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What changed in Ranger Energy Services, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Ranger Energy Services, Inc.'s 2022 and 2023 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 2023 report.

+290 added−363 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in Ranger Energy Services, Inc.'s 2023 10-K

290 paragraphs added · 363 removed · 222 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+6 added−40 removed79 unchanged
Biggest changeLimitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities. Additionally, the Securities and Exchange Commission recently proposed new rules relating to the disclosure of a range of climate-related risks.
Biggest changeThere is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.
Our well completion support services are utilized subsequent to hydraulic fracturing operations but prior to placing a well into production, and primarily include unconventional well completion operations, including milling out composite plugs, frac sand or other downhole debris or obstructions that were 2 introduced in the well as part of the completion process and installing production tubing and other permanent downhole equipment necessary to facilitate production. • Workovers .
Our well completion support services are utilized subsequent to hydraulic fracturing operations but prior to placing a well into production, and primarily include unconventional well completion operations, including milling out composite plugs, frac sand or other downhole debris or obstructions that were introduced in the well as part of the completion process and installing production tubing and other permanent downhole equipment necessary to facilitate production. 2 • Workovers .
Pursuant to rules issued by the EPA, individual states can have delegated authority to administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. In the course of our operations, we generate industrial wastes, such as paint wastes, waste solvents and oils that are regulated as hazardous materials.
Pursuant to rules issued by the EPA, individual states can have delegated 6 authority to administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. In the course of our operations, we generate industrial wastes, such as paint wastes, waste solvents and oils that are regulated as hazardous materials.
These developments could result in additional regulation and restrictions on the use of injection wells by our customers to dispose of flowback and produced water and certain other oilfield fluids. Increased regulation and attention given to induced seismicity also could lead to greater opposition to, and litigation concerning, oil and natural gas activities utilizing injection wells for waste disposal.
These developments could result in additional regulation and restrictions on the use of injection wells by our customers to dispose of flowback and 7 produced water and certain other oilfield fluids. Increased regulation and attention given to induced seismicity also could lead to greater opposition to, and litigation concerning, oil and natural gas activities utilizing injection wells for waste disposal.
Moreover, it is possible that other developments, such as the adoption of stricter environmental laws, regulations and enforcement policies, could result in additional costs or liabilities that we cannot currently quantify. State and Local Regulation Our operations, and the operations of our customers, are subject to a variety of state and local environmental review and permitting requirements.
Moreover, it is possible that other developments, such as the adoption of stricter environmental laws, regulations and enforcement policies, could result in additional costs or liabilities that we cannot currently quantify. 9 State and Local Regulation Our operations, and the operations of our customers, are subject to a variety of state and local environmental review and permitting requirements.
One such concern relates to recent seismic events near underground disposal wells used for the disposal by injection of flowback and produced water or certain other oilfield fluids resulting from oil and natural gas activities. When caused by human activity, such events are called induced seismicity.
One such concern relates to seismic events near underground disposal wells used for the disposal by injection of flowback and produced water or certain other oilfield fluids resulting from oil and natural gas activities. When caused by human activity, such events are called induced seismicity.
During periods of heavy snow, ice, wind or rain, we may be unable to move our equipment between locations, thereby reducing our ability to provide services and generate revenue, or we could suffer weather-related damage to our facilities and equipment resulting in delays in operations.
During periods of heavy snow, ice, wind or rain, we may be unable to operate or move our equipment between locations, thereby reducing our ability to provide services and generate revenue, or we could suffer weather-related damage to our facilities and equipment resulting in delays in operations.
Under the OPA, responsible parties including owners and operators of onshore facilities 7 may be held strictly liable for oil cleanup costs and natural resource damages as well as a variety of public and private damages that may result from oil spills.
Under the OPA, responsible parties including owners and operators of onshore facilities may be held strictly liable for oil cleanup costs and natural resource damages as well as a variety of public and private damages that may result from oil spills.
Moreover, our business could be materially affected if these or other similar requirements increase the cost of doing business for us and our customers, or reduce the demand for the oil and natural gas our customers produce, and thus have an adverse effect on the demand for our services.
Our business could be materially affected if these or other similar requirements increase the cost of doing business for us and our customers, or reduce the demand for the oil and natural gas our customers produce, and thus have an adverse effect on the demand for our services.
The trucking industry is subject to possible regulatory and legislative changes that may affect the economics of the industry by requiring changes in operating practices or by changing the demand for common or contract carrier services or the cost of 11 providing truckload services.
The trucking industry is subject to possible regulatory and legislative changes that may affect the economics of the industry by requiring changes in operating practices or by changing the demand for common or contract carrier services or the cost of providing truckload services.
Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services include equipment rentals, snubbing and coil tubing, plug and abandonment, logistics hauling, and processing solutions.
Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services include equipment rentals, plug and abandonment, logistics, snubbing and coil tubing, and processing solutions.
In horizontal wellbores, the perforating guns are lowered into the vertical portion of the well and are then pumped out to the end of the 3 horizontal wellbore. Then the perforating guns are detonated to perforate the casing and they are retrieved out of the well.
In horizontal wellbores, the perforating guns are lowered into the vertical portion of the well and are then pumped out to the end of the horizontal wellbore. Then the perforating guns are detonated to perforate the casing and they are retrieved out of the well.
Our pumping services can also be used in conjunction with our high-spec rigs or coiled tubing units to circulate composite frac plug cuttings, frac sand, and other debris out of the wellbore during completion operations. Ranger provides a range of high-pressure mobile pumps including ones that meet tier four emissions standards.
Our pumping services can also be used in conjunction with our high specification rigs or coiled tubing units to circulate composite frac plug cuttings, frac sand, and other debris out of the wellbore during completion operations. Ranger provides a range of high-pressure mobile pumps including ones that meet tier four emissions standards.
Our high‑spec well service rigs are designed to support U.S. horizontal well demands. Specifically, our high-spec rig services consist of the following: • Well completion support .
Our high‑spec well service rigs are designed to support U.S. horizontal well demands. Specifically, our high specification rig services consist of the following: • Well completion support .
Litigation risks are also increasing, as a number of parties have sought to bring suit against certain oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change or alleging that 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. 9 There are also increasing financial risks for companies in the fossil fuel sector as shareholders currently invested in fossil fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel related sectors.
Litigation risks are also increasing, as a number of parties have sought to bring suit against certain oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change or alleging that 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. 8 There are also increasing financial risks for companies in the fossil fuel sector as stockholders currently invested in fossil fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel related sectors.
(2) The mast ratings of our high-spec well service rigs complement their high operating HP and tall mast heights by allowing such rigs to safely support the higher weights associated with the long tubing strings used in long-lateral well completion operations and is measured in pounds.
(2) The mast ratings of our high specification well service rigs complement their high operating HP and tall mast heights by allowing such rigs to safely support the higher weights associated with the long tubing strings used in long-lateral well completion operations and is measured in pounds.
Workover operations include major subsurface repairs such as the repair or replacement of well casing, recovery or replacement of tubing and removal of foreign objects from the wellbore. All of our high‑spec well service rigs are designed to perform complex workover operations. • Well maintenance .
Workover operations include major subsurface repairs such as the repair or replacement of well casing, recovery or replacement of tubing and removal of foreign objects from the wellbore. All of our high specification well service rigs are designed to perform complex workover operations. • Well maintenance .
Provides high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well. • Wireline Services . Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production and pump down lines of business. • Processing Solutions and Ancillary Services .
Provides high specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well. • Wireline Services . Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production and pump down lines of business. • Processing Solutions and Ancillary Services .
Our decommissioning services primarily include plugging and abandonment, in which our well service rigs and wireline and cementing equipment are used to prepare non‑economic oil and natural gas wells to be permanently sealed or temporarily shut in.
Our decommissioning services primarily include plugging and abandonment, in which our well service rigs, wireline and cementing equipment are used to prepare oil and natural gas wells to be permanently sealed or temporarily shut in.
Our well service‑related equipment rentals are typically used in conjunction with the services provided by our high-spec well services. • Coil Tubing . Our coiled tubing services utilize coiled tubing units to perform well intervention and other production services on a well by injecting small diameter steel pipe, unwound from a reel, into an existing production string.
Our well service‑related equipment rentals are typically used in conjunction with the services provided by our high specification well services. • Coil Tubing . Our coiled tubing services utilize coiled tubing units to perform well intervention and other production and completion services on a well by injecting small diameter steel pipe, unwound from a reel, into an existing production string.
Our wireline services involve the use of wireline trucks equipped with a spool of cable that is unwound and lowered into oil and natural gas wells to convey specialized tools or equipment primarily for well completion, but also for well intervention, pipe recovery, and plugging and abandonment purposes. Our wireline services consist of the following: • Production Services .
Our wireline services involve the use of wireline trucks equipped with a spool of cable that is unwound and lowered into oil and natural gas wells to convey specialized tools or equipment for well completion, intervention, pipe recovery, and plugging and abandonment purposes. Our wireline services consist of the following: • Production Services .
Hydraulic fracturing typically is regulated by state oil and natural gas commissions, however the EPA has asserted federal regulatory authority pursuant to the Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuel and issued permitting guidance in February 2014 that applies to such activities.
Hydraulic fracturing typically is regulated by state oil and natural gas commissions, however the EPA has asserted federal regulatory authority pursuant to the Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuel and issued permitting guidance that applies to such activities.
Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services, its subsidiaries, and Torrent Services’ business and consolidates the financial results of Ranger Services, its subsidiaries, and Torrent Services. 1 The following diagram indicates our ownership structure as of February 28, 2023: _________________________ (1) CSL and Bayou Well Holdings Company, LLC (collectively the “Legacy Owners”) own the equity interests, where CSL holds a majority.
Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services, its subsidiaries, and Torrent Services’ business and consolidates the financial results of Ranger Services, its subsidiaries, and Torrent Services. 1 The following diagram indicates our ownership structure as of February 29, 2024: _________________________ (1) CSL and Bayou Well Holdings Company, LLC (collectively the “Legacy Owners”) own the equity interests, where CSL holds a majority.
Suppliers Our internal supply chain team manages sourcing and logistics to ensure flexibility and continuity of supply in a cost- effective manner across all areas of our operations. We have built long‑term relationships with multiple industry leading suppliers of materials and equipment. We purchase a wide variety of materials, parts and components that are manufactured and supplied for our operations.
Suppliers Our internal supply chain personnel manage sourcing and logistics to ensure flexibility and continuity of supply in a cost- effective manner across all areas of our operations. We have built long‑term relationships with multiple industry leading suppliers of materials and equipment. We purchase a wide variety of materials, parts and components that are manufactured and supplied for our operations.
