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What changed in OIL STATES INTERNATIONAL, INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OIL STATES INTERNATIONAL, INC's 2023 and 2024 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 2024 report.

+376 added−317 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-21)

Top changes in OIL STATES INTERNATIONAL, INC's 2024 10-K

376 paragraphs added · 317 removed · 259 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

83 edited+22 added−37 removed52 unchanged
Biggest changeThese laws and regulations may, among other things: (i) require the acquisition of permits to conduct drilling and other regulated activities; (ii) restrict the types, quantities and concentration of various substances that can be released into the environment or injected into subsurface formations in connection with oil and natural gas drilling and production activities and well site support services; (iii) limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas; (iv) impose stringent regulations on the licensing or storage and use of explosives; (v) require remedial measures to mitigate pollution from former and ongoing operations, such as requirements to close pits and plug abandoned wells or decommission offshore facilities; (vi) impose specific safety and health criteria addressing worker protection; and (vii) impose substantial liabilities for pollution resulting from drilling operations and well site support services. -9- The more significant of these existing environmental and occupational health and safety laws and regulations include the following U.S. legal standards, as amended from time to time: • the Clean Air Act (“CAA”), which restricts the emission of air pollutants from many sources and imposes various pre-construction, operational, monitoring and reporting requirements, and that the EPA has relied upon as authority for adopting climate change regulatory initiatives relating to greenhouse gas (“GHG”) emissions; • the Federal Water Pollution Control Act, also known as the Clean Water Act (“CWA”), which regulates discharges of pollutants from facilities to state and federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking as protected waters of the United States; • the Oil Pollution Act of 1990, which subjects owners and operators of vessels, onshore facilities, and pipelines, as well as lessees or permittees of areas in which offshore facilities are located, to liability for removal costs and damages arising from an oil spill in waters of the United States; • U.S.
Biggest changeThe more significant of these existing environmental and occupational health and safety laws and regulations include the following U.S. legal standards, as amended from time to time: • the Clean Air Act (“CAA”), which restricts the emission of air pollutants from many sources and imposes various pre-construction, operational, monitoring and reporting requirements, and that the EPA has relied upon as authority for adopting climate change regulatory initiatives relating to greenhouse gas (“GHG”) emissions; • the Federal Water Pollution Control Act, also known as the Clean Water Act (“CWA”), which regulates discharges of pollutants from facilities to state and federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking as protected waters of the United States; • the Oil Pollution Act of 1990, which subjects owners and operators of vessels, onshore facilities, and pipelines, as well as lessees or permittees of areas in which offshore facilities are located, to liability for removal costs and damages arising from an oil spill in waters of the United States; • U.S.
Department of the Interior (“DOI”) regulations, which govern oil and natural gas operations on federal lands and waters and impose obligations for establishing financial assurances for decommissioning activities, liabilities for pollution cleanup costs resulting from operations, and liabilities for pollution damages; • the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), which imposes liability, without regard to fault or the legality of the original conduct, on generators, transporters, disposers and arrangers of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur; • the Resource Conservation and Recovery Act (“RCRA”), which governs the generation, treatment, storage, transport, and disposal of solid wastes, including oil and natural gas exploration and production wastes and hazardous wastes; • the Safe Drinking Water Act (“SDWA”), which ensures the quality of the nation’s public drinking water through adoption of drinking water standards and controlling the injection of waste fluids into below-ground formations that may adversely affect drinking water sources; • the Emergency Planning and Community Right-to-Know Act, which requires facilities to implement a safety hazard communication program and disseminate information to employees, local emergency planning committees, and response departments on toxic chemical uses and inventories; • the Occupational Safety and Health Act, which establishes workplace standards for the protection of the health and safety of employees, including the implementation of hazard communications programs designed to inform employees about hazardous substances in the workplace, potential harmful effects of these substances, and appropriate control measures; • the Endangered Species Act (“ESA”), which restricts activities that may affect federally identified endangered and threatened species or their habitats through the implementation of operating restrictions or a temporary, seasonal, or permanent ban in affected areas; • the National Environmental Policy Act, which requires federal agencies, including the DOI, to evaluate major agency actions having the potential to impact the environment and that may require the preparation of environmental assessments and more detailed environmental impact statements that may be made available for public review and comment; • the U.S.
Department of the Interior (“DOI”) regulations, which govern oil and natural gas operations on federal lands and waters and impose obligations for establishing financial assurances for decommissioning activities, liabilities for pollution cleanup costs resulting from operations, and liabilities for pollution damages; • the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), which imposes liability, without regard to fault or the legality of the original conduct, on generators, transporters, disposers and arrangers of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur; • the Resource Conservation and Recovery Act (“RCRA”), which governs the generation, treatment, storage, transport, and disposal of solid wastes, including oil and natural gas exploration and production wastes and hazardous wastes; • the Safe Drinking Water Act (“SDWA”), which ensures the quality of the nation’s public drinking water through adoption of drinking water standards and controlling the injection of waste fluids into below-ground formations that may adversely affect drinking water sources; • the Emergency Planning and Community Right-to-Know Act, which requires facilities to implement a safety hazard communication program and disseminate information to employees, local emergency planning committees, and response departments on toxic chemical uses and inventories; • the Occupational Safety and Health Act, which establishes workplace standards for the protection of the health and safety of employees, including the implementation of hazard communications programs designed to inform employees about hazardous substances in the workplace, potential harmful effects of these substances, and appropriate control measures; • the Endangered Species Act (“ESA”), which restricts activities that may affect federally identified endangered and threatened species or their habitats through the implementation of operating restrictions or a temporary, seasonal, or permanent ban in affected areas; • the National Environmental Policy Act, which requires federal agencies, including the DOI, to evaluate major agency actions having the potential to impact the environment and that may require the preparation of environmental assessments and more detailed environmental impact statements that may be made available for public review and comment; -10- • the U.S.
Litigation risks are also increasing, as a number of states, municipalities and other plaintiffs have sought to bring suit against oil and natural gas 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 or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their investors or customers by failing to adequately disclose those impacts.
Litigation risks are also increasing, as a number of states, municipalities and other plaintiffs have sought to bring suit against oil and natural gas 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 or alleging that the companies have been aware of the adverse effects of climate change for some time but defrauded their -13- investors or customers by failing to adequately disclose those impacts.
For more information, see our risk factor titled “Climatic impacts could adversely impact our operations or those of our customers or suppliers.” -14- While we maintain insurance coverage for certain environmental and occupational health and safety risks that we believe is consistent with insurance coverage held by other similarly situated industry participants, our insurance does not cover any penalties or fines that may be issued by a government authority.
For more information, see our risk factor titled “Climatic impacts could adversely impact our operations or those of our customers or suppliers.” While we maintain insurance coverage for certain environmental and occupational health and safety risks that we believe is consistent with insurance coverage held by other similarly situated industry participants, our insurance does not cover any penalties or fines that may be issued by a government authority.
Any failure by us to comply with these laws, regulations and regulatory initiatives or controls may result in: the assessment of sanctions, including administrative, civil, and criminal penalties; the imposition of investigatory, remedial, and corrective action obligations or the incurrence of capital expenditures; the occurrence of restrictions, delays or cancellations in the permitting, development or expansion of projects; and issuance of injunctions restricting or prohibiting some or all of our activities in a -10- particular area.
Any failure by us to comply with these laws, regulations and regulatory initiatives or controls may result in: the assessment of sanctions, including administrative, civil, and criminal penalties; the imposition of investigatory, remedial, and corrective action obligations or the incurrence of capital expenditures; the occurrence of restrictions, delays or cancellations in the permitting, development or expansion of projects; and issuance of injunctions restricting or prohibiting some or all of our activities in a particular area.
Since that time, the EPA has issued area designations with respect to ground-level ozone and final requirements that apply to state, local and tribal air agencies for implementing the 2015 NAAQS for ground-level ozone and, more recently, in December 2020, the EPA (under the Trump Administration) published a final action that, upon conducting a periodic review of the ozone standard in accord with CAA requirements, elected to retain the 2015 ozone NAAQS without revision on a going-forward basis.
Since that time, the EPA has issued area designations with respect to ground-level ozone and final requirements that apply to state, local and tribal air agencies for implementing the 2015 NAAQS for ground-level ozone and, more recently, in December 2020, the EPA (under the first Trump Administration) published a final action that, upon conducting a periodic review of the ozone standard in accord with CAA requirements, elected to retain the 2015 ozone NAAQS without revision on a going-forward basis.
In December 2023, the EPA published a final rule that established the so-called Quad Ob new source and Quad Oc first-time existing source standards of performance under applicable agency regulations established at 40 C.F.R. Part 60 for methane and volatile organic compound emissions for the crude oil and natural gas source category.
Additionally, in December 2023, the EPA published a final rule that established the so-called Quad Ob new source and Quad Oc first-time existing source standards of performance under applicable agency regulations established at 40 C.F.R. Part 60 for methane and volatile organic compound emissions for the crude oil and natural gas source category.
In this regard, exploration and production companies generally evaluate their capital expenditure commitments for -5- offshore (particularly deepwater) and international projects based on the longer-term outlook for commodity prices since they are expensive to drill and complete and have long lead times to first production.
In this regard, exploration and production companies generally evaluate their capital expenditure commitments for offshore (particularly deepwater) and international projects based on the longer-term outlook for commodity prices since they are expensive to drill and complete and have long lead times to first production.
Our customers compliance with such new, more stringent legal requirements may result in increased costs for our customers and could adversely affect, delay or curtail new or ongoing drilling and development efforts by our customers.
Our customers’ compliance with such new, more stringent legal requirements may result in increased costs for our customers and could adversely affect, delay or curtail new or ongoing drilling and development efforts by our customers.
See Note 14, “Segments and Related Information,” to the Consolidated Financial Statements included in this Annual Report on Form 10‑K for financial information by segment along with a geographical breakout of revenues and long-lived assets for each of the three years in the period ended December 31, 2023.
See Note 14, “Segments and Related Information,” to the Consolidated Financial Statements included in this Annual Report on Form 10‑K for financial information by segment along with a geographical breakout of revenues and long-lived assets for each of the three years in the period ended December 31, 2024.
Our focus on safety was recognized with the 2023 NOIA Safety in Seas Culture of Safety Award, which recognizes overall organizational immersion in, and commitment to, safety through measurable and sustained safety performance over a prolonged period of time. Diversity We recognize that our employees are critical to our long-term success.
Our focus on safety was recognized with the 2023 NOIA Safety in Seas Culture of Safety Award, which recognizes overall organizational immersion in, and commitment to, safety through measurable and sustained safety performance over a prolonged period of time. Our Global Workforce We recognize that our employees are critical to our long-term success.
Our equipment is primarily used during the completion and production stages of a well. We provide our services and equipment based on daily rates which vary depending on the type of equipment and the length of the job.
Our equipment is primarily used during the completion and production stages of a well. We provide our services and equipment based on daily rates which vary depending on the type of equipment, the complexity of activities and the length of the job.
We were party to collective bargaining agreements covering approximately 350 employees located outside the United States as of December 31, 2023. We believe we have good labor relations with our employees.
We were party to collective bargaining agreements covering approximately 350 employees located outside the United States as of December 31, 2024. We believe we have good labor relations with our employees.
Through this segment, we provide technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities, military and other energy applications, as well as certain products and services to the offshore and land-based drilling and completion markets.
Through this segment, we provide technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities, military and other energy applications, as well as certain products and services to offshore drilling and completion markets.
In addition, the SEC has proposed a rule that would require registrants to make certain climate-related disclosures in registration statements and annual reports, including their governance of climate-related risks, material climate-related impacts on strategy, outlook and business model, climate risk management, Scope 1 and 2 GHG emissions and Scope 3 GHG emissions under certain circumstances, and if the registrant has set them, climate-related targets and goals.
In addition, the SEC has finalized a rule that would require registrants to make certain climate-related disclosures in registration statements and annual reports, including their governance of climate-related risks, material climate-related impacts on strategy, outlook and business model, climate risk management, Scope 1 and 2 GHG emissions, and if the registrant has set them, climate-related targets and goals.
In addition, the Inflation Reduction Act of 2022 (“IRA 2022”) contains provisions requiring particular offshore oil and gas lease sales under the 2017 – 2022 leasing program to proceed and the DOI has reinstated or announced plans for those sales. In 2023, the DOI published a final offshore leasing program for 2024-2029.
The Inflation Reduction Act (“IRA 2022”) contains provisions requiring particular offshore oil and gas lease sales under the 2017 – 2022 leasing program to proceed and the DOI has announced plans for those sales. In 2023, the DOI published a final offshore leasing program for 2024-2029.
Our operations are global and demand a diverse workforce, which we believe provides us with a competitive advantage and allows us to better understand and communicate with a diverse population of constituents.
Our operations are global and demand a multifaceted workforce, which we believe provides us with a competitive advantage and allows us to better understand and communicate with a wide population of constituents.
The SEC has also, from time to time, focused additional scrutiny on existing climate-change related disclosures in public filings, increasing the potential for enforcement if the SEC were to allege that an issuer’s existing climate disclosures were misleading or deficient.
The SEC has also, from time to time, focused additional scrutiny on existing climate-change related disclosures in public filings, and there is the potential for enforcement if the SEC were to allege that an issuer’s existing climate disclosures were misleading or deficient.
In past years, operator spending in our industry has been particularly focused on crude oil and liquids-rich exploration and development in the U.S. shale plays utilizing enhanced horizontal drilling and completion techniques. Offshore/Manufactured Products Overview For the years ended December 31, 2023, 2022 and 2021, our Offshore/Manufactured Products segment generated 52% to 56% of our consolidated revenue.
In past years, operator spending in our industry has been particularly focused on crude oil and liquids-rich exploration and development in the U.S. shale plays utilizing enhanced horizontal drilling and completion techniques. Offshore Manufactured Products Overview For the years ended December 31, 2024, 2023 and 2022, our Offshore Manufactured Products segment generated 44% to 57% of our consolidated revenue.
The Biden Administration has also called for revisions and restrictions to the leasing and permitting programs for oil and gas development on federal lands and, for a time, suspended federal oil and gas leasing activities.
The Biden Administration has at times called for revisions and restrictions to the leasing and permitting programs for oil and gas development on federal lands and, for a time, suspended federal oil and gas leasing activities.
The primary driver for this activity is the price of crude oil and, to a lesser extent, natural gas. Activity levels have been, and we expect will continue to be, highly correlated with hydrocarbon commodity prices.
The primary drivers for this activity are the price of crude oil and, to a lesser extent, natural gas. Activity levels have been, and we expect will continue to be, highly correlated with hydrocarbon commodity prices.
Products and services used primarily in deepwater producing regions include our FlexJoint ® technology, advanced connector systems, high-pressure riser systems, managed pressure drilling systems, compact valves, deepwater mooring systems, cranes, subsea pipeline products, specialty welding, fabrication, cladding and machining services, offshore installation services and inspection and repair services.
Products and services used primarily in deepwater producing regions include our FlexJoint® technology, advanced connector systems, high-pressure riser systems, managed pressure drilling systems, compact valves, deepwater mooring systems, cranes, subsea pipeline products, offshore installation services and inspection and repair services.
States could also elect to place prohibitions on hydraulic fracturing and local governments may seek to adopt ordinances within their jurisdictions regulating the time, place or manner of drilling activities in general or hydraulic fracturing activities in particular. -11- • Induced seismicity .
States could also elect to place prohibitions on hydraulic fracturing and local governments may seek to adopt ordinances within their jurisdictions regulating the time, place or manner of drilling activities in general or hydraulic fracturing activities in particular. • Lease development .
As discussed previously, we saw continued growth and recovery in offshore and international project activity in 2023, partially offset by a decline in U.S. well completion activity due to a decline in commodity prices from 2022 levels. For additional information about activities in each of our segments, see “Part II, Item 7.
As discussed previously, we saw continued growth and recovery in offshore and international project activity in 2024, offset by a decline in U.S. activity due to well completion efficiencies leading to higher production and a decline in commodity prices from 2023 levels. For additional information about activities in each of our segments, see “Part II, Item 7.
We have facilities globally that support our Offshore/Manufactured Products segment. Market The market for products and services offered by our Offshore/Manufactured Products segment centers primarily on the development of infrastructure for offshore production facilities and their subsequent operations, exploration and drilling activities, and to a lesser extent, on-vessel construction, refurbishments or upgrades.
Market The market for products and services offered by our Offshore Manufactured Products segment centers primarily on the development of infrastructure for offshore production facilities and their subsequent operations, exploration and drilling -6- activities, and to a lesser extent, on-vessel construction, refurbishments or upgrades.
Supreme Court finding that GHG emissions constitute a pollutant under the CAA, the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources, and impose new standards reducing methane emissions from oil and gas operations through limitations on venting and flaring and the implementation of enhanced emission leak detection and repair requirements.
Moreover the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources, and impose new standards reducing methane emissions from oil and gas operations through limitations on venting and flaring and the implementation of enhanced emission leak detection and repair requirements.
State implementation of a revised NAAQS could, among other things, require installation of new emission controls on some of our or our customers’ equipment, result in longer permitting timelines, and significantly increase our or our customers’ capital expenditures and operating costs. -12- • Waters of the United States .
The EPA’s consideration of this standard remains ongoing. State implementation of a revised NAAQS could, among other things, require installation of new emission controls on some of our or our customers’ equipment, result in longer permitting timelines, and significantly increase our or our customers’ capital expenditures and operating costs. • Waters of the United States .
We operate through three business segments – Offshore/Manufactured Products, Well Site Services and Downhole Technologies – and maintain a leadership position with certain of our product and service offerings in each segment.
We operate through three business segments – Offshore Manufactured Products, Completion and Production Services (previously referred to as Well Site Services) and Downhole Technologies – and maintain a leadership position with certain of our product and service offerings in each segment.
We strive to cultivate a culture and work environment that enables us to attract, train, promote and retain a diverse group of skilled individuals who collectively enable us to safely provide quality, innovative solutions to our customers while remaining considerate of the environment and of our communities. We strive to align our national and cultural diversity with our global operations.
