.50 to 1.0 for the test periods ending March 31, 2025 through December 31, 2025, stepping down to 4.00 to 1.0 for the test periods ending March 31, 2026 through December 31, 2026, 3.50 to 1.0 for the test periods ending March 31, 2027 through December 31, 2027, 3.00 to 1.0 for the test periods ending March 31, 2028 through December 31, 2028, and 2.50 to 1.0 for each test period thereafter and (ii) restrictions on making net capital expenditures in any test period in excess of the greater of (x) $65.0 in the aggregate or (y) 7% of revenues during such test period.
Additional factors over which we have no control that could affect our customers’ willingness to undertake drilling, completion, production, and intervention spending activities include: • the level of prices, and expectations about prices, for oil and natural gas; • the level of domestic and global oil and natural gas production; • the level of domestic and global oil and natural gas inventories; • the availability, pricing and perceived safety of pipeline, trucking, train storage and other transportation capacity; • the supply of and demand for oilfield services and equipment; • lead times associated with acquiring equipment and availability of qualified personnel; • the cost of exploring for, developing, producing and delivering oil and natural gas; • the expected rates of decline in production from existing and prospective wells; • the discovery rates of new oil and natural gas reserves; • any prolonged reduction in the overall level of oil and natural gas E&P activities, whether resulting from changes in oil and natural gas prices or otherwise; • uncertainty in capital and commodities markets and the ability of oil and natural gas E&P companies to raise equity capital and debt financing; • federal, state and local regulation of hydraulic fracturing and other oilfield service activities, as well as E&P activities, including public pressure on governmental bodies and regulatory agencies to regulate the oil and gas industry; • moratoriums on drilling activity resulting in a cessation of operation or a failure to expand operations; • adverse weather conditions, including rain, tropical storms, hurricanes and severe cold weather, that can affect oil and natural gas operations over a wide area; • oil refining capacity; • merger and divestiture activity among oil and gas producers; • the availability of water resources and suitable proppants in sufficient quantities and on acceptable terms for use in hydraulic fracturing operations; • the availability, capacity and cost of disposal and recycling services for used hydraulic fracturing fluids; • the political environment in oil and natural gas producing regions, including uncertainty or instability resulting from civil disorder, terrorism or war, such as the continuing conflicts in Ukraine and Israel; • worldwide political, military and economic conditions; • global or national health pandemics, epidemics or concerns, such as the COVID-19 pandemic, which reduced and may further reduce demand for oil and natural gas and related products due to reduced global or national economic activity; • actions of the Organization of the Petroleum Exporting Countries ("OPEC"), its members and other state-controlled oil companies relating to oil and natural gas price and production levels, including announcements of potential changes to such levels; • advances in exploration, development and production technologies or in technologies affecting energy consumption; • stockholder activism or activities by non-governmental organizations to restrict the exploration, development and production of oil and natural gas; • the potential acceleration of the energy transition and development of alternative fuels; and • the price and availability of alternative fuels and energy sources.
Additional factors over which we have no control that could affect our customers’ willingness to undertake drilling, completion, production, and intervention spending activities include: • the level of prices, and expectations about prices, for oil and natural gas; • the level of domestic and global oil and natural gas production; • the level of domestic and global oil and natural gas inventories; • the availability, pricing and perceived safety of pipeline, trucking, train storage and other transportation capacity; • the supply of and demand for oilfield services and equipment; • lead times associated with acquiring equipment and availability of qualified personnel; • the cost of exploring for, developing, producing and delivering oil and natural gas; • the expected rates of decline in production from existing and prospective wells; 23 • the discovery rates of new oil and natural gas reserves; • any prolonged reduction in the overall level of oil and natural gas E&P activities, whether resulting from changes in oil and natural gas prices or otherwise; • uncertainty in capital and commodities markets and the ability of oil and natural gas E&P companies to raise equity capital and debt financing; • federal, state and local regulation of hydraulic fracturing and other oilfield service activities, as well as E&P activities, including public pressure on governmental bodies and regulatory agencies to regulate the oil and gas industry; • moratoriums on drilling activity resulting in a cessation of operation or a failure to expand operations; • adverse weather conditions, including rain, tropical storms, hurricanes and severe cold weather, that can affect oil and natural gas operations over a wide area; • oil refining capacity; • merger and divestiture activity among oil and gas producers; • the availability of water resources and suitable proppants in sufficient quantities and on acceptable terms for use in hydraulic fracturing operations; • the availability, capacity and cost of disposal and recycling services for used hydraulic fracturing fluids; • the political environment in oil and natural gas producing regions, including uncertainty or instability resulting from civil disorder, terrorism or war, such as the continuing conflicts in Ukraine, Iran and Israel and events in Venezuela; • worldwide political, military and economic conditions; • global or national health pandemics, epidemics or concerns, such as the COVID-19 pandemic, which reduced and may further reduce demand for oil and natural gas and related products due to reduced global or national economic activity; • actions of the Organization of the Petroleum Exporting Countries ("OPEC"), its members and other state-controlled oil companies relating to oil and natural gas price and production levels, including announcements of potential changes to such levels; • advances in exploration, development and production technologies or in technologies affecting energy consumption; • stockholder activism or activities by non-governmental organizations to restrict the exploration, development and production of oil and natural gas; • the potential acceleration of the energy transition and development of alternative fuels; and • the price and availability of alternative fuels and energy sources.
As a result, we could become subject to material uninsured liabilities or situations where we have high deductibles or self-insured retentions that expose us to liabilities that could have a material adverse effect on our business, financial condition and results of operations. Competition among oilfield service and equipment providers is affected by each provider’s reputation for safety and quality.
As a 29 result, we could become subject to material uninsured liabilities or situations where we have high deductibles or self-insured retentions that expose us to liabilities that could have a material adverse effect on our business, financial condition and results of operations. Competition among oilfield service and equipment providers is affected by each provider’s reputation for safety and quality.
In connection with the Refinancing, on March 12, 2025, we issued warrants to purchase, in aggregate, up to 2,373,187 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment (the “Warrants”), as described in greater detail in Item 7. “Management’s Discussion and Analysis of Financial 44 Condition and Results of Operations” below.
In connection with the Refinancing, on March 12, 2025, we issued warrants to purchase, in aggregate, up to 2,373,187 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment (the “Warrants”), as described in greater detail in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.
Even if we are able to increase our prices in future periods, we may not be able to do so at a rate that is sufficient to offset any rising costs, which could have a material adverse effect on our business, financial condition and results of operations. 26 We have been expanding our available products and services in recent periods.
Even if we are able to increase our prices in future periods, we may not be able to do so at a rate that is sufficient to offset any rising costs, which could have a material adverse effect on our business, financial condition and results of operations. We have been expanding our available products and services in recent periods.
Although we monitor individual customer financial viability in granting such credit arrangements and maintain reserves we believe are adequate to cover 34 exposure for doubtful accounts, in weak economic environments, customers’ delays and failures to pay often increase due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to credit markets.
Although we monitor individual customer financial viability in granting such credit arrangements and maintain reserves we believe are adequate to cover exposure for doubtful accounts, in weak economic environments, customers’ delays and failures to pay often increase due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to credit markets.
However, if these indemnification provisions terminate or if the indemnifying parties do not fulfill their indemnification obligations, we may be subject to liability with respect to the environmental matters that those indemnification provisions address. We face risks from increasing activism against, and negative investor sentiment towards the oil and gas industry, which may adversely impact our business.
However, if these indemnification provisions terminate or if the indemnifying parties do not fulfill their indemnification obligations, we may be subject to liability with respect to the environmental matters that those indemnification provisions address. 41 We face risks from increasing activism against, and negative investor sentiment towards the oil and gas industry, which may adversely impact our business.
We are unable to predict what effect consolidations in our industry may have on prices, capital spending by customers, selling strategies, competitive position, ability to retain customers or ability to negotiate favorable agreements with customers. The loss of one or more of our larger customers could have a material adverse effect on our business, financial condition and results of operations.
We are unable to predict what effect consolidations in our industry may have on prices, capital spending by customers, selling strategies, competitive position, ability to retain customers or ability to negotiate favorable agreements with customers. 25 The loss of one or more of our larger customers could have a material adverse effect on our business, financial condition and results of operations.
We may be adversely affected by disputes regarding intellectual property rights and the value of our intellectual property rights is uncertain. 37 We may become involved in claims, litigation or dispute resolution proceedings from time to time to maintain, protect or enforce our intellectual property rights against potential third-party infringers, which could be costly and time-consuming.
We may be adversely affected by disputes regarding intellectual property rights and the value of our intellectual property rights is uncertain. We may become involved in claims, litigation or dispute resolution proceedings from time to time to maintain, protect or enforce our intellectual property rights against potential third-party infringers, which could be costly and time-consuming.
Silica-related legal requirements, including compliance with OSHA regulations relating to respirable crystalline silica or litigation, could have a material adverse effect on our business, financial condition, results of operation and reputation. We are subject to laws and regulations relating to human exposure to crystalline silica. See Part I, Item 1.
Silica-related legal requirements, including compliance with OSHA regulations relating to respirable crystalline silica or litigation, could have a material adverse effect on our business, financial condition, results of operation and reputation. 42 We are subject to laws and regulations relating to human exposure to crystalline silica. See Part I, Item 1.
We may be subject to claims for personal injury and property damage or other litigation, which could materially adversely affect our business, financial condition and results of operations. Our services are subject to inherent risks that can cause personal injury or loss of life, damage to or destruction of property, equipment or the environment or the suspension of our operations.
We may be subject to claims for personal injury and property damage or other litigation, which could materially adversely affect our business, financial condition and results of operations. 43 Our services are subject to inherent risks that can cause personal injury or loss of life, damage to or destruction of property, equipment or the environment or the suspension of our operations.
The fact that certain oilfield services equipment is mobile and can be moved from one market to another in response to market conditions heightens the competition in the industry. In addition, any increase in the supply of hydraulic fracturing fleets could have a material adverse impact on market prices.
The fact that certain oilfield services 30 equipment is mobile and can be moved from one market to another in response to market conditions heightens the competition in the industry. In addition, any increase in the supply of hydraulic fracturing fleets could have a material adverse impact on market prices.
However, despite this general allocation of risk, we might not succeed in enforcing such contractual allocation, might incur an 43 unforeseen liability falling outside the scope of such allocation or may be required to enter into a service agreement with terms that vary from the above allocations of risk.
However, despite this general allocation of risk, we might not succeed in enforcing such contractual allocation, might incur an unforeseen liability falling outside the scope of such allocation or may be required to enter into a service agreement with terms that vary from the above allocations of risk.
We cannot predict the impact of the changing demand for oil and natural gas services, and any major changes may have a material adverse effect on our business, financial condition and results of operations. Our business involves many hazards and operational risks that could adversely affect our business, financial condition and results of operations.
We cannot predict the impact of the changing demand for oil and natural gas services, and any major changes may have a material adverse effect on our business, financial condition and results of operations. 28 Our business involves many hazards and operational risks that could adversely affect our business, financial condition and results of operations.
Volatility or weakness in oil prices or natural gas prices (or the perception that oil prices or natural gas prices will decrease) affects the spending patterns of our customers and may result in the drilling of fewer new wells. 24 This, in turn, could lead to lower demand for our services and may cause lower utilization of our assets.
Volatility or weakness in oil prices or natural gas prices (or the perception that oil prices or natural gas prices will decrease) affects the spending patterns of our customers and may result in the drilling of fewer new wells. This, in turn, could lead to lower demand for our services and may cause lower utilization of our assets.