Our service offerings consist of well completion support, workover, well maintenance, wireline, fluid management, and other complementary services, as well as well installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows: • High Specification Rigs .
Our service offerings consist of well completion support, well workover and maintenance, wireline associated services, and other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows: • High Specification Rigs .
We have a fleet of 67 wireline units and 13 high-pressure pump trucks that are utilized in our wireline services. Our wireline services utilize high-pressure pump trucks to pump fracturing plugs and perforating guns into extended reach horizontal wells for pump down perforating completion purposes. From time-to-time our wireline units will be used in conjunction with our Ancillary Services.
We have a fleet of 66 wireline units and 29 high-pressure pump trucks that are utilized in our wireline services. Our wireline services utilize high-pressure pump trucks to pump fracturing plugs and perforating guns into extended reach horizontal wells for pump down perforating completion purposes. From time-to-time our wireline units will be used in conjunction with our Ancillary Services.
Decommissioning work is typically less sensitive to oil and natural gas prices than our other well service rig operations as a result of decommissioning obligations imposed by state regulations. • Snubbing Services . Our snubbing services consist of using our snubbing units together with our well service rigs in order to perform well completion, workover or maintenance activities.
Decommissioning work is typically less sensitive to oil and natural gas prices than our service lines as a result of decommissioning obligations imposed by state regulations. • Snubbing Services . Our snubbing services consist of using our snubbing units together with our well service rigs in order to perform well completion, workover or maintenance activities.
No other customers represented more than 10% of our consolidated revenue for each of the years ended December 31, 2022 and 2021. We have a diverse portfolio of customers which included approximately 350 distinct customers that we served during 2022.
No other customers represented more than 10% of our consolidated revenue for each of the years ended December 31, 2023 and 2022. We have a diverse portfolio of customers which included approximately 190 distinct customers that we served during 2023.
We believe our field sales personnel understand the region‑specific issues and customer operating procedures and, therefore, can more effectively target marketing activities. Our sales representatives work closely with our managers and field sales personnel to target market opportunities. 5 Significant Customers During the year ended December 31, 2022, one customer accounted for approximately 10% of our consolidated revenue.
We believe our field sales personnel understand the region‑specific issues and customer operating procedures and, therefore, can more effectively target marketing activities. Our sales representatives work closely with our managers and field sales personnel to target market opportunities. Significant Customers During the year ended December 31, 2023, two customers accounted for approximately 10% each of our consolidated revenue.
In conjunction with the initial public offering of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), which closed on August 16, 2017 (the “Offering”), and the corporate reorganization we underwent in connection with the Offering, we became a holding company, the sole material assets of which consist of membership interests in RNGR Energy Services, LLC (“Ranger LLC”).
In conjunction with the initial public offering of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), which closed on August 16, 2017 (the “Offering”), and the corporate reorganization Ranger Inc. underwent in connection with the Offering, Ranger Inc. became a holding company, and its sole material assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”).
States may, from time to time, develop and implement plans directing certain wells where seismic incidents have occurred to restrict or suspend disposal well operations. In addition, ongoing lawsuits allege that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal.
States may, from time to time, develop and implement plans directing certain wells where seismic incidents have occurred to restrict or suspend disposal well operations. In addition, a number of lawsuits have alleged that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal.
Processing Solutions and Ancillary Services Our processing solutions and ancillary services, which are described below, are utilized in conjunction with our High Spec Rigs and Wireline Services to establish and enhance the productive life of a well.
Processing Solutions and Ancillary Services Our processing solutions and ancillary services, which are described below, can be utilized exclusively or in conjunction with our High Specification Rigs and Wireline Services to establish and enhance the productive life of a well.
Prior periods have been revised to conform to the current presentation. High Specification Rigs Our High Specification Rig segment provides high-spec well and complementary equipment and services to facilitate operations throughout the lifecycle of a well. We provide services to E&P companies, particularly to those operating in unconventional oil and natural gas reservoirs and requiring technically and operationally advanced services.
High Specification Rigs Our High Specification Rig segment provides high specification well and complementary equipment and services to facilitate operations throughout the lifecycle of a well. We provide services to E&P companies, particularly to those operating in unconventional oil and natural gas reservoirs and requiring technically and operationally advanced services.
For further information related to our services and financial results of our operating segments, see “Part I, Item 1. Business—Our Segments,” “Part II, Item 7. Management Discussion and Analysis—Operating Results,” and “Part II, Item 8. Financial Statements and Supplementary Data—Note 17 — Segment Reporting.” Organization Ranger Inc. was incorporated as a Delaware corporation in February 2017.
For further information related to our services and financial results of our operating segments, see “Part I, Item 1. Business—Our Segments” and “Part II, Item 7. Management Discussion and Analysis—Operating Results.” Organization Ranger Inc. was incorporated as a Delaware corporation in February 2017.
We currently have a fleet of 428 well service rigs, which we believe to be among the newest and most advanced in the industry and are considered to be high-spec rigs, with high operating horsepower (“HP”) (450 HP or greater) and tall mast heights (102 feet or higher).
We currently have a fleet of 402 well service rigs, which we believe to be among the newest and most advanced in the industry and are considered to be high specification rigs, with higher operating horsepower (“HP”) (450 HP or greater) and taller mast heights (102 feet or higher) than traditional well servicing rigs.
Texas has specific permitting and review processes for oilfield service operations, and state agencies may impose different or additional monitoring or mitigation requirements than federal agencies. The development of new sites and our existing operations also are subject to a variety of local environmental and regulatory requirements, including land use, zoning, building and transportation requirements.
State agencies may impose different or additional monitoring or mitigation requirements than federal agencies. The development of new sites and our existing operations also are subject to a variety of local environmental and regulatory requirements, including land use, zoning, building and transportation requirements.
HP Rating (1) Mast Height Mast Rating (2) Number of High-Spec Rigs 550 — 600 112’ — 117’ 250,000 — 300,000’ 97 500 104’ — 108’ 240,000 — 250,000’ 255 450 — 475 102’ — 104’ 200,000 — 250,000’ 76 Total High-Spec Rigs 428 ______________________ (1) Per manufacturer or historical records obtained through acquisitions.
HP Rating (1) Mast Height Mast Rating (2) Number of High Specification Rigs 550 — 600 112’ — 117’ 250,000 — 300,000’ 94 500 104’ — 108’ 240,000 — 250,000’ 234 450 — 475 102’ — 104’ 200,000 — 250,000’ 74 Total High Specification Rigs 402 ______________________ (1) Per manufacturer or historical records obtained through acquisitions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” and “Part II, Item 8. Financial Statements and Supplementary Data — Note 17 — Segment Reporting.” Competition We provide services in various geographic regions across the United States, which are highly competitive. Our competitors include many large and small oilfield service providers.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” 4 Competition We provide services in various geographic regions across the United States, which are highly competitive. Our competitors include many large and small oilfield service providers.
During the year ended December 31, 2021, two customers accounted for approximately 25% of our consolidated revenue. For the years ended December 31, 2022 and 2021, our top five revenue-generating customers represented approximately 36% and 42% of our consolidated revenue, respectively.
During the year ended December 31, 2022, one customer accounted for approximately 10% of our consolidated revenue. For the years ended December 31, 2023 and 2022, our top five revenue-generating customers represented approximately 43% and 36% of our consolidated revenue, respectively.
In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors.
To the extent this rule is finalized, we could incur increased costs related to the assessment and disclosure of climate-related risks. In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon intensive sectors.
Item 1. Business Overview Ranger Energy Services, Inc. (the “Company,” “Ranger,” “we,” “us” or “our”) is a provider of onshore high specification (“high-spec”) well service rigs, wireline services, and additional processing solutions and ancillary services in the United States.
Item 1. Business Overview Ranger Energy Services, Inc. (“Ranger, Inc.,” “Ranger,” “we,” “us,” “our” or the “Company”) is a provider of onshore high specification well service rigs, wireline services, and additional processing solutions and ancillary services in the United States (“U.S.”). The Company provides an extensive range of well site services to leading U.S.
In addition, various state and local governments have implemented, or are considering, increased regulatory oversight of hydraulic fracturing through additional permit requirements, operational restrictions, disclosure requirements, well construction and temporary or 10 permanent bans on hydraulic fracturing in certain areas.
However, any regulations that ban or effectively ban such operations may adversely impact demand for our products and services. In addition, various state and local governments have implemented, or are considering, increased regulatory oversight of hydraulic fracturing through additional permit requirements, operational restrictions, disclosure requirements, well construction and temporary or permanent bans on hydraulic fracturing in certain areas.
The EPA also finalized rules in June 2016 that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly-owned wastewater treatment plants. In addition, the EPA released its final report on the potential impacts of hydraulic fracturing on drinking water resources in December 2016.
The EPA also finalized rules that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly-owned wastewater treatment plants. In addition, the EPA released its final report on the potential impacts of hydraulic fracturing on drinking water resources which concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources under certain limited circumstances.
Because of the foregoing, methane requirements on federal land remain uncertain at this time. Compliance with this and other air pollution control and permitting requirements has the potential to delay the development of oil and natural gas projects and increase costs for us and our customers.
Moreover, compliance with air pollution control and permitting requirements has the potential to delay the development of oil and natural gas projects and increase costs for us and our customers.
Our customers may also incur increased costs or delays or restrictions in permitting or operating activities as a result of more stringent environmental laws and regulations, which may result in a curtailment of exploration, development or production activities that would reduce the demand for our services. 6 Worker Health and Safety We are subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”), and comparable state statutes that regulate the protection of the health and safety of workers.
Our customers may also incur increased costs or delays or restrictions in permitting or operating activities as a result of more stringent environmental laws and regulations, which may result in a curtailment of exploration, development or production activities that would reduce the demand for our services.
In turn, the level of drilling depends largely on the current and anticipated economics of new well completions. Global supply and demand for oil and the domestic supply and demand for natural gas are critical in assessing industry outlook. Demand for oil and natural gas is cyclical and subject to large, rapid fluctuations.
Global supply and demand for oil and the domestic supply and demand for natural gas are critical in assessing industry outlook. Demand for oil and natural gas is cyclical and subject to large, rapid fluctuations.
Our Processing Solutions services engage in the rental, installation, commissioning, start‑up, operation and maintenance of Mechanical Refrigeration Units (“MRU”), Nitrogen Gas Liquid (“NGL”) stabilizer units, NGL storage units and related equipment.