We strive to cultivate a culture and work environment that enables us to attract, train, promote and retain a group of skilled individuals with diverse experience, backgrounds and perspectives who collectively enable us to safely provide quality, innovative solutions to our customers while remaining considerate of the environment and of our communities.
Additionally, the IRA 2022 was signed into law in August 2022, which contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, and supporting infrastructure and carbon capture and sequestration, among other provisions.
The IRA 2022 contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, and supporting infrastructure and carbon capture and sequestration, among other provisions.
As of December 31, 2023, we provided completion and drilling services through approximately 20 locations serving our customers in the United States, including the Gulf of Mexico, and international markets. Employees in our Well Site Services segment typically rig up and operate our equipment on the well site for our customers.
As of December 31, 2024, we provided completion and production services through 17 locations serving our customers in the United States, including the Gulf of America, and international markets. Employees in our Completion and Production Services segment typically rig up and operate our equipment on the well site for our customers.
It is likely that the rule will be subject to legal challenges. As a result, we cannot predict the scope of any final methane regulatory requirements, or the expected cost to comply with such requirements, but any such increase in regulatory scope and oversight may increase compliance expenditures or mitigation costs for our or our customers’ operations.
As a result, we cannot predict the scope of any final methane regulatory requirements, or the expected cost to comply with such requirements, but any such increase in regulatory scope and oversight may increase compliance expenditures or mitigation costs for our or our customers’ operations.
U.S. drilling and completion activity and, in turn, our Well Site Services segment results, are sensitive to near-term fluctuations in commodity prices, particularly West Texas Intermediate (“WTI”) crude oil prices, given the shorter lead times for investment and the call-out nature of our operations in the segment.
U.S. well completion activity and, in turn, our Completion and Production Services segment results, are sensitive to near-term fluctuations in WTI crude oil and natural gas prices, given the shorter lead times for investment and the call-out nature of our operations in the segment.
Additionally, regulatory agencies under the Biden Administration may issue new or amended rulemakings regarding deepwater leasing, permitting or drilling that could result in more stringent or costly restrictions, delays or cancellations to our oil and gas exploration and production customers with respect to their offshore operations or significantly increase financial assurances of operators for decommissioning of offshore facilities on the OCS.
Regulatory agencies such as the federal Bureau of Safety and Environmental Enforcement and Bureau of Ocean Energy Management may issue new or amended rulemakings regarding deepwater leasing, permitting or drilling that could result in more stringent or costly restrictions, delays or cancellations to our oil and gas exploration and production customers with respect to their offshore operations or significantly increase financial assurances of operators for decommissioning of offshore facilities on the Outer Continental Shelf.
In some instances, these purchase -6- orders are cancellable by the customer, subject to the payment of termination fees and/or the reimbursement of our costs incurred. While backlog cancellations have historically been insignificant, material cancellations may occur in the future.
We expect approximately 70% of our backlog as of December 31, 2024 to be recognized as revenue during 2025. In some instances, these purchase orders are cancellable by the customer, subject to the payment of termination fees and/or the reimbursement of our costs incurred. While backlog cancellations have historically been insignificant, material cancellations may occur in the future.
Our investments are focused in areas where we expect to be able to expand market share through our new and existing technology offerings and where we believe we can achieve an attractive return on our investment.
Our Business Strategy We have historically grown our product and service offerings organically, through capital spending, and strategic acquisitions. Our investments are focused in areas where we expect to be able to expand market share through our new and existing technology offerings and where we believe we can achieve an attractive return on our investment.
Several states have also enacted or are considering enhanced climate-related disclosure requirements. Such enhanced disclosure could increase our operating costs and may also lead to reputational or other harm with customers, regulators or other stakeholders.
Such enhanced disclosure could increase our operating costs and may also lead to reputational or other harm with customers, regulators or other stakeholders.
Additionally, in July 2023, the BLM proposed a rule to update the fiscal terms of federal oil and gas leases, increasing fees, rents, royalties, and bonding requirements.
Additionally, the BLM finalized a rule to update the fiscal terms of federal oil and gas leases, increasing fees, rents, royalties, and bonding requirements according to provisions in the IRA 2022. • Induced seismicity .
Our main competitors in this segment include Baker Hughes Company, Hutchinson Group (a subsidiary of Total S.A.), NOV Inc., Oceaneering International, Inc., OneSubsea (a joint venture between SLB, Aker Solutions and Subsea 7), Sparrows Offshore Group Limited, TenarisHydril (a division of Tenaris S.A.) and W-Industries LLC.
No customer in this segment represented more than 10% of our total consolidated revenue in any period presented. Our main competitors in this segment include Baker Hughes Company, Hutchinson Group (a subsidiary of Total S.A.), NOV Inc., OneSubsea (a joint venture between SLB, Aker Solutions and Subsea 7), Sparrows Offshore Group Limited and TenarisHydril (a division of Tenaris S.A.).
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Demand for the products and services supplied by our Offshore/Manufactured Products segment is generally driven by both the longer-term outlook for commodity prices and, to a lesser extent, changes in land-based drilling and completion activity.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Demand for the products and services supplied by our Offshore Manufactured Products segment is primarily driven by the longer-term outlook for commodity prices.
Another consequence of seismic events may be lawsuits alleging that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal.
The Oklahoma Corporation Commission has similarly suspended certain deep disposal well operations in the recent past following earthquakes of certain magnitudes in Oklahoma. Another consequence of seismic events may be lawsuits alleging that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal.
In this regard, the Texas Railroad Commission has pursued several regulatory initiatives during the latter half of 2021 as a result of recent seismic activity in an area of the Midland Basin from northeast Ector County to southwest Martin County known as the Gardendale Seismic Response Area (“SRA”), including voluntary reductions in produced water disposals from injection wells in the Gardendale SRA, suspending injection operations of certain deep disposal wells within the Gardendale SRA, and suspending all disposal well permits to inject oil and gas waste into deep strata within the boundaries of the Gardendale SRA.
In this regard, the Texas Railroad Commission has pursued several regulatory initiatives in recent years as a result of recent seismic activity in areas of the Midland Basin, including voluntary reductions in produced water disposals through injection wells, suspending injection operations of certain deep disposal wells, and suspending all disposal well permits to inject oil and gas waste in certain areas.
We solicit input to improve our programs and employee participation is a vital element in our success. We establish global targets in an effort to promote HSE improvement and monitor our performance through real-time reporting.
We solicit input to improve our programs and employee participation is a vital element in our success. We establish global targets in an effort to promote HSE improvement and monitor our performance through real-time reporting. Executive management and operations personnel review incidents and loss trends on a weekly basis and we update our Board no less than monthly.
Market Similar to our Well Site Services segment, demand for our Downhole Technologies segment products is predominantly tied to land-based oil and natural gas exploration and production activity levels in the United States. The primary drivers for this activity are the price of crude oil and, to a lesser extent, natural gas.
Market, Services, Customers and Competitors Demand for our completion and production services is predominantly tied to the level of oil and natural gas exploration and production activity on land in the United States. The primary driver for this activity is the price of crude oil and, to a lesser extent, natural gas.
We prioritize recalling our experienced employees for manufacturing and field positions to the extent possible as conditions improve following an industry downturn. We invest in ongoing training and development of our employees through technical and non-technical courses and programs, which are regularly refreshed to meet the requirements of an evolving business landscape.
We invest in ongoing training and development of our employees through technical and non-technical courses and programs, which are regularly refreshed and designed to meet the requirements of an evolving business landscape.
On February 16, 2024, we amended our senior secured credit facility, which provides for a $125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”), to extend its maturity date from February 10, 2025 to February 16, 2028. Our Industry We provide a broad range of products and services to our customers through each of our business segments.
In February 2024, we amended our senior secured credit facility, which provides for a $125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”), to extend its maturity date to February 16, 2028.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, President Biden has made action on climate change a priority of his administration’s agenda, and certain federal laws, such as the IRA 2022, were enacted to advance numerous climate-related objectives. Moreover, with the U.S.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, certain federal laws, such as the IRA 2022, have been enacted to advance numerous climate-related objectives.
With these market improvements, we grew our backlog and related project-driven revenues in 2023. Demand for our Well Site Services segment is primarily affected by drilling and completion activity in the United States, including the Gulf of Mexico, and, to a lesser extent, the rest of the world.
Demand for our Completion and Production Services segment is primarily affected by well completion activity in the United States, including the Gulf of America, and, to a lesser extent, the rest of the world.
Our customers’ capital spending programs are generally based on their outlook for near-term and long-term commodity prices, economic growth, commodity demand and estimates of resource production as well as regulatory and market pressures around ESG considerations. As a result, demand for our products and services is largely sensitive to expectations regarding future crude oil and natural gas prices.
Our customers’ capital spending programs are generally based on their outlook for near-term and long-term commodity prices, economic growth, commodity demand and estimates of resource production as well as regulatory and market pressures related to Environmental, Social and Governance (“ESG”) considerations.
Item 1. Business Our Company Oil States International, Inc., through its subsidiaries, is a global provider of manufactured products and services to the energy, industrial and military sectors. Our manufactured products include highly engineered capital equipment as well as products consumed in the drilling, well construction and production of oil and natural gas.
Item 1. Business Our Company Oil States International, Inc., through its subsidiaries, is a global provider of manufactured products and services to customers in the energy, industrial and military sectors. The Company’s manufactured products include highly engineered capital equipment and consumable products. Oil States is headquartered in Houston, Texas with manufacturing and service facilities strategically located across the globe.
Environmental Protection Agency (“EPA”), the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), a law enforcement agency under the U.S. Department of Justice, the U.S. Occupational Safety and Health Administration (“OSHA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions.
Occupational Safety and Health Administration (“OSHA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions.
Future actions taken by the federal government to limit the availability of new oil and gas leases would adversely impact the oil and gas industry and impact demand for our products and services.
Although leasing has resumed, the areas offered for leasing in the 2024-2029 program are the smallest since federal offshore leasing for oil and gas development began. Future actions taken by the federal government to limit the availability of new oil and gas leases would adversely -11- impact the oil and gas industry and impact demand for our products and services.
Products and Services In operation for over 80 years, our Offshore/Manufactured Products segment provides a broad range of products and services for use in offshore development and drilling activities. This segment also provides products for onshore oil and natural gas, defense and other industries.
Demand for oil and natural gas, and the related drilling and production in offshore areas throughout the world, particularly in deeper water, drive spending for these activities. Products and Services In operation for over 80 years, our Offshore Manufactured Products segment provides a broad range of products and services for use in offshore development and drilling activities.
As part of our long-term strategy, we continue to review business expansion, make complementary acquisitions, invest in research and development and fund organic capital expenditures to enhance our cash flows, leverage our cost structure and increase our stockholders’ returns. For additional discussion of our business strategy, please read “Part II, Item 7.
As part of our long-term strategy, we continue to: review opportunities for offshore and international business expansion; strategically optimize our U.S. land-based operations; market new technology offerings; invest in research and development; and fund organic capital expenditures to enhance our cash flows, leverage our cost structure and increase our stockholders’ returns.
Our historical financial results reflect the cyclical nature of the oilfield services industry – witnessed by periods of increasing and decreasing activity in each of our operating segments.
As a result, demand for our products and services is largely sensitive to expectations regarding future crude oil and natural gas prices. Our historical financial results reflect the cyclical nature of the oilfield services industry – witnessed by periods of increasing and decreasing activity in each of our operating segments.
Oil States is headquartered in Houston, Texas with manufacturing and service facilities strategically located across the globe. Our customers include many national oil and natural gas companies, major and independent oil and natural gas companies, onshore and offshore drilling companies and other oilfield service, defense and industrial companies.
Our customers include many national oil and natural gas companies, major and independent oil and natural gas companies, offshore drilling companies and other oilfield service, defense and industrial companies.
Products Product and service offerings for this segment utilize innovations in perforation technology through patented and proprietary systems combined with advanced modeling and analysis tools. Our expertise has led to the optimization of perforation hole size, depth, and quality of tunnels, which are key factors for maximizing the effectiveness of hydraulic fracturing.
Our expertise has led to the optimization of perforation hole size, depth, and quality of tunnels, which are key factors for maximizing the effectiveness of hydraulic fracturing.
Copies of such documents will be provided to stockholders without charge upon written request to the corporate secretary at the address shown on the cover page of this Annual Report on Form 10‑K. -4- Our Business Strategy We have historically grown our product and service offerings organically, through capital spending, and strategic acquisitions.
The Financial Code of Ethics for Senior Officers applies to our principal executive officer, principal financial officer, principal accounting officer and other senior officers. Copies of such -4- documents will be provided to stockholders without charge upon written request to the corporate secretary at the address shown on the cover page of this Annual Report on Form 10‑K.
In addition, summer and fall completion and drilling activity can be restricted due to hurricanes and other storms prevalent in the Gulf of Mexico and along the Gulf Coast. As a result, full-year results are not likely to be a direct multiple of any particular quarter or combination of quarters.
In addition, summer and fall completion and drilling activity can be restricted due to hurricanes and other storms prevalent in the Gulf of America and along the Gulf Coast.
In addition, the 26 th Conference of the Parties (“COP26”), resulted in multiple announcements, including a call for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs.
In addition, the annual Conferences of the Parties have resulted in multiple announcements, including a call for parties to eliminate certain fossil fuel subsidies and pursue further action on non-carbon dioxide GHGs, agreements to transition away from fossil fuels in energy systems and increase renewable energy capacity, and similar initiatives, though none are legally binding.
Our Offshore/Manufactured Products segment is dependent in part on the industry’s continuing innovation and creative applications of existing technologies. To that end, we are investing in research, have been awarded select contracts and are bidding on additional projects that facilitate the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities.
We invest in research and product development (and have been awarded select contracts and are bidding on additional projects) to facilitate the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities. We own various patents covering some of our technology, particularly in our connector and valve product lines.
Customers and Competitors We market our products and services to a broad customer base, including end-users, engineering and design companies, prime contractors, and at times, our competitors through outsourcing arrangements. No customer in this segment represented more than 10% of our total consolidated revenue in any period presented.
In addition, we provide a variety of products for use in applications outside the traditional energy industry in the United States and abroad. Customers and Competitors We market our products and services to a broad customer base, including end-users, engineering and design companies, prime contractors, and at times, our competitors through outsourcing arrangements.
Environmental and Occupational Health and Safety Matters Our business operations are subject to stringent environmental and occupational health and safety laws and regulations that may be imposed domestically at the federal, regional, state, tribal and local levels or by foreign governments. Numerous governmental entities, including domestically the U.S.
In addition to internal training and development, we also value the benefits of continuing formal education and maintain an educational assistance program that reimburses eligible expenses from accredited institutions. -9- Environmental and Occupational Health and Safety Matters Our business operations are subject to stringent environmental and occupational health and safety laws and regulations that may be imposed domestically at the federal, regional, state, tribal and local levels or by foreign governments.
In addition, we design, manufacture and market numerous other products and services used in both land and offshore drilling and completion activities and by non-oil and gas customers, including consumable downhole elastomer products used in onshore completion activities, subsea mineral gathering systems, valves and sound and vibration dampening products used in military applications.
In addition, we recently introduced other products and services used by non-oil and gas customers, including subsea mineral gathering systems, offshore wind applications, geothermal products and services, valves and sound and vibration dampening products used in military applications. We have facilities globally that support our Offshore Manufactured Products segment.
Hiring, Training and Development of our Workforce Our employee hiring, training, career development and retention practices are key to our success. We recruit and train our workforce while providing competitive wages and benefits. Our industry is cyclical, leading to varying headcount needs during industry cycles.
We recruit and train our workforce while providing competitive wages and benefits. Our industry is cyclical, leading to varying headcount needs during industry cycles. We prioritize recalling our experienced employees for manufacturing and field positions to the extent possible.
Additionally, there is the possibility that financial institutions will be pressured or required to adopt policies that limit funding for fossil fuel energy companies. President Biden signed an executive order calling for the development of a climate finance plan and, separately, the U.S.
Additionally, there is the possibility that financial institutions will be pressured or required to adopt policies that limit funding for fossil fuel energy companies. However, this trend has waned in recent years.
Our Well Site Services business, which is primarily marketed through the brand names Oil States Energy Services, Falcon and Tempress, provides a wide range of services used in the onshore and offshore oil and gas industry, including pressure control, flowback and well testing, downhole and extended-reach, and drilling services.
Activity levels have been, and we expect will continue to be, highly correlated with hydrocarbon commodity prices. -7- Our Completion and Production Services business, which is primarily marketed through the brand names Oil States Energy Services and Tempress, currently provides services used in the onshore and offshore oil and gas industry, including pressure control equipment, and downhole and extended-reach technologies.
Human Capital Employees As of December 31, 2023, we had a total of 2,752 full-time employees – with 61% in our Offshore/Manufactured Products segment, 26% in our Well Site Services segment, 10% in our Downhole Technologies segment and 3% in our corporate headquarters.
As a result, full-year results are not likely to be a direct multiple of any particular quarter or combination of quarters. -8- Human Capital Employees As of December 31, 2024, we had a total of 2,439 full-time employees – with 60% in our Offshore Manufactured Products segment, 18% in our Completion and Production Services segment, 19% in our Downhole Technologies segment and 3% in our corporate headquarters.
Our Well Site Services segment includes a broad range of equipment and services that are used to drill for, establish and maintain the flow of oil and natural gas from a well throughout its life cycle. In this segment, our operations primarily include completion-focused equipment and services and, to a much lesser extent, land drilling services in the United States.
Completion and Production Services Overview For the years ended December 31, 2024, 2023 and 2022, our Completion and Production Services segment generated 24% to 31% of our consolidated revenue. Our Completion and Production Services segment includes equipment and services that are used to establish and maintain the flow of oil and natural gas from a well throughout its life cycle.
Competition in the Well Site Services segment is widespread and includes many smaller companies, although we also compete with the larger oilfield service companies for certain equipment and services. -7- Downhole Technologies Overview For the years ended December 31, 2023, 2022 and 2021, our Downhole Technologies segment contributed 13% to 18% of our consolidated revenue.
No customer in this segment represented more than 10% of our total consolidated revenue in any period presented. Competition in the Completion and Production Services segment is widespread and includes many smaller companies, although we also compete with the larger oilfield service companies for certain equipment and services.