Risks Relating to Our Common Stock Future sales of our Common Stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership interest. We may sell shares of Common Stock in the future.
Risks Relating to Our Common Stock 44 Future sales of our Common Stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership interest. We may sell shares of Common Stock in the future.
Cybersecurity” for additional information on our cybersecurity risk management, strategy and governance. Risks Relating to Government Regulation and Legal Matters Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us.
Cybersecurity” for additional information on our cybersecurity risk management, strategy and governance. Risks Relating to Government Regulation and Legal Matters 39 Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us.
The lenders or other investors 32 who hold debt that we fail to service or on which we otherwise default could also accelerate amounts due, which could in such an instance potentially trigger a default or acceleration of other debt we may incur.
The lenders or other investors who hold debt that we fail to service or on which we otherwise default could also accelerate amounts due, which could in such an instance potentially trigger a default or acceleration of other debt we may incur.
As our competitors and others use or develop new technologies in the future, we may be placed at a competitive 36 disadvantage if we fail to keep pace with technological advancements within our industry.
As our competitors and others use or develop new technologies in the future, we may be placed at a competitive disadvantage if we fail to keep pace with technological advancements within our industry.
In addition, the terms of the agreements governing our debt limit, and the terms of the agreements governing any future debt may limit or prohibit, the payments of dividends. We cannot assure you that we will pay dividends in the future or continue to pay any dividends if we do commence the payment of dividends.
In addition, the terms of the agreements governing our debt 46 limit, and the terms of the agreements governing any future debt may limit or prohibit, the payments of dividends. We cannot assure you that we will pay dividends in the future or continue to pay any dividends if we do commence the payment of dividends.
For example, they could: • increase our vulnerability to adverse economic and industry conditions; • require us to dedicate a substantial portion of cash from operations to the payment of debt service, including making mandatory quarterly redemptions of the 2030 Senior Notes, thereby reducing the availability of cash to fund working capital, capital expenditures and other general corporate purposes; • limit our ability to obtain additional financing for working capital, capital expenditures, general corporate purposes or acquisitions; • place us at a disadvantage compared to our competitors that are less leveraged; • limit our flexibility in planning for, or reacting to, changes in our business and in our industry; and • make us vulnerable to increases in interest rates with respect to the outstanding 2030 Senior Notes and amounts borrowed under our New ABL Facility.
For example, they could: • increase our vulnerability to adverse economic and industry conditions; • require us to dedicate a substantial portion of cash from operations to the payment of debt service, including making mandatory quarterly redemptions of the 2030 Senior Notes, thereby reducing the availability of cash to fund working capital, capital expenditures and other general corporate purposes; • limit our ability to obtain additional financing for working capital, capital expenditures, general corporate purposes or acquisitions; • place us at a disadvantage compared to our competitors that are less leveraged; 34 • limit our flexibility in planning for, or reacting to, changes in our business and in our industry; and • make us vulnerable to increases in interest rates with respect to the outstanding 2030 Senior Notes and amounts borrowed under our 2028 ABL Facility.
To date, we have not experienced any 38 material losses relating to cyberattacks; however, there can be no assurance that we will not suffer such losses in the future.
To date, we have not experienced any material losses relating to cyberattacks; however, there can be no assurance that we will not suffer such losses in the future.
Our ability to request borrowings for the working capital or general corporate purposes under the New ABL Facility is subject to satisfaction of certain customary conditions, including representations and warranties, no default or event of default, and the amount of requested borrowing not exceeding the lesser of the aggregate commitments thereunder and the borrowing base then in effect.
Our ability to request borrowings for the working capital or general corporate purposes under the 2028 ABL Facility is subject to satisfaction of certain customary conditions, including representations and warranties, no default or event of default, and the amount of requested borrowing not exceeding the lesser of the aggregate commitments thereunder and the borrowing base then in effect.
The New ABL Facility includes financial, operating and negative covenants that limit our ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, including dividend payments, to engage in transactions with affiliates, to engage in sale/leaseback transactions, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities.
The 2028 ABL Facility includes financial, operating and negative covenants that limit our ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, including dividend payments, to engage in transactions with affiliates, to engage in sale/leaseback transactions, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities.
We are also at risk that we may be required to refund amounts collected from a customer during the period immediately prior to that customer’s bankruptcy filing, and the amount we ultimately collect from the customer’s bankruptcy estate may be significantly less. Customer bankruptcies may also reduce our availability under our New ABL Facility.
We are also at risk that we may be required to refund amounts collected from a customer during the period immediately prior to that customer’s bankruptcy filing, and the amount we ultimately collect from the customer’s bankruptcy estate may be significantly less. Customer bankruptcies may also reduce our availability under our 2028 ABL Facility.
Our results have been, and in the future may be, impacted by the uncertainty caused by an economic downturn, public health crises, geopolitical issues, including the ongoing conflict between Russia and Ukraine, volatility or deterioration in the debt and equity capital markets, inflation, deflation or other adverse economic conditions that negatively affect us or parties with whom we do business resulting in a reduction in our customers’ spending and their non-payment or inability to perform obligations owed to us, such as the failure of customers to honor their commitments or the failure of major suppliers to complete orders.
Our results have been, and in the future may be, impacted by the uncertainty caused by an economic downturn, public health crises, geopolitical issues, including the ongoing conflict between Russia and Ukraine and recent developments in Venezuela and Iran, volatility or deterioration in the debt and equity capital markets, inflation, deflation or other adverse economic conditions that negatively affect us or parties with whom we do business resulting in a reduction in our customers’ spending and their non-payment or inability to perform obligations owed to us, such as the failure of customers to honor their commitments or the failure of major suppliers to complete orders.
“Business – Government Regulation and Environmental, Health and Safety Matters” for more discussion on climate change and ESG matters that may pose a risk to our business. We may be required to assume responsibility for environmental and other liabilities of companies we have acquired or will acquire.
“Business – Government Regulation and Environmental, Health and Safety Matters” for more discussion on climate change and sustainability matters that may pose a risk to our business. We may be required to assume responsibility for environmental and other liabilities of companies we have acquired or will acquire.
Our leverage and the restrictions and obligations contained in the 2030 Senior Notes Indenture and the New ABL Facility and any agreements governing future indebtedness may reduce our ability to incur additional indebtedness, engage in certain transactions or capitalize on acquisition or other business opportunities.
Our leverage and the restrictions and obligations contained in the 2030 Senior Notes Indenture and the 2028 ABL Facility and any agreements governing future indebtedness may reduce our ability to incur additional indebtedness, engage in certain transactions or capitalize on acquisition or other business opportunities.
If our customers delay or fail to pay a significant amount of outstanding receivables, it could reduce our availability under our New ABL Facility or otherwise have a material adverse effect on our liquidity, financial condition, results of operations and cash flows.
If our customers delay or fail to pay a significant amount of outstanding receivables, it could reduce our availability under our 2028 ABL Facility or otherwise have a material adverse effect on our liquidity, financial condition, results of operations and cash flows.
Our operations rely on an extensive network of IT resources and a failure to maintain, upgrade and protect such systems could adversely impact our business, financial condition and results of operations. Our operations are subject to cybersecurity risks that could have a material adverse effect on our business, financial condition and results of operations.
Our operations rely on an extensive network of IT systems and a failure to maintain, upgrade and protect such systems could adversely impact our business, financial condition and results of 38 operations. Our operations are subject to cybersecurity risks that could have a material adverse effect on our business, financial condition and results of operations.
A failure to comply with the obligations contained in the New ABL Facility could result in an event of default, which could permit acceleration of the debt, termination of undrawn commitments and enforcement against any liens securing the debt.
A failure to comply with the obligations contained in the 2028 ABL Facility could result in an event of default, which could permit acceleration of the debt, termination of undrawn commitments and enforcement against any liens securing the debt.
“Business – Government Regulation and Environmental, Health and Safety Matters” for more discussion on these matters.
“Business – Government Regulation and Environmental, Health and Safety Matters” for more 40 discussion on these matters.
Our past acquisition activity and any future acquisitions may not be successful in delivering expected performance post-acquisition, which could have a material adverse effect on our business, financial condition and results of operations. Our business was created largely through a series of acquisitions, including the Greene's Acquisition (as defined below).
Our past acquisition activity and any future acquisitions may not be successful in delivering expected performance post-acquisition, which could have a material adverse effect on our business, financial condition and results of operations. Our business was created largely through a series of acquisitions, including the Greene's Acquisition.
If our future cash flows and available borrowings under our New ABL Facility are insufficient to fund our operating expenses, we may be forced to consider additional financing alternatives.
If our future cash flows and available borrowings under our 2028 ABL Facility are insufficient to fund our operating expenses, we may be forced to consider additional financing alternatives.
Pursuant to the Exchange Agreement, the noteholder exchanged $1.0 in aggregate principal amount of the Company’s outstanding 2025 Senior Notes for an aggregate of 190,476 shares of our Common Stock (the “Exchange”). During the year ended December 31, 2023, we did not engage in any debt-for-equity exchanges.
Pursuant to the Exchange Agreement, the noteholder exchanged $1.0 in aggregate principal amount of the Company’s outstanding 2025 Senior Notes for an aggregate of 190,476 shares of our Common Stock (the “Exchange”). During the year ended December 31, 2025, we did not have any Exchanges.
Significant factors that are likely to affect commodity prices in current and future periods include, but are not limited to, price reductions or increased production by OPEC members and other oil exporting nations, the effect of U.S. energy, monetary and trade policies, U.S. and global economic conditions, U.S. and global political and economic developments, including initiatives introduced by the Trump Administration and resulting energy and environmental policies, war or other military conflict, including the continuing conflict between Russia and Ukraine, and conditions in the U.S. oil and gas industry and the resulting demand for domestic land oilfield services.
Significant factors that are likely to affect commodity prices in current and future periods include, but are not limited to, price reductions or increased production by OPEC members and other oil exporting nations, the effect of U.S. energy, monetary and trade policies, U.S. and global economic conditions, U.S. and global political and economic developments, including initiatives introduced by the Trump Administration and resulting energy and environmental policies, war or other military conflict, including the continuing conflict between Russia and Ukraine, conditions in the Middle East and South America, including most recently in Iran 24 and Venezuela, and conditions in the U.S. oil and gas industry and the resulting demand for domestic land oilfield services.
The current trend in the insurance industry is towards larger deductibles and self-insured retentions. In addition, insurance may not be available in the future at rates that we consider reasonable and commercially justifiable, compelling us to have larger deductibles or self-insured retentions to effectively manage expenses.
In addition, insurance may not be available in the future at rates that we consider reasonable and commercially justifiable, compelling us to have larger deductibles or self-insured retentions to effectively manage expenses.
During the year ended December 31, 2024, based on total purchase cost, our ten largest suppliers of goods and services represented approximately 27% of all such purchases.
During the year ended December 31, 2025, based on total purchase cost, our ten largest suppliers of goods and services represented approximately 23% of all such purchases.
We may also issue additional shares of, and securities exercisable for, or convertible into, Common Stock, including as employee compensation or as consideration in one or more acquisitions or other business combination transactions. As of December 31, 2024, we had outstanding approximately 16.4 million shares of our Common Stock.
We may also issue additional shares of, and securities exercisable for, or convertible into, Common Stock, including as employee compensation or as consideration in one or more acquisitions or other business combination transactions. As of December 31, 2025, we had outstanding approximately 19.2 million shares of our Common Stock.