Our snubbing services enable operators to safely run or remove pipe and other associated downhole tools into pressurized or highly deviated wellbores. • Processing Solutions . Our Processing Solutions services engage in the rental, installation, commissioning, start‑up, operation and maintenance of Mechanical Refrigeration Units (“MRU”), Nitrogen Gas Liquid (“NGL”) stabilizer units, NGL storage units and related equipment.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, President Biden has highlighted addressing climate change as a priority of his administration, which includes certain initiatives for climate change legislation to be proposed and passed into law. Moreover, following the U.S.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, there are a number of proposed federal initiatives for climate change legislation that may be passed into law. Moreover, following the U.S.
Some states have state laws similar to major federal environmental laws and thus our operations are also subject to state requirements that may be more stringent than those imposed under federal law. For example, initiatives have been underway in the State of Colorado to limit or ban crude oil and natural gas exploration, development or operations.
Some states have state laws similar to major federal environmental laws and thus our operations are also subject to state requirements that may be more stringent than those imposed under federal law.
We are currently assessing this rule but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rule. To the extent this rule is finalized as proposed, we could incur increased costs related to the assessment and disclosure of climate-related risks.
Additionally, the Securities and Exchange Commission (the “SEC”) has proposed new rules relating to the disclosure of a range of climate-related risks. We are currently assessing this proposed rule but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the proposed rule.
Our pumping services can be used during intervention operations for pressure testing casing, tubing and plugs, for injecting and pumping acid into the reservoir to stimulate production.
Combining Ranger’s wireline perforating and pump down services maximizes operational efficiency through integrated safety, quality and communications systems. Our pumping services can be used during intervention operations for pressure testing casing, tubing and plugs, or for injecting and pumping acid into the reservoir to stimulate production.
Our largest competitors in the current market include RCP, Inc., ProPetro Holding Corp., Select Energy Services, Inc., Oil States International, Inc., KLX Energy Services Holdings, Inc., Dril-Quip, Inc., Mammoth Energy Services, Inc. and Solaris Oilfield Infrastructure, Inc. In addition, our industry is highly fragmented and we compete regionally with a significant number of smaller service providers.
Our largest competitors in the current market include RPC, Inc., ProPetro Holding Corp., Select Water Solutions, Inc., Oil States International, Inc., KLX Energy Services Holdings, Inc., Dril-Quip, Inc., Mammoth Energy Services, Inc., Solaris Oilfield Infrastructure, Inc., and NINE Energy Service, Inc.
Securities Exchange Act of 1934 are available free of charge at our website at http://www.rangerenergy.com, as soon as reasonably practicable after having been electronically filed or furnished to the U.S. Securities and Exchange Commission (the “SEC”).
Securities Exchange Act of 1934 are available free of charge at our website at www.rangerenergy.com, as soon as reasonably practicable after having been electronically filed or furnished with the U.S. SEC. The SEC maintains an internet site that contains reports, proxy, information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov, including us. 10
Human Capital We combine our services offerings with a highly skilled and experienced workforce, enabling us to consistently deliver exceptional service while maintaining high health, safety and environmental standards. We invest in attracting, developing and retaining talented personnel and believe we have good relationships with our employees.
We have generally been able to obtain the equipment, parts and supplies necessary to support our operations on a timely basis. 5 Human Capital We combine our services offerings with a highly skilled and experienced workforce, enabling us to consistently deliver exceptional service while maintaining high health, safety and environmental standards.
The federal regulation of methane emissions from oil and gas facilities has been subject to substantially controversy in recent years; for more information, please see our regulatory disclosure titled “Air Emissions.” Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.
Department of Transportation (“DOT”), implement GHG emissions limits on vehicles manufactured for operation in the United States. Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.
We seek to differentiate ourselves from our competitors by striving to deliver the highest-quality services and equipment possible, coupled with superior execution and operating efficiency in a safe working environment. Cyclical Nature of Industry We operate in a highly cyclical industry and the key factor driving demand for our services is the level of drilling activity by E&P companies.
Additionally, projects are often awarded on a bid basis, which tends to create a highly competitive environment. We seek to differentiate ourselves from our competitors by striving to deliver the highest-quality services and equipment possible, coupled with superior execution and operating efficiency in a safe working environment.
We are not dependent on any single source of supply for those parts, supplies or materials. We have generally been able to obtain the equipment, parts and supplies necessary to support our operations on a timely basis.
We are not dependent on any single source of supply for those parts, supplies or materials.
We believe that the principal competitive factors in the markets we serve are technical expertise, equipment capacity, work force competency, efficiency, safety record, reputation, experience and price. Additionally, projects are often awarded on a bid basis, which tends to create a highly competitive environment.
In addition, our industry is highly fragmented and we compete regionally with a significant number of smaller service providers that are not publicly traded. We believe that the principal competitive factors in the markets we serve are technical expertise, equipment capacity, work force competency, efficiency, safety record, reputation, experience and price.
This operation is typically repeated fifty to one hundred times to fully perforate, fracture and complete a one- or two-mile-long horizontal wellbore. Ranger uses innovative technologies to enable cleaner, safer, faster, and environmentally friendly operations. • Pump Down.
This operation is typically repeated fifty to one hundred times to fully perforate, fracture and complete a one- or two-mile-long horizontal wellbore. 3 • Pump Down. Our pumping services can be used during completion or intervention operations as a standalone service or in a comprehensive completion pump down perforating solution.
We provide an extensive range of well site services to leading United States (“U.S.”) exploration and production (“E&P”) companies that are fundamental to establishing and enhancing the flow of oil and natural gas throughout the productive life of a well.
E&P companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.
As of December 31, 2022, we had approximately 2,000 full-time and part-time employees and we hire independent contractors on an as-needed basis. We are not a party to collective bargaining agreements, nor do we have any unionized labor.
We are not a party to collective bargaining agreements, nor do we have any unionized labor.
Our personnel are dedicated to redefining services for our customers, driving new thinking, raising standards and rising to challenges. We believe that our efficient operational performance, executed at a high level of integrity, strong safety record and low leverage provides a competitive advantage.
We believe that our efficient operational performance, executed at a high level of integrity, strong safety record and low leverage provides a competitive advantage. As of December 31, 2023, we had approximately 2,000 full-time and part-time employees and we hire independent contractors on an as-needed basis.
As a result, we cannot predict the final scope of regulations or restrictions that may apply to oil and gas operations on federal lands. However, any regulations that ban or effectively ban such operations may adversely impact demand for our products and services.
The federal Bureau of Land Management (“BLM”) has pursued rules governing hydraulic fracturing activities on federal lands. These requirements have been subject to legal challenge and the outcome remains uncertain. We cannot predict the final scope of regulations or restrictions that may apply to oil and gas operations on federal lands.
Removed
Our focus has been positioning ourselves to serve a high-quality customer base by leveraging our young fleet, improving systems and streamlining processes, making Ranger an operator of choice for U.S. E&P companies that require completion and production services.
Added
Cyclical Nature of Industry We operate in a highly cyclical industry and the key factor driving demand for our services is the level of drilling activity by E&P companies. In turn, the level of drilling depends largely on the current and anticipated economics of new well completions.
Removed
As a result of three business combinations, coupled with executive management changes, the Company re-evaluated the reportable segments accordingly. During the fourth quarter of 2021, the Company bifurcated the legacy Completion and Other Services segment into Wireline Services and Ancillary Services, where the historical Processing Solutions segment has been consolidated into the Ancillary Services segment.
Added
We invest in attracting, developing and retaining talented personnel and believe we have good relationships with our employees. Our personnel are dedicated to redefining services for our customers, driving new thinking, raising standards and rising to challenges.
Removed
Our pumping services can be used during completion or intervention operations as a standalone service or in a comprehensive completion pump down perforating solution. Combining Ranger’s wireline perforating and pump down services maximizes operational efficiency through integrated safety, quality and communications systems.
Added
Worker Health and Safety We are subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”), and comparable state statutes that regulate the protection of the health and safety of workers.
Removed
Our snubbing services enable operators to safely run or remove pipe and other associated downhole tools into pressurized or highly deviated wellbores. • Fluid Management Services . Our fluid management services utilize transport trucks, pumps and other tools and equipment to control and separate completion fluids and to haul oilfield fluids used in production.
Added
International developments focused on restricting GHG emissions include the United Nations Framework Convention on Climate Change, which includes implementation of the Paris Agreement and the Kyoto Protocol by the signatories.
Removed
These services consist of the hauling of oilfield fluids, including drilling mud, fresh water and saltwater used or produced in well drilling, completion and production. Additionally, we rent tanks to store such fluids at the wellsite. 4 • Processing Solutions .
Added
Caps or fees on carbon emissions, including in the U.S., have been and may continue to be established and the cost of such caps or fees could disproportionately affect the fossil-fuel sectors.
Removed
For example, in June 2016, the EPA published additional final rules establishing new emissions standards for methane and additional standards for Volatile Organic Compounds from certain new, modified and reconstructed equipment and processes in the oil and natural gas source category, including production, processing, transmission and storage activities.
Added
The implementation of these agreements and other existing or future regulatory mandates, may adversely affect the demand for our products and services, require us or our customers to reduce GHG emissions or impose taxes on us or our customers, all of which could have a material adverse effect on our operations and results.
Removed
In September 2020, the EPA finalized amendments which removed the transmission and storage segment from the oil and natural gas source category and rescinded the methane-specific requirements for production and processing facilities. Subsequently, the U.S.
Removed
Congress approved, and President Biden signed into law, a resolution under the Congressional Review Act to repeal the September 2020 revisions to the methane standards, effectively reinstating the prior standards.
Removed
Additionally, in November 2021, EPA issued a proposed rule that, if finalized, would establish (a) new source and (b) first-time existing source standards of performance for methane and volatile organic compound emissions for oil and gas facilities.
Removed
Operators of affected facilities will have to comply with specific standards of performance to include leak detection using optical gas imaging and subsequent repair requirement, and reduction of emissions by 95% through capture and control systems.
Removed
The EPA plans to issue a supplemental proposal in 2022 containing additional requirements not included in the November 2021 proposed rule and anticipates the issuance of a final rule by the end of the year.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

74 edited+13 added−42 removed173 unchanged
Biggest changeContinued increases in interest rates could adversely impact the price of our shares, our ability to issue equity or incur debt for acquisitions or other purposes. Interest rates on future borrowings, credit facilities and debt offerings could be higher than current levels, causing our financing costs to increase accordingly.
Biggest changeInterest rates on future borrowings, credit facilities and debt offerings could be higher than current levels, causing our financing costs to increase accordingly. In addition, the Secured Overnight Financing Rate (“SOFR”) and other “benchmark” rates are subject to ongoing national and international regulatory scrutiny and reform.