Our completion equipment and services are used in both onshore and offshore applications throughout the drilling, completion and production phases of a well’s life cycle. Market, Services, Customers and Competitors Demand for our completion and drilling services is predominantly tied to the level of oil and natural gas exploration and production activity on land in the United States.
In this segment, our operations primarily include completion-focused equipment and services, which are used in both onshore and offshore applications throughout the completion and production phases of a well’s life cycle. Prior to the sale of our remaining drilling rigs in August 2024, our operations included land drilling services in the United States.
Executive management and operations personnel review incidents and loss trends on a weekly basis and we update our Board no less than monthly. -8- We seek to encourage our employees to actively participate in HSE initiatives through safety committees, behavior-based observations, and employees stopping work if at-risk conditions are observed, among other aspects of our safety management system.
We seek to encourage our employees to actively participate in HSE initiatives through safety committees, behavior-based observations, and employees stopping work if at-risk conditions are observed, among other aspects of our safety management system. We monitor global compliance with our internal policies and procedures, internationally recognized/certified management systems and all applicable national, state, local and international laws and regulations.
For example, in November 2022, the federal Bureau of Land Management (“BLM”) proposed a rule that would limit flaring from well sites on federal lands, as well as allow an increase in the costs associated with federal oil and gas leasing and the delay or denial of permits if the BLM finds that an operator’s methane waste minimization plan is insufficient.
Separately, in April 2024, the federal Bureau of Land Management (“BLM”) finalized a rule that would limit flaring from well sites on federal lands, increase the costs associated with federal oil and gas leasing and require operators to submit a methane waste minimization plan or a self-certification statement committing the operator to capturing 100% of the gas produced from a well and pay royalties on lost gas as part of the permit application process.
Activity levels have been, and we expect will continue to be, highly correlated with hydrocarbon commodity prices. Demand for this segment’s products is also influenced by continued trends toward longer lateral lengths, increased frac stages and more perforation clusters to target increased unconventional well productivity, which requires ongoing technological and product development.
Demand for this segment’s products is also influenced by continued trends toward longer lateral lengths, increased frac stages and more perforation clusters to target increased unconventional well productivity. Products Product and service offerings for this segment utilize innovations in perforation technology through patented and proprietary systems combined with advanced modeling and analysis tools.
This segment provides oil and gas perforation systems, downhole tools and services in support of completion, intervention, wireline and well abandonment operations. This segment designs, manufactures and markets its consumable engineered products to oilfield service as well as exploration and production companies.
This segment designs, manufactures and markets its consumable engineered products to oilfield service as well as exploration and production companies. Market Similar to our Completion and Production Services segment, demand for our Downhole Technologies segment products is predominantly tied to land-based oil and natural gas exploration and production activity levels in the United States and well decommissioning activity internationally.
The change in backlog levels from one period to the next does not necessarily evidence a long-term trend. Regions of Operations Our Offshore/Manufactured Products segment provides products and services to customers in the major offshore crude oil and natural gas producing regions of the world, including the U.S.
The change in backlog levels from one period to the next does not necessarily evidence a long-term trend.
We own various patents covering some of our technology, particularly in our connector and valve product lines. Backlog Offshore/Manufactured Products’ backlog consists of firm customer purchase orders for which contractual commitments exist and delivery is scheduled.
Backlog Offshore Manufactured Products’ backlog consists of firm customer purchase orders for which contractual commitments exist and delivery is scheduled. Backlog in our Offshore Manufactured Products segment was $311 million as of December 31, 2024, compared to $327 million as of December 31, 2023 and $300 million as of December 31, 2022.
Therefore, implementation of the rule is currently split by jurisdiction: for the 27 states subject to the injunction, the agencies are implementing the pre-2015 rule and the changes made by the Sackett decision; in the remaining 23 states, the agencies are implementing their September 2023 rule.
Following legal actions, implementation of the most -12- recent rule is currently split by jurisdiction, with 27 states subject to an injunction resulting in implementation of the pre-2015 rule taking into account the changes made by the Supreme Court decision in Sackett v. EPA .
Well Site Services Overview For the years ended December 31, 2023, 2022 and 2021, our Well Site Services segment generated 30% to 31% of our consolidated revenue.
Downhole Technologies Overview For the years ended December 31, 2024, 2023 and 2022, our Downhole Technologies segment contributed 19% to 25% of our consolidated revenue. This segment provides oil and gas perforation systems, downhole tools and services in support of completion, intervention, wireline and well abandonment operations.
Conversely, near-term variations in crude oil and natural gas prices affect land-based drilling and completion activity, particularly in the United States. Bidding and quoting activity, along with customer orders, for offshore and international projects continued to increase in 2023, following improvements in recent years in the longer-term outlook for crude oil prices and associated increases in customer spending commitments.
Bidding and quoting activity, along with customer orders, for offshore and international projects remained strong in 2024, following improvements in recent years in the longer-term outlook for the sustainability of crude oil and natural gas demand. With these market improvements, we grew our backlog and related project-driven revenues in 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGiven the cyclical nature of our business, a severe prolonged downturn could negatively affect the value of our goodwill and other intangible assets. As of December 31, 2023, goodwill and other intangible assets represented 8% and 15%, respectively, of our total assets.
Biggest changeAny currency controls implemented by local monetary authorities in countries where we currently operate could also adversely affect our business, financial condition, cash flows and results of operations. -19- Given the cyclical nature of our business, a severe prolonged downturn could negatively affect the value of our goodwill and other intangible assets.
Ongoing uncertainties related to future crude oil demand and the willingness of operators to invest in U.S. land-based drilling, completion and production activities given regulatory pressures has reduced the demand, and the prices we are able to charge, for our products and services.
Ongoing uncertainties related to future crude oil demand and the willingness of operators to invest in U.S. land-based drilling, completion and production activities given regulatory pressures has reduced the demand for, and the prices we are able to charge for, our products and services.
Risks associated with our international operations include, but are not limited to: • expropriation, confiscation or nationalization of assets; • renegotiation or nullification of existing contracts; • foreign capital controls or similar monetary or exchange limitations; • foreign currency fluctuations; • foreign and global minimum taxation regulations; • tariffs and duties on imported and exported goods; -20- • the inability to repatriate earnings or capital in a tax efficient manner; • changing political conditions; • economic or trade sanctions; • changing foreign and domestic monetary and trade policies; • regulatory restrictions or controls more stringently applied or enforced; • changes in trade activity; • military or social situations, such as a widespread outbreak of an illness or other public health issues, in foreign areas where we do business, and the possibilities of war, other armed conflict or terrorist attacks; and • regional economic downturns.
Risks associated with our international operations include, but are not limited to: • expropriation, confiscation or nationalization of assets; • renegotiation or nullification of existing contracts; • foreign capital controls or similar monetary or exchange limitations; • foreign currency fluctuations; • foreign and global minimum taxation regulations; • tariffs and duties on imported and exported goods; • the inability to repatriate earnings or capital in a tax efficient manner; • changing political conditions; • economic or trade sanctions; • changing foreign and domestic monetary and trade policies; • regulatory restrictions or controls more stringently applied or enforced; • changes in trade activity; -20- • military or social situations, such as a widespread outbreak of an illness or other public health issues, in foreign areas where we do business, and the possibilities of war, other armed conflict or terrorist attacks; and • regional economic downturns.
Some of these claims relate to the activities of businesses that we have sold, and some relate to the activities of businesses that we have acquired, even though these activities may have occurred prior to our acquisition of such businesses.
Some of these claims may relate to the activities of businesses that we have sold, and some may relate to the activities of businesses that we have acquired, even though these activities may have occurred prior to our acquisition of such businesses.
The ongoing military conflicts in Europe and the Middle East could cause market and other disruptions that could adversely affect us, such as: volatility in crude oil and natural gas prices, which can adversely affect demand for our products and services; further supply chain constraints and disruptions, or increased prices for certain raw materials and component parts, such as steel and forgings, that are used in products we manufacture and other products needed by our customers in connection with their ongoing operations; instability in financial markets; higher inflation; delays or cancellations of planned -17- projects by our customers due to rising costs; changes in currency rates; and increases in cyberattacks and espionage.
The ongoing military conflicts in Europe and the Middle East could cause market and other disruptions that could adversely affect us, such as: volatility in crude oil and natural gas prices, which can adversely affect demand for our products and services; further supply chain constraints and disruptions, or increased prices for certain raw materials and component parts, such as steel and forgings, that are used in products we manufacture and other products needed by our customers in connection with their ongoing operations; instability in financial markets; higher inflation; delays or cancellations of planned projects by our customers due to rising costs; changes in currency rates; and increases in cyberattacks and espionage.
We are required to at least annually review the goodwill and other intangible assets of our applicable reporting units (Offshore/Manufactured Products, Completion Services and Downhole Technologies) for impairment in value and to recognize a non-cash charge against earnings causing a corresponding decrease in stockholders’ equity if circumstances, some of which are beyond our control, indicate that the carrying amounts will not be recoverable.
We are required to at least annually review the goodwill and other intangible assets of our applicable reporting units (Offshore Manufactured Products, Completion and Production Services and Downhole Technologies) for impairment in value and to recognize a non-cash charge against earnings causing a corresponding decrease in stockholders’ equity if circumstances, some of which are beyond our control, indicate that the carrying amounts will not be recoverable.
If we are unable to access the bank and capital markets on favorable terms, or if we are not successful in raising capital at an attractive cost within the time period required or at all, we may not be able to grow -18- or maintain our business, which could have a material adverse effect on our business, results of operations and financial condition.
If we are unable to access the bank and capital markets on favorable terms, or if we are not successful in raising capital at an attractive cost within the time period required or at all, we may not be able to grow or maintain our business, which could have a material adverse effect on our business, results of operations and financial condition.
Moreover, the increased competitiveness of alternative energy sources (such as wind, solar, geothermal, tidal and biofuels), and government grants, incentives and subsidies such as those contained in the IRA 2022, could reduce demand for hydrocarbons, and therefore demand for our products and services, which would have an adverse effect on our business and results of operations.
Moreover, the increased competitiveness of alternative energy sources (such as wind, solar, nuclear, geothermal, tidal and biofuels), and government grants, incentives and subsidies such as those contained in the IRA 2022, could reduce demand for hydrocarbons, and therefore demand for our products and services, which would have an adverse effect on our business and results of operations.
As a result of competition, we may lose market share or be unable to maintain or increase prices for our present products and services, or to acquire additional business opportunities, which could have a material adverse effect on our business, financial condition and results of operations. Consolidation of our customers and competitors may impact our results of operations.
As a result of competition, we may lose market share or be unable to maintain or increase prices for our present products and services, or to acquire additional business opportunities, which could have a material adverse effect on our business, financial condition and results of operations. -15- Consolidation of our customers and competitors may impact our results of operations.
In addition, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about such events or other similar risks, have in the past and may in the future lead to acute or market-wide liquidity problems.
In addition, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about such events or other similar risks, have in the past and may in the future lead to -18- acute or market-wide liquidity problems.
We are also subject to OSHA Process Safety Management regulations, which are designed -24- to prevent or minimize the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals. See “Part I. Item I. Business – Environmental and Occupational Health and Safety Matters” for more discussion on these matters.
We are also subject to OSHA Process Safety Management regulations, which are designed to prevent or minimize the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals. See “Part I. Item I. Business – Environmental and Occupational Health and Safety Matters” for more discussion on these matters.
As a result, our operations as well as the operations of our oil and natural gas exploration and production customers are subject to a series of regulatory, political, financial and litigation risks associated with the production and processing of fossil fuels and emission of GHGs. See “Part I, Item 1.
As a result, our operations as well as the operations of our oil and natural gas exploration and production customers are subject to a series of regulatory, political, financial and litigation risks and uncertainty associated with the production and processing of fossil fuels and emission of GHGs. See “Part I, Item 1.
In addition, the existence of inflation in the economy has and may continue to result in higher interest rates, which could result in higher borrowing costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects.
In addition, the existence of inflation in the economy has and may continue to result in higher interest rates, which could result in higher borrowing costs, supply shortages, increased costs of labor and materials, weakening exchange rates and other similar effects.
If we are unable to design, develop -16- and produce commercially competitive products in a timely manner in response to changes in technology, our business and revenues will be adversely affected.
If we are unable to design, develop and produce commercially competitive products in a timely manner in response to changes in technology, our business and revenues will be adversely affected.
Companies which do not adapt to or comply with investor or stakeholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.
Companies which do not adapt to or comply with such stakeholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG-related issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.
Moreover, certain members of the broader investment community may consider a company’s sustainability score as a reputational or other factor in making an investment decision.
Moreover, certain members of the broader investment community may consider a company’s sustainability score as a reputational or other factor -26- in making an investment decision.
During 2023, we have sought to strengthen our ESG performance through certain voluntary operational strategies, including, for example (i) pursuing a goal to reduce GHG emissions generated by us; (ii) seeking to co-locate certain of our facilities and common processes, where feasible, to minimize our GHG emission impacts; (iii) pursuing the implementation of alternative energy systems (for example, solar power) at certain of our facilities, where applicable; (iv) seeking to identify and select low-impact energy providers, where geographically available; (v) evaluating the addition of an onboard system for our trucks that would link to integral vehicle systems to reduce vehicle idling time on work locations; and (vi) purchasing alternative fueled vehicles to reduce carbon-based emissions and improved technology offerings, as fleet replacements occur from time to time, among others.
We have sought to strengthen our ESG performance through certain voluntary operational strategies, including, for example (i) pursuing a goal to reduce GHG emissions generated by us; (ii) seeking to co-locate certain of our facilities and common processes, where feasible, to mitigate our GHG emission impacts; (iii) pursuing the implementation of alternative energy systems (for example, solar power) at certain of our facilities, where applicable; (iv) seeking to identify and select low-impact energy providers, where geographically available; (v) evaluating the addition of an onboard system for our trucks that would link to integral vehicle systems to reduce vehicle idling time on work locations; and (vi) purchasing alternative fueled vehicles to reduce carbon-based emissions and improved technology offerings, as fleet replacements occur from time to time, among others.
Fish and Wildlife Service (“FWS”) under former President Trump issued a final rule on January 7, 2021, which notably clarifies that criminal liability under the MBTA will apply only to actions “directed at” migratory birds, their nests, or their eggs; however, in October 2021, the FWS under the Biden Administration revoked the Trump Administration’s rule on incidental take and published an advanced notice of proposed rulemaking to codify a general prohibition on incidental take while establishing a process to regulate or permit exceptions to such a prohibition.
Fish and Wildlife Service (“FWS”) (under the first Trump Administration) issued a final rule on January 7, 2021, which notably clarifies that criminal liability under the MBTA will apply only to actions “directed at” migratory birds, their nests, or their eggs; however, in October 2021, the FWS under the Biden Administration revoked the Trump Administration’s rule on incidental take and published an advanced notice of proposed rulemaking to codify a general prohibition on incidental take while establishing a process to regulate or permit exceptions to such a prohibition.
Also, despite these aspirational goals, we may receive pressure from investors, lenders or other groups to adopt more aggressive climate or other ESG-related goals, but we cannot guarantee that we will be able to implement such goals because of changes in activity levels, potential costs or technical or operational obstacles.
Also, despite any aspirational goals, we may receive pressure from investors, lenders or other groups to adopt more aggressive climate or other ESG-related goals, but we cannot guarantee that we will be able to implement such goals because of changes in activity levels, potential costs or technical or operational obstacles.
While no customer accounted for more than 10% of our consolidated revenues in 2023, 2022 or 2021, the loss of a significant portion of customers in any of our business segments, or a sustained decrease in demand by any of such customers, could result in a loss of revenues and could have a material adverse effect on our results of operations.
While no customer accounted for more than 10% of our consolidated revenues in 2024, 2023 or 2022, the loss of a significant portion of customers in any of our business segments, or a sustained decrease in demand by any of such customers, could result in a loss of revenues and could have a material adverse effect on our results of operations.
In the ordinary course of business, we become the subject of various claims, lawsuits and administrative proceedings, seeking damages or other remedies concerning our commercial operations, products, employees and other matters, including occasional claims by individuals alleging exposure to hazardous materials as a result of our products or operations.
In the ordinary course of business, we have and may become the subject of various claims, lawsuits and administrative proceedings, seeking damages or other remedies concerning our commercial operations, products, employees and other matters, including occasional claims by individuals alleging exposure to hazardous materials as a result of our products or operations.
Disruption to the timely supply of raw materials, parts and finished goods or increases in the cost of transportation services, including due to general inflationary pressures, cost of fuel and labor, labor disputes, governmental regulation or governmental restrictions limiting specific forms of transportation, could have an adverse effect on our ability to manufacture, transport and sell our products, which would adversely affect our results of operations, cash flows and financial position.
Disruption to the timely supply of raw materials, parts and finished goods or increases in the cost of transportation services, including due to general inflationary pressures, cost of fuel and labor, trade disputes, tariffs, duties, labor disputes, governmental regulation or governmental restrictions limiting specific forms of transportation, could have an adverse effect on our ability to manufacture, transport and sell our products, which would adversely affect our results of operations, cash flows and financial position.
Furthermore, uncertainty with respect to potential costs in the drilling and completion of oil and gas wells could cause our customers to delay or cancel planned projects which, if this occurred, would adversely affect our financial position and results of operations.
Furthermore, uncertainty with respect to potential costs in the drilling and completion of oil and gas wells could cause our customers to delay or cancel planned projects which, if this occurred, would adversely affect our financial position, cash flows and results of operations.
Financial Risks We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require. We rely on our liquidity to pay our operating and capital expenditures, interest and principal payments on debt, taxes and other similar costs.
We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require. We rely on our liquidity to pay our operating and capital expenditures, interest and principal payments on debt, taxes and other similar costs.
For example, the 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, including Texas, Oklahoma and Colorado. The dunes sagebrush lizard, located in west Texas and New Mexico, has also recently been proposed for listing as endangered under the ESA.
For example, the FWS 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, including Texas, Oklahoma and Colorado. The dunes sagebrush lizard, located in west Texas and New Mexico, has also been listed as endangered under the ESA.