Risks Relating to Our Industry Conservation measures and technological advances could reduce demand for oil and natural gas. 28 Fuel conservation measures, alternative fuel requirements, increasing consumer demand for or legislative incentives for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas.
Fuel conservation measures, alternative fuel requirements, increasing consumer demand for or legislative incentives for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas.
These provisions may also prevent or discourage attempts to remove and replace incumbent directors. 46 Our amended and restated bylaws designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a different judicial forum for intra-corporate disputes with us or our directors, officers, employees or agents.
Our amended and restated bylaws designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a different judicial forum for intra-corporate disputes with us or our directors, officers, employees or agents.
The 2030 Senior Notes Indenture also restricts, among other things, the Company’s ability to incur indebtedness and liens, pay dividends or make other distributions, make certain other restricted payments or investments, sell assets, enter into restrictive agreements, enter into transactions with the Company’s affiliates, and merge or consolidate with other entities or convey, transfer or lease all or substantially all of the Company’s properties and assets to another person, which, in each case, is subject to certain limitations and exceptions.
As of December 31, 2025, the Company was in compliance with its debt covenants under the 2030 Senior Notes. 32 The 2030 Senior Notes Indenture also restricts, among other things, the Company’s ability to incur indebtedness and liens, pay dividends or make other distributions, make certain other restricted payments or investments, sell assets, enter into restrictive agreements, enter into transactions with the Company’s affiliates, and merge or consolidate with other entities or convey, transfer or lease all or substantially all of the Company’s properties and assets to another person, which, in each case, is subject to certain limitations and exceptions.
As with all governmental permitting processes, there is a degree of uncertainty as to whether a permit will be granted, the time it will take for a permit to be issued and the conditions that may be imposed in connection with the granting of the permit.
As with all governmental permitting processes, and particularly with respect to those processes that involve public participation and comment, there is a degree of uncertainty as to whether a permit will be granted, the time it will take for a permit to be issued and the conditions that may be imposed in connection with the granting of the permit.
The warrant agreements governing the Warrants stipulate that the Company will file a registration statement with SEC with respect to the shares of Common Stock underlying the Warrants within 90 days of their issuance.
The warrant agreements governing the Warrants stipulate that the Company will file a registration statement with SEC with respect to the shares of Common Stock underlying the Warrants within 90 days of their issuance, providing for registered resale pursuant thereto.
As a result of market conditions, premiums and deductibles for certain of our insurance policies may substantially increase. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. 29 Our insurance has deductibles or self-insured retentions and contains certain coverage exclusions.
As a result of market conditions, premiums and deductibles for certain of our insurance policies may substantially increase. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. Our insurance has deductibles or self-insured retentions and contains certain coverage exclusions. The current trend in the insurance industry is towards larger deductibles and self-insured retentions.
However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or effectively prevent an acquisition that our Board determines is not in the best interests of our company and our stockholders.
However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or effectively prevent an acquisition that our Board determines is not in the best interests of our company and our stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.
We also have registered 2,477,051 shares of Common Stock reserved for issuance under our Long-Term Incentive Plan ("LTIP"). Of those shares initially registered and reserved for issuance, as of December 31, 2024, approximately 1,716,489 restricted shares of Common Stock were granted in connection with equity awards to management, directors and employees and approximately 760,562 shares remain available for future issuance.
We also have registered 2,477,051 shares of Common Stock reserved for issuance under our Long-Term Incentive Plan ("LTIP"). Of those shares initially registered and reserved for issuance, as of December 31, 2025, approximately 2,110,977 restricted shares of Common Stock were granted in connection with equity awards to management, directors and employees and approximately 366,074 shares remain available for future issuance.
Our ability to continue to achieve our goals may depend upon our ability to 27 effectively identify attractive businesses, access financing sources on acceptable terms, negotiate favorable transaction terms and successfully integrate any businesses we acquire, achieve cost efficiencies and manage these businesses as part of our company.
Our ability to continue to achieve our goals may depend upon our ability to effectively identify attractive businesses, access financing sources on acceptable terms, negotiate favorable transaction terms and successfully integrate any businesses we acquire, achieve cost efficiencies and manage these businesses as part of our company. Our acquisition and merger activities may involve unanticipated delays, costs and other problems.
Price competition, equipment availability, location and suitability, experience of the workforce, safety records, reputation, operating integrity and the condition of equipment are all factors used by customers in awarding contracts. Our competitors are numerous and may 30 have greater financial and technological resources than we do.
Price competition, equipment availability, location and suitability, experience of the workforce, safety records, reputation, operating integrity and the condition of equipment are all factors used by customers in awarding contracts. Our competitors are numerous and may have greater financial and technological resources than we do. Contracts are traditionally awarded on the basis of competitive bids or direct negotiations with customers.
Contracts are traditionally awarded on the basis of competitive bids or direct negotiations with customers. The competitive environment has intensified as mergers among E&P companies have reduced the number of available customers and may further increase if E&P company bankruptcies further reduce the number of available customers or our existing and potential customers may develop their own service businesses.
The competitive environment has intensified as mergers among E&P companies have reduced the number of available customers and may further increase if E&P company bankruptcies further reduce the number of available customers or our existing and potential customers may develop their own service businesses.
Shares of Common Stock offered and sold in the ATM Offering were issued pursuant to the Company's shelf registration statement on Form S-3 (Registration No. 333-256149) filed with the SEC on May 14, 2021 and declared effective on June 11, 2021 (the “Registration Statement”), the prospectus supplement relating to the ATM Offering filed with the SEC on June 14, 2021 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement.
Any Common Stock offered and sold in the ATM Offering may be issued pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-271182) filed with the SEC on April 7, 2023 and declared effective on April 19, 2023 (the “Registration Statement”), the prospectus supplement relating to the ATM Offering filed with the SEC on March 14, 2025 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement.
Our future operating performance will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources, the willingness of capital providers to lend to our industry and other financial and business factors, many of which are beyond our control.
Our future operating performance will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources, the willingness of capital providers to lend to our industry and other financial and business factors, many of which are beyond our control. 33 Our ability to refinance our debt will depend on the condition of the public and private debt markets and our financial condition at such time, among other things.
Such demands on our capital or reductions in demand and the increase in cost to maintain labor necessary for such maintenance and improvement, in each case, could have a material adverse effect on our business, financial condition and results of operations.
Additionally, competition or advances in technology within our industry may require us to update our products and services. Such demands on our capital or reductions in demand and the increase in cost to maintain labor necessary for such maintenance and improvement, in each case, could have a material adverse effect on our business, financial condition and results of operations.
The borrowing base of our New ABL Facility is dependent upon our receivables, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services.
The borrowing base of our 2028 ABL Facility is dependent upon our receivables, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services. The industry in which we operate has undergone and may continue to undergo consolidation.
Pursuant to the terms of the Equity Distribution Agreement, we may sell from time to time through the Agent (the “ATM Offering”) the Company’s Common Stock, par value $0.01 per share, having an aggregate offering price of up to $50.0. On November 16, 2022, the Company entered into Amendment No. 1 to the Equity Distribution Agreement (the “EDA Amendment”).
Pursuant to the terms 45 of the Equity Distribution Agreement, we may sell from time to time through the Agent (the “ATM Offering”) the Company’s Common Stock, par value $0.01 per share, having an aggregate offering price of up to $50.0.
Sales of substantial amounts of our Common Stock (including shares issued in connection with an acquisition or shares held by stockholders with registration rights), or the perception that such sales could occur, may adversely affect prevailing market prices of our Common Stock. 45 Sales of or other transactions relating to shares of our Common Stock by our significant stockholders, directors, officers or employees could cause a perception in the marketplace that adverse events or trends have occurred or may be occurring at our company or that it is otherwise an advantageous time to sell shares of our Common Stock.
Sales of or other transactions relating to shares of our Common Stock by our significant stockholders, directors, officers or employees could cause a perception in the marketplace that adverse events or trends have occurred or may be occurring at our company or that it is otherwise an advantageous time to sell shares of our Common Stock.
During the past five years, West Texas Intermediate (“WTI”) has ranged from a low of $(36.98) per barrel (“Bbl”) in April 2020 to a high of $123.64 per Bbl in March 2022. As of December 31, 2024, WTI closed at $72.44 per Bbl, a 0.8% increase compared to the closing price of WTI on December 31, 2023.
During the past five years, West Texas Intermediate (“WTI”) has ranged from a low of $47.47 per barrel (“Bbl”) in January 2021 to a high of $123.64 per Bbl in March 2022. As of December 31, 2025, WTI closed at $57.26 per Bbl, a 21.0% decrease compared to the closing price of WTI on December 31, 2024.
Our reliance on such suppliers could increase the 35 difficulty of obtaining such goods and services in the event of a disruption to the supply chain or upon a bankruptcy of one or more of these suppliers or upon a shortage in our industry.
Our reliance on such suppliers could increase the difficulty of obtaining such goods and services in the event of a disruption to the supply chain or upon a bankruptcy of one or more of these suppliers or upon a shortage in our industry. Price increases, delays in delivery and interruptions in supply may require us to incur higher operating costs.
While we cannot predict whether, or in what form, any legislation or regulatory and executive actions that change existing trucking legal requirements will occur, we may incur increased expenses associated with new or changed trucking laws, regulatory and executory actions, or other restrictions, which could negatively impact our business, financial condition and results of operations. 39 Legal requirements relating to hydraulic fracturing could increase our customers’ costs of doing business, limit the areas in which our customers can operate and reduce oil and natural gas production by our customers, which could adversely impact our business, financial condition and results of operations.
While we cannot predict whether, or in what form, any legislation or regulatory and executive actions that change existing trucking legal requirements will occur, we may incur increased expenses associated with new or changed trucking laws, regulatory and executory actions, or other restrictions, which could negatively impact our business, financial condition and results of operations.
While the Federal Reserve reduced benchmark interest rates by 75 basis points in late 2024, it has recently announced a pause on interest rate cuts. To the extent elevated inflation remains, we may experience further cost increases for our operations, including labor costs and equipment.
While the Federal Reserve reduced benchmark interest rates by 100 basis points in late 2024 and by 75 basis points in 2025, no assurance can be given that such rate cuts will continue. To the extent elevated inflation remains, we may experience further cost increases for our operations, including labor costs and equipment.
Our equipment requires periodic capital investment in maintenance, upgrades and refurbishment to maintain its competitiveness. The costs of components and labor have increased in the past and may increase in the future with increases in demand, which will require us to incur additional costs to upgrade any equipment we may acquire in the future.
The costs of components and labor have increased in the past and may increase in the future with increases in demand, which will require us to incur additional costs to upgrade any equipment we may acquire in the future. Our equipment typically does not generate revenue while it is undergoing maintenance, refurbishment or upgrades.
Explosive incidents arising out of dangerous materials used in our business could disrupt operations and result in bodily injuries and property damages, which occurrences could have a material adverse effect our business, results of operations and financial conditions. 42 Our operations include the licensing, storage and handling of explosive materials that are subject to regulation by the ATF and analogous state agencies.
Explosive incidents arising out of dangerous materials used in our business could disrupt operations and result in bodily injuries and property damages, which occurrences could have a material adverse effect our business, results of operations and financial conditions.
We may not be able to expand effectively or manage our expansion successfully, and the failure to do so could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our Common Stock to decline.