These laws and regulations impose numerous obligations that may impact our operations, including the acquisition of permits to conduct regulated activities, the imposition of restrictions on the types, quantities and concentrations of various substances that can be released into the environment or injected in formations in connection with oil and natural gas drilling and production activities, the 20 incurrence of capital expenditures to mitigate or prevent releases of materials from our equipment, facilities or from customer locations where we are providing services, the imposition of substantial liabilities for pollution resulting from our operations, and the application of specific health and safety standards or criteria addressing worker protection.
These laws and regulations impose numerous obligations that may impact our operations, including the acquisition of permits to conduct regulated activities, the imposition of restrictions on the types, quantities and concentrations of various substances that can be released into the environment or injected in formations in connection with oil and natural gas drilling and production activities, the incurrence of capital expenditures to mitigate or prevent releases of materials from our equipment, facilities or from customer locations where we are providing services, the imposition of substantial liabilities for pollution resulting from our operations, and the application of specific health and safety standards or criteria addressing worker protection.
For more information, see our risk factor titled “Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.” Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, certain statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
For more information, see our risk factor titled “Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.” Moreover, while we may create and publish voluntary disclosures regarding sustainability and ESG matters from time to time, certain statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
The trend in environmental regulation has been to place more restrictions and limitations on activities that may adversely affect the environment, and thus any changes in environmental laws and regulations or reinterpretation of enforcement policies that result in more stringent and costly regulatory requirements could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects if we are unable to pass on such increased compliance costs to our customers.
The trend in environmental regulation has been to place more restrictions and limitations on activities that may adversely affect the environment, and thus any changes in environmental laws and regulations or reinterpretation of 18 enforcement policies that result in more stringent and costly regulatory requirements could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects if we are unable to pass on such increased compliance costs to our customers.
This may be more likely as we continue to grow, if we experience high employee turnover or labor shortage, or hire inexperienced personnel to bolster our staffing needs. We may be subject to claims for personal injury and property damage, or for catastrophic events, which could materially and adversely affect our financial condition, results of operations and prospects.
This may be more likely as we continue to grow, if we experience high employee turnover or labor shortage, or hire inexperienced personnel to bolster our staffing needs. 15 We may be subject to claims for personal injury and property damage, or for catastrophic events, which could materially and adversely affect our financial condition, results of operations and prospects.
Increasing attention to, and societal expectations on companies to address, climate change and other environmental and social impacts, investor and societal expectations regarding voluntary ESG disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our customers’ products, reduced profits, increased investigations and litigation, and negative impacts on our stock price and access to capital markets.
Increasing attention to, and societal expectations on companies to address, climate change and other environmental and social impacts, investor and societal expectations regarding voluntary sustainability and ESG disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for our customers’ products, reduced profits, increased investigations and litigation, and negative impacts on our stock price and access to capital markets.
Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
Unfavorable sustainability and ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
One such concern relates to seismic events near underground disposal wells used for the disposal by injection of flowback and 19 produced water or certain other oilfield fluids resulting from oil and natural gas activities. When caused by human activity, such events are called induced seismicity.
One such concern relates to seismic events near underground disposal wells used for the disposal by injection of flowback and produced water or certain other oilfield fluids resulting from oil and natural gas activities. When caused by human activity, such events are called induced seismicity.
However, we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our ESG profile, including but not limited to as a result of unforeseen 23 costs, consequences, or technical difficulties associated with such targets or offerings.
However, we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our ESG profile, including but not limited to as a result of unforeseen costs, consequences, or technical difficulties associated with such targets or offerings.
Decreases to the stringency of regulation of existing natural gas pipelines at either the state or federal level could reduce the demand for our services and could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.
Decreases to the stringency of regulation of existing natural gas pipelines at either the state or federal level 16 could reduce the demand for our services and could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.
For more information, see our risk factor titled “Seasonal weather conditions and natural disasters could severely disrupt normal operations and harm our business.” Increased attention to environmental, social, and governance (“ESG”) matters and conservation measures may adversely impact our or our customers’ business.
For more information, see our risk factor titled “Seasonal weather conditions and natural disasters could severely disrupt normal operations and harm our business.” Increased attention to sustainability, environmental, social, and governance (“ESG”) matters and conservation measures may adversely impact our or our customers’ business.
In particular, subject to the limitations of applicable law, our amended and restated certificate of incorporation, among other things: • permits CSL, Bayou Holdings and their respective affiliates to conduct business that competes with us and to make investments in any kind of property in which we may make investments; and • provides that if CSL, Bayou Holdings or their respective affiliates, or any employee, partner, member, manager, officer or director of CSL, Bayou Holdings or their respective affiliates who is also one of our directors or 28 officers, becomes aware of a potential business opportunity, transaction or other matter, they will have no duty to communicate or offer that opportunity to us.
In particular, subject to the limitations of applicable law, our amended and restated certificate of incorporation, among other things: • permits CSL, Bayou Holdings and their respective affiliates to conduct business that competes with us and to make investments in any kind of property in which we may make investments; and • provides that if CSL, Bayou Holdings or their respective affiliates, or any employee, partner, member, manager, officer or director of CSL, Bayou Holdings or their respective affiliates who is also one of our directors or 25 officers, becomes aware of a potential business opportunity, transaction or other matter, they will have no duty to communicate or offer that opportunity to us.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to sustainability and ESG matters. Such ratings are used by some investors to inform their investment and voting decisions.
Any inability to compete effectively could have a material adverse impact on our financial condition and results of operations. 16 Increasing competition for workers, as well as labor shortages, could adversely affect our business.
Any inability to compete effectively could have a material adverse impact on our financial condition and results of operations. Increasing competition for workers, as well as labor shortages, could adversely affect our business.
Further, we may choose to implement or acquire certain new technologies at a substantial cost to support environmental initiatives, respond to competitive pressure, meet new regulatory requirements, or satisfy customer requirements.
Further, we may choose to implement or acquire certain new technologies at a substantial cost to support environmental 13 initiatives, respond to competitive pressure, meet new regulatory requirements, or satisfy customer requirements.
We depend on information technology systems that we manage, and others that are managed by our third-party service and equipment providers, to conduct our day-to-day operations, including critical systems, and these systems are subject to risk associated with cyber incidents or attacks, especially originating from countries such as China, Russia, Iran, and North Korea as broadly reported in the media.
We depend on information technology systems that we manage, and others that are managed by third-party service and equipment providers, to conduct our day-to-day operations, including critical systems, and these systems are subject to risks associated with cyber incidents or attacks, especially originating from countries such as China, Russia, Iran, and North Korea as broadly reported in the media.
A cyber incident could negatively impact the Company in a number of ways, including but not limited (i) remediation costs, such as liability for stolen assets or information and repairs of system damage; (ii) increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees, and 24 engaging third party experts and consultants; (iii) lost revenue resulting from downtime, operational disruptions, the unauthorized use of proprietary information or the failure to retain or attract customers following an attack; (iv) litigation and legal risks, including regulatory actions by state and federal governmental authorities and non-U.S. authorities; (v) increased insurance premiums; (vi) reputational damage that adversely affects customer or investor confidence; (vii) the loss, theft, corruption or unauthorized release of intellectual property, proprietary information, customer and vendor data or other critical data and (viii) damage to the company’s competitiveness, stock price, and long-term shareholder value.
A cyber incident could negatively impact the Company in a number of ways, including but not limited to; (i) remediation costs, such as liability for stolen assets or information and repairs of system damage; (ii) increased cybersecurity protection costs, which may include the costs of making organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants; (iii) lost revenue resulting from downtime, operational disruptions, the unauthorized use of proprietary information or the failure to retain or attract customers following an attack; (iv) litigation and legal risks, including regulatory actions by state and federal governmental authorities and non-U.S. authorities and related investigation costs; (v) increased insurance premiums; (vi) reputational damage that adversely affects customer or investor confidence; (vii) the loss, theft, corruption or unauthorized release of intellectual property, proprietary information, customer and vendor data or other critical data and (viii) damage to the company’s competitiveness, stock price, and long-term stockholder value.
If we are unable to remain in compliance with the financial covenants of our Revolving Credit Facility, then amounts outstanding thereunder may be accelerated and become due immediately. Any such acceleration could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.
If we are unable to remain in compliance with the financial covenants of our Wells Fargo Revolving Credit Facility, then amounts outstanding thereunder may be accelerated and become due immediately. Any such acceleration could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.
Our technology systems and networks, and those of our vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches.
Our technology systems and networks, and those of our vendors, suppliers and other 21 business partners, may become the target of cyberattacks or information security breaches.
Also, despite any voluntary actions, we may receive pressure from certain investors, lenders, or other groups to adopt more aggressive climate or other ESG-related goals or policies, but we cannot guarantee that we will be able to implement such goals because of potential costs or technical or operational obstacles.
Also, despite any voluntary actions, we may receive pressure from certain investors, lenders, or other groups to adopt more aggressive climate or other sustainability and ESG-related goals or policies, but we cannot guarantee that we will be able to implement such goals because of potential costs or technical or operational obstacles.
We may incur substantial indebtedness to finance future acquisitions and also may issue equity, debt or convertible securities in connection with such acquisitions. Debt service requirements could represent a significant burden on our results of operations and financial condition, and the issuance of additional equity or convertible securities could be dilutive to our existing shareholders.
We may incur substantial indebtedness to finance future acquisitions and also may issue equity, debt or convertible securities in connection with such acquisitions. Debt service requirements could represent a significant burden on our results of operations and financial condition, and the issuance of additional equity or convertible securities could be dilutive to our existing stockholders.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our Class A Common Stock respecting dividends and distributions, as our Board of Directors may determine.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our Class A Common Stock respecting dividends and distributions, as our Board of Directors may determine.
Hydraulic fracturing typically is regulated by state oil and natural gas commissions, but the EPA has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuel and issued permitting guidance in 2014 that applies to such activities.
Hydraulic fracturing typically is regulated by state oil and natural gas commissions, but the EPA has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuel and issued permitting guidance that applies to such activities.
If current hostilities continue or escalate, or any other such events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on demand for our services and causing a reduction in our revenue.
If other current hostilities around the globe continue or escalate, or any other such events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on demand for our services and causing a reduction in our revenue.
The failure of any of our information technology systems may cause disruptions in our operations, which could adversely affect our revenue and profitability. We are subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss.
The failure of any of our information technology systems may cause disruptions in our operations, which could adversely affect our revenue and profitability. We are subject to cybersecurity risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss.
Our Revolving Credit Facility subjects us to significant financial and other restrictive covenants, such that our ability to comply with financial condition tests can be affected by events beyond our control, including economic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.
Our Wells Fargo Revolving Credit Facility subjects us to significant financial and other restrictive covenants, such that our ability to comply with financial condition tests can be affected by events beyond our control, including economic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.
Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Class A Common Stock. Our Revolving Credit Facility places certain restrictions on our ability to pay cash dividends on our Class A Stock.
Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Class A Common Stock. Our Wells Fargo Revolving Credit Facility places certain restrictions on our ability to pay cash dividends on our Class A Stock.
The Legacy Owners and the Bridge Loan Lenders are parties to a registration rights agreement, which requires us to effect the registration of any shares of Class A Common Stock held by a Legacy Owner or Bridge Loan Lender or that a Legacy Owner or Bridge Loan Lender receives upon redemption of its shares of Class B Common Stock.
The Legacy Owners and the Bridge Loan Lenders are parties to a registration rights agreement, which requires us to affect the registration of any shares of Class A Common Stock held by a Legacy Owner or Bridge Loan Lender or that a Legacy Owner or Bridge Loan Lender receives upon redemption of its shares of Class B Common Stock.
Further, the borrowing base of our Revolving Credit Facility is dependent upon our receivables, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services.
Further, the borrowing base of our Wells Fargo Revolving Credit Facility is dependent upon our receivables, which may be significantly lower in the future due to reduced activity levels or decreases in pricing for our services.
Changes to our operational activity levels have an impact on our total eligible accounts receivable, which could result in significant changes to our borrowing base and therefore our availability under our Revolving Credit Facility.
Changes to our operational activity levels have an impact on our total eligible accounts receivable, which could result in significant changes to our borrowing base and therefore our availability under our Wells Fargo Revolving Credit Facility.
As a result, a natural disaster, severe weather event, or 13 inclement weather conditions could severely disrupt the normal operation of our business and adversely impact our financial condition and results of operations.
As a result, a natural disaster, severe weather event, or 11 inclement weather conditions could severely disrupt the normal operation of our business and adversely impact our financial condition and results of operations.
Additionally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.
Additionally, to the extent sustainability and ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.
A significant reduction of CSL’s ownership interests in us could adversely affect us. We believe that CSL’s ownership interest in us provides with it an economic incentive to assist us to be successful.
A significant reduction of CSL’s ownership interests in the Company could adversely affect us. We believe that CSL’s ownership interest in the Company provides with it an economic incentive to assist us to be successful.
They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated, and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor. 29 Item 1B. Unresolved Staff Comments None.
They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated, and as a result, they may elect not to present those opportunities to us. These conflicts may not be resolved in our favor. 26 Item 1B. Unresolved Staff Comments None. 27
Our Revolving Credit Facility subjects us to various financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our Revolving Credit Facility.
Our Wells Fargo Revolving Credit Facility subjects us to various financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our Wells Fargo Revolving Credit Facility.
The table below presents the percentage of revenue, for each respective segment, from our top five customers for the years ended December 31, 2022 and 2021.
The table below presents the percentage of revenue, for each respective segment, from our top five customers for the years ended December 31, 2023 and 2022.
Sales of substantial amounts of our Class A Common Stock, or the perception that such sales could occur, may adversely affect prevailing market prices of our Class A Common Stock. 27 We may issue additional preferred stock, the terms of which could adversely affect the voting power or value of our Class A Common Stock.
Sales of substantial amounts of our Class A Common Stock, or the perception that such sales could occur, may adversely affect prevailing market prices of our Class A Common Stock. 24 We may issue preferred stock, the terms of which could adversely affect the voting power or value of our Class A Common Stock.
Our Revolving Credit Facility contains certain financial and other restrictive covenants, including a certain minimum fixed charge coverage ratio during certain testing periods. The Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the value of the Company’s eligible accounts receivable less certain reserves.
Our Wells Fargo Revolving Credit Facility contains certain financial and other restrictive covenants, including a certain minimum fixed charge coverage ratio during certain testing periods. The Wells Fargo Revolving Credit Facility is 22 subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves.
Moreover, CSL’s concentration of stock ownership may adversely affect the trading price of our Class A Common Stock to the extent investors perceive a disadvantage in owning stock of a company with a significant shareholder. CSL’s interests may differ from the interests of other shareholders and the status of their ownership could change at their discretion.
Moreover, CSL’s concentration of stock ownership may adversely affect the trading price of our Class A Common Stock to the extent investors perceive a disadvantage in owning stock of a company with a significant stockholder. CSL’s interests may differ from the interests of other stockholders and the status of their ownership could change at their discretion.
In addition, in June 2016, the EPA finalized regulations that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants. In December 2016, the EPA released its final report on the potential impacts of hydraulic fracturing on drinking water resources.
In addition, the EPA finalized regulations that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants. The EPA also released its final report on the potential impacts of hydraulic fracturing on drinking water resources.
Any one or more of these developments may result in our customers having to limit disposal well volumes, disposal rates or locations, or require our customers or third party disposal well operators that are used to disposals of customers’ wastewater to shut down disposal wells, which developments could adversely affect our customers’ business and result in a corresponding decrease in the need for our services, which could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.
Any one or more of these developments may result in our customers having to limit disposal well volumes, disposal rates or locations, or require our customers or third-party disposal well operators that are used to disposals of customers’ wastewater to shut down disposal wells, which developments could adversely affect our customers’ business and result in a corresponding decrease in the need for our services, which could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects. 17 Changes in transportation regulations may increase our costs and negatively impact our results of operations.
As long as CSL controls a large portion of our voting stock, it may be able to significantly influence the election of the Board of Directors and the outcome of all matters involving a shareholder vote.
As long as CSL owns a large portion of our voting stock, it may be able to significantly influence the election of the Board of Directors and the outcome of all matters involving a stockholder vote.
It is likely that we will continue to derive a significant portion of our revenue from a relatively small number of customers in the future. During the year ended December 31, 2022, one customer accounted for approximately 10% of our consolidated revenues.
It is likely that we will continue to derive a significant portion of our revenue from a relatively small number of customers in the future. During the year ended December 31, 2023, two customers accounted for approximately 10% each of our consolidated revenues.
A sustained labor shortage, lack of skilled labor force, increased turnover, or labor cost inflation, as a result of general macroeconomic and other factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, which could negatively affect our ability to efficiently staff and operate our equipment, deploy additional assets to meet customer demand, and have other adverse effects on our results of operations and financial condition.
A sustained labor shortage, lack of skilled labor force, increased turnover, or labor cost inflation, as a result of general macroeconomic and other factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, which could negatively affect our ability to efficiently staff and operate our equipment, deploy additional assets to meet customer demand, and have other adverse effects on our results of operations and financial condition. 14 Customers and Employees Reliance upon a few large customers may adversely affect our revenue and operating results.
As of December 31, 2022 and 2021 our total debt was $18.6 million and $63.2 million , respectively. We may also incur additional indebtedness in the future. If we do so, the risks related to our level of debt could intensify.
As of December 31, 2023 and 2022 our total debt was $0.1 million and $18.6 million , respectively. We may also incur additional indebtedness in the future. If we do so, the risks related to our level of debt could intensify.
For more information, see our regulatory disclosure titled “Hydraulic Fracturing.” Depending on the ultimate outcome of any agency reviews and pending litigation, these regulations could result in increased compliance costs or additional operating restrictions for us and our customers, and could have a material adverse effect on our business, liquidity position, cash flows, financial condition, results of operations, prospects and demand for our services.
Depending on the ultimate outcome of any agency reviews and pending litigation, these regulations could result in increased compliance costs or additional operating restrictions for us and our customers, and could have a material adverse effect on our business, liquidity position, cash flows, financial condition, results of operations, prospects and demand for our services.
Equity and Common Stock We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
Equity and Common Stock We may identify material weaknesses or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.
Growth in accordance with our business plan, if achieved, could place a significant strain on our financial, operational and management resources. As we expand the scope of our activities and our geographic coverage through both organic growth and acquisitions, there will be additional demands on our financial, technical, operational and management resources.
Growth could place a significant strain on our financial, operational and management resources. As we expand the scope of our activities and our geographic coverage through both organic growth and acquisitions, there will be additional demands on our financial, technical, operational and management resources.
CSL controls a significant portion of our voting stock, and their interests may conflict with those of our other shareholders. CSL and its affiliates beneficially own an aggregate of approximately 29% of the outstanding shares of our Common Stock.
CSL owns a significant portion of our voting stock, and their interests may conflict with those of our other stockholders. CSL and its affiliates beneficially own an aggregate of approximately 17% of the outstanding shares of our Common Stock.
The material weaknesses did not result in any adjustments to the Consolidated Financial Statements. Any newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.
Any newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.
For more information, see our regulatory disclosure titled “Hydraulic Fracturing.” The adoption and implementation of any new laws or regulations that restrict our customers’ ability to dispose of produced water could result in increased operating costs for the customer, which in turn could indirectly reduce demand for our services.
The adoption and implementation of any new laws or regulations that restrict our customers’ ability to dispose of produced water could result in increased operating costs for the customer, which in turn could indirectly reduce demand for our services.
Year Ended December 31, 2022 2021 High Specification Rigs 55 % 47 % Wireline Services 16 % 68 % Processing Solutions and Ancillary Services 29 % 38 % Consolidated 36 % 42 % Our customers may be forced to curtail or shut in production due to a lack of storage capacity.
Year Ended December 31, 2023 2022 High Specification Rigs 49 % 55 % Wireline Services 25 % 16 % Processing Solutions and Ancillary Services 26 % 29 % Consolidated 43 % 36 % Our customers may be forced to curtail or shut in production due to a lack of storage capacity.
For more information, please see our regulatory disclosure titled “Air Emissions.” Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.
Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of emissions.
If the recent recovery does not continue or our customers fail to further increase their capital spending, it could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects. 14 Industry conditions are influenced by numerous factors over which we have no control, including: • domestic and foreign economic conditions and supply of and demand for oil and natural gas; • the level of prices, and expectations about future prices, of oil and natural gas; • the level and cost of global and domestic oil and natural gas exploration, production, transportation of reserves and delivery; • taxes and governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; • political and economic conditions in oil and natural gas producing countries; • actions by the members of the Organization of Petroleum Exporting Countries (“OPEC”) and other countries, such as Russia and Saudi Arabia, with respect to oil production levels and announcements of potential changes in such levels, including the failure of such countries to comply with production cuts; • sanctions and other restrictions placed on oil producing countries, such as Iran and Venezuela; • global weather conditions and natural disasters; • worldwide political, military and economic conditions; • the discovery rates of new oil and natural gas reserves; • shareholder activism or activities by non‑governmental organizations to restrict the exploration, development and production of oil and natural gas; and • uncertainty in capital and commodities markets.