In addition, summer and fall completion and drilling activity can be restricted due to hurricanes and other storms prevalent in the Gulf of Mexico and along the Gulf Coast. As a result of these seasonal differences, full year results are not likely to be a direct multiple of any particular quarter or combination of quarters.
In addition, summer and fall completion and drilling activity can be restricted due to hurricanes and other storms prevalent in the Gulf of America and along -17- the Gulf Coast. As a result of these seasonal differences, full year results are not likely to be a direct multiple of any particular quarter or combination of quarters.
While no provisions for impairment were recognized during 2023, it is possible that we could recognize goodwill or other intangible assets impairment losses in the future if, among other factors: • global economic and industry conditions deteriorate; • the outlook for future profits and cash flow for any of our reporting units deteriorate as the result of many possible factors, including, but not limited to, increased or unanticipated competition, lack of technological development, reductions in customer capital spending plans, loss of key personnel or customers, adverse legal or regulatory judgment(s), future operating losses at a reporting unit, downward forecast revisions, or restructuring plans; • costs of equity or debt capital increase further; • laws, executive actions or regulatory initiatives are imposed, which significantly restrict, delay or otherwise reduce the drilling, completion and production of oil and natural gas wells; • U.S. and/or foreign income tax rates increase, or regulations change; • valuations for comparable public companies or comparable acquisition valuations deteriorate; or • our stock price experiences a sustained decline.
While no other provisions for goodwill or other intangible asset impairment were recognized during 2024, it is possible that we could recognize goodwill or other intangible assets impairment losses in the future if, among other factors: • global economic and industry conditions deteriorate; • the outlook for future profits and cash flow for any of our reporting units deteriorate as the result of many possible factors, including, but not limited to, increased or unanticipated competition, lack of technological development, reductions in customer capital spending plans, loss of key personnel or customers, adverse legal or regulatory developments, future operating losses at a reporting unit, downward forecast revisions, or restructuring plans; • we implement certain strategic management actions; • costs of equity or debt capital increase further; • laws, executive actions or regulatory initiatives are imposed, which significantly restrict, delay or otherwise reduce the drilling, completion and production of oil and natural gas wells; • U.S. and/or foreign income tax rates increase, or regulations change; • valuations for comparable public companies or comparable acquisition valuations deteriorate; or • our stock price experiences a sustained decline.
The level of capital expenditures by companies in the crude oil and natural gas industry could remain highly volatile and have adverse effects on our business and operations due to numerous factors, including: • worldwide demand for and supply of oil and natural gas; • crude oil and natural gas prices; • inflation in wages, materials, parts, equipment and other costs; • the level of drilling and completion activity; • the level of oil and natural gas production; • the levels of oil and natural gas inventories; • depletion rates; • the expected cost of finding, developing and producing new reserves; • delays in major offshore and onshore oil and natural gas field permitting or development timetables; • the availability of attractive offshore and onshore oil and natural gas field prospects that may be affected by governmental actions or environmental activists that may restrict, suspend or cancel development; • the availability of transportation infrastructure for oil and natural gas, refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas; • global weather conditions and natural disasters; • worldwide economic activity including growth in developing countries; • national government political requirements, including the ability and willingness of OPEC to set and maintain production levels and prices for oil and government policies which could nationalize or expropriate oil and natural gas exploration, production, refining or transportation assets; • stockholder activism or activities by non-governmental organizations to limit or cease certain sources of funding for the energy sector or restrict the exploration, development, production and transportation of oil and natural gas; • the impact of military actions, including, but not limited to: energy market disruptions, supply chain disruptions and increased costs, government sanctions, and delays or potential cancellation of planned customer projects; -15- • rapid technological change and the timing and extent of development of energy sources, including LNG as well as solar, wind and other renewable energy sources; • environmental and other governmental laws, regulations and executive actions; and • U.S. and foreign tax policies, including those regarding tariffs, duties and global minimum tax rates.
A worsening of these conditions may result in a material adverse impact on our financial condition, results of operations and cash flows. -14- The level of capital expenditures by companies in the crude oil and natural gas industry could remain highly volatile and have adverse effects on our business and operations due to numerous factors, including: • worldwide demand for and supply of oil and natural gas; • crude oil and natural gas prices; • inflation in wages, materials, parts, equipment and other costs; • the level of drilling and completion activity; • the level of oil and natural gas production; • the levels of oil and natural gas inventories; • depletion rates; • the expected cost of finding, developing and producing new reserves; • delays in major offshore and onshore oil and natural gas field permitting or development timetables; • the availability of attractive offshore and onshore oil and natural gas field prospects that may be affected by governmental actions or environmental activists that may restrict, suspend or cancel development; • the availability of transportation infrastructure for oil and natural gas, refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas; • global weather conditions and natural disasters; • worldwide economic activity including growth in developing countries; • national government political requirements, including the ability and willingness of OPEC to set and maintain production levels and prices for oil and government policies which could nationalize or expropriate oil and natural gas exploration, production, refining or transportation assets; • stockholder activism or activities by non-governmental organizations to limit or cease certain sources of funding for the energy sector or restrict the exploration, development, production and transportation of oil and natural gas; • the impact of military actions, including, but not limited to: energy market disruptions, supply chain disruptions and increased costs, government sanctions, and delays or potential cancellation of planned customer projects; • rapid technological change and the timing and extent of development of energy sources, including LNG as well as nuclear, solar, wind and other renewable energy sources; • environmental and other governmental laws, regulations and executive actions; and • U.S. and foreign tax policies, including those regarding tariffs, duties and global minimum tax rates.
The oil and gas industry is undergoing rapid consolidation, which may result in reduced capital spending by some of our customers, the acquisition of one or more of our primary customers or competitors or consolidated entities using size and purchasing power to seek pricing or other concessions, which may lead to decreased demand for our products and services.
The oil and gas industry has undergone rapid consolidation, which may result in reduced capital spending by some of our customers, the acquisition of one or more of our primary customers or competitors or consolidated entities using size and purchasing power to seek pricing or other concessions, which may lead to decreased demand for our products and services.
As observed in the U.S. shale play regions such as the Permian Basin in recent years, during periods of increased activity, the demand for such personnel is high, and the supply is limited. When these events occur, our cost structure increases and our growth potential could be impaired.
As observed in the U.S. shale play regions such as the Permian Basin in 2022 and 2023, during periods of increased activity, the demand for such personnel is high, and the supply is limited. When these events occur, our cost structure increases and our growth potential could be impaired.
Conversely, during periods of reduced activity, we are forced to reduce headcount, freeze or reduce wages, and implement other cost-saving measures which could lead skilled personnel to migrate to other industries.
Conversely, during periods of reduced activity, such as 2024, we are forced to reduce headcount, freeze or reduce wages, and implement other cost-saving measures which could lead skilled personnel to migrate to other industries.
We are subject to stringent federal and state laws and regulations, including the federal Occupational Safety and Health Act and comparable state statutes, whose purpose is to protect the health and safety of workers, both generally and within the Offshore Manufactured Products, Well Site Services and Downhole Technologies business segments.
We are subject to stringent federal and state laws and regulations, including the federal Occupational Safety and Health Act and comparable state statutes, whose purpose is to protect the health and safety of workers, both generally and within the Offshore Manufactured Products, Completion and Production Services and Downhole Technologies business segments.
In addition, if any of our customers, suppliers or other business counterparties are unable to access funds held by such a financial institution, such parties' ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. We may be adversely affected by the effects of inflation.
In addition, if any of our customers, suppliers or other business counterparties are unable to access funds held by such a financial institution, such parties' ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.
In addition, the tools, techniques, methodologies, programs and components we use to provide our products and services may infringe, or be alleged to infringe, upon the intellectual property rights of others. Infringement claims generally result in significant legal and other costs, and may distract us from running our core business.
In addition, the tools, techniques, methodologies, programs and components we use to provide our products and services may infringe, or be alleged to infringe, upon the intellectual property rights of others. Infringement claims, whether or not with merit, may result in significant legal and other costs, and may distract us from running our core business.
For example, in September 2023 the National Marine Fisheries Service proposed to designate certain waters in the Gulf of Mexico as critical habitat for the Rice’s whale under the ESA.
For example, in 2023 the National Marine Fisheries Service proposed to designate certain waters in the Gulf of America as critical habitat for the Rice’s whale under the ESA.
Ongoing uncertainties related to future crude oil demand and the willingness of operators to invest in U.S. land-based drilling, completion and production activities given regulatory pressures have resulted in an oversupply of many of our services and products and reduced the prices we could charge our customers for these services and products.
Ongoing uncertainties related to future crude oil demand and the willingness of operators to invest in U.S. land-based drilling, completion and production activities given efficiencies gained and regulatory pressures have resulted in an oversupply of many of our products and services leading to competitive pressures and reduced prices we can charge our customers for these services and products.
Any new legislation, executive actions or regulatory initiatives, whether in the United States or in other countries, that impose increased costs, more stringent operational standards or result in significant delays, cancellations or disruptions in our customers’ operations, increase the risk of losing leasing or permitting opportunities, expired leases due to the time required to develop new technology, increased supplemental bonding costs, or cause our customers to incur penalties, fines, or shut-in production at one or more of their facilities, any or all of which could reduce demand for our products and services.
Business – Environmental and Occupational Health and Safety Matters” for more discussion on deepwater regulatory matters. -23- Any new legislation, executive actions or regulatory initiatives, whether in the United States or in other countries, that impose increased costs, more stringent operational standards or result in significant delays, cancellations or disruptions in our customers’ operations, increase the risk of losing leasing or permitting opportunities, expired leases due to the time required to develop new technology, increased supplemental bonding costs, or cause our customers to incur penalties, fines, or shut-in production at one or more of their facilities, any or all of which could reduce demand for our products and services.
To a lesser extent, our Well Site Services and Downhole Technologies segments also provide equipment and services to customers operating offshore in the deepwaters of the United States and in other countries.
To a lesser extent, our Completion and Production Services and Downhole Technologies segments also provide equipment and services to customers operating offshore in the deepwaters of the United States and in other countries.
In addition, there are other risks and liabilities associated with these contracts, such as consequential damages payable (generally as a result of our gross negligence or willful misconduct), unforeseen technical or logistical challenges in fulfilling the contracts, or warranty claims, any of which could result in our not being fully or properly compensated for the cost to develop, design, and manufacture the final product and resulting in a significant impact on our reported operating results as we progress towards completion of major jobs. -19- Exchange rate fluctuations could adversely affect our U.S. reported results of operations and financial position.
In addition, there are other risks and liabilities associated with these contracts, such as consequential damages payable (generally as a result of our gross negligence or willful misconduct), unforeseen technical or logistical challenges in fulfilling the contracts, or warranty claims, any of which could result in our not being fully or properly compensated for the cost to develop, design, and manufacture the final product and resulting in a significant impact on our reported operating results as we progress towards completion of major jobs.
We might be unable to compete successfully with other companies in our industry. The markets in which we operate are highly competitive and certain of them have relatively few barriers to entry. The principal competitive factors in our markets are product, equipment and service quality, availability, responsiveness, experience, technology, safety performance and price.
We might be unable to compete successfully with other companies in our industry. The markets in which we operate are highly competitive and certain of them, particularly those supporting U.S. land driven activities, have relatively few barriers to entry. The principal competitive factors in our markets are product, equipment and service quality, availability, responsiveness, experience, technology, safety performance and price.
Moreover, further or different constraints may be adopted by the Biden Administration in the future, including but not limited to a delay in permitting procedures, which may reduce the desirability or viability of projects on federals lands or waters. See “Part I, Item 1.
Moreover, further or different constraints may be adopted by the U.S. federal or state governments in the future, including but not limited to a delay in permitting procedures, which may reduce the desirability or viability of projects on federals lands or waters. See “Part I, Item 1.
Despite our governance, however, we cannot guarantee that we will be able to implement any of the opportunities we may review or explore, or, for any opportunities we do choose to implement, to implement them within a specific timeframe or across all operational assets.
Despite our governance designs to pursue and oversee these matters, however, we cannot guarantee that we will be able to implement any of the opportunities we may review or explore, or, for any opportunities we do choose to implement, to implement them successfully and within a specific timeframe or across all operational assets.
In August 2022, President Biden signed the IRA 2022 into law. The IRA 2022 contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.
The IRA 2022 contains hundreds of billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.
The market success of our technologies will depend, in part, on our ability to obtain and enforce our proprietary rights in these technologies, to preserve rights in our trade secret and non-public information. We may not be able to successfully preserve these intellectual property rights and these rights could be invalidated, circumvented or challenged.
The market success of our technologies will depend, in part, on our ability to obtain, secure, maintain and enforce our proprietary rights in these technologies and to safeguard our trade secrets and non-public information. We may not be able to successfully preserve these intellectual property rights and these rights could be invalidated, circumvented or challenged by third parties.
We are subject to various complex and evolving U.S. federal, state and local and foreign taxes. U.S. federal, state and local and foreign tax laws, policies, statutes, rules, regulations or ordinances could be implemented, interpreted, changed, modified or applied adversely to us, in each case, possibly with retroactive effect.
U.S. federal, state, local and foreign tax laws, policies, statutes, rules, regulations or ordinances could be implemented, interpreted, changed, modified or applied adversely to us, in each case, possibly with retroactive effect.
Although we devote resources to protect the systems and data we rely on in our business, our information and operational technology systems may still be subject to cyberattacks or security breaches, including as a result of employee error, malfeasance or other threat vectors.
Although we devote resources to protect the systems and data we rely on in our business, including through monitoring, procedural safeguards, and employee training, our information and operational technology systems may still be subject to cyberattacks or security breaches, including as a result of employee error, malfeasance or other threats.
Other opportunities in our industry and market interest in ESG and alternative energy sources may also make it more difficult for us to attract and retain employees who may feel it necessary to exit our business in favor of such other opportunities. The loss of key personnel to competitors or companies in other industries could adversely affect us.
Other opportunities in our industry and market interest in ESG and alternative energy sources may also make it more difficult for us to attract and retain employees who may prefer employment opportunities other than our business. The inability to attract, or the loss of, key personnel to competitors or companies in other industries could adversely affect us.
Inflation in wages, materials, parts, equipment and other costs has the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our products and services.
Inflation in wages, materials, parts, equipment and other costs, including as a result of tariffs imposed on certain of the goods and materials we import, has the potential to adversely affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our products and services.
Moreover, failure to comply with any applicable existing or newly -21- established requirements, or the occurrence of an explosive incident, may also result in the loss of our ATF or analogous state and international license to store and handle explosives, which would have a material adverse effect on our business, financial condition and results of operations.
Moreover, failure to comply with any applicable existing or newly established requirements, or the occurrence of an explosive incident, may also result in the loss of our ATF or analogous state and international license to store and handle explosives, which would have a material adverse effect on our business, financial condition and results of operations. -21- We may not have adequate insurance for potential liabilities and our insurance may not cover certain liabilities, including litigation risks.
The designation of previously unidentified endangered or threatened species or their critical habitats -25- could indirectly cause us to incur additional costs, cause our or our oil and natural gas exploration and production customers’ operations to become subject to operating restrictions or bans, and limit future development activity in affected areas, which could reduce demand for our products and services to those customers.
While no final action has been taken on that proposal, the designation of previously unidentified endangered or threatened species or their critical habitats could indirectly cause us to incur additional costs, cause our or our oil and natural gas exploration and production customers’ operations to become subject to operating restrictions or bans, and limit future development activity in affected areas, which could reduce demand for our products and services to those customers. -25- Increasing attention to ESG matters may impact our business.
Moreover, we note that even with our governance oversight in place, we may not be able to adequately identify or manage ESG-related risks and opportunities, which may include failing to achieve ESG-related strategies and goals.
Moreover, we note that even with our governance oversight in place, we may not be able to adequately identify or manage ESG-related risks and opportunities, which may include failing to achieve ESG-related strategies and goals or inadvertently increasing certain risks with some stakeholders in an attempt to address those of other stakeholders.
Moreover, there also exists, under the Biden Administration, the potential for new or amended laws, regulations, executive actions and other regulatory initiatives that could impose more stringent restrictions on hydraulic fracturing, including potential restrictions on hydraulic fracturing on federal lands.
Moreover, there has existed, from time to time, the potential for new or amended laws, regulations, executive actions and other regulatory initiatives that could impose more stringent restrictions on hydraulic fracturing, including potential restrictions on hydraulic fracturing on federal lands.
Our capitalization and results of operations may change significantly following an acquisition, and our stockholders may not have the opportunity to evaluate the economic, financial, and other relevant information that we will consider in evaluating future acquisitions.
Our capitalization and results of operations may change significantly following an acquisition, and our stockholders may not have the opportunity to evaluate the economic, financial, and other relevant information that we will consider in evaluating future acquisitions. Financial Risks We may be adversely affected by the effects of inflation and increases in tariffs on goods we import.
In the ordinary course of our business, we enter into purchase and sales commitments that are denominated in currencies that differ from the functional currency used by our operating subsidiaries. Currency exchange rate fluctuations can create volatility in our consolidated financial position, results of operations, and/or cash flows.
Exchange rate fluctuations could adversely affect our U.S. reported results of operations and financial position. In the ordinary course of our business, we enter into purchase and sales commitments that are denominated in currencies that differ from the functional currency used by our operating subsidiaries.
If any of these events were to materialize, they would lead to the loss, disclosure, or hindrance of sensitive information (including our intellectual property, and employee and customer data), critical infrastructure, personnel or capabilities essential to our operations.
If a security breach or cyberattack were to materialize, it could lead to the loss, disclosure, or hindrance of sensitive information (including our intellectual property, and employee and customer data), critical infrastructure, personnel or capabilities essential to our operations.
Although we may enter into foreign exchange agreements with financial institutions in order to reduce our exposure to fluctuations in currency exchange rates, these transactions, if entered into, will not eliminate that risk entirely.
Currency exchange rate fluctuations can create volatility in our consolidated financial position, results of operations, and/or cash flows. Although we may enter into foreign exchange agreements with financial institutions in order to reduce our exposure to fluctuations in currency exchange rates, these transactions, if entered into, will not eliminate that risk entirely.