We may not be able to expand effectively or manage our expansion successfully, and the failure to do so could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our Common Stock to decline. 26 If we lose significant customers, significant customers materially reduce their purchase orders or significant programs on which we rely are delayed, scaled back or eliminated, our business, financial condition and results of operations may be adversely affected.
This consolidation may result in reduced capital spending by E&P customers or the acquisition of one or more of our other primary customers, which may lead to decreased demand for our products and services.
Some of our largest customers have consolidated in recent years and are using their size and purchasing power to achieve economies of scale and pricing concessions. This consolidation may result in reduced capital spending by E&P customers or the acquisition of one or more of our other primary customers, which may lead to decreased demand for our products and services.
Our success may be affected by our development and implementation of new product designs and improvements and by our ability to protect, obtain and maintain intellectual property assets related to these developments. We rely on a combination of patents and trade secrets to protect our proprietary technology.
Our success may be affected by our ability to use and protect our proprietary technology as well as our ability to enter into license agreements. 37 Our success may be affected by our development and implementation of new product designs and improvements and by our ability to protect, obtain and maintain intellectual property assets related to these developments.
Our significant level of indebtedness may limit our ability to borrow additional funds or capitalize on acquisition or other business opportunities. The 2030 Senior Notes Indenture and the New ABL Facility have significant financial and operating restrictions that may have an adverse effect on our business, financial condition and results of operations.
The 2030 Senior Notes Indenture and the 2028 ABL Facility have significant financial and operating restrictions that may have an adverse effect on our business, financial condition and results of operations.
We have received patents and have filed patent applications with respect to certain aspects of our technology in the U.S. and international jurisdictions. In addition to seeking patent protection, we also protect our proprietary technology with other protective measures, including through a combination of trade secrets and employee and third-party non-disclosure agreements.
We rely on a combination of patents and trade secrets to protect our proprietary technology. We have received patents and have filed patent applications with respect to certain aspects of our technology in the U.S. and international jurisdictions.
These locations and activities are susceptible to the physical effects of climate change, such as increased frequency or severity storm systems, hurricanes, droughts, floods, extreme winter weather, or geologic/geophysical conditions. 31 Risks Relating to Financial Considerations We have operated at a loss, and there is no assurance of our profitability in the future.
These locations and activities are susceptible to the physical effects of climate change, such as increased frequency or severity storm systems, hurricanes, droughts, floods, extreme winter weather, or geologic/geophysical conditions.
Although we maintain reserves for potential customer credit losses, customer bankruptcies could result in unanticipated credit losses. As a result, if one or more of our customers enter bankruptcy proceedings, particularly our larger customers or those to whom we have greater credit exposure, it could have a material adverse impact on our liquidity, operating results and financial condition.
As a result, if one or more of our customers enter bankruptcy proceedings, particularly our larger customers or those to whom we have greater credit exposure, it could have a material adverse impact on our liquidity, operating results and financial condition. 35 Risks Relating to Third Parties Shortages or increases in the costs of the equipment we use in our operations could adversely affect our operations in the future.
Fuel conservation measures, alternative fuel requirements and increasing consumer demand for or legislative incentives supporting alternative energy sources (such as wind, solar, geothermal and tidal) could also reduce demand for oil and natural gas.
Fuel conservation measures, alternative fuel requirements and increasing consumer demand for or legislative incentives supporting alternative energy sources (such as wind, solar, geothermal and tidal) could also reduce demand for oil and natural gas. The occurrence of one or more of these developments could have a material adverse effect on our business, financial condition and results of operations.
Upon completing the Refinancing on March 12, 2025, we had total outstanding long-term indebtedness of $287.2, comprised of $55.0 outstanding borrowings under our New ABL Facility and $232.2 in aggregate principal amount of 2030 Senior Notes. Our New ABL Facility matures in 2028. See Item 8. Note 7 - Long Term Debt for more information.
As of December 31, 2025, we had total outstanding long-term indebtedness of $258.3, comprised of $36.0 in outstanding borrowings under our 2028 ABL Facility and $222.3 in net principal amount of 2030 Senior Notes. Our 2028 ABL Facility matures in 2028. See Item 8. Note 6 - Long Term Debt for more information.
Additionally, we may fail to consummate proposed acquisitions or divestitures, after incurring expenses and devoting substantial resources, including management time, to such transactions. Acquisitions also pose the risk that we may be exposed to successor liability relating to actions by an acquired company and its management before the acquisition.
Acquisitions 27 also pose the risk that we may be exposed to successor liability relating to actions by an acquired company and its management before the acquisition.
For the year ended December 31, 2024, no single customer accounted for more than 10% of our revenues. Our top five customers for the year ended December 31, 2024 together accounted for approximately 31% of our revenues.
Our significant customers change from year to year, depending on the level of E&P activity and the use of our services. For the year ended December 31, 2025, no single customer accounted for more than 10% of our revenues. Our top five customers for the year ended December 31, 2025 together accounted for approximately 31% of our revenues.
We have experienced periods of low demand for our services and have incurred operating losses. Although there have been improvements in profitability, we still had a net loss during the most recent period. We serve customers who are involved in drilling for and production of oil and natural gas.
Risks Relating to Financial Considerations We have operated at a loss, and there is no assurance of our profitability in the future. 31 We have experienced periods of low demand for our services and have incurred operating losses. Although there have been improvements in profitability, we still had a net loss during the most recent period.
We may not have, or may not be able to obtain, sufficient funds to make any required accelerated payments. We may experience future impairment charges. To conduct our business operations and execute our strategy, we acquire tangible and intangible assets, which affect the amount of future period amortization expense and possible impairment expense that we may incur.
We may experience future impairment charges. To conduct our business operations and execute our strategy, we acquire tangible and intangible assets, which affect the amount of future period amortization expense and possible impairment expense that we may incur. The risk of impairment may be heightened for the duration of the current industry conditions, which may persist for a prolonged period.
However, an unexpected slowdown in economic activity may result in lower capital expenditures, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us, which could have a material adverse effect on our financial condition, results of operations and cash flows. 23 Over the past several years, an increasing number of E&P companies increased their focus on generating free cash flow; as a result, if oil prices drop or spending for activities exceeds amounts budgeted earlier in their fiscal years, many E&P companies will sharply curtail spending, which negatively impacts demand for our services.
Over the past several years, an increasing number of E&P companies increased their focus on generating free cash flow; as a result, if oil prices drop or spending for activities exceeds amounts budgeted earlier in their fiscal years, many E&P companies will sharply curtail spending, which negatively impacts demand for our services.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−0 removed8 unchanged
Biggest changeWe continue to evaluate internal systems, processes, and controls to identify potential cybersecurity vulnerabilities and mitigate potential loss from cyber-attacks. We have implemented a monitoring and detection system to help identify cybersecurity incidents. All incidents are escalated to our cybersecurity committee, which includes Vice President of IT, Chief Financial Officer, Chief Compliance Officer/General Counsel and other senior management.
Biggest changeWe perform technical assessments with feedback incorporated into our systems and procedures through continual upgrades intended to further improve our cybersecurity posture. 48 We continue to evaluate internal systems, processes, and controls to identify potential cybersecurity vulnerabilities and mitigate potential loss from cyber-attacks. We have implemented a monitoring and detection system to help identify cybersecurity incidents.
ITEM 1C. CYBERSECURITY Risk Management and Strategy 47 IT plays a crucial role in all of our operations.
ITEM 1C. CYBERSECURITY Risk Management and Strategy IT plays a crucial role in all of our operations.
We have also implemented a multi-factor authentication process for employees accessing company information. We engage third-party service providers in connection with our cybersecurity risk program, including assessors, consultants, and auditors. We recognize that third-party service providers introduce cybersecurity risks. In an effort to mitigate these risks, we include security and privacy addendums to our contracts where applicable.
We engage third-party service providers in connection with our cybersecurity risk program, including assessors, consultants, and auditors. We recognize that third-party service providers introduce cybersecurity risks. In an effort to mitigate these risks, we include security and privacy addendums to our contracts where applicable.
To facilitate effective oversight, our Vice President of IT holds discussions on cybersecurity risks, incident trends, and the effectiveness of cybersecurity measures as necessitated by emerging material cyber risks. 48 Our Vice President of IT has over thirty years of IT background in a variety of industries, with experience developing security frameworks, training on cyber security best practices, and emergency response and remediation. 49
Our Vice President of IT has over thirty years of IT background in a variety of industries, with experience developing security frameworks, training on cyber security best practices, and emergency response and remediation. 49
Our cybersecurity risk program references industry-standard frameworks and incorporates policies and practices designed to protect the privacy and security of our sensitive information. We perform technical assessments with feedback incorporated into our systems and procedures through continual upgrades intended to further improve our cybersecurity posture.
Our cybersecurity risk program references industry-standard frameworks and incorporates policies and practices designed to protect the privacy and security of our sensitive information.
We also require our employees to receive annual cybersecurity awareness training. We perform cybersecurity tabletop exercises and implement post-incident “lessons learned” to enhance our response. We provide our system users with access consistent with the principle of least privilege, which requires that such users be given no more access than necessary to complete their job functions.
We provide our system users with access consistent with the principle of least privilege, which requires that such users be given no more access than necessary to complete their job functions. We have also implemented a multi-factor authentication process for employees accessing company information.
Our Vice President of IT reports to the Company’s Chief Financial Officer, including with respect to emerging cybersecurity incidents.
Our Vice President of IT reports to the Company’s Chief Financial Officer, including with respect to emerging cybersecurity incidents. To facilitate effective oversight, our Vice President of IT holds discussions on cybersecurity risks, incident trends, and the effectiveness of cybersecurity measures as necessitated by emerging material cyber risks.
Added
All incidents are escalated to our cybersecurity committee, which includes Vice President of IT, Chief Financial Officer, Chief Compliance Officer/General Counsel and other senior management. We also require our employees to receive annual cybersecurity awareness training. We perform cybersecurity tabletop exercises and implement post-incident “lessons learned” to enhance our response.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeWe currently own or lease over 50 service facilities, including the following material facilities: Leased or Owned Expiration of Lease Rocky Mountains LaSalle, CO Lease 11/1/2027 Mills, WY Lease 10/31/2026 Nunn, CO Lease 11/30/2027 Williston, ND Own N/A Southwest Odessa, TX Lease 6/30/2027 Odessa, TX Lease 6/30/2028 Odessa, TX Lease 5/31/2030 Willis, TX Own N/A Northeast/Mid-Con Bossier City, LA Lease 5/31/2026 Bridgeport, WV Lease 8/31/2028 Oklahoma City, OK Lease 6/30/2026 Union City, OK Own N/A We believe that our facilities are adequate for our current operations and allow us to efficiently serve our customers.
Biggest changeWe currently own or lease over 60 service facilities, including the following material facilities: Leased or Owned Expiration of Lease Rocky Mountains LaSalle, CO Lease 11/1/2027 Mills, WY Lease 10/31/2026 Nunn, CO Lease 11/30/2027 Williston, ND Own N/A Southwest Odessa, TX Lease 6/30/2028 Odessa, TX Lease 11/30/2028 Odessa, TX Lease 5/31/2030 Pleasanton, TX Lease 6/30/2027 Victoria, TX Own N/A Willis, TX Own N/A Northeast/Mid-Con Bossier City, LA Lease 6/30/2027 Bridgeport, WV Lease 8/31/2028 Union City, OK Own N/A We believe that our facilities are adequate for our current operations and allow us to efficiently serve our customers.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−4 removed1 unchanged
Biggest change“Commitments, Contingencies and Off-Balance Sheet Arrangements” to our audited consolidated financial statements included in Item 8 in this Form 10-K.