Industry conditions are influenced by numerous factors over which we have no control, including: • domestic and foreign economic conditions and supply of and demand for oil and natural gas; • the level of prices, and expectations about future prices, of oil and natural gas; • the level and cost of global and domestic oil and natural gas exploration, production, transportation of reserves and delivery; • taxes and governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; • political and economic conditions in oil and natural gas producing countries; 12 • actions by the members of the Organization of Petroleum Exporting Countries (“OPEC”) and other countries, such as Russia and Saudi Arabia, with respect to oil production levels and announcements of potential changes in such levels, including the failure of such countries to comply with production cuts; • sanctions and other restrictions placed on oil producing countries, such as Iran and Venezuela; • global weather conditions and natural disasters; • worldwide political, military and economic conditions; • the discovery rates of new oil and natural gas reserves; • stockholder activism or activities by non‑governmental organizations to restrict the exploration, development and production of oil and natural gas; and • uncertainty in capital and commodities markets.
We may sell additional shares of Class A Common Stock or preferred stock that is convertible into Class A Common Stock in subsequent public offerings. As of February 28, 2023, we had 24,896,972 shares of Class A Common Stock outstanding, which may be resold immediately in the public market.
We may sell additional shares of Class A Common Stock or preferred stock that is convertible into Class A Common Stock in subsequent public offerings. As of February 29, 2024, we had 22,662,569 shares of Class A Common Stock outstanding, which may be resold immediately in the public market.
Changes in transportation regulations may increase our costs and negatively impact our results of operations. We are subject to various transportation regulations including as a motor carrier by the DOT and by various federal, state and tribal agencies, whose regulations include certain permit requirements of highway and safety authorities.
We are subject to various transportation regulations including as a motor carrier by the DOT and by various federal, state and tribal agencies, whose regulations include certain permit requirements of highway and safety authorities.
The geopolitical and macroeconomic consequences of this invasion and associated sanctions cannot be predicted, and such events, or any further hostilities in Ukraine or elsewhere, could severely impact the world economy.
The geopolitical and macroeconomic consequences of this invasion and associated sanctions cannot be predicted, and such events could severely impact the world economy.
There are also increasing financial risks for companies in the fossil fuel sector as shareholders currently invested in fossil fuel-related companies may elect in the future to shift some or all of their investments to other sectors.
There are also increasing financial risks for companies in the fossil fuel sector as stockholders currently invested in fossil fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel related sectors.
Customers and Employees Reliance upon a few large customers may adversely affect our revenue and operating results. If a major customer fails to pay us, our revenue would be impacted and our operating results and financial condition could be materially harmed.
If a major customer fails to pay us, our revenue would be impacted and our operating results and financial condition could be materially harmed.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters. Additionally, we may announce various targets or product and service offerings in an attempt to improve our ESG profile.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring 20 and reporting on many sustainability and ESG matters.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in those internal controls. We and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting as of December 31, 2022.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in those internal controls.
However, any regulations that ban or effectively ban such operations may adversely impact demand for our products and services. 21 Various state and local governments have also implemented, or are considering, increased regulatory oversight of hydraulic fracturing through additional permit requirements, operational restrictions, disclosure requirements, well construction, and temporary or permanent bans on hydraulic fracturing in certain areas.
Various state and local governments have also implemented, or are considering, increased regulatory oversight of hydraulic fracturing through additional permit requirements, operational restrictions, disclosure requirements, well construction, and temporary or permanent bans on hydraulic fracturing in certain areas.
The Revolving Credit Facility includes cash dominion provisions where the Administrative Agent sweeps cash daily from the Company’s bank accounts into an account of the Administrative Agent to repay the Company’s obligations under the Revolving Credit Facility. 25 The growth of our business through potential future acquisitions or mergers may expose us to various risks, including those relating to difficulties in identifying suitable, accretive acquisition or merger opportunities and integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for increased leverage or debt service requirements.
The growth of our business through potential future acquisitions or mergers may expose us to various risks, including those relating to difficulties in identifying suitable, accretive acquisition or merger opportunities and integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for increased leverage or debt service requirements.
The inability to effectively manage the integration of acquisitions, including in connection with our corporate reorganization, could reduce our focus on current operations, which, in turn, could negatively impact our earnings and growth. Our financial position and results of operations may fluctuate significantly from period to period, based on whether or not significant acquisitions are completed in particular periods.
The inability to effectively manage the integration of acquisitions, including in connection with our corporate reorganization, could reduce our focus on current operations, which, in turn, could negatively impact our earnings and growth.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, President Biden has highlighted addressing climate change as a priority of his administration, which includes certain potential initiatives for climate change legislation to be proposed and passed into law. Moreover, following the U.S.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, there are a number of proposed federal initiatives for climate change legislation that may be passed into law. Moreover, following the U.S.
Additionally, the increased competitiveness of alternative energy sources (such as wind, solar, geothermal, tidal, and biofuels) could reduce demand for hydrocarbons and therefore for our services, which would lead to a reduction in our revenue. 15 We may incur significant capital expenditures for new equipment as we grow our operations and may be required to incur further capital expenditures as a result of environmental initiatives, new regulatory requirements, and advancements in oilfield services technologies.
Additionally, the increased competitiveness of alternative energy sources (such as wind, solar, geothermal, tidal, and biofuels) could reduce demand for hydrocarbons and therefore for our services, which would lead to a reduction in our revenue.
As a result, we cannot predict the final scope of regulations or restrictions that may apply to oil and gas operations on federal lands.
We cannot predict the final scope of regulations or restrictions that may apply to oil and gas operations on federal or tribal lands. However, any regulations that ban or effectively ban such operations may adversely impact demand for our products and services.
From time to time regulators develop and implement plans directing certain wells located in proximity to seismic incidents to restrict or suspend disposal well operations.
From time to time regulators develop and implement plans directing certain wells located in proximity to seismic incidents to restrict or suspend disposal well operations. In addition, ongoing lawsuits allege that disposal well operations have caused damage to neighboring properties or otherwise violated state and federal rules regulating waste disposal.
Increased regulation and attention given to induced seismicity also could lead to greater opposition to, and litigation concerning, oil and natural gas activities utilizing injection wells for waste disposal.
These developments could result in additional regulation and restrictions on the use of injection wells by our customers to dispose of flowback and produced water and certain other oilfield fluids. Increased regulation and attention given to induced seismicity also could lead to greater opposition to, and litigation concerning, oil and natural gas activities utilizing injection wells for waste disposal.
As a result, we are not insured against any losses resulting from the death of our key employees. 17 Unsatisfactory safety performance may negatively affect our current and future customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenue.
If our customers are forced to shut in production, it would result in decreased demand for our services and lower utilization of our assets. Unsatisfactory safety performance may negatively affect our current and future customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenue.
Consequently, in the future, if we no longer meet the Revolving Credit Facility’s criteria to pay cash dividends on Class A Stock, your only opportunity to achieve a return on your investment is if the price of our Class A Common Stock appreciates.
During any period where dividends are restricted, your only opportunity to achieve a return on your investment is if the price of our Class A Common Stock appreciates.
The final report concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources under certain limited circumstances.
The final report concluded that “water cycle” activities associated with hydraulic fracturing may impact drinking water resources under certain limited circumstances. Certain of our customers have operations on federal or tribal lands and the U.S. government has considered more stringent regulations for operations on such lands.
Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities. Additionally, the Securities and Exchange Commission announced its intention to promulgate rules requiring climate disclosures.
There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.
Consequently, if in the future, we no longer meet the criteria under our Resolving Credit Facility allowing for the payment of cash dividends, your only opportunity to achieve a return on your investment will be if you sell your Class A Common Stock at a price greater than you paid for it.
Consequently, in the future, if we no longer meet the Wells Fargo Revolving Credit Facility’s criteria to pay cash dividends on Class A Stock, the Company will be restricted in its ability to pay a dividend until compliance with the stated criteria is regained. In 2023, we initiated a quarterly dividend to holders of our Class A Common Stock.
Removed
The widespread outbreak of disease, including the reemergence of COVID-19 including through new variants, and its potential effect on business operations and financial condition. The outbreak of COVID-19 spread across the globe and was declared a public health emergency by the World Health Organization (“WHO”) and a National Emergency by the President of the United States in March of 2020.
Added
Any of these conditions or events could adversely affect our operating results. If the recent recovery does not continue or our customers fail to further increase their capital spending, it could have a material adverse effect on our business, liquidity position, financial condition, results of operations and prospects.
Removed
The COVID-19 pandemic resulted in significant economic disruption and adversely affected the operations of the Company’s business, and reduced global and national economic activity resulted in reduced demand for oil and natural gas and an oversupply of crude oil.
Added
We may incur significant capital expenditures for new equipment as we grow our operations and may be required to incur further capital expenditures as a result of environmental initiatives, new regulatory requirements, and advancements in oilfield services technologies.
Removed
The direct impact to the Company’s operations began to take affect at the close of the first quarter ended March 31, 2020, and continued in the year ended December 31, 2022. Significant progress has been made to combat COVID-19 and its multiple variants.
Added
Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing GHG emissions, as well as to restrict or eliminate future emissions.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, we owned or leased maintenance facilities, yards and field offices around the U.S. and our material properties include the following: Facility Location and Description Size of Location* Leased / Owned Lease Expiration High Specification Rigs (square feet) (acres) Milliken, Colorado 131,390 23.0 Leased 2036 Williston, North Dakota 11,100 5.0 Leased 2029 Pleasanton, Texas 23,325 15.9 Leased 2027 Wharton, Texas 4,200 4.0 Leased 2023 Artesia, New Mexico 5,368 1.7 Leased ** Hobbs, New Mexico 25,950 4.5 Owned *** Belfield, North Dakota 34,280 34.5 Owned *** Big Spring, Texas 21,420 7.5 Owned *** Denver City, Texas 23,000 60.4 Owned *** Midland, Texas 14,000 16.7 Owned *** Midland, Texas 47,000 25.9 Owned *** Odessa, Texas 17,500 1.3 Owned *** Andrews, Texas 15,341 39.3 Owned *** Wireline Services Midland, Texas 36,320 12.0 Leased 2027 Williston, North Dakota 71,239 13.8 Leased 2027 Casper, Wyoming 12,950 3.2 Leased ** Processing Solutions and Ancillary Services Milliken, Colorado 131,390 23.3 Leased 2036 Ft.