We record goodwill when the consideration we pay in acquiring a business exceeds the fair market value of the tangible and separately measurable intangible net assets of that business.
As of December 31, 2024, goodwill and other intangible assets represented 7% and 13%, respectively, of our total assets. We record goodwill when the consideration we pay in acquiring a business exceeds the fair market value of the tangible and separately measurable intangible net assets of that business.
We may not have adequate insurance for potential liabilities and our insurance may not cover certain liabilities, including litigation risks. The products that we manufacture and the services that we provide are complex, and the failure of our equipment to operate properly or to meet specifications may greatly increase our customers’ costs.
The products that we manufacture and the services that we provide are complex, and the failure of our equipment to operate properly or to meet specifications may greatly increase our customers’ costs.
Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.
However, there can be no assurance that such costs will not be material in the future or that such future compliance will not have a material adverse effect on our business, financial condition and results of operation. -24- Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.
Additionally, regulatory agencies under the Biden Administration may issue new or amended rulemakings regarding deepwater leasing, permitting or drilling that could result in more stringent or costly restrictions, delays or cancellations in offshore oil and natural gas exploration and production activities, such as the Biden Administration’s suspension of the issuance of authorizations for oil and gas activities.
Regulatory agencies may issue new or amended rulemakings regarding deepwater leasing, permitting or drilling that could result in more stringent or costly restrictions, delays or cancellations in offshore oil and natural gas exploration and production activities. See “Part I, Item 1.
Consequently, a low sustainability score could result in exclusion of our stock from consideration by certain investment funds, engagement by investors seeking to improve such scores and a negative perception of our operations by certain investors. The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and could impose new costs on our customers’ operations.
Consequently, a low sustainability score could result in exclusion of our stock from consideration by certain investment funds, engagement by investors seeking to improve such scores and a negative perception of our operations by certain investors or other constituencies.
If we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase further as a result of customs, anti-dumping and countervailing duty regulations or otherwise, and we are unable to pass corresponding cost increases on to our customers, our financial position and results of operations could be adversely affected.
While we cannot predict with certainty the impact of any new or increased tariffs, or the impact of any retaliatory tariffs, if we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.
The methane emissions charge starts in 2024 at $900 per ton of methane, increases to $1,200 in 2025, and increases to $1,500 for 2026 and each year after. Regulations to implement the methane emissions charge were proposed in January 2024 and are subject to public comment. Calculation of the fee is based on certain thresholds established in the IRA 2022.
The methane emissions charge starts in 2024 at $900 per ton of methane, increases to $1,200 in 2025, and increases to $1,500 for 2026 and each year after. Regulations to implement the methane emissions charge were finalized in November 2024.
As a result, a material decrease in the value of these currencies relative to the U.S. dollar may have a negative impact on our reported results of operations and cash flows. Any currency controls implemented by local monetary authorities in countries where we currently operate could also adversely affect our business, financial condition and results of operations.
As a result, a material decrease in the value of these currencies relative to the U.S. dollar may have a negative impact on our reported results of operations and cash flows.
Increasing attention to ESG matters may impact our business. Companies across all industries are facing increasing scrutiny from stakeholders related to their ESG practices.
Companies across all industries are facing increasing scrutiny from investors, customers, employees, regulatory bodies and other stakeholders related to their ESG practices.
The Biden Administration has taken several actions intended to suspend or limit oil and gas leasing on federal lands and waters, though these actions have been subject to legal challenge. Additionally, the BLM has recently proposed rules to update the terms of federal oil and gas leases, including increasing the associated costs and fees.
Additionally, the BLM has recently finalized rules to update the terms of federal oil and gas leases, including increasing the associated costs and fees.
The methane emissions charge could increase our customers’ operating costs and adversely affect their businesses, thereby reducing demand for our products and services. -26- Changes to applicable tax laws and regulations may result in our incurring additional income tax liabilities, which could have a material adverse effect on our business, results of operations and financial condition.
Changes to applicable tax laws and regulations may result in our incurring additional income tax liabilities, which could have a material adverse effect on our business, results of operations and financial condition. We are subject to various complex and evolving U.S. federal, state, local and foreign taxes.
In addition, the laws of some foreign countries in which our products and services may be sold do not protect intellectual property rights to the same extent as the laws of the United States.
In addition, we face risks related to the global nature of our business, as the laws of some foreign countries in which our products and services may be sold may provide less robust protection of enforcement mechanisms than those available in the United States.
In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs. The effect of these tariffs and the application and interpretation of existing trade agreements and customs, anti-dumping and countervailing duty regulations continues to evolve, and we continue to monitor these matters.
In addition, the Trump Administration has proposed the imposition of certain new tariffs. The effect of these sanctions and tariffs and the application and interpretation of existing trade agreements and customs, anti-dumping and countervailing duty regulations continue to evolve, and we continue to monitor these matters.
Removed
A worsening of these conditions may result in a material adverse impact on our financial condition, results of operations and cash flows.
Added
The realization of any of these threats could lead to the unauthorized access, corruption, loss, or disclosure of proprietary and sensitive data, including -16- proprietary information, intellectual property, and employee or customer data.
Removed
Any one of these threat vectors could lead to the corruption, loss, or disclosure of proprietary and sensitive data, misdirected wire transfers, and an inability to: perform services for our customers; complete or settle transactions; maintain our books and records; prevent environmental damage; and maintain communications or operations.
Added
Additionally such incidents could lead to misdirected wire transfers, operational downtime, environmental damage, disruptions to key communications and services, and could significantly impair our ability to fulfill customer obligations and comply with legal and regulatory requirements.
Removed
President Biden has issued an executive order that commits to substantial action on climate change, calling for, among other things, the elimination of subsidies provided to the fossil fuel industry and an increased emphasis on climate-related risks across government agencies and economic sectors.
Added
In addition, the evolving nature of data security regulations globally presents challenges, as compliance requires continual updates to our policies and practices to address new standards and avoid penalties.
Removed
President Biden may pursue additional executive orders, new legislation and regulatory initiatives to further implement his -23- regulatory agenda beyond the IRA 2022.
Added
The interconnected nature of modern technology means that weaknesses or breaches within the systems of third-party vendors, suppliers, or business partners could significantly impact our operations, potentially introducing vulnerabilities into our own systems despite our safeguards.
Removed
For example, on January 26, 2024, the Biden Administration announced a temporary pause pending Department of Energy review on decisions on new exports of LNG to countries with which the United States does not have free trade agreements.
Added
As cyberattacks continue to evolve, we may be required to allocate additional resources to strengthen our cybersecurity infrastructure, enhance employee training programs, or implement emerging technologies to address new threats.
Removed
See “Part I, Item 1. Business – Environmental and Occupational Health and Safety Matters” for more discussion on deepwater regulatory matters.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeShould we be unable to successfully detect and defend against cybersecurity threats in the future, we may experience significant expenses, potential investigations and legal liability, liquidated contractual damages, a loss of current or future customers, and reputational damage. See “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our IT systems.
Biggest changeShould we be unable to successfully detect and defend against cybersecurity threats in the future, we may experience significant expenses, potential investigations and legal liability, liquidated contractual damages, a loss of current or future customers, and reputational damage.
Risk Management Process We strive to follow the guidelines set by the National Institute of Standards and Technology Cybersecurity Framework to manage information assets, protect sensitive data and mitigate security risks. To address risks from cybersecurity threats, we maintain an information security team, automated monitoring and detection services, and policies and procedures for managing risk to our information systems.
Risk Management Process We strive to follow the guidelines set by the National Institute of Standards and Technology Cybersecurity Framework to manage information assets, protect sensitive data and mitigate security risks. To address risks from cybersecurity threats, we -27- maintain an information security team, automated monitoring and detection services, and policies and procedures for managing risks to our information systems.
In addition, we may face cyber threats from parties that seek to target us through our customers, suppliers, and other stakeholders with whom we do business. Cybersecurity threats are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully defending against them.
In addition, we may face cyber threats from parties that seek to target us through our customers, suppliers, vendors and other stakeholders with whom we do business. Cybersecurity threats are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully defending against them.
Our Chief Information Officer is responsible for timely informing management regarding cybersecurity incidents, including prevention, detection, mitigation, and remediation activities. Our Chief Information Officer and Director of Cybersecurity communicate at least annually with the Board on matters such as data protection and cybersecurity.
Our Chief Information Officer is responsible for timely informing management regarding cybersecurity incidents, including prevention, detection, mitigation, and remediation activities. Our Chief Information Officer and Director of Cybersecurity communicate at least annually with the Audit Committee and the Board on matters such as data protection and cybersecurity.
Cybersecurity risks we face include threats from entities and persons that may seek to target our information technology (“IT”) infrastructure or use malware, computer viruses, denial of services attacks, ransomware attacks, credential harvesting, social engineering and other means to obtain unauthorized access to or disrupt the operation of our networks, systems and those of our suppliers, vendors and other service providers.
Cybersecurity risks we face include threats from entities and persons that may seek to target our information technology (“IT”) or operational technology (“OT”) infrastructures or use malware, computer viruses, denial of services attacks, ransomware attacks, credential harvesting, social engineering and other means to obtain unauthorized access to or disrupt the operation of our networks, systems and those of our suppliers, vendors and other service providers.
Our Board is responsible for risk oversight and utilizes an enterprise risk management process to assist in fulfilling its oversight -27- responsibilities. The Board has delegated responsibility for overseeing the monitoring and assessment of risks related to cybersecurity to the Audit Committee.
Our Board is responsible for risk oversight and monitors an enterprise risk management process prepared by management to assist in fulfilling its oversight responsibilities. The Board has delegated responsibility for overseeing the monitoring and assessment of risks related to cybersecurity to the Audit Committee.
We maintain cybersecurity incident response plans, which address defined actions to be taken in response to cyber incidents. In the event of a material cybersecurity incident, the Chief Information Officer must notify both management and the Board.
In the event of a material cybersecurity incident, the Chief Information Officer must notify management, the Audit Committee and the Board.
Added
These individuals have extensive cybersecurity knowledge and skills, with over 15 years of collective experience in the management of cybersecurity threats. We maintain cybersecurity incident response plans, which address defined actions to be taken in response to risks from cyber incidents.
Added
See “Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our IT systems. -28-

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOffshore/Manufactured Products – Rio de Janeiro and Macae, Brazil; Aberdeen and West Lothian, Scotland; Rayong, Thailand; Singapore; Navi Mumbai, India; Las Palmas, Spain; Shenzhen, China; Abu Dhabi, UAE; and in the United States: Arlington, Houston and Lampasas, Texas; Oklahoma City and Tulsa, Oklahoma and Houma, Louisiana.
Biggest changeOffshore Manufactured Products – Rio de Janeiro and Macae, Brazil; Aberdeen and West Lothian, Scotland; Rayong, Thailand; Singapore; Batam, Indonesia; Navi Mumbai, India; Las Palmas, Spain; Abu Dhabi, UAE; and in the United States: Arlington and Houston, Texas; Oklahoma City, Oklahoma and Houma, Louisiana.
We believe that our leases are at competitive or market rates and do not anticipate any difficulty in leasing additional suitable space upon the expiration of our current lease terms. -28-
We believe that our leases are at competitive or market rates and do not anticipate any difficulty in leasing additional suitable space upon the expiration of our current lease terms.
Item 2. Properties We own and lease numerous manufacturing facilities, service centers, sales and administrative offices, storage yards and data processing centers in support of our worldwide operations. The following presents the location of our principal owned or leased facilities, by segment.
Item 2. Properties We own and lease numerous manufacturing facilities, service centers, sales and administrative offices, storage yards and data processing centers in support of our worldwide operations. The following presents the location of our principal owned or leased facilities, by segment as of December 31, 2024.
Downhole Technologies – Nunn, Colorado; Millsap, Fort Worth, Pleasanton and Midland, Texas; and Clearfield, Pennsylvania in the United States; and Aberdeen, Scotland. Our principal corporate offices are located in Houston, Texas.
Downhole Technologies – Nunn, Colorado; Tulsa, Oklahoma; Millsap, Fort Worth, Lampasas and Midland, Texas; and Clearfield, Pennsylvania in the United States; and Aberdeen, Scotland. Our principal corporate offices are located in Houston, Texas.
Well Site Services – Houston, Kilgore and Midland, Texas; New Iberia and Houma, Louisiana; Oklahoma City, Oklahoma; Canonsburg, Towanda and Watsontown, Pennsylvania; Casper and Rock Springs, Wyoming; Williston, North Dakota and Renton, Washington in the United States; and Red Deer, Alberta, Canada.
Completion and Production Services – Houston and Midland, Texas; New Iberia, Broussard and Houma, Louisiana; Oklahoma City, Oklahoma; Casper and Rock Springs, Wyoming; Williston, North Dakota and Renton, Washington in the United States; and Red Deer, Alberta, Canada.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Oil States International, Inc., the S&P 500 Index, the PHLX Oil Service Sector Index and our Peer Group (1) -30- 2018 2019 2020 2021 2022 2023 Oil States International, Inc. $ 100.00 $ 114.22 $ 35.15 $ 34.80 $ 52.24 $ 47.55 Peer Group (1) $ 100.00 $ 100.45 $ 58.64 $ 61.68 $ 98.92 $ 100.05 PHLX Oil Service Sector $ 100.00 $ 99.45 $ 57.60 $ 69.55 $ 112.31 $ 114.47 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 ____________________ (1) The twelve companies included in our customized peer group are: Archrock, Inc., Core Laboratories N.V., Dril-Quip, Inc., Expro Group Holdings N.V., Forum Energy Technologies, Inc., Helix Energy Solutions Group, Inc., Helmerich & Payne, Inc., Newpark Resources, Inc., Oceaneering International, Inc., RPC, Inc., Select Water Solutions, Inc.
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Oil States International, Inc., the S&P 500 Index, the PHLX Oil Service Sector Index, our Old Peer Group (1) and our New Peer Group (2) -30- 2019 2020 2021 2022 2023 2024 Oil States International, Inc. $ 100.00 $ 30.78 $ 30.47 $ 45.74 $ 41.63 $ 31.02 Old Peer Group (1) $ 100.00 $ 58.37 $ 61.40 $ 98.48 $ 99.60 $ 107.37 New Peer Group (2) $ 100.00 $ 60.02 $ 63.17 $ 90.17 $ 97.35 $ 109.02 PHLX Oil Service Sector $ 100.00 $ 57.92 $ 69.94 $ 112.94 $ 115.10 $ 101.68 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 ____________________ (1) The twelve companies included in our first customized peer group (“Old Peer Group”) are: Archrock, Inc., Core Laboratories N.V., Expro Group Holdings N.V., Forum Energy Technologies, Inc., Helix Energy Solutions Group, Inc., Helmerich & Payne, Inc., Innovex International, Inc., (Dril-Quip, Inc., prior to merger), NPK International, Inc.
The graph and chart show the value at the dates indicated of $100 invested as of December 31, 2018 and assume the reinvestment of all dividends. The stockholder return set forth below is not necessarily indicative of future performance.
The graph and chart show the value at the dates indicated of $100 invested as of December 31, 2019 and assume the reinvestment of all dividends. The stockholder return set forth below is not necessarily indicative of future performance.
Our common stock is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “OIS”. We have not declared or paid any cash dividends on our common stock since our initial public offering in 2001 and our ABL Facility (as defined below) limits the payment of dividends. For additional discussion of such restrictions, see “Part II, Item 7.
Our common stock is traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “OIS”. We have not declared or paid any cash dividends on our common stock since our initial public offering in 2001 and, while permitted, our ABL Facility limits the payment of dividends. For additional discussion of such restrictions, see “Part II, Item 7.
Performance Graph The following graph and table compare the cumulative five-year total stockholder return on our common stock relative to the cumulative total returns of the Standard & Poor’s 500 Stock Index, the PHLX Oil Service Sector index, an index of oil and gas related companies that represent an industry composite of our peer group, and a customized peer group of twelve companies, with the individual companies listed in footnote (2) below.
Performance Graph The following graph and table compare the cumulative five-year total stockholder return on our common stock relative to the cumulative total returns of the Standard & Poor’s 500 Stock Index, the PHLX Oil Service Sector index, an index of oil and gas related companies that represent an industry composite of our peer group, and customized peer groups of twelve companies, with the individual companies listed in footnotes (1) and (2) below, respectively for the period from December 31, 2019 to December 31, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Information Our authorized common stock consists of 200,000,000 shares of common stock. There were 63,582,041 shares of common stock outstanding as of February 9, 2024. The approximate number of record holders of our common stock as of February 9, 2024 was 150.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Information Our authorized common stock consists of 200,000,000 shares of common stock. There were 61,760,608 shares of common stock outstanding as of February 14, 2025. The approximate number of record holders of our common stock as of February 14, 2025 was 150.
Purchases of Equity Securities by the Issuer and Affiliated Purchases Period Total Number of Shares Purchased (1) Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) October 1 through October 31, 2023 — $ — — $ 21,998,595 November 1 through November 30, 2023 198,007 6.98 198,007 20,609,161 December 1 through December 31, 2023 365,183 6.71 365,183 18,133,096 Total 563,190 $ 6.81 563,190 ____________________ (1) Average price paid per share excludes the impact of excise taxes.
Purchases of Equity Securities by the Issuer and Affiliated Purchases Period Total Number of Shares Purchased (1) Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) October 1 through October 31, 2024 — $ — — $ 50,000,000 November 1 through November 30, 2024 890,484 5.34 890,484 45,245,016 December 1 through December 31, 2024 730,020 5.26 730,020 41,306,216 Total 1,620,504 $ 5.30 1,620,504 ____________________ (1) Average price paid per share excludes the impact of excise taxes.
Removed
(2) On February 16, 2023, our Board approved a share repurchase program of up to $25.0 million, which extends for two years. As of December 31, 2023, $6.9 million of share repurchases have been made under this authorization. Item 6. [Reserved]
Added
(formerly Newpark Resources, Inc.), Oceaneering International, Inc., RPC, Inc., Select Water Solutions, Inc. (formerly Select Energy Services, Inc.), and TETRA Technologies, Inc.