Biggest changeSee Note 9. “Commitments, Contingencies and Off-Balance Sheet Arrangements” to our audited consolidated financial statements included in Item 8 in this Form 10-K.
Removed
On March 9, 2021, the Company filed claims in the District Court of Harris County, Texas against Magellan E&P Holdings, Inc. (“Magellan”), Redmon-Keys Insurance Group, Inc.
Removed
(“Redmon-Keys”) and certain underwriters at Lloyd's (the “Magellan Underwriters”) to recover $4.6 owed on invoices duly issued by the Company for services rendered on behalf of the defendants in response to an offshore well blowout near Bob Hall Pier in Corpus Christi, Texas. On March 30, 2021, Magellan filed for bankruptcy pursuant to Chapter 7 of the U.S. bankruptcy code.
Removed
During the fiscal year ended January 31, 2021, the Company reserved the full amount of its invoices totaling $4.6 as a prudent action in light of the Chapter 7 filing.
Removed
Through the bankruptcy proceedings, the Company recovered $1.0 in March 2024 and, following a settlement by the Chapter 7 Trustee with the Magellan Underwriters in December 2024 and approved by the Court in January 2025, the Company expects to receive an additional $1.0 to $1.3 in 2025. The Company continues to pursue claims against Redmon-Keys. See Note 10.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−2 removed4 unchanged
Biggest changeThe shares of Common Stock issued in the Exchange were issued to existing holders of the Company’s securities without commission in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act.
Biggest changeThe Warrants were not, and the shares of Common Stock issuable upon the exercise of the Warrants will not be, registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) thereof as a transaction not involving any public offering.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table presents the total number of shares of our Common Stock that we repurchased during the three months ended December 31, 2024: 51 Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs (2) Approximate dollar value of shares that may yet be purchased under the plans or programs October 1, 2024 - October 31, 2024 0 $ — — $ 48,859,603 November 1, 2024 - November 30, 2024 0 $ — — $ 48,859,603 December 1, 2024 - December 31, 2024 0 $ — — $ 48,859,603 Total — — (1) The average price paid per share of Common Stock repurchased under the share repurchase program includes commissions paid to the brokers.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table presents the total number of shares of our Common Stock that we repurchased during the three months ended December 31, 2025: 51 Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs (2) Approximate dollar value of shares that may yet be purchased under the plans or programs October 1, 2025 - October 31, 2025 0 $ — — $ 48,859,603 November 1, 2025 - November 30, 2025 0 $ — — $ 48,859,603 December 1, 2025 - December 31, 2025 0 $ — — $ 48,859,603 Total — — (1) The average price paid per share of Common Stock repurchased under the share repurchase program includes commissions paid to the brokers.
As of such date, based on information provided to us by Computershare, our transfer agent, we had 498 registered holders, and because many of these shares are held by brokers and other institutions on behalf of the beneficial holders, we are unable to estimate the number of beneficial stockholders represented by these holders of record.
As of such date, based on information provided to us by Computershare, our transfer agent, we had 435 registered holders, and because many of these shares are held by brokers and other institutions on behalf of the beneficial holders, we are unable to estimate the number of beneficial stockholders represented by these holders of record.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock is quoted on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “KLXE”. On February 28, 2025, the last reported sale price of our Common Stock as reported by Nasdaq was $4.67 per share.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock is quoted on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “KLXE”. On February 27, 2026, the last reported sale price of our Common Stock as reported by Nasdaq was $2.54 per share.
In connection with the Refinancing, on March 12, 2025, we issued Warrants to purchase, in aggregate, up to 2,373,187 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment.
Recent Sales of Unregistered Equity Securities There were no unregistered sales of equity securities for the three months ended December 31, 2025. In connection with the Refinancing, on March 12, 2025, we issued Warrants to purchase, in aggregate, up to 2,373,187 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment.
Removed
Recent Sales of Unregistered Equity Securities In November 2024, we entered into the Exchange Agreement with a noteholder of our 2025 Senior Notes. Pursuant to the Exchange Agreement, the noteholder exchanged $1.0 in aggregate principal amount of the Company’s outstanding 2025 Senior Notes for an aggregate of 190,476 shares of our Common Stock.
Added
In connection with our entry into the First Amendment to the Indenture, on March 6, 2026 and March 11, 2026, we issued additional Warrants to our noteholders, based on their pro rata ownership of principal amount of the 2030 Senior Notes, providing for the purchase of up to 803,712 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment.
Removed
Other than as described above or as previously reported in a Form 8-K, there were no unregistered sales of equity securities for the three months ended December 31, 2024.
Added
Under the warrant agreements governing the Warrants, the Company undertakes to file a registration statement with the SEC with respect to the shares of Common Stock underlying the Warrants within 90 days of their issuance, providing for registered resale pursuant thereto.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

70 edited+33 added−30 removed67 unchanged
Biggest changeUpon deposit of such redemption amount, the indenture that governs the 2025 Senior Notes was satisfied and discharged in accordance with its terms and, as a result thereof, the Company has been released from its obligations under the 2025 Senior Notes except with respect to those provisions of the indenture that, by their terms, survive the satisfaction and discharge of thereof. 2030 Senior Notes On March 12, 2025, as part of the Refinancing, the Company and certain of its subsidiaries entered into an indenture, dated as of March 12, 2025 (the “2030 Senior Notes Indenture”), with U.S.
Biggest changeThe Company consummated the Refinancing on March 12, 2025. Senior Secured Notes 2030 Senior Notes On March 12, 2025, as part of the Refinancing, the Company and certain of its subsidiaries entered into the 2030 Senior Notes Indenture, with U.S.
To what extent these and 55 other external factors (such as government action with respect to climate change regulation) ultimately impact our future business, liquidity, financial condition, and results of operations is highly uncertain and dependent on numerous factors, including future developments, that are not within our control and cannot be accurately predicted.
To what extent these and other external factors (such as government action with respect to climate change regulation) ultimately impact our future business, liquidity, financial condition, and results of 55 operations is highly uncertain and dependent on numerous factors, including future developments, that are not within our control and cannot be accurately predicted.
The 2030 Senior Notes Indenture contains certain financial covenants that include (i) a maximum total net leverage ratio of not greater than 4.50 to 1.0 for the test periods ending March 31, 2025 through December 31, 2025, stepping down to 4.00 to 1.0 for the test periods ending March 31, 2026 through December 31, 2026, 3.50 to 1.0 for the test periods ending March 31, 2027 through December 31, 2027, 3.00 to 1.0 for the 61 test periods ending March 31, 2028 through December 31, 2028, and 2.50 to 1.0 for each test period thereafter and (ii) restrictions on making net capital expenditures in any test period in excess of the greater of (x) $65.0 in the aggregate or (y) 7% of revenues during such test period.
The 2030 Senior Notes Indenture contains certain financial covenants that include (i) a maximum total net leverage ratio of not greater than 4.50 to 1.0 for the test periods ending March 31, 2025 through December 31, 2025, stepping down to 4.00 to 1.0 for the test periods ending March 31, 2026 through December 31, 2026, 3.50 to 1.0 for the test periods ending March 31, 2027 through December 31, 2027, 3.00 to 1.0 for the test periods ending March 31, 2028 through December 31, 2028, and 2.50 to 1.0 for each test period thereafter and (ii) restrictions on making net capital expenditures in any test period in excess of the greater of (x) $65.0 in the aggregate or (y) 7% of revenues during such test period.
North American unconventional onshore wells are increasingly characterized by extended lateral lengths, tighter spacing between hydraulic fracturing stages, increased cluster density and heightened proppant loads. Drilling and completion activities for wells in unconventional resource plays are extremely complex, and downhole challenges and operating costs increase as the complexity and lateral length of these wells increase.
North American unconventional onshore wells are increasingly 54 characterized by extended lateral lengths, tighter spacing between hydraulic fracturing stages, increased cluster density and heightened proppant loads. Drilling and completion activities for wells in unconventional resource plays are extremely complex, and downhole challenges and operating costs increase as the complexity and lateral length of these wells increase.
We exclude the items listed above in arriving at Adjusted EBITDA (Loss) because these amounts can vary substantially from company to company 66 within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired.
We exclude the items listed above in arriving at Adjusted EBITDA (Loss) because these amounts can vary substantially from company to company within our industry depending upon accounting methods, book values of assets, capital structures and the method by which the assets were acquired.
Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and 64 assumptions on a regular basis.
Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis.
We believe we are well positioned as a company to service customers when they are drilling and completing complex wells, and remediating both newer and older legacy wells. 54 We invest in innovative technology and equipment designed for modern production techniques that increase efficiencies and production for our customers.
We believe we are well positioned as a company to service customers when they are drilling and completing complex wells, and remediating both newer and older legacy wells. We invest in innovative technology and equipment designed for modern production techniques that increase efficiencies and production for our customers.
Refinancing On March 7, 2025, the Company and certain of our subsidiaries party thereto entered into a Securities Purchase Agreement with certain holders (the “Investors”) of our 2025 Senior Notes, pursuant to which the Company agreed to issue and sell to the Investors (a) approximately $232.2 in aggregate principal amount of 2030 Senior Notes and (b) Warrants entitling the holders thereof to purchase, in the aggregate, up to 2,373,187 shares of Common Stock, at an exercise price of $0.01 per share, subject to adjustment in exchange for (i) approximately $78.4 in aggregate cash consideration and (ii) approximately $143.6 aggregate principal amount of the 2025 Senior Notes, which will be cancelled by the Company upon receipt thereof (collectively, the “Refinancing”).
Refinancing On March 7, 2025, the Company and certain of our subsidiaries party thereto entered into a Securities Purchase Agreement with certain holders (the “Investors”) of our 2025 Senior Notes, pursuant to which the Company agreed to issue and sell to the Investors (a) approximately $232.2 in aggregate principal amount of the 2030 Senior Notes and (b) warrants entitling the holders thereof to purchase, in the aggregate, up to 2,373,187 shares of Common Stock, at an exercise price of $0.01 per share, subject to adjustment in exchange for (i) approximately $78.4 in aggregate cash consideration and (ii) approximately $143.6 aggregate principal amount of the 2025 Senior Notes, which were cancelled by the Company upon receipt thereof (collectively, the “Refinancing”).
Despite the decrease in commodity prices during the fiscal year ended December 31, 2024, the Company remained focused on building a leaner and more profitable set of service offerings, which allowed us to make meaningful positive impacts to our revenue, operating margins, cash flows and Adjusted EBITDA (as defined below).
Despite the decrease in commodity prices during the fiscal year ended December 31, 2025, the Company remained focused on building a leaner and more profitable set of service offerings, which allowed us to make meaningful positive impacts to our revenue, operating margins, cash flows and Adjusted EBITDA (as defined below).
Our required maintenance capital expenditures tend to be lower than other oilfield service providers due to the generally asset-light nature of our services, the lower average age of our assets and our ability to charge back a portion of asset maintenance to customers for a number of our assets. 56 Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue .
Our required maintenance capital expenditures tend to be lower than other oilfield service providers due to the generally asset-light nature of our services, the lower average age of our assets and our ability to charge back a portion of asset maintenance to customers for a number of our assets. 56 Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenue .
The New ABL Facility includes financial, operating and negative covenants that limit our ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, including dividend payments, to engage in transactions with affiliates, to engage in sale/leaseback transactions, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities.