Biggest changeAs of December 31, 2023, we owned or leased maintenance facilities, yards and field offices around the U.S. and our material properties include the following: Facility Location and Description Size of Location* Leased / Owned Lease Expiration High Specification Rigs (square feet) (acres) Milliken, Colorado 131,390 23.0 Leased 2036 Williston, North Dakota 11,100 5.0 Leased 2029 Pleasanton, Texas 23,325 15.9 Leased 2027 Wharton, Texas 4,200 4.0 Leased ** Artesia, New Mexico 5,368 1.7 Leased ** Hobbs, New Mexico 25,950 4.5 Owned *** Belfield, North Dakota 34,280 34.5 Owned *** Denver City, Texas 23,000 60.4 Owned *** Midland, Texas 14,000 16.7 Owned *** Midland, Texas 47,000 25.9 Owned *** Odessa, Texas 17,500 1.3 Owned *** Andrews, Texas 15,341 39.3 Owned *** Wireline Services Midland, Texas 36,320 12.0 Leased 2027 Williston, North Dakota 71,239 13.8 Leased 2027 Casper, Wyoming 12,950 3.2 Leased ** Processing Solutions and Ancillary Services Milliken, Colorado 131,390 23.3 Leased 2036 Ft.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the outcome of these lawsuits, investigations and claims cannot be predicted with certainty, we do not expect these matters to have a material adverse impact on our business, results of operations, cash flows or financial condition. Information regarding legal proceedings is presented in “Part II, Item 8.
Biggest changeWhile the outcome of these lawsuits, investigations and claims cannot be predicted with certainty, we do not expect these matters to have a material adverse impact on our business, results of operations, cash flows or financial condition. Information regarding legal proceedings is presented in “Part II, Item 8. Financial Statements and Supplementary Data—Note 14 — Commitments and Contingencies.” Item 4.
Removed
Financial Statements and Supplementary Data—Note 15 — Commitments and Contingencies.” 30 Item 4. Mine Safety Disclosure Not applicable. 31 PART II
Added
Mine Safety Disclosure Not applicable. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Repurchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2022 - October 31, 2022 5,593 $ 10.50 November 1, 2022 - November 30, 2022 964 11.18 December 1, 2022 - December 31, 2022 — — Total 6,557 $ 10.60 — — _________________________ (1) Total number of shares repurchased in the fourth quarter of 2022 consists of 6,557 shares withheld by us in satisfaction of withholding taxes due upon the vesting of restricted shares granted to our employees under our Long-Term Incentive Plan. 32 Stock Performance Graph The graph below presents a comparison of the cumulative total return on our Class A Common Stock, assuming $100 was invested on August 10, 2017, the initial trading day for our common stock for the NYSE Composite Index and a self- determined peer group, which includes RCP, Inc., ProPetro Holding Corp., Select Energy Services, Inc., Oil States International, Inc., KLX Energy Services Holdings, Inc., Dril-Quip, Inc., Mammoth Energy Services, Inc. and Solaris Oilfield Infrastructure, Inc.
Biggest changePeriod Total Number of Shares Repurchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (3) October 1, 2023 - October 31, 2023 474 $ 13.94 — 2,272,778 November 1, 2023 - November 30, 2023 326,100 10.47 326,100 2,356,237 December 1, 2023 - December 31, 2023 698,400 10.19 698,400 1,549,992 Total 1,024,974 $ 10.28 1,024,500 1,549,992 _________________________ (1) Total number of shares repurchased in the fourth quarter of 2023 consists of 1,024,974 shares of Class A Common Stock, at an average price paid per share of $10.28, withheld by the Company in satisfaction of withholding taxes due upon the vesting of restricted shares granted to our employees under the Ranger Energy Services, Inc. 2017 Long-Term Incentive Plan and 1,024,500 shares of Class A Common Stock, at an average price paid per share of $10.28, repurchased pursuant to the repurchase program that was announced on March 7, 2023.
We have a significant number of beneficial shareholders or shareholders whose shares are held in “street name,” where such shares are held by a broker or other nominee, thereby increasing the number holders of record.
Market for Registrant's Common Equity, Related Stockholders' Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is listed on the NYSE under the symbol “RNGR.” We have a significant number of beneficial stockholders or stockholders whose shares are held in “street name,” where such shares are held by a broker or other nominee, thereby increasing the number holders of record.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information with respect to Class A Common Stock purchases made by the Company during the three months ended December 31, 2022.
The duration of the share repurchase program is 36 months and may be accelerated, suspended or discontinued at any time without notice. The following table provides information with respect to Class A Common Stock purchases made by the Company during the three months ended December 31, 2023.
Removed
Item 5. Market for Registrant's Common Equity, Related Stockholders' Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is listed on the NYSE under the symbol “RNGR,” and there was no public market for our Class B Common Stock.
Added
As of February 29, 2024, there were approximately 90 stockholders of record of our Class A Common Stock. On March 7, 2023, the Board of Directors announced an intention to initiate a quarterly dividend of $0.05 per share during the year.
Removed
As of February 28, 2023, there were approximately 140 and no shareholders of record of our Class A Common Stock and Class B Common Stock, respectively. We have not paid any dividends since our inception to holders of our Class A Common Stock.
Added
The Board of Directors approved the initiation of the quarterly dividend, which first became payable on September 8, 2023 to all stockholders of record as of August 18, 2023. Additionally, the Board of Directors declared a second quarterly cash dividend of $0.05 per share payable December 1, 2023 to all stockholders of record as of November 13, 2023.
Removed
The Company recently announced plans to initiate a capital returns program, which includes authorization for a share buyback program up to $35.0 million in share buybacks over a period of 36 months and approval to initiate a dividend program upon the Company’s achievement of net debt zero, which is currently expected in the second half of 2023.
Added
The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.
Removed
The Company regularly assesses strategic priorities and actively announces any information as it relates to capital returns, and it will continue to do so.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers On March 7, 2023, the Company announced that its Board of Directors authorized a share repurchase program, allowing the Company to purchase currently outstanding Class A Common Stock held by non-affiliates, not to exceed $35.0 million in aggregate value.
Added
Share repurchases may take place from time to time on the open market or through privately negotiated transactions. The duration of the share repurchase program is 36 months and may be accelerated, suspended or discontinued at any time without notice.
Added
On March 4, 2024, the Company announced that its Board of Directors approved for a new share repurchase program authorization not to exceed $50.0 million in aggregate value. Share repurchases may take place from time to time on the open market or through privately negotiated transactions.
Added
(2) As of December 31, 2023, an aggregate of 1,806,000 shares of Class A Common Stock were purchased for a total of $19.3 million, net of tax since the inception of the repurchase plan announced on March 7, 2023.
Added
(3) As of December 31, 2023, the maximum number of shares that may yet be purchased under the plan is 1,549,992 shares of Class A Common Stock.
Added
This is based on the closing price of $10.23 of Ranger Energy Services, Inc.’s Class A Common Stock on the New York Stock Exchange as of December 31, 2023. 30 Stock Performance Graph The graph below presents a comparison of the cumulative total return on our Class A Common Stock, assuming $100 was invested on December 31, 2018 in each of the Company’s Class A Common Stock. the NYSE Composite Index and a self- determined peer group, which includes RPC, Inc., ProPetro Holding Corp., Select Water Solutions, Inc., Oil States International, Inc., KLX Energy Services Holdings, Inc., Dril-Quip, Inc., Mammoth Energy Services, Inc., Solaris Oilfield Infrastructure, Inc., and NINE Energy Service, Inc.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe Year Ended December 31, 2022 compared to The Year Ended December 31, 2021 Year Ended December 31, 2022 High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total (in millions) Net income (loss) $ 34.3 $ 7.6 $ 20.2 $ (47.0) $ 15.1 Interest expense, net — — — 7.3 7.3 Tax expense (benefit) — — — 0.9 0.9 Depreciation and amortization 26.2 11.0 5.3 1.9 44.4 Equity based compensation — — — 3.8 3.8 Gain on disposal of property and equipment — — — (0.7) (0.7) Severance and reorganization costs — — — 1.6 1.6 Acquisition related costs — — — 7.9 7.9 Legal fees and settlements — — — 1.5 1.5 Impairment of fixed assets — — — — — 1.3 1.3 Gain on bargain purchase, net of tax — — — (3.6) (3.6) TRA termination expense — — — — — Allowance for AR write-off — — — — — Adjusted EBITDA $ 60.5 $ 18.6 $ 25.5 $ (25.1) $ 79.5 Year Ended December 31, 2021 High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total (in millions) Net income (loss) $ 37.0 $ (5.8) $ 0.3 $ (33.6) $ (2.1) Interest expense, net — — — 5.0 5.0 Tax expense (benefit) — — — (6.2) (6.2) Depreciation and amortization 21.5 8.1 5.9 1.3 36.8 Equity based compensation — — — 3.2 3.2 Gain on disposal of property and equipment — — — (1.1) (1.1) Severance and reorganization costs — — — (0.4) (0.4) Acquisition related costs — — — 8.6 8.6 Legal fees and settlements — — — 0.9 0.9 Impairment of fixed assets — — — — — Gain on bargain purchase, net of tax (37.2) — — — (37.2) TRA termination expense — — — 3.8 3.8 Allowance for AR write-off — — — 1.5 1.5 Adjusted EBITDA $ 21.3 $ 2.3 $ 6.2 $ (17.0) $ 12.8 39 $ Variance High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total (in millions) Net income (loss) $ (2.7) $ 13.4 $ 19.9 $ (13.4) $ 17.2 Interest expense, net — — — 2.3 2.3 Tax expense (benefit) — — — 7.1 7.1 Depreciation and amortization 4.7 2.9 (0.6) 0.6 7.6 Equity based compensation — — — 0.6 0.6 Gain on disposal of property and equipment — — — 0.4 0.4 Severance and reorganization costs — — — 2.0 2.0 Acquisition related costs — — — (0.7) (0.7) Legal fees and settlements — — — 0.6 0.6 Impairment of fixed assets — — — 1.3 1.3 Gain on bargain purchase, net of tax 37.2 — — (3.6) 33.6 TRA termination expense — — — (3.8) (3.8) Allowance for AR write-off — — — (1.5) (1.5) Adjusted EBITDA $ 39.2 $ 16.3 $ 19.3 $ (8.1) $ 66.7 Adjusted EBITDA for the year ended December 31, 2022 increased $66.7 million to $79.5 million from $12.8 million for the year ended December 31, 2021.