Added
(2) The twelve companies included in our second customized peer group (“New Peer Group”) are: Archrock, Inc., Core Laboratories N.V., Expro Group Holdings N.V., Forum Energy Technologies, Inc., Helix Energy Solutions Group, Inc., Innovex International, Inc., (Dril-Quip, Inc., prior to merger), NPK International, Inc. (formerly Newpark Resources, Inc.), Oceaneering International, Inc., ProPetro Holding Corp., RPC, Inc., Select Water Solutions, Inc.
Added
(2) In February 2023, our Board approved a share repurchase program of up to $25.0 million, through February 2025. On October 24, 2024, our Board of Directors terminated our existing common stock repurchase program and replaced it with a new $50.0 million common stock repurchase authorization, which expires in October 2026.
Added
As of December 31, 2024, $8.7 million of share repurchases were made under this new authorization. Item 6. [Reserved]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe following are important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, us: • the impact of the ongoing military actions in Europe and the Middle East, including, but not limited to, energy market disruptions, supply chain disruptions and increased costs, government sanctions, and delays or potential cancellation of planned customer projects; • the ability and willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and other producing nations to set and maintain oil production levels and pricing; • the level of supply of and demand for oil and natural gas; • fluctuations in the current and future prices of oil and natural gas; • the level of exploration, drilling and completion activity; • the cyclical nature of the oil and natural gas industry; • the level of offshore oil and natural gas developmental activities; • the impact of disruptions in the bank and capital markets, including multiple U.S. bank failures during 2023; • the financial health of our customers; • the impact of environmental matters, including executive actions and regulatory or legislative efforts to adopt environmental or climate change regulations that may result in increased operating costs or reduced oil and natural gas production or demand globally, such as the Biden Administration’s recent pause on pending decisions on certain new exports of liquefied natural gas (“LNG”); • proposed new rules by the Securities and Exchange Commission (the “SEC”) relating to the disclosure of a range of climate-related information and risks; • political, economic and litigation efforts to restrict or eliminate certain oil and natural gas exploration, development and production activities due to concerns over the threat of climate change; • the availability of and access to attractive oil and natural gas field prospects, which may be affected by governmental actions or actions of other parties restricting drilling and completion activities; • general global economic conditions; • global weather conditions and natural disasters, including hurricanes in the Gulf of Mexico; • changes in tax laws and regulations; • supply chain disruptions; • the impact of tariffs and duties on imported materials and exported finished goods; • our ability to timely obtain and maintain critical permits for operating facilities; • our ability to attract and retain skilled personnel; -3- • our ability to develop new competitive technologies and products; • inflation, including our ability to increase prices to our customers as our costs increase; • fluctuations in currency exchange rates; • physical, digital, cyber, internal and external security breaches and other incidents affecting information security and data privacy; • the cost of capital in the bank and capital markets and our ability to access them; • our ability to protect and enforce our intellectual property rights; • negative outcome of litigation, threatened litigation or government proceedings; • our ability to complete the integration of acquired businesses and achieve the expected accretion in earnings; and • the other factors identified in “Part I, Item 1A.
Biggest changeThe following are important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, us: • the impact of the ongoing military actions in Europe and the Middle East, including, but not limited to, energy market disruptions, supply chain disruptions and increased costs, government sanctions, and delays or potential cancellation of planned customer projects; • the ability and willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and other producing nations to set and maintain oil production levels and pricing; • the level of supply of and demand for oil and natural gas; • fluctuations in the current and future prices of oil and natural gas; • the level of exploration, drilling and completion activity; • the cyclical nature of the oil and natural gas industry; • the level of offshore oil and natural gas developmental activities; • the impact of disruptions in the bank and capital markets; • the financial health of our customers; • the impact of environmental matters, including executive actions and regulatory or legislative efforts to adopt environmental or climate change regulations that may result in increased operating costs or reduced oil and natural gas production or demand globally, such as the Biden Administration’s pause on pending decisions on certain new exports of liquefied natural gas (“LNG”) and whether the Trump Administration will reverse such pause; • proposed new rules by the Securities and Exchange Commission (the “SEC”) relating to the disclosure of a range of climate-related information and risks, if enacted; • political, economic and litigation efforts to restrict or eliminate certain oil and natural gas exploration, development and production activities due to concerns over the threat of climate change; • the availability of and access to attractive oil and natural gas field prospects, which may be affected by governmental actions or actions of other parties restricting drilling and completion activities; • general global economic conditions; • global weather conditions and natural disasters, including hurricanes in the Gulf of America (formerly named the Gulf of Mexico); • changes in tax laws and regulations as well as volatility in the political, legal and regulatory environments in connection with the recent U.S. presidential election; • supply chain disruptions, including as a result of labor unrest; • the impact of changes in tariffs and duties on imported materials and exported finished goods; -3- • our ability to timely obtain and maintain critical permits for operating facilities; • our ability to attract and retain skilled personnel; • our ability to develop new competitive technologies and products; • inflation, including our ability to increase prices to our customers as our costs increase; • fluctuations in currency exchange rates; • physical, digital, cyber, internal and external security breaches and other incidents affecting information security and data privacy; • the cost of capital in the bank and capital markets and our ability to access them; • our ability to protect and enforce our intellectual property rights; • negative outcome of litigation, threatened litigation or government proceedings; • our ability to complete the integration of acquired businesses and achieve the expected accretion in earnings; and • the other factors identified in “Part I, Item 1A.
Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44 Item 8. Financial Statements and Supplementary Data 44 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 45 Item 9A. Controls and Procedures 45 Item 9B.
Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47 Item 8. Financial Statements and Supplementary Data 48 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 48 Item 9A. Controls and Procedures 48 Item 9B.
Other Information 46 PART III Item 10. Directors, Executive Officers and Corporate Governance 47 Item 11. Executive Compensation 47 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 47 Item 13. Certain Relationships and Related Transactions, and Director Independence 47 Item 14. Principal Accounting Fees and Services 47 PART IV Item 15.
Other Information 49 PART III Item 10. Directors, Executive Officers and Corporate Governance 50 Item 11. Executive Compensation 50 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 50 Item 13. Certain Relationships and Related Transactions, and Director Independence 50 Item 14. Principal Accounting Fees and Services 50 PART IV Item 15.
Form 10-K Summary 50 SIGNATURES 51 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 52 -2- PART I C autionary Statement Regarding Forward-Looking Statements This Annual Report on Form 10-K and other statements we make contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”).
Form 10-K Summary 53 SIGNATURES 54 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 55 -2- PART I C autionary Statement Regarding Forward-Looking Statements This Annual Report on Form 10-K and other statements we make contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”).

Item 7. Management's Discussion & Analysis

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

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Biggest changeConsolidated Results of Operations The following summarizes our consolidated results of operations for the years ended December 31, 2023 and 2022 (in thousands, except per share amounts): Year Ended December 31, 2023 2022 Variance Revenues: Products $ 418,550 $ 385,564 $ 32,986 Services 363,733 352,142 11,591 782,283 737,706 44,577 Costs and expenses: Product costs 328,815 307,371 21,444 Service costs 278,073 271,185 6,888 Cost of revenues (exclusive of depreciation and amortization expense presented below) 606,888 578,556 28,332 Selling, general and administrative expenses (1) 94,185 96,038 (1,853) Depreciation and amortization expense 60,778 67,334 (6,556) Other operating expense (income), net (2) (2,732) (7,127) 4,395 759,119 734,801 24,318 Operating income 23,164 2,905 20,259 Interest expense, net (8,189) (10,280) 2,091 Other income, net 849 3,315 (2,466) Income (loss) before income taxes 15,824 (4,060) 19,884 Income tax provision (2,933) (5,480) 2,547 Net income (loss) $ 12,891 $ (9,540) $ 22,431 Net income (loss) per share: Basic $ 0.20 $ (0.15) Diluted 0.20 (0.15) Weighted average number of common shares outstanding: Basic 62,690 61,638 Diluted 63,152 61,638 _______________ (1) During 2023, we recognized $0.6 million, associated with the defense of certain Well Site Services segment patents related to proprietary technologies.
Biggest changeConsolidated Results of Operations The following summarizes our consolidated results of operations for the years ended December 31, 2024, 2023 and 2022 (in thousands, except per share amounts): Variance 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenues: Products $ 402,565 $ 418,550 $ 385,564 $ (15,985) $ 32,986 Services 290,023 363,733 352,142 (73,710) 11,591 692,588 782,283 737,706 (89,695) 44,577 Costs and expenses: Product costs 314,628 328,815 307,371 (14,187) 21,444 Service costs 221,573 278,073 271,185 (56,500) 6,888 Cost of revenues (exclusive of depreciation and amortization expense presented below) 536,201 606,888 578,556 (70,687) 28,332 Selling, general and administrative expenses 95,009 94,185 96,038 824 (1,853) Depreciation and amortization expense 54,708 60,778 67,334 (6,070) (6,556) Impairment of goodwill 10,000 — — 10,000 — Impairments of intangible assets 10,787 — — 10,787 — Impairments of operating lease assets 3,767 — — 3,767 — Other operating income, net (1) (16,195) (2,732) (7,127) (13,463) 4,395 694,277 759,119 734,801 (64,842) 24,318 Operating (loss) income (1,689) 23,164 2,905 (24,853) 20,259 Interest expense, net (7,731) (8,189) (10,280) 458 2,091 Other income, net 1,568 849 3,315 719 (2,466) (Loss) income before income taxes (7,852) 15,824 (4,060) (23,676) 19,884 Income tax provision (3,406) (2,933) (5,480) (473) 2,547 Net (loss) income $ (11,258) $ 12,891 $ (9,540) $ (24,149) $ 22,431 Net (loss) income per share: Basic $ (0.18) $ 0.20 $ (0.15) Diluted (0.18) 0.20 (0.15) Weighted average number of common shares outstanding: Basic 62,004 62,690 61,638 Diluted 62,004 63,152 61,638 _______________ (1) During 2024, we recognized a net gain of $15.3 million associated with the sale of a previously idled facility.
The remainder of our assets largely consisted of cash, accounts receivable, inventories and goodwill. -43- An assessment for impairment of long-lived tangible and intangible assets is conducted at the asset group level whenever changes in facts and circumstances indicate that the carrying value of such asset group may not be recoverable based on estimated undiscounted future cash flows.
The remainder of our assets largely consisted of cash, accounts receivable, inventories and goodwill. An assessment for impairment of long-lived tangible and intangible assets is conducted at the asset group level whenever changes in facts and circumstances indicate that the carrying value of such asset group may not be recoverable based on estimated undiscounted future cash flows.
Well intensity and complexity have increased with the continuing transition to multi-well pads, the drilling of longer lateral wells and increased downhole pressures, along with the increased number of frac stages completed in horizontal wells. Our Downhole Technologies segment provides oil and gas perforation systems, downhole tools and services in support of completion, intervention, wireline and well abandonment operations.
Well intensity and complexity have increased with the continuing transition to multi-well pads, the drilling of longer lateral wells and increased downhole pressures, along with the increased number of frac stages completed in horizontal wells. -33- Our Downhole Technologies segment provides oil and gas perforation systems, downhole tools and services in support of completion, intervention, wireline and well abandonment operations.
Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, which are adopted by us as of the specified effective date. We believe that the impact of recently issued standards, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.
Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”), which are adopted by us as of the specified effective date. We believe that the impact of recently issued standards, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.
As of December 31, 2023, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met. 2023 Notes. On February 15, 2023, our 2023 Notes matured and the outstanding $17.3 million in principal amount was repaid in full.
As of December 31, 2024, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met. 2023 Notes. On February 15, 2023, our 2023 Notes matured and the outstanding $17.3 million in principal amount was repaid in full.
This compares to an income tax provision of $5.5 million on a pre-tax loss of $4.1 million for 2022, which included certain non-deductible expenses and discrete tax items. Other Comprehensive Income (Loss). Reported comprehensive income (loss) is the sum of reported net income (loss) and other comprehensive income (loss).
This compares to an income tax provision of $5.5 million, which included the impact of certain non-deductible expenses and discrete tax items, on a pre-tax loss of $4.1 million for 2022. Other Comprehensive Income (Loss). Reported comprehensive income (loss) is the sum of reported net income (loss) and other comprehensive income (loss).
The critical accounting policies and estimates described in this section are those that are most important to the depiction of our financial condition and results of operations and the application of which requires our most subjective judgments in making estimates about the effect of matters that are inherently uncertain.
The critical accounting policies and estimates described in this section are those that are most -45- important to the depiction of our financial condition and results of operations and the application of which requires our most subjective judgments in making estimates about the effect of matters that are inherently uncertain.
Excluding these patent defense costs, selling, general and administrative costs decreased $2.4 million, or 3%, from 2022, due primarily to reductions in short-term incentive and bad debt expenses. Depreciation and Amortization Expense.
Excluding these patent defense costs, selling, general and administrative costs decreased $2.4 million, or 3%, from 2022, due primarily to reductions in short-term incentive compensation and bad debt expenses. Depreciation and Amortization Expense.
The ABL Agreement, as amended, matures on February 16, 2028 with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $17.5 million. See Note 7, “Long-term Debt,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information regarding the ABL Agreement.
The ABL Agreement matures on February 16, 2028 with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $17.5 million. See Note 7, “Long-term Debt,” to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information regarding the ABL Agreement.
Interest expense as a percentage of total debt outstanding was approximately 7% in 2023, compared to 6% in 2022. Income Tax. For 2023, our income tax provision was $2.9 million on pre-tax income of $15.8 million, which included certain non-deductible expenses, discrete tax items and reductions in valuation allowances recorded against deferred tax assets.
Interest expense as a percentage of total debt outstanding was approximately 7% in 2023, compared to 6% in 2022. Income Tax. For 2023, our income tax provision was $2.9 million, which included the impact of certain non-deductible expenses, discrete tax items and reductions in valuation allowances recorded against deferred tax assets, on pre-tax income of $15.8 million.
See Note 2, “Summary of Significant Accounting Policies,” and Note 10, “Income Taxes,” to the Consolidated Financial Statements included in this Annual Report on Form 10‑K for additional information with respect to tax matters. Off-Balance Sheet Arrangements. As of December 31, 2023, we had no off-balance sheet arrangements.
See Note 2, “Summary of Significant Accounting Policies,” and Note 10, “Income Taxes,” to the Consolidated Financial Statements included in this Annual Report on Form 10‑K for additional information with respect to tax matters. Off-Balance Sheet Arrangements. As of December 31, 2024, we had no off-balance sheet arrangements.
This year-over-year increase in operating loss is due primarily to the reported decrease in the Downhole Technologies segment’s revenue, $1.1 million in incremental non-cash provisions for excess and obsolete inventory as well as higher labor, material and other costs. Corporate Operating Loss.
This year-over-year decrease in operating results is due primarily to the reported decrease in the Downhole Technologies segment’s revenue, $1.1 million in incremental non-cash provisions for excess and obsolete inventory as well as higher labor, material and other costs. Corporate Operating Loss.
Additionally, we are investing in research and product development related to, and have been awarded select contracts and are bidding on additional projects that facilitate, the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities.
Additionally, we are investing in research and product development (and have been awarded select contracts and are bidding on additional projects) to facilitate the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities.
Corporate expenses in 2023 increased $0.6 million, or 1%, from 2022, with the impact of higher personnel and marketing costs partially offset by lower short-term incentive and professional service expenses. -39- Liquidity, Capital Resources and Other Matters Our primary liquidity needs are to fund operating and capital expenditures, new product development and general working capital needs.
Corporate expenses in 2023 increased $0.6 million, or 1%, from 2022, with the impact of higher personnel and marketing costs partially offset by lower short-term incentive compensation and professional service expenses. -42- Liquidity, Capital Resources and Other Matters Our primary liquidity needs are to fund operating and capital expenditures, new product development and general working capital needs.
The United States has imposed tariffs on a variety of imported products, including steel and aluminum. In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs.
In 2018, the United States imposed tariffs on a variety of imported products, including steel and aluminum. In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs.
We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. The United States has imposed tariffs on a variety of imported products, including steel and aluminum.
We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products. In 2018, the United States imposed tariffs on a variety of imported products, including steel and aluminum.
During 2023, $21.0 million was used to fund net working capital increases, primarily due to increases in inventories as well as decreases in accounts payable, accrued liabilities and deferred revenue, partially offset by a decrease in accounts receivable. During 2022, $34.7 million was used to fund net working capital increases, primarily due to increases in accounts receivable and inventories.
During 2023, $21.0 million was used to fund net working capital increases, primarily due to increases in inventories as well as decreases in accounts payable, accrued liabilities and deferred revenue, partially offset by a decrease in accounts receivable.
U.S. drilling, completion and production activity and, in turn, our financial results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of our U.S. operations.
U.S. drilling, completion and production activity and, in turn, our financial results, are sensitive to near-term fluctuations in commodity prices, particularly U.S. crude oil and natural gas prices, given the short-term, call-out nature of our U.S. operations.
As of December 31, 2023, oil-directed drilling accounted for 80% of the total U.S. rig count – with the balance largely natural gas related. We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products.
As of December 31, 2024, oil-directed drilling accounted for 82% of the total U.S. rig count – with the balance largely natural gas related. We use a variety of domestically produced and imported raw materials and component products, including steel, in the manufacture of our products.
Depreciation and amortization expense decreased $6.6 million, or 10%, in 2023 compared to the prior-year period, due to certain intangible assets reaching the end of their economic life coupled with reduced capital investments made in our Well Site Services segment in recent years.
Depreciation and amortization expense decreased $6.6 million, or 10%, in 2023 compared to the prior-year period, due to certain intangible assets reaching the end of their economic life coupled with reduced capital investments made in our Completion and Production Services segment in recent years.
Indicators of impairment might include persistent negative economic trends affecting the markets we serve, recurring losses or lowered expectations of future cash flows to be generated by our assets.
Indicators of impairment might include strategic management actions, persistent negative economic trends affecting the markets we serve, recurring losses or lowered expectations of future cash flows to be generated by our assets.
Approximately 69% of Offshore/Manufactured Products segment sales in 2023 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair -32- system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”).
Approximately 90% of Offshore Manufactured Products segment sales in 2024 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”).
On February 16, 2024, we amended our ABL Facility to extend its maturity date from February 10, 2025 to February 16, 2028.