The 2028 ABL Facility includes financial, operating and negative covenants that limit our ability to incur indebtedness, to create liens or other encumbrances, to make certain payments and investments, including dividend payments, to engage in transactions with affiliates, to engage in sale/leaseback transactions, to guarantee indebtedness and to sell or otherwise dispose of assets and merge or consolidate with other entities.
Oil and natural gas prices could decrease or increase with any changes in demand due to, among other things, the ongoing conflict in Ukraine, the recent Israel-Hamas conflict, international sanctions, speculation as to future actions by OPEC+, gas prices, interest rates, inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a perceived economic recovery or any increased volatility in financial and credit markets or a prolonged recession.
Oil and natural gas prices could decrease or increase with any changes in demand due to, among other things, the ongoing conflict in Ukraine, the Israel-Hamas conflict, the recent developments in Venezuela and Iran, international sanctions, speculation as to future actions by OPEC+, gas prices, interest rates, inflation and government efforts to reduce inflation, and possible changes in the overall health of the global economy, including a perceived economic recovery or any increased volatility in financial and credit markets or a prolonged recession.
The 2030 Senior Notes will mature on March 12, 2030 and bear a floating rate of interest of Term SOFR plus the Applicable Margin (as defined in the 2030 Senior Notes Indenture) based on the Secured Net Leverage Ratio (as defined in the 2030 Senior Notes Indenture) payable on the last day of the applicable interest period in cash or, at the Company’s election, additional 2030 Senior Notes paid-in-kind on one-, three- or six-month interest periods, which shall include a 0 basis point premium for any period where interest is paid-in-kind.
The 2030 Senior Notes will mature on March 12, 2030 and bear a floating rate of interest of Term SOFR plus the Applicable Margin (as 59 defined in the 2030 Senior Notes Indenture) based on the Secured Net Leverage Ratio (as defined in the 2030 Senior Notes Indenture) payable on the last day of the applicable interest period in cash or, at the Company’s election, additional 2030 Senior Notes paid-in-kind on one-, three- or six-month interest periods, which shall include a 100 basis point premium for any period where interest is paid-in-kind.
These guarantees are senior secured obligations of the guarantors secured by a first priority security interest on substantially all of the guarantors’ assets (other than collateral securing the New ABL Facility on a first priority basis) and a second priority security interest on the guarantors’ assets which secure the New ABL Facility on a first priority basis, subject in each case to certain excluded assets.
These guarantees are senior secured obligations of the guarantors secured by a first priority security interest on substantially all of the guarantors’ assets (other than collateral securing the 2028 ABL Facility on a first priority basis) and a second priority security interest on the guarantors’ assets which secure the 2028 ABL Facility on a first priority basis, subject in each case to certain excluded assets.
Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” The following discussion and analysis addresses the results of our operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.
Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” The following discussion and analysis addresses the results of our operations for the year ended December 31, 2025, as compared to the year ended December 31, 2024. In addition, the discussion and analysis addresses our liquidity, financial condition and other matters for these periods.
This modest increase along with weather-related challenges across the country and a cautious approach to drilling expansion are expected to be some of the driving factors for activity in our industry through December 31, 2025.
This modest increase along with weather-related challenges across the country and a cautious approach to drilling expansion are expected to be some of the driving factors for activity in our industry through December 31, 2026.
The New ABL Facility is comprised of an asset-based revolving credit facility with a $125.0 commitment (the “Revolving Facility”), a first-in-last-out asset-based credit facility with a $10.0 commitment (the “FILO Facility”), and a committed incremental loan option under the Revolving Facility with a $25.0 commitment (the “Incremental Revolving Loans”).
The 2028 ABL Facility is comprised of an asset-based revolving credit facility with a $125.0 commitment (the “Revolving Facility”), a first-in-last-out asset-based credit facility with a $10.0 commitment (the “FILO Facility”), and a committed incremental loan option under the Revolving Facility with a $25.0 commitment (the “Incremental Revolving Loans”).
The 2030 Senior Notes will also be guaranteed by each of the Company’s future subsidiaries that guarantee the Company’s indebtedness or indebtedness of guarantors, including under the New ABL Facility and such subsidiaries that become guarantors in the future will also pledge their collateral in support of such guarantees.
The 2030 Senior Notes will also be guaranteed by each of the Company’s future subsidiaries that guarantee the Company’s indebtedness or indebtedness of guarantors, including under the 2028 ABL Facility and such subsidiaries that become guarantors in the future will also pledge their collateral in support of such guarantees.
The 2030 Senior Notes are senior secured obligations of the Company and are guaranteed on a senior secured basis by each of the Company’s current domestic subsidiaries and by certain future subsidiaries, subject to agreed guaranty and security principles and certain exclusions. The 2030 Senior Notes were initially fully and unconditionally guaranteed by each of the Company’s current subsidiaries.
The 2030 Senior Notes are senior secured obligations of the Company and are guaranteed on a senior secured basis by each of the Company’s current domestic subsidiaries and by certain future subsidiaries, subject to agreed guaranty and security principles and certain exclusions. The 2030 Senior Notes are fully and unconditionally guaranteed by each of the Company’s current subsidiaries.
Most recently, we completed a refinancing of our long-term indebtedness on March 12, 2025, as described in greater detail under “—Refinancing”, “—New ABL Facility” and “—2030 Senior Notes” below.
Most recently, we completed a refinancing of our long-term indebtedness on March 12, 2025, as described in greater detail under “—Refinancing”, “—2028 ABL Facility” and “—2030 Senior Notes” below.
Based on our current forecasts, we believe our cash on hand, availability under the New ABL Facility and our cash flows will provide us with the ability to fund our operations for at least the next twelve months.
Based on our current forecasts, we believe our cash on hand, availability under the 2028 ABL Facility and our cash flows will provide us with the ability to fund our operations for at least the next twelve months.
A failure to comply with the obligations contained in the New ABL Facility could result in an event of default, which could permit acceleration of the debt, termination of undrawn commitments and enforcement against any liens securing the debt.
A failure to comply with the obligations contained in the 2028 ABL Facility could result in an event of default, which could permit acceleration of the debt, termination of undrawn commitments and enforcement against any liens securing the debt.
Our innovative and adaptive approach to proprietary tool design has been employed by our in-house R&D organization and, in selected instances, by our technology partners to develop tools covered by 36 patents and 8 pending patent applications, which we believe differentiates us from our regional competitors and also allows us to deliver more focused service and better outcomes in our specialized services than larger national competitors that do not discretely dedicate their resources to the services we provide.
Our innovative and adaptive approach to proprietary tool design has been employed by our in-house R&D organization and, in selected instances, by our technology partners to develop tools covered by 39 patents and 6 pending patent applications, which we believe differentiates us from our regional competitors and also allows us to deliver more focused service and better outcomes in our specialized services than larger national competitors that do not discretely dedicate their resources to the services we provide.
The New ABL Facility is secured by, among other things, a first priority lien on accounts receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants. The initial funding under the New ABL Facility occurred on March 12, 2025, and the proceeds therefrom were used to repay the Prior ABL Facility in full.
The 2028 ABL Facility is secured by, among other things, a first priority lien on accounts 61 receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants. The initial funding under the 2028 ABL Facility occurred on March 12, 2025, and the proceeds therefrom were used to repay the Prior ABL Facility in full.
Looking ahead to the year ending December 31, 2025, assuming commodity prices remain volatile, we anticipate that our customers will continue to cautiously allocate capital and operating expense spending.
Looking ahead to the year ending December 31, 2026, assuming commodity prices remain volatile, we anticipate that our customers will continue to cautiously allocate capital and operating expense spending.
The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the COVID-19 pandemic and increasing demand for oil and gas. Furthermore, sanctions and import bans on Russian oil have been implemented by various countries in response to the ongoing conflict in Ukraine, further impacting global oil supply.
The oil and gas industry experienced significant increases in activity in late 2021 and 2022 due to the recovery from the COVID-19 pandemic. Furthermore, sanctions and import bans on Russian oil have been implemented by various countries in response to the ongoing conflict in Ukraine, further impacting global oil supply.
The cash used in investing activities for the year ended December 31, 2024 was primarily driven by increased maintenance and growth capital spending to support our business operations.
The cash used in investing activities for the year ended December 31, 2025 was primarily driven by increased maintenance and growth capital spending to support our business operations.
So far in the year ending December 31, 2025, WTI prices have remained largely unchanged, while Organisation for Economic Co-operation and Development (“OECD”) crude inventories are expected to remain around the same level as at the end of 2024.
So far in the year ending December 31, 2026, WTI prices have remained largely unchanged, while Organisation for Economic Co-operation and Development crude inventories are expected to remain around the same level as at the end of 2024.
As market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we may further access the public or private debt and equity markets or seek to recapitalize, refinance or otherwise restructure our capital structure.
As market conditions warrant and subject to our contractual restrictions, liquidity position and other factors, we may further access the public or private debt and equity markets or seek to recapitalize, refinance or otherwise restructure our capital structure. We have substantial indebtedness.
Our future operating performance will be affected by prevailing economic and 58 political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources, the willingness of capital providers to lend to our industry and other financial and business factors, many of which are beyond our control.
Our future operating performance and ability to refinance such indebtedness will be affected by prevailing economic and political conditions, the level of drilling, completion, production and intervention services activity for North American onshore oil and natural gas resources, the willingness of capital providers to lend to our industry and other financial and business factors, many of which are beyond our control.
As cost of sales decreased, labor costs per employee decreased by (9.3)% as compared with the year ended December 31, 2023. Repair & maintenance costs as a percentage of revenues increased by 15.9% as compared to the year ended December 31, 2023. Selling, general and administrative expenses ("SG&A") .
As cost of sales decreased, labor costs per employee increased by 0.9% as compared with the year ended December 31, 2024. Repair & maintenance costs as a percentage of revenues decreased by (0.3)% as compared to the year ended December 31, 2024. Selling, general and administrative expenses ("SG&A") .
On a net basis, after taking into consideration the debt issuance costs for the 2025 Senior Notes, total debt as of December 31, 2024 was $235.1. The 2025 Senior Notes bear interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1. Accrued interest as of December 31, 2024 was $4.5.
On a net basis, after taking into consideration the debt issuance costs for the 2025 Senior Notes, total debt related to the 2025 Senior Notes as of December 31, 2024 was $235.1. The 2025 Senior Notes bore interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1.
The Company will be required to redeem the 2030 Senior Notes in an amount equal to 2.00% per annum of all 2030 Senior Notes outstanding as of the prior applicable Interest Payment Date (as defined in the 2030 Senior Notes Indenture) on the last business day of each of March, June, September and December, commencing on March 31, 2025.
The Company is required to redeem the 2030 Senior Notes in an amount equal to 2.00% per annum of all 2030 Senior Notes outstanding as of the prior applicable Interest Payment Date (as defined in the 2030 Senior Notes Indenture) on the last business day of each of March, June, September and December.
The decrease in operating cash flows was primarily attributable to the decrease in revenues across all operating segments. Net cash used in investing activities Net cash used in investing activities was $51.1 for the year ended December 31, 2024, as compared to net cash used in investing activities of $39.7 for the year ended December 31, 2023.
The decrease in operating cash flows was primarily attributable to the decrease in revenues across all operating segments. Net cash used in investing activities Net cash used in investing activities was $32.9 for the year ended December 31, 2025, as compared to net cash used in investing activities of $51.1 for the year ended December 31, 2024.