On February 16, 2024, we amended the ABL Facility to extend its maturity date from February 10, 2025 to February 16, 2028.
The ultimate impact on our business is uncertain but, upon finalization, we and our customers may incur increased compliance costs related to the assessment and disclosure of climate-related risks. We may also face increased litigation risks related to disclosures made pursuant to the rule if finalized as proposed.
The ultimate impact on our business is uncertain but we and our customers may incur increased compliance costs related to the assessment and disclosure of climate-related risks. We may also face increased litigation risks related to disclosures made pursuant to the Rules if finalized as proposed.
Excluding the 2023 patent defense costs, the Well Site Services segment’s operating results improved $9.6 million from the prior-year period, due to the reported revenue growth and a $3.2 million decrease in depreciation and amortization expense, partially offset by increased labor, material and other costs. Downhole Technologies Revenues.
Excluding the 2023 patent defense costs, the Completion and Production Services segment’s operating results improved $9.6 million from the prior-year period, due to the reported revenue growth and a $3.2 million decrease in depreciation and amortization expense, partially offset by increased labor, material and other costs. -41- Downhole Technologies Revenues.
The total amount available to be drawn as of December 31, 2023 was $76.1 million. (2) Amount represents the full principal amount of the 2026 Notes together with cash interest payments due semi-annually. (3) Amount represents payment obligations (including implied interest) for operating leases with an initial term of greater than twelve months.
The total amount available to be drawn as of December 31, 2024 was $57.2 million. (2) Amount represents the full principal amount of the 2026 Notes together with cash interest payments due semi-annually. (3) Amount represents payment obligations (including implied interest) for operating leases with an initial term of greater than twelve months.
Revenues from products and services transferred to customers over time accounted for approximately 66%, 65% and 65% of consolidated revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
Revenues from products and services transferred to customers over time accounted for approximately 67%, 66% and 65% of consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Demand for our completion-related products and services within each of our segments is highly correlated to changes in the total number of wells drilled in the United States, total footage drilled, the number of drilled wells that are completed and changes in the drilling rig count.
Demand for our completion-related products and services within our Completion and Production Services and Downhole Technologies segments is highly correlated to changes in the total number of wells drilled in the United States, total footage drilled, the number of drilled wells that are completed and changes in the drilling rig count.
Revolving Credit Facility. On February 10, 2021, we entered into a senior secured credit facility, which provides for a $125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”) under which credit availability is subject to a borrowing base calculation. On February 16, 2024, we amended the ABL Facility to extend the maturity date to February 16, 2028.
Our senior secured credit facility provides for a $125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”) under which credit availability is subject to a borrowing base calculation. On February 16, 2024, we amended the ABL Facility to extend the maturity date to February 16, 2028.
Our total debt represented 16% and 18% of our combined total debt and stockholders’ equity as of December 31, 2023 and December 31, 2022, respectively. -41- Contractual Obligations. As discussed above, we believe that cash on-hand, cash flow from operations and borrowing capacity under our ABL facility will be sufficient to meet our liquidity needs in the coming twelve months.
Our total debt represented 16% of our combined total debt and stockholders’ equity as of December 31, 2024 and December 31, 2023. -44- Contractual Obligations. As discussed above, we believe that cash on-hand, cash flow from operations and borrowing capacity under our ABL facility will be sufficient to meet our liquidity needs in the coming twelve months.
Our Well Site Services segment revenues increased $11.4 million, or 5%, in 2023 compared to 2022, driven primarily by higher U.S. customer activity levels during the first half of 2023. Operating Income. Our Well Site Services segment reported operating income of $13.9 million in 2023, compared to operating income of $4.9 million in 2022.
Our Completion and Production Services segment revenues increased $11.4 million, or 5%, in 2023 compared to 2022, driven primarily by higher U.S. customer activity levels during the first half of 2023. Operating Income. Our Completion and Production Services segment reported operating income of $13.9 million in 2023, compared to operating income of $4.9 million in 2022.
Excluding the facility consolidation charges and prior-year litigation gain, operating income increased $28.6 million year-over-year due primarily to the Offshore/Manufactured Products segment’s reported revenue growth and lower bad debt expense, partially offset by the impact of higher material, transportation, labor and other costs. Backlog.
Excluding the facility consolidation charges and 2022 litigation gain, operating income increased $29.2 million year-over-year due primarily to the Offshore Manufactured Products segment’s reported revenue growth and lower bad debt expense, partially offset by the impact of higher material, transportation, labor and other costs. Backlog.
Additional offerings include proprietary frac plug and toe valve products, which are focused on zonal isolation for hydraulic fracturing of horizontal wells, and a broad range of consumable products, such as setting tools and bridge plugs, that are used in completion, intervention and decommissioning applications.
Additional offerings include frac plugs, toe valves and other elastomer products, which are focused on zonal isolation for hydraulic fracturing of horizontal wells, and a broad range of consumable products, such as setting tools and bridge plugs, that are used in completion, intervention and decommissioning applications.
As of December 31, 2023, we had $15.2 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement. The total amount available to be drawn as of December 31, 2023 was $76.1 million, calculated based on the then-current borrowing base less outstanding letters of credit. 2026 Notes.
As of December 31, 2024, we had $15.9 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement. The total amount available to be drawn as of December 31, 2024 was $57.2 million, calculated based on the then-current borrowing base less outstanding letters of credit. 2026 Notes.
Customer spending in the natural gas shale plays has moderated over the last ten years due to technological advancements that have led to significant amounts of natural gas being produced from prolific basins in the Northeastern United States and from associated gas produced from the drilling and completion of unconventional oil wells in the United States.
Customer spending in the natural gas shale plays has declined in recent years due to technological advancements that have led to significant amounts of natural gas being produced from prolific basins in the Northeastern United States and from associated gas produced from the drilling and completion of unconventional oil wells in the United States.
Our customers’ capital spending programs are generally based on their cash flows and their outlook for near-term and long-term commodity prices, making demand for our products and services sensitive to expectations regarding future crude oil and natural gas prices, as well as economic growth, commodity demand and estimates of resource production and regulatory pressures related to ESG considerations. -31- Recent Developments Brent and WTI crude oil and natural gas pricing trends were as follows: Average Price (1) for quarter ended Average Price (1) for year ended December 31 Year March 31 June 30 September 30 December 31 Brent Crude (per bbl) 2023 $ 81.01 $ 77.99 $ 86.65 $ 84.01 $ 82.47 2022 100.87 113.84 100.71 $ 88.77 $ 100.99 WTI Crude (per bbl) 2023 $ 75.91 $ 73.54 $ 82.25 $ 78.53 $ 77.56 2022 95.18 108.83 93.06 $ 82.79 $ 94.90 Henry Hub Natural Gas (per MMBtu) 2023 $ 2.64 $ 2.16 $ 2.59 $ 2.74 $ 2.53 2022 4.67 7.50 8.03 $ 5.55 $ 6.45 ________________ (1) Source: U.S.
Our customers’ capital spending programs are generally based on their cash flows and their outlook for near-term and long-term commodity prices, making demand for our products and services sensitive to expectations regarding future crude oil and natural gas prices, as well as economic growth, commodity demand and estimates of resource production and regulatory pressures. -31- Recent Developments Brent and West Texas Intermediate (“WTI”) crude oil and natural gas pricing trends were as follows: Average Price (1) for quarter ended Average Price (1) for year ended December 31 Year March 31 June 30 September 30 December 31 Brent Crude (per bbl) 2024 $ 82.92 $ 84.68 $ 80.01 $ 74.66 $ 80.52 2023 81.01 77.99 86.65 84.01 82.47 2022 100.87 113.84 100.71 88.77 100.99 WTI Crude (per bbl) 2024 $ 77.50 $ 81.81 $ 76.43 $ 70.73 $ 76.61 2023 75.91 73.54 82.25 78.53 77.56 2022 95.18 108.83 93.06 82.79 94.90 Henry Hub Natural Gas (per MMBtu) 2024 $ 2.15 $ 2.07 $ 2.11 $ 2.44 $ 2.19 2023 2.64 2.16 2.59 2.74 2.53 2022 4.67 7.50 8.03 5.55 6.45 ________________ (1) Source: U.S.
We provide a broad range of manufactured products and services to customers in the energy, industrial and military sectors through our Offshore/Manufactured Products, Well Site Services and Downhole Technologies segments.
We provide a broad range of manufactured products and services to customers in the energy, industrial and military sectors through our Offshore Manufactured Products, Completion and Production Services (previously referred to as Well Site Services) and Downhole Technologies segments.
During 2022, we recognized a gain of $6.1 million associated with the settlement of outstanding litigation against certain service providers. -35- Segment Results of Operations We manage and measure our business performance in three distinct operating segments: Offshore/Manufactured Products, Well Site Services and Downhole Technologies.
During 2022, we recognized a gain of $6.1 million associated with the settlement of outstanding litigation. -35- Segment Results of Operations We manage and measure our business performance in three distinct operating segments: Offshore Manufactured Products, Completion and Production Services and Downhole Technologies.
Our Downhole Technologies segment revenues decreased $26.4 million, or 21%, in 2023 from 2022 due primarily to lower U.S. customer demand for perforating and completion products. -38- Operating Loss. Our Downhole Technologies segment reported an operating loss of $14.9 million in 2023, compared to an operating loss of $6.7 million reported in 2022.
Our Downhole Technologies segment revenues decreased $26.2 million, or 14%, in 2023 from 2022 due primarily to lower U.S. customer demand for perforating and completion products. Operating Loss. Our Downhole Technologies segment reported an operating loss of $5.9 million in 2023, compared to operating income of $2.9 million reported in 2022.
Other factors that can affect our business and financial results include but are not limited to: the general global economic environment (including disruptions in the banking sector); competitive pricing pressures; public health crises; natural disasters; labor market constraints; supply chain disruptions; inflation in wages, materials, parts, equipment and other costs; climate-related and other regulatory changes; geopolitical conflicts and tensions; and changes in tax laws in the United States and international markets.
Other factors that can affect our business and financial results include but are not limited to: the general global economic environment; competitive pricing pressures; customer consolidations; labor market constraints; supply chain disruptions; inflation in wages, materials, parts, equipment and other costs; climate-related and other regulatory changes; geopolitical conflicts and tensions; management’s implementation of strategic decisions; public health crises; natural disasters; and changes in tax laws in the United States and in the international markets in which we operate.
As of February 9, 2024 Average for the Year Ended December 31, 2023 2022 United States Rig Count: Land – Oil 479 527 557 Land – Natural gas and other 123 138 148 Offshore 21 21 18 623 686 723 The U.S. energy industry is primarily focused on crude oil and liquids-rich exploration and development activities in U.S. shale plays utilizing horizontal drilling and completion techniques.
As of February 14, 2025 Average for the Year Ended December 31, 2024 2023 2022 United States Rig Count: Land – Oil 467 473 527 557 Land – Natural gas and other 105 107 138 148 Offshore 16 19 21 18 588 599 686 723 The U.S. energy industry is primarily focused on crude oil and liquids-rich exploration and development activities in U.S. shale plays utilizing horizontal drilling and completion techniques.
If we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.
While we cannot predict with certainty the impact of any new or increased tariffs, or the impact of any retaliatory tariffs, if we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.
Financing Activities During 2023, net cash of $26.7 million was used in financing activities, which included the repayment of the $17.3 million in principal amount of our outstanding 2023 Notes and the repurchases of $6.9 million of our common stock.
This compares to $26.7 million of cash used in financing activities during 2023, which included the repayment of the $17.3 million principal amount outstanding under our 2023 Notes and the repurchase of $6.9 million of our common stock.
If our plans or assumptions change, or are inaccurate, we may need to raise additional capital. Our ability to obtain capital for additional projects to implement our growth strategy over the longer term will depend upon our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing.
Our ability to obtain capital for additional projects to implement our growth strategy over the longer term will depend upon our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing.
Crude oil prices and levels of demand for crude oil are likely to remain highly volatile due to numerous factors, including: geopolitical conflicts in Europe and the Middle East, along with associated international tensions; the perceived risk of a global economic recession; domestic or international crude oil production; changes in governmental rules and regulations; sanctions; the willingness of operators to invest capital in the exploration for and development of resources; use of alternative fuels; improved vehicle fuel efficiency; timing of capital investments in alternative energy sources; a more sustained movement to electric vehicles; and the potential for ongoing supply/demand imbalances.
Expectations for the longer-term price for Brent crude oil will continue to influence our customers’ spending related to global offshore and international drilling and development and, thus, a significant portion of the activity of our Offshore Manufactured Products segment. -32- Crude oil and natural gas prices and levels of demand for crude oil and natural gas are likely to remain highly volatile due to numerous factors, including: geopolitical conflicts in Europe and the Middle East, along with associated international tensions; the moderate perceived risk of a global economic recession; the levels of domestic or international crude oil and natural gas production; changes in governmental rules and regulations; sanctions; the willingness of operators to invest capital in the exploration for and development of resources; use of alternative fuels; improved vehicle fuel efficiency; timing of capital investments in alternative energy sources; a more sustained movement to electric vehicles; and the potential for ongoing supply/demand imbalances.
Revenue on these contracts is recognized when control over the product has transferred to the customer. Indicators we consider in determining when transfer of control to the customer occurs include: right to payment for the product, transfer of legal title to the customer, transfer of physical possession of the product, transfer of risk and customer acceptance of the product.
Indicators we consider in determining when transfer of control to the customer occurs include: right to payment for the product, transfer of legal title to the customer, transfer of physical possession of the product, transfer of risk and customer acceptance of the product.
Backlog in our Offshore/Manufactured Products segment totaled $333 million as of December 31, 2023 compared to $308 million as of December 31, 2022. Bookings during 2023 totaled $472 million, yielding a year-to-date book-to-bill ratio of 1.1x. Well Site Services Revenues.
Backlog in our Offshore Manufactured Products segment totaled $327 million as of December 31, 2023 compared to $300 million as of December 31, 2022. Bookings during 2023 totaled $414 million, yielding a year-to-date book-to-bill ratio of 1.1x. Completion and Production Services Revenues.
Given the long lead times associated with field development, we believe some of these deepwater projects, once approved for development, are generally less susceptible to change based on short-term fluctuations in the price of crude oil and natural gas.
Given the long lead times associated with field development, we believe some of these deepwater projects, once approved for development, are generally less susceptible to change based on short-term fluctuations in the price of crude oil and natural gas. This segment also produces a variety of products for use in industrial, military and other applications outside the traditional energy industry.
Capital availability will be affected by prevailing conditions in our industry, the global economy, the global banking and financial markets, stakeholder scrutiny of ESG matters and other factors, many of which are beyond our control. In this regard, the effect of multiple U.S. bank failures in 2023 resulted in significant disruptions to global banking and financial markets.
Capital availability will be affected by prevailing conditions in our industry, the global economy, the global banking and financial markets, stakeholder scrutiny of ESG matters and other factors, many of which are beyond our control.
U.S. drilling and completion activity and, in turn, our Well Site Services results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations.
Prior to the sale of its drilling rigs in August of 2024, the segment also provided land drilling services in the United States. U.S. drilling and completion activity and, in turn, our Completion and Production Services results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations.
If we encounter difficulty in procuring these raw materials and component products as a result of tariffs, supply chain disruptions or other events, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.
While we cannot predict with certainty the impact of any new or increased tariffs, or the impact of any retaliatory tariffs, if we encounter difficulty in procuring these raw materials and component products, or if the prices we have to pay for these products increase and we are unable to pass corresponding cost increases on to our customers, our financial position, cash flows and results of operations could be adversely affected.
Note 14, “Segments and Related Information,” to our Consolidated Financial Statements presents depreciation and amortization expense by segment. -37- Other Operating Income, Net.
Note 14, “Segments and Related Information,” to our Consolidated Financial Statements included in this Annual Report on Form 10-K presents depreciation and amortization expense by segment. -40- Other Operating Income, Net.
We issued $135.0 million aggregate principal amount of 4.75% convertible senior notes due 2026 (the “2026 Notes”) pursuant to an indenture, dated as of March 19, 2021 (the “2026 Indenture”), between us and Computershare Trust Company, National Association, as successor trustee. The 2026 Notes will mature on April 1, 2026, unless earlier repurchased, redeemed or converted.
We issued $135.0 million aggregate principal amount of the 2026 Notes pursuant to an indenture, dated as of March 19, 2021 (the “2026 Indenture”), between us and Computershare Trust Company, National Association, as successor trustee.
For companies like ours that support the energy industry, these disruptions negatively impacted the value of our common stock and may reduce our ability to access capital in the bank and capital markets or result in such capital being available on less favorable terms, which could in the future negatively affect our liquidity.
For companies like ours that support the energy industry, disruptions affecting the availability of capital have in the past and may in the future negatively impact the value of our common stock and may reduce our ability to access capital in the bank and capital markets or result in such capital being available on less favorable terms, which could negatively affect our liquidity. -43- On March 6, 2024, the SEC finalized rules relating to the disclosure of a range of climate-related information (the “Rules”).
In addition, in response to Russia’s invasion of Ukraine, -33- governments in the European Union, the United States, the United Kingdom, Switzerland and other countries have enacted sanctions against Russia and Russian interests.
In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs. In addition, in response to Russia’s invasion of Ukraine, governments in the European Union, the United States, the United Kingdom, Switzerland and other countries have enacted sanctions against Russia and Russian interests.
(2) In 2023, we recognized $0.6 million in costs associated with the defense of certain Well Site Services segment patents related to proprietary technologies. -36- Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 We reported net income for the year ended December 31, 2023 of $12.9 million, or $0.20 per share, which included facility consolidation charges of $2.5 million ($2.0 million after-tax, or $0.03 per share) and patent defense costs of $0.6 million ($0.5 million after-tax, or $0.01 per share).
These results compare to net income for the year ended December 31, 2023 of $12.9 million, or $0.20 per share, which included facility consolidation charges of $2.5 million ($2.0 million after-tax, or $0.03 per share) and patent defense costs of $0.6 million ($0.5 million after-tax, or $0.01 per share).
In addition, capital has been used to fund strategic business acquisitions, repay debt and fund share repurchases. Our primary sources of funds are cash flow from operations, proceeds from borrowings under our credit facilities and, less frequently, capital markets transactions. Operating Activities Cash flows from operations totaled $56.6 million during 2023, compared to $32.9 million provided by operations during 2022.
In addition, capital has been used to repay debt, fund share repurchases and fund strategic business acquisitions. Our primary sources of funds are cash flow from operations, asset sales and proceeds from borrowings under our ABL Facility and, less frequently, capital markets transactions.
In 2022, the exchange rate for the British pound weakened compared to the U.S. dollar, while the Brazilian real strengthened compared to the U.S. dollar. Segment Operating Results Offshore/Manufactured Products Revenues. Our Offshore/Manufactured Products segment revenues increased $59.5 million, or 16%, in 2023 compared to 2022 due primarily to increased demand for international and offshore-project driven products and services.
In 2022, the exchange rate for the British pound weakened compared to the U.S. dollar, while the Brazilian real strengthened compared to the U.S. dollar. Segment Operating Results Offshore Manufactured Products Revenues.
Our Offshore/Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore and land-based drilling and completion markets. This segment also produces a variety of products for use in industrial, military and other applications outside the traditional energy industry.
Our Offshore Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore drilling and completion markets.
Energy Information Administration (spot prices). On February 9, 2024, Brent crude oil, WTI crude oil and natural gas spot prices closed at $83.58 per barrel, $77.26 per barrel and $1.74 per MMBtu, respectively. Additionally, the U.S. drilling rig count reported on February 9, 2024 was 623 rigs – comparable to the fourth quarter 2023 average.
On February 14, 2025, Brent crude oil, WTI crude oil and natural gas spot prices closed at $75.81 per barrel, $71.05 per barrel and $4.60 per MMBtu, respectively – above the fourth quarter 2024 averages. Additionally, the U.S. drilling rig count reported on February 14, 2025 was 588 rigs – comparable to the fourth quarter 2024 average.
We recognize revenue and the related cost when, or as, the performance obligations are satisfied. The majority of our significant contracts for custom engineered products have a single performance obligation as no individual good or service is separately identifiable from other performance obligations in the contracts.
The majority of our significant contracts for custom engineered products have a single performance obligation as no individual good or service is separately identifiable from other performance obligations in the contracts. For contracts with multiple distinct performance obligations, we allocate revenue to the identified performance obligations in the contract. Our product sales terms do not include significant post-performance obligations.
Within our Offshore/Manufactured Products segment, we completed the consolidation of certain facilities in Houston, Texas during 2023 and are in the process of strategically relocating our Asian manufacturing and service operations from Singapore to Batam, Indonesia. With these consolidations, two facilities are classified as held-for-sale assets within prepaid expenses and other current assets as of December 31, 2023.
Investing Activities Within our Offshore Manufactured Products segment, we completed the consolidation of certain facilities in Houston, Texas during 2023 and strategically relocated our Asian manufacturing and service operations from Singapore to Batam, Indonesia.
Operating Income. Our Offshore/Manufactured Products segment reported operating income of $65.3 million in 2023, which included the $2.5 million in facility consolidation charges. This compares to operating income of $45.3 million in 2022, which included a $6.1 million gain recognized in connection with the settlement of outstanding litigation.
This compares to operating income of $35.7 million in 2022, which included a $6.1 million gain recognized in connection with the settlement of outstanding litigation.
This discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on our current expectations, estimates and projections about our business operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Consolidated Financial Statements and related notes appearing in “Part II Item 8 Financial Statements and Supplementary Data.” This discussion contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on our current expectations, estimates and projections about our business operations.
We plan to fund our capital expenditures with available cash, internally generated funds and, if necessary, borrowings under our ABL Facility discussed below.
Including investments associated with the continuing construction of a new facility in Batam, we expect to invest approximately $25 million in capital expenditures during 2025. We plan to fund our capital expenditures with available cash, internally generated funds and, if necessary, borrowings under our ABL Facility discussed below.
We describe our significant accounting policies more fully in Note 2, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included in this Annual Report on Form 10‑K. -42- Revenue and Cost Recognition Our revenue contracts may include one or more promises to transfer a distinct good or service to the customer, which is referred to as a “performance obligation,” and to which revenue is allocated.
We describe our significant accounting policies more fully in Note 2, “Summary of Significant Accounting Policies,” to the Consolidated Financial Statements included in this Annual Report on Form 10‑K.
Revenues from goods and services transferred to customers at a point in time accounted for approximately 34%, 35% and 35% of consolidated revenues for the years ended December 31, 2023, 2022 and 2021, respectively. The majority of our revenue recognized at a point in time is derived from short-term contracts for standard products offered by us.
Our performance obligations may be satisfied at a point in time or over time as work progresses. Revenues from goods and services transferred to customers at a point in time accounted for approximately 33%, 34% and 35% of consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
The following summarizes our more significant contractual obligations as of December 31, 2023, and the effect such obligations are expected to have on our liquidity and cash flow over the next five years (in thousands): Payments due by year Total 2024 2025 and 2026 2027 and 2028 After 2028 Contractual obligations ABL Facility (1) $ — $ — $ — $ — $ — 2026 Notes (2) 151,031 6,413 144,618 — — Other debt and finance lease obligations 3,092 627 1,092 1,121 252 Operating lease liabilities (3) 28,235 7,860 11,333 5,813 3,229 Purchase obligations (4) 110,550 108,746 1,804 — — Total contractual cash obligations $ 292,908 $ 123,646 $ 158,847 $ 6,934 $ 3,481 ____________________ (1) As of December 31, 2023, we had no borrowings outstanding under our ABL Facility.
The following summarizes our more significant contractual obligations as of December 31, 2024, and the effect such obligations are expected to have on our liquidity and cash flow over the next five years (in thousands): Payments due by year Total 2025 2026 and 2027 2028 and 2029 After 2029 Contractual obligations ABL Facility (1) $ — $ — $ — $ — $ — 2026 Notes (2) 132,299 5,866 126,433 — — Other debt and finance lease obligations 2,782 633 1,193 704 252 Operating lease liabilities (3) 29,352 8,797 12,519 6,707 1,329 Purchase obligations (4) 93,202 89,633 3,569 — — Total contractual cash obligations $ 257,635 $ 104,929 $ 143,714 $ 7,411 $ 1,581 ____________________ (1) As of December 31, 2024, we had no borrowings outstanding under our ABL Facility.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of products.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from a customer, are excluded from revenue.
For 2023, our contractual cash interest expense was $7.8 million, or approximately 5% of the average principal balance of debt outstanding. -40- We believe that cash on-hand, cash flow from operations and borrowing capacity available under our ABL Facility will be sufficient to meet our liquidity needs in the coming twelve months.
We believe that cash on-hand, cash flow from operations and borrowing capacity available under our ABL Facility will be sufficient to meet our liquidity needs in the coming twelve months. If our plans or assumptions change, or are inaccurate, we may need to raise additional capital.
Backlog reported by our Offshore/Manufactured Products segment increased to $333 million as of December 31, 2023 from $308 million as of December 31, 2022. Bookings totaled $472 million in 2023, yielding a book-to-bill ratio of 1.1x. The following table sets forth backlog as of the dates indicated (in millions).
Backlog reported by our Offshore Manufactured Products segment decreased to $311 million as of December 31, 2024 from $327 million as of December 31, 2023. Bookings totaled $392 million in 2024, yielding an annual book-to-bill ratio of 1.0x in 2024. This compares to total bookings of $414 million in 2023 and a book-to-bill ratio of 1.1x.
With the decline in operating results reported by the Downhole Technologies segment in 2023, we assessed the carrying value of the segment’s long-lived tangible and intangible assets by comparing management’s estimates of undiscounted future cash flows to the carrying value of the assets. This assessment indicated that the segment’s long-lived assets were recoverable.
We assessed the carrying value of the long-lived assets of this group by comparing our estimates of undiscounted future cash flows to the carrying value of the assets. This assessment indicated that the asset group’s long-lived assets were recoverable. Accordingly, no additional long-lived asset impairment losses were recorded in 2024.
As of December 31, 2023, we had no borrowings outstanding under our ABL Facility, $135.0 million principal amount of our 2026 Notes (as defined below) outstanding and other debt of $3.1 million. Our reported interest expense included amortization of deferred financing costs of $1.8 million during 2023.
As of December 31, 2024, we had cash and cash equivalents totaling $65.4 million, which compared to $47.1 million as of December 31, 2023. As of December 31, 2024, we had no borrowings outstanding under our ABL Facility, $123.5 million principal amount of our 2026 Notes outstanding and other debt of $2.8 million.
Supplemental financial information by operating segment for the years ended December 31, 2023 and 2022 is summarized below (in thousands): Year Ended December 31, 2023 2022 Variance Revenues: Offshore/Manufactured Products Project-driven: Products $ 189,739 $ 158,040 $ 31,699 Services 112,742 98,968 13,774 302,481 257,008 45,473 Military and other products 32,596 32,563 33 Short-cycle products 106,186 92,152 14,034 441,263 381,723 59,540 Well Site Services 242,633 231,189 11,444 Downhole Technologies 98,387 124,794 (26,407) $ 782,283 $ 737,706 $ 44,577 Operating income (loss): Offshore/Manufactured Products (1) $ 65,299 $ 45,268 $ 20,031 Well Site Services (2) 13,881 4,865 9,016 Downhole Technologies (14,884) (6,669) (8,215) Corporate (41,132) (40,559) (573) $ 23,164 $ 2,905 $ 20,259 _______________ (1) During 2023, we recognized facility consolidation charges of $2.5 million associated with the Offshore/Manufactured Products segment’s ongoing consolidation and relocation of certain manufacturing and service locations.
Supplemental financial information by operating segment for the years ended December 31, 2024, 2023 and 2022 is summarized below (in thousands): Variance 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenues: Offshore Manufactured Products Project-driven: Products $ 232,867 $ 235,080 $ 189,842 $ (2,213) $ 45,238 Services 123,906 112,742 98,968 11,164 13,774 356,773 347,822 288,810 8,951 59,012 Military and other products 41,127 33,889 33,560 7,238 329 397,900 381,711 322,370 16,189 59,341 Completion and Production Services 163,902 242,633 231,189 (78,731) 11,444 Downhole Technologies 130,786 157,939 184,147 (27,153) (26,208) $ 692,588 $ 782,283 $ 737,706 $ (89,695) $ 44,577 Operating income (loss): Offshore Manufactured Products (1) $ 65,279 $ 56,289 $ 35,697 $ 8,990 $ 20,592 Completion and Production Services (2) (23,225) 13,881 4,865 (37,106) 9,016 Downhole Technologies (3) (20,904) (5,874) 2,902 (15,030) (8,776) Corporate (4) (22,839) (41,132) (40,559) 18,293 (573) $ (1,689) $ 23,164 $ 2,905 $ (24,853) $ 20,259 _______________ (1) During 2024 and 2023 , we recognized facility consolidation and other charges of $3.4 million and $2.5 million, respectively, within the Offshore Manufactured Products segment, associated primarily with the segment’s consolidation and relocation of certain manufacturing and service locations.
In response to the U.S. tariffs on steel and aluminum, the European Union and several other countries, including Canada and China, have threatened and/or imposed retaliatory tariffs. The effect of these tariffs and the application and interpretation of existing trade agreements and customs, anti-dumping and countervailing duty regulations continue to evolve, and we continue to monitor these matters.
In early 2025, the Trump Administration, after taking office, proposed increases to existing U.S. tariffs as well as the imposition of certain new tariffs. The effect of these sanctions and tariffs and the application and interpretation of existing trade agreements and customs, anti-dumping and countervailing duty regulations continue to evolve, and we continue to monitor these matters.
On February 16, 2023, the Board authorized $25.0 million for the repurchases of our common stock, par value $0.01 per share, through February 2025. Subject to applicable securities laws, such purchases will be at such times and in such amounts as we deem appropriate. As of December 31, 2023, $6.9 million of share repurchases have been made under this authorization.
Subject to applicable securities laws, such purchases will be at such times and in such amounts as we deem appropriate. During the year ended December 31, 2024, $14.2 million in repurchases of common stock were made under these programs. The amount remaining under our new share repurchase authorization as of December 31, 2024 was $41.3 million. Revolving Credit Facility.
The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the years ended December 31, 2023 and 2022 (in thousands): Offshore/ Manufactured Products Well Site Services Downhole Technologies Total Year Ended December 31 2023 2022 2023 2022 2023 2022 2023 2022 Project-driven: Products $ 189,739 $ 158,040 $ — $ — $ — $ — $ 189,739 $ 158,040 Services 112,742 98,968 — — — — 112,742 98,968 Total project-driven 302,481 257,008 — — — — 302,481 257,008 Military and other products 32,596 32,563 — — — — 32,596 32,563 Short-cycle: Products 106,186 92,152 — — 90,029 102,808 196,215 194,960 Services — — 242,633 231,189 8,358 21,986 250,991 253,175 Total short-cycle 106,186 92,152 242,633 231,189 98,387 124,794 447,206 448,135 $ 441,263 $ 381,723 $ 242,633 $ 231,189 $ 98,387 $ 124,794 $ 782,283 $ 737,706 Percentage of total revenue by type - Products 74 % 74 % — % — % 92 % 82 % 54 % 52 % Services 26 % 26 % 100 % 100 % 8 % 18 % 46 % 48 % Cost of Revenues (exclusive of Depreciation and Amortization Expense).
The following table provides supplemental disaggregated revenue from contracts with customers by operating segment for the years ended December 31, 2023 and 2022 (in thousands): Offshore Manufactured Products Completion and Production Services Downhole Technologies Total Year Ended December 31 2023 2022 2023 2022 2023 2022 2023 2022 Project-driven: Products $ 235,080 $ 189,842 $ — $ — $ — $ — $ 235,080 $ 189,842 Services 112,742 98,968 — — — — 112,742 98,968 Total project-driven 347,822 288,810 — — — — 347,822 288,810 Military and other products 33,889 33,560 — — — — 33,889 33,560 Short-cycle: Products — — — — 149,581 162,161 149,581 162,161 Services — — 242,633 231,189 8,358 21,986 250,991 253,175 Total short-cycle — — 242,633 231,189 157,939 184,147 400,572 415,336 $ 381,711 $ 322,370 $ 242,633 $ 231,189 $ 157,939 $ 184,147 $ 782,283 $ 737,706 By destination: Offshore and international $ 346,657 $ 297,472 $ 48,509 $ 46,977 $ 30,948 $ 31,277 $ 426,114 $ 375,726 U.S. land 35,054 24,898 194,124 184,212 126,991 152,870 356,169 361,980 $ 381,711 $ 322,370 $ 242,633 $ 231,189 $ 157,939 $ 184,147 $ 782,283 $ 737,706 Cost of Revenues (exclusive of Depreciation and Amortization Expense).
Backlog as of Year March 31 June 30 September 30 December 31 2023 $ 326 $ 338 $ 348 $ 333 2022 265 241 258 308 2021 226 214 249 260 Our Well Site Services segment provides completion services and, to a much lesser extent, land drilling services, in the United States (including the Gulf of Mexico) and internationally.
Backlog as of Year March 31 June 30 September 30 December 31 2024 $ 305 $ 300 $ 313 $ 311 2023 316 328 341 327 2022 255 232 248 300 Our Completion and Production Services segment provides completion and production services in the United States (including the Gulf of America) and internationally.
(2) During 2023, we recognized facility consolidation charges of $2.5 million associated with the Offshore/Manufactured Products segment’s ongoing consolidation and relocation of certain manufacturing and service locations.
Other operating income, net for 2023 included gains on disposals of assets totaling $4.1 million, partially offset by charges of $2.5 million recognized in connection with our ongoing consolidation of certain manufacturing and service locations within our Offshore Manufactured Products segment. Operating Income (Loss).
This compares to $20.3 million of cash used in financing activities during 2022, which included a cash payment of $10.0 million related to the settlement of a promissory note to the seller of GEODynamics, Inc. (discussed below) and the purchase of $8.7 million principal amount of our outstanding 2023 Notes.
Financing Activities During 2024, net cash of $29.5 million was used in financing activities, which included the repurchase of $14.2 million of our common stock and the purchase of $11.5 million principal amount of our outstanding 2026 Notes for $10.8 million in cash.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur accumulated other comprehensive loss decreased $9.0 million from $78.9 million as of December 31, 2022 to $70.0 million as of December 31, 2023, due to changes in currency exchange rates. During the year ended December 31, 2023, the exchange rates for the British pound and the Brazilian real strengthened by 6% and 8%, respectively, compared to the U.S. dollar.
Biggest changeOur accumulated other comprehensive loss increased $9.5 million from $70.0 million as of December 31, 2023 to $79.5 million as of December 31, 2024, due to changes in currency exchange rates. During the year ended December 31, 2024, the exchange rates for the British pound and the Brazilian real weakened by 1% and 22%, respectively, compared to the U.S. dollar.
In order to mitigate the effects of foreign currency exchange rate risks in areas outside of the United States (primarily in our Offshore/Manufactured Products segment), we generally pay a portion of our expenses in local currencies and a substantial portion of our contracts provide for collections from customers in U.S. dollars.
In order to mitigate the effects of foreign currency exchange rate risks in areas outside of the United States (primarily in our Offshore Manufactured Products segment), we generally pay a portion of our expenses in local currencies and a substantial portion of our -47- contracts provide for collections from customers in U.S. dollars.
As of December 31, 2023, we had no floating-rate obligations outstanding under our ABL Facility. The use of floating-rate obligations would expose us to the risk of increased interest expense in the event of increases in short-term interest rates. Foreign Currency Exchange Rate Risk.
As of December 31, 2024, we had no floating-rate obligations outstanding under our ABL Facility. The use of floating-rate obligations would expose us to the risk of increased interest expense in the event of increases in short-term interest rates. Foreign Currency Exchange Rate Risk.
During 2023, our reported foreign currency exchange losses were $0.8 million and are included in “other operating income, net” in the consolidated statements of operations.
During 2024, our reported foreign currency exchange losses were $0.2 million and are included in “other operating income, net” in the consolidated statements of operations.

Other OIS 10-K year-over-year comparisons