During the three and twelve months ended December 31, 2023, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.1 and $0.5, respectively. Cash Flows At December 31, 2024, we had $91.6 of cash and cash equivalents.
During the three and twelve months ended December 31, 2024, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.3 and $0.5, respectively. Cash Flows At December 31, 2025, we had $5.7 of cash and cash equivalents.
For the year ended December 31, 2024, each of our segments demonstrated lower operating income compared to the year ended December 31, 2023, driven by the decrease in pricing and utilization outpacing decreases in operating costs and labor in the year ended December 31, 2024.
For the year ended December 31, 2025, two out of our three operating segments demonstrated lower operating income compared to the year ended December 31, 2024, driven by the decrease in pricing and utilization outpacing decreases in operating costs and labor in the year ended December 31, 2025.
The following table sets forth our cash flows for the periods presented below: 63 Year Ended December 31, 2024 December 31, 2023 Net cash provided by operating activities $ 54.2 $ 115.6 Net cash used in investing activities (51.1) (39.7) Net cash used in financing activities (24.0) (20.8) Net change in cash (20.9) 55.1 Cash balance end of period $ 91.6 $ 112.5 Net cash provided by operating activities Net cash provided by operating activities was $54.2 for the year ended December 31, 2024, as compared to net cash provided by operating activities of $115.6 for the year ended December 31, 2023.
The following table sets forth our cash flows for the periods presented below: Year Ended December 31, 2025 December 31, 2024 Cash balance beginning of period $ 91.6 $ 112.5 Net cash provided by operating activities 7.5 54.2 Net cash used in investing activities (32.9) (51.1) Net cash used in financing activities (60.5) (24.0) Net change in cash (85.9) (20.9) Cash balance end of period $ 5.7 $ 91.6 Net cash provided by operating activities Net cash provided by operating activities was $7.5 for the year ended December 31, 2025, as compared to net cash provided by operating activities of $54.2 for the year ended December 31, 2024.
Our liquidity requirements consist of working capital needs, debt service obligations and ongoing capital expenditure requirements. Our primary requirements for working capital are directly related to the activity level of our operations. This Annual Report includes net working capital, which is a “non-GAAP financial measure” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Our primary requirements for working capital are directly related to the activity level of our operations. This Annual Report includes net working capital, which is a “non-GAAP financial measure” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
We have taken several actions to continue to improve our liquidity position, including efficiencies gained from the QES Merger, equity issuances under our ATM Offering program, debt-for-equity exchanges that have reduced interest burden and monetized non-core and obsolete assets.
We have taken several actions to continue to improve our liquidity position, including equity issuances under our ATM Offering program, debt-for-equity exchanges that have reduced interest burden and monetization of non-core and obsolete assets.
Net cash used in financing activities Net cash used in financing activities was $24.0 for the year ended December 31, 2024, compared to net cash used in financing activities of $20.8 for the year ended December 31, 2023.
Net cash used in financing activities Net cash used in financing activities was $60.5 for the year ended December 31, 2025, compared to net cash used in financing activities of $24.0 for the year ended December 31, 2024.
The overall decrease in revenues reflects decreased demand for our services during the year. Decreased weighted average price contributed to approximately 15% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 85%. On a segment basis, Rocky Mountains segment revenue decreased by $42.4 or (15.6)%.
The overall decrease in revenues reflects decreased demand for our services during the year. Decreased weighted average price contributed to approximately 16% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 84%. On a segment basis, Rocky Mountains segment revenue decreased by $29.9 or (13.1)%.
The following is a summary of operating income (loss) by segment: Year Ended December 31, 2024 December 31, 2023 % Change Operating income (loss): Rocky Mountains $ 23.8 $ 46.1 (48.4) % Southwest 3.7 19.3 (80.8) % Northeast/Mid-Con 2.3 40.6 (94.3) % Corporate and other (45.3) (49.1) 7.7 % Total operating (loss) income $ (15.5) $ 56.9 NM For the year ended December 31, 2024, operating loss was $15.5, as compared to operating income of $56.9 in the year ended December 31, 2023, largely driven by a decrease in revenues due to lower activity .
The following is a summary of operating income (loss) by segment: Year Ended December 31, 2025 December 31, 2024 % Change Operating income (loss): Rocky Mountains $ 5.7 $ 23.8 (76.1) % Southwest (3.5) 3.7 NM Northeast/Mid-Con 3.6 2.3 56.5 % Corporate and other (36.1) (45.3) 20.3 % Total operating loss $ (30.3) $ (15.5) (95.5) % For the year ended December 31, 2025, operating loss was $30.3, as compared to operating loss of $15.5 in the year ended December 31, 2024, largely driven by a decrease in revenues due to lower activity and deleveraging of fixed costs .
Our primary sources of liquidity to date have been capital contributions from our equity and note holders, borrowings under our Prior ABL Facility and New ABL Facility and cash flows from operations. At December 31, 2024, we had $91.6 of cash and cash equivalents and $20.4 of available capacity under the Prior ABL Facility.
Our primary sources of liquidity to date have been capital contributions from our equity and note holders, borrowings under our Prior ABL Facility (as defined below) and 2028 ABL Facility and cash flows from operations. At December 31, 2025, we had $5.7 of cash and cash equivalents and $50.6 of available capacity under the 2028 ABL Facility.
SG&A expenses during the twelve months ended December 31, 2024, were $79.6, or 11.2% of revenues, as compared with $86.7, or 9.8% of revenues, in the year ended December 31, 2023. SG&A decreased by $7.1 due to management of costs as activity decreased. SG&A as a percentage of revenues increased primarily due to certain fixed costs within SG&A.
SG&A expenses during the twelve months ended December 31, 2025, were $68.5, or 10.8% of revenues, as compared with $79.6, or 11.2% of revenues, in the year ended December 31, 2024. SG&A decreased by $11.1 and decreased as a percentage of revenues due to management of costs as activity decreased.
The following table provides revenues by segment and product line for the periods indicated: Year Ended December 31, 2024 December 31, 2023 % Change Revenue: Rocky Mountains $ 228.9 $ 271.3 (15.6) % Southwest 269.3 304.9 (11.7) % Northeast/Mid-Con 211.1 312.2 (32.4) % Total revenue $ 709.3 $ 888.4 (20.2) % Year Ended December 31, 2024 December 31, 2023 % Change Revenue: Drilling $ 156.1 $ 220.2 (29.1) % Completion 372.7 468.5 (20.4) % Production 110.7 117.8 (6.0) % Intervention 69.8 81.9 (14.8) % Total revenue $ 709.3 $ 888.4 (20.2) % For the year ended December 31, 2024, revenues of $709.3 decreased by $179.1 or (20.2)% as compared with the year ended December 31, 2023.
The following table provides revenues by segment and product line for the periods indicated: Year Ended December 31, 2025 December 31, 2024 % Change Revenue: Rocky Mountains $ 199.0 $ 228.9 (13.1) % Southwest 231.6 269.3 (14.0) % Northeast/Mid-Con 206.0 211.1 (2.4) % Total revenue $ 636.6 $ 709.3 (10.2) % Year Ended December 31, 2025 December 31, 2024 % Change Revenue: Drilling $ 110.9 $ 156.1 (29.0) % Completion 356.5 372.7 (4.3) % Production 107.3 110.7 (3.1) % Intervention 61.9 69.8 (11.3) % Total revenue $ 636.6 $ 709.3 (10.2) % For the year ended December 31, 2025, revenues of $636.6 decreased by $72.7 or (10.2)% as compared with the year ended December 31, 2024.
The effective interest rate under the Prior ABL Facility was approximately 7.44% on December 31, 2024. On March 12, 2025, in connection with the completion of the Refinancing, the Prior Credit Facility was repaid in full using borrowings under the New ABL Facility and the commitments thereunder terminated.
Prior ABL Facility On March 12, 2025, in connection with the completion of the Refinancing, the Prior ABL Facility was repaid in full using borrowings under the 2028 ABL Facility and the commitments thereunder terminated.
R&D costs were $1.4 during both the year ended December 31, 2024 and the year ended December 31, 2023, reflecting our continued focus on maintaining an in-house R&D function while scaling costs to adjust to current levels of customer demand. 57 Operating income (loss) .
R&D costs were $1.7 in the year ended December 31, 2025 and $1.4 in the year ended December 31, 2024, reflecting our continued focus on maintaining an in-house R&D function. 57 Operating income (loss) .
The New ABL Facility contains certain other covenants (including the ability to incur indebtedness for the purpose of consummating permitted acquisitions, subject to the terms of the New ABL Facility), events of default and other customary provisions. Our New ABL Facility matures in 2028.
The 2028 ABL Facility contains certain other covenants (including the ability to incur indebtedness for the purpose of consummating permitted acquisitions, subject to the terms of the 2028 ABL Facility), events of default and other customary provisions. As of December 31, 2025, the Company was in compliance with its debt covenants under the 2028 ABL Facility.
After giving effect to the foregoing, we had approximately $39,900,000.0 of available borrowing capacity under the New ABL Facility. The New ABL Facility includes a springing financial covenant which requires the Company’s consolidated fixed charge coverage ratio to be at least 1.0 to 1.0 if availability under the Revolving Facility falls below $7.0.
The 2028 ABL Facility includes a springing financial covenant which requires the Company’s consolidated fixed charge coverage ratio to be at least 1.0 to 1.0 if availability under the Revolving Facility falls below $7.0.
Our ability to pay the principal and interest on our debt and to satisfy our other liabilities will depend on our future operating performance.
Our ability to comply with the covenants in our debt instruments and pay the principal and interest on our debt and to satisfy our other liabilities will depend on our future operating performance and ability to refinance our debt as it becomes due.
WTI's average daily price per barrel decreased by approximately $0.95, or 1.2%, to $76.63 per Bbl during the year ended December 31, 2024, compared to the average daily price per barrel of $77.58 during the year ended December 31, 2023. As of December 31, 2024, U.S. rig count stood at 589, a decrease of 5.3% since December 31, 2023.
WTI's average daily price per barrel decreased by approximately $11.24, or 14.7%, to $65.39 per Bbl during the year ended December 31, 2025, compared to the average daily price per barrel of $76.63 during the year ended December 31, 2024. As of December 31, 2025, U.S. land rig count stood at 527, a decrease of 8.0% since December 31, 2024.
Shares of Common Stock offered and sold in the ATM Offering were issued pursuant to the Company's shelf registration statement on Form S-3 (Registration No. 333-256149) filed with the SEC on May 14, 2021 and declared effective on June 11, 2021 (the “Registration Statement”), the prospectus supplement relating to the ATM Offering filed with the SEC on June 14, 2021 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement.
Any Common Stock offered and sold in the ATM Offering may be issued pursuant to the Registration Statement, the prospectus supplement relating to the ATM Offering filed with the SEC on March 14, 2025 and any applicable additional prospectus supplements related to the ATM Offering that form a part of the Registration Statement.
Income tax expense was comprised of federal, state and local taxes for each year reported. Net (loss) income . Net loss for the year ended December 31, 2024 was $53.0, as compared to net income of $19.2 in the year ended December 31, 2023, primarily due to lower activity in the most recent year.
Income tax expense was $0.8 for the year ended December 31, 2025, as compared to $0.6 for the year ended December 31, 2024. Income tax expense is comprised of federal, state and local taxes for each year reported. Net loss .
Capital Expenditures Our capital expenditures were $65.1 during the year ended December 31, 2024, compared to $57.1 in the year ended December 31, 2023. Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur between $45.0 and $55.0 in capital expenditures for the year ending December 31, 2025.
Based on current industry conditions and our significant investments in capital expenditures over the past several years, we expect to incur approximately $40.0 in capital expenditures for the year ending December 31, 2026.
The following table sets forth the reconciliation of current assets and current liabilities to net working capital: As of December 31, 2024 December 31, 2023 Current assets $ 233.0 $ 290.3 Less: Cash 91.6 112.5 Net current assets 141.4 177.8 Current liabilities 140.1 164.1 Less: Accrued interest 4.5 4.6 Less: Operating lease obligations 6.9 6.9 Less: Finance lease obligations 13.0 22.0 Net current liabilities 115.7 130.6 Net Working Capital $ 25.7 $ 47.2 Net working capital as of December 31, 2024 was $25.7, a decrease of $21.5 as compared to net working capital of $47.2 as of December 31, 2023.
The following table sets forth the reconciliation of current assets and current liabilities to net working capital: 63 As of December 31, 2025 December 31, 2024 Current assets $ 149.9 $ 233.0 Less: Cash 5.7 91.6 Net current assets 144.2 141.4 Current liabilities 126.2 140.1 Less: Current portion of long-term debt 4.4 — Less: Accrued interest 0.4 4.5 Less: Operating lease obligations 7.1 6.9 Less: Finance lease obligations 19.6 13.0 Net current liabilities 94.7 115.7 Net Working Capital $ 49.5 $ 25.7 Net working capital as of December 31, 2025 was $49.5, an increase of $23.8 as compared to net working capital of $25.7 as of December 31, 2024.
During the year ended December 31, 2024, there were no additional borrowings under our Prior ABL Facility and no sales under our ATM Offering program. Off-Balance Sheet Arrangements Indemnities, Commitments and Guarantees In the normal course of our business, we make certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions.
Off-Balance Sheet Arrangements Indemnities, Commitments and Guarantees In the normal course of our business, we make certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions.
Net working capital is calculated as current assets, excluding cash, less current liabilities, excluding accrued interest, operating lease obligations and finance lease obligations. As of December 31, 2024, total current assets excluding cash decreased by $36.4 and total current liabilities excluding accrued interest, operating lease obligations and finance lease obligations decreased by $14.9.
Net working capital is calculated as current assets, excluding cash, less current liabilities, excluding current portion of long-term debt, accrued interest, operating lease obligations and finance lease obligations.
Our customers are primarily large independent and major oil and gas companies. We currently support these customer operations from over 50 service facilities located in the key major shale basins.
We currently support these customer operations from over 60 service facilities located in the key major shale basins.
As of the date of this filing, the integration is complete. See Note 3 - Business Combinations to our audited consolidated financial statements included in Item 8 in this Form 10-K. Company Overview We serve many of the leading companies engaged in the exploration and development of onshore conventional and unconventional oil and natural gas reserves in the United States.
As of the date of this filing, the integration is complete. Company Overview We serve many of the leading companies engaged in the exploration and development of onshore conventional and unconventional oil and natural gas reserves in the United States. Our customers are primarily large independent and major oil and gas companies.
Rocky Mountains segment operating income decreased by $22.3 or (48.4)% from $46.1 in the year ended December 31, 2023 to $23.8 in the year ended December 31, 2024. Southwest segment operating income decreased by $15.6 or (80.8)% from $19.3 in the year ended December 31, 2023 to $3.7 in the year ended December 31, 2024.
Rocky Mountains segment operating income decreased by $18.1 or (76.1)% from $23.8 in the year ended December 31, 2024 to $5.7 in the year ended December 31, 2025. Southwest segment operating income decreased by $7.2 from $3.7 in the year ended December 31, 2024 to a loss of $(3.5) in the year ended December 31, 2025.
During the three and twelve months ended December 31, 2024, the Company did not sell any shares of Common Stock and incurred legal and administrative fees of $0.3 and $0.5, respectively.
During the three and twelve months ended December 31, 2025, the Company sold — and 167,769 shares of Common Stock, respectively, in exchange for gross proceeds of $— and $0.6, respectively, and incurred legal and administrative fees of $— and $0.3, respectively.
In connection with the prepayment and termination of the Prior ABL Facility, the Company provided Prior Administrative Agent cash collateral in support of certain existing letters of credit and existing purchasing card program in an aggregate amount of approximately $8.1. 59 New ABL Facility On March 7, 2025, the Company also entered into a Credit Agreement, dated as of March 7, 2025 (the “New ABL Facility”), with the Company, as borrower, Eclipse Business Capital LLC, as administrative agent, as collateral agent and as FILO administrative agent and the lenders party thereto.
ABL Facilities 2028 ABL Facility On March 7, 2025, the Company also entered into a Credit Agreement, dated as of March 7, 2025 (the “2028 ABL Facility”), with the Company, as borrower, Eclipse Business Capital LLC, as administrative agent, as collateral agent and as FILO administrative agent and the lenders party thereto.
The decrease in net current assets was primarily related to a decrease of $30.1 in accounts receivable-trade, net and a decrease of $2.5 in inventory. The decrease in total current liabilities was due to a decrease of $13.5 in accounts payable and a decrease of $1.4 in accrued liabilities.
The decrease in total current liabilities was due to a decrease of $5.7 in accounts payable and a decrease of $15.3 in accrued liabilities.
Cash on hand at December 31, 2024 decreased by $20.9 during the year then ended, due to $54.2 of cash flows provided by operating activities, partially offset by $24.0 of cash flows used in financing activities and $51.1 of cash flows used in investing activities.
Cash on hand at December 31, 2025 decreased by $85.9 during the year then ended, due to $60.5 of cash flows used in financing activities and $32.9 of cash flows used in investing activities, offset by $7.5 of cash flows provided by operating activities. Our liquidity requirements consist of working capital needs, debt service obligations and ongoing capital expenditure requirements.
Decreased weighted average price contributed to approximately 52% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 48%. Cost of sales . For the year ended December 31, 2024, cost of sales was $549.7, or 77.5% of revenues, as compared to $672.5, or 75.7% of revenues, in the year ended December 31, 2023.
Northeast/Mid-Con segment revenue decreased by $5.1 or (2.4)% . This decrease was driven entirely by a decrease in weighted average volume. Cost of sales . For the year ended December 31, 2025, cost of sales was $501.5, or 78.8% of revenues, as compared to $549.7, or 77.5% of revenues, in the year ended December 31, 2024.
Income tax expense . Income tax expense was $0.6 for the year ended December 31, 2024, as compared to income tax expense of $3.0 for the year ended December 31, 2023. The decrease in income tax expense was primarily due to the decrease in pre-tax income.
Net loss for the year ended December 31, 2025 was $77.1, as compared to net loss of $53.0 in the year ended December 31, 2024, primarily due to lower activity in the most recent year.
Under the terms of the Equity Distribution Agreement, the Company will pay the Agent a commission equal to 3% of the gross sales price of the Common Stock sold. 62 The Company used the net proceeds from the ATM Offering, after deducting the Agent’s commissions and the Company’s offering expenses, for general corporate purposes, which included funding acquisitions, capital expenditures and working capital.
Under the terms of the Equity Distribution Agreement, the Company will pay the Agent a commission equal to 3.0% of the gross sales price of the Common Stock sold.
Northeast/Mid-Con segment operating income decreased by $38.3 or (94.3)% from $40.6 in the year ended December 31, 2023 to $2.3 in the year ended December 31, 2024. The 7.7% decrease in operating loss in our Corporate and other in the year ended December 31, 2024 was primarily driven by higher one-off expenses in the year ended December 31, 2023.
Northeast/Mid-Con segment operating income increased by $1.3 or 56.5% from $2.3 in the year ended December 31, 2024 to $3.6 in the year ended December 31, 2025.
Pursuant to the terms of the Equity Distribution Agreement, the Company may sell from time to time through the Agent, in the ATM Offering, the Company’s Common Stock, having an aggregate offering price of up to $50.0. On November 16, 2022, the Company entered into the EDA Amendment.
Pursuant to the terms of the Equity Distribution Agreement, the ATM Offering had an aggregate offering price of up to $50.0. On November 16, 2022, the Company entered into Amendment No. 1 to the Equity Distribution Agreement, which, among other things, allows for debt-for-equity exchanges in accordance with Section 3(a)(9) of the Securities Act.
Actual results may differ from these estimates and assumptions used in preparation of our financial statements. Business Combinations We completed our acquisition of Greene's on March 8, 2023. Greene's results of operations have been included in our financial results for the period subsequent to the acquisition date.
Actual results may differ from these estimates and assumptions used in preparation of our financial statements. Accrued Revenue The Company records accrued revenue for services performed but not yet invoiced as of the reporting date.
Removed
This decrease was driven entirely by a decrease in weighted average volume. Southwest segment revenue decreased by $35.6 or (11.7)%. This decrease was driven entirely by a decrease in weighted average volume. Northeast/Mid-Con segment revenue decreased by $101.1 or (32.4)% .
Added
Decreased weighted average price contributed to approximately 23% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 77%. Southwest segment revenue decreased by $37.7 or (14.0)%. Decreased weighted average price contributed to approximately 23% of the decrease in dollar amount, and decreased weighted average volume contributed to approximately 77%.
Removed
In addition, incurring additional debt in excess of our existing outstanding indebtedness would result in increased interest expense and financial leverage, and issuing Common Stock may result in dilution to our current stockholders. We actively manage our capital spending and are focused primarily on required maintenance spending.
Added
The 20.3% decrease in operating loss in our Corporate and other in the year ended December 31, 2025 was primarily driven by lower incentive-based compensation and legal costs in the year ended December 31, 2024. Income tax expense .
Removed
The Company consummated the Refinancing on March 12, 2025.
Added
As of December 31, 2025, we had total outstanding indebtedness of $258.3 under our 2028 ABL Facility and our 2030 Senior Notes as described in greater detail under “—2028 58 ABL Facility” and “—2030 Senior Notes” below.
Removed
ABL Facilities Prior ABL Facility On August 10, 2018, the Company entered into a Credit Agreement, by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent (“Prior Administrative Agent”), as collateral agent and as issuing lender, and the lenders party thereto, which has been repaid in full and the commitments thereunder terminated (as amended, supplemented, or otherwise modified prior to the date hereof, the “Prior ABL Facility”).
Added
In order to ensure our continued compliance with the maximum total net leverage ratio covenant under the 2030 Senior Notes Indenture, on March 6, 2026, the requisite holders agreed to execute the First Amendment to the 2030 Senior Notes Indenture (the “First Amendment to the Indenture”) to provide financial covenant relief, described more fully below under “2030 Senior Notes.” In connection with the entry into the First Amendment to the Indenture, we issued Warrants to our noteholders, based on their pro rata ownership of principal amount of the 2030 Senior Notes, providing for the purchase of up to 803,712 shares of Common Stock at an exercise price of $0.01 per share, subject to adjustment, pursuant to Section 4(a)(2) of the Securities Act.
Removed
The Prior ABL Facility became effective on September 14, 2018 and was scheduled to mature in 2025. Borrowings under the Prior ABL Facility bore interest at a rate equal to Term SOFR (as defined in the Prior ABL Facility) plus the Applicable Margin (as defined in the Prior ABL Facility).
Added
Our 2028 ABL Facility matures on March 7, 2028 and we intend to work with our existing lenders or other sources of capital to refinance the 2028 ABL Facility as well as our 2030 Senior Notes.

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