Biggest changeHigh Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total Year Ended December 31, 2023 Net income (loss) $ 44.0 $ 7.1 $ 15.5 $ (42.8) $ 23.8 Interest expense, net — — — 3.5 3.5 Tax expense — — — 7.2 7.2 Depreciation and amortization 20.1 11.3 6.9 1.6 39.9 EBITDA 64.1 18.4 22.4 (30.5) 74.4 Equity based compensation — — — 4.8 4.8 Loss on retirement of debt — — — 2.4 2.4 Gain on disposal of property and equipment — — — (1.8) (1.8) Severance and reorganization costs — 1.7 — 0.4 2.1 Acquisition related costs — — — 2.1 2.1 Impairment of fixed assets — — — — — 0.4 0.4 Adjusted EBITDA $ 64.1 $ 20.1 $ 22.4 $ (22.2) $ 84.4 36 High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total Year Ended December 31, 2022 Net income (loss) $ 34.3 $ 7.6 $ 20.2 $ (47.0) $ 15.1 Interest expense, net — — — 7.3 7.3 Tax expense — — — 0.9 0.9 Depreciation and amortization 26.2 11.0 5.3 1.9 44.4 EBITDA 60.5 18.6 25.5 (36.9) 67.7 Equity based compensation — — — 3.8 3.8 Gain on disposal of property and equipment — — — (0.7) (0.7) Severance and reorganization costs — — — 1.6 1.6 Acquisition related costs — — — 7.9 7.9 Legal fees and settlements — — — 1.5 1.5 Impairment of fixed assets — — — 1.3 1.3 Gain on bargain purchase, net of tax — — — (3.6) (3.6) Adjusted EBITDA $ 60.5 $ 18.6 $ 25.5 $ (25.1) $ 79.5 High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total Variance ($) Net income (loss) $ 9.7 $ (0.5) $ (4.7) $ 4.2 $ 8.7 Interest expense, net — — — (3.8) (3.8) Tax expense — — — 6.3 6.3 Depreciation and amortization (6.1) 0.3 1.6 (0.3) (4.5) EBITDA 3.6 (0.2) (3.1) 6.4 6.7 Equity based compensation — — — 1.0 1.0 Loss on retirement of debt — — — 2.4 2.4 Gain on disposal of property and equipment — — — (1.1) (1.1) Severance and reorganization costs — 1.7 — (1.2) 0.5 Acquisition related costs — — — (5.8) (5.8) Legal fees and settlements — — — (1.5) (1.5) Impairment of fixed assets — — — (0.9) (0.9) Gain on bargain purchase, net of tax — — — 3.6 3.6 Adjusted EBITDA $ 3.6 $ 1.5 $ (3.1) $ 2.9 $ 4.9 Adjusted EBITDA for the year ended December 31, 2023 increased $4.9 million to $84.4 million from $79.5 million for the year ended December 31, 2022.
We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements and to permit us to manage the cyclicality associated with our business. We currently expect to have sufficient funds to meet the Company’s short and long term liquidity requirements and comply with our covenants of our debt agreements.
We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements that permit us to manage the cyclicality associated with our business. We currently expect to have sufficient funds to meet the Company’s short and long term liquidity requirements and comply with our covenants of our debt agreements.
Our primary costs associated with our cost of services are related to personnel expenses, repairs and maintenance of our fixed assets and, as it relates to our Wireline Services segment, perforating and gun costs. A significant portion of these expenses are variable, and therefore typically managed based on industry conditions and demand for our services.
Our primary costs associated with our cost of services are related to personnel expenses, repairs and maintenance of our fixed assets and, additionally, as it relates to our Wireline Services segment, perforating and gun costs. A significant portion of these expenses are variable, and therefore typically managed based on industry conditions and demand for our services.
Further, there is generally a correlation between our revenue generated and personnel and repairs and maintenance costs, which are dependent upon the operational activity. Personnel costs associated with our operational employees represent a significant cost of our business.
Further, there is generally a correlation between our revenue generated and personnel and repairs and maintenance costs, which are dependent upon the operational activity. Personnel costs associated with our operational employees represent the most significant cost of our business.
Management believes that the following accounting estimates are those most critical to fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. 43 Property and Equipment Policy description Property and equipment is stated at cost or estimated fair market value at the acquisition date less accumulated depreciation.
Management believes that the following accounting estimates are those most critical to fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. 40 Property and Equipment Policy description Property and equipment is stated at cost or estimated fair market value at the acquisition date less accumulated depreciation.
The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services. Liquidity and Capital Resources Overview We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet, organic growth initiatives, investments and acquisitions.
The balances 37 included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services. Liquidity and Capital Resources Overview We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, investments and acquisitions.
Under US GAAP, the valuation allowance is recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.
GAAP, the valuation allowance is recorded to reduce the Company’s deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.
We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense (benefit), depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, gain or loss on disposal of assets, legal fees and settlements, and other non‑cash and certain other items that we do not view as indicative of our ongoing performance.
We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, gain or loss on disposal of assets, significant and unusual legal fees and settlements, and other non‑cash and certain other items that we do not view as indicative of our ongoing performance.
How We Evaluate Our Operations We provide services within the United States that are organized into three reporting segments, which include: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services, which are described below. The reportable segments have been categorized based on the nature of services provided within each line of business.
Controls and Procedures.” How We Evaluate Our Operations We provide services within the United States that are organized into three reporting segments, which include: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services, which are described below. The reportable segments have been categorized based on the nature of services provided within each line of business.
We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time we prepare our Consolidated Financial Statements. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance with US GAAP.
We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time we prepare our Consolidated Financial Statements. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our Consolidated Financial Statements are presented fairly and in accordance with U.S. GAAP.
We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense (benefit), depreciation and amortization, equity‑based compensation, gain or loss on disposal of assets, legal fees and settlements, and other non-cash and certain other items that we do not view as indicative of our ongoing performance.
We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, depreciation and amortization, equity‑based compensation, gain on disposal of assets, significant and unusual legal fees and settlements legal fees and settlements, and other non-cash and certain other items that we do not view as indicative of our ongoing performance.
We exclude the items listed above from net income or loss in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods, book values of assets, capital structures and the method by which 38 the assets were acquired.
We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired.
Judgments and assumptions The establishment of a valuation allowance requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets.
Judgments and assumptions The establishment of a valuation allowance requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. Under U.S.
Our service offerings consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as well installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows: • High Specification Rigs. Provides high-spec well service rigs to facilitate operations throughout the life cycle of a well. • Wireline Services.
Our service offerings consist of well completion support, workover, well maintenance, wireline, other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows: 32 • High Specification Rigs. Provides high specification well service rigs to facilitate operations throughout the life cycle of a well. • Wireline Services.
The Revolving Credit Facility includes a subjective acceleration clause and cash dominion provisions that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility.
The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions under certain circumstances that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Wells Fargo Revolving Credit Facility.
Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income or loss determined in accordance with US GAAP.
Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income determined in accordance with U.S. GAAP.
The change in cash flows provided by operating activities is attributable to increased operational activity and efficiencies. Cash used from working capital decreased to $19.1 million for the year ended December 31, 2022 from cash used of $38.6 million for the year ended December 31, 2021 which was due to increased cash receipts on outstanding accounts receivable.
The change in cash flows provided by operating activities is attributable to increased operational activity and efficiencies. Cash provided by working capital increased to $12.9 million for the year ended December 31, 2023 from cash used of $19.1 million for the year ended December 31, 2022 which was largely due to increased cash receipts on outstanding accounts receivable.
See discussion below for a description of our reporting segments. We operate in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.
We operate in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.
In connection with preparing our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and the related disclosures.
Critical Accounting Estimates and Policies Our financial statements are prepared in accordance with U.S. GAAP. In connection with preparing our financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expense and the related disclosures.
Our Debt Agreements Eclipse Loan and Security Agreement On September 27, 2021, the Company entered into a loan and security agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”).
Eclipse Loan and Security Agreement On September 27, 2021, the Company entered into a loan and security agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”). 39 On May 31, 2023, the Company extinguished the Eclipse Revolving Credit Facility and Eclipse M&E Term Loan Facility, paying the remaining principal amount of $10.4 million associated with the Eclipse M&E Term Loan Facility for the five months ended May 31, 2023.
Revenue increased $315.4 million, or 108%, to $608.5 million for the year ended December 31, 2022 from $293.1 million for the year ended December 31, 2021. The change in revenue by segment was as follows: High Specification Rigs.
Revenue increased $28.1 million, or 5%, to $636.6 million for the year ended December 31, 2023 from $608.5 million for the year ended December 31, 2022. The change in revenue by segment was as follows: High Specification Rigs.
Processing Solutions and Ancillary Services cost of services increased $63.9 million, or 221%, to $92.8 million for the year ended December 31, 2022 from $28.9 million for the year ended December 31, 2021.
Processing Solutions and Ancillary Services cost of services increased $9.0 million, or 10%, to $101.8 million for the year ended December 31, 2023 from $92.8 million for the year ended December 31, 2022.
On September 15, 2021, Ranger Energy Acquisition, LLC, entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries, which closed on October 1, 2021. As consideration for the assets acquired, the Company paid $36.7 million in cash, where such cash was generated through the issuance of Series A Preferred Stock.
The largest of its recent acquisitions took place during the fall of 2021 when Ranger Energy Acquisition, LLC, entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries. As consideration for the assets acquired, the Company paid $36.7 million in cash, where such cash was generated through the issuance of Series A Preferred Stock.
The change by segment was as follows: High Specification Rigs. High Specification Rigs Adjusted EBITDA increased $39.2 million to $60.5 million from $21.3 million primarily due to an increase in revenue of $153.1 million partially offset by a corresponding increase in cost of services of $113.9 million. Wireline Services.
The change by segment was as follows: High Specification Rigs. High Specification Rigs Adjusted EBITDA increased $3.6 million to $64.1 million from $60.5 million primarily due to an increase in revenue of $20.1 million partially offset by an increase in cost of services of $16.5 million. Wireline Services.
Cost of services (exclusive of depreciation and amortization) increased $240.6 million, or 91%, to $503.9 million for the year ended December 31, 2022 from $263.3 million for the year ended December 31, 2021. As a percentage of revenue, cost of services was approximately 83% and 89% for the years ended December 31, 2022 and 2021, respectively.
Cost of services (exclusive of depreciation and amortization) increased $27.8 million, or 6%, to $531.7 million for the year ended December 31, 2023 from $503.9 million for the year ended December 31, 2022. As a percentage of revenue, cost of services was approximately 84% and 83% for the years ended December 31, 2023 and 2022, respectively.
The change in cost of services by segment was as follows: High Specification Rigs. High Specification Rig cost of services increased $113.9 million, or 96%, to $232.7 million for the year ended December 31, 2022 from $118.8 million for the year ended December 31, 2021.
The change in cost of services by segment was as follows: High Specification Rigs. High Specification Rig cost of services increased $16.5 million, or 7%, to $249.2 million for the year ended December 31, 2023 from $232.7 million for the year ended December 31, 2022.
Generally, during the period our services are being provided, our customers are billed on an hourly basis for our high-spec rig services or, as it relates to our wireline services, they are billed upon the earlier of the completion of the well or on a monthly basis.
Generally, during the period our services are being provided, our customers are billed on an hourly basis for our high specification rig services or, as it relates to our wireline services, they are billed on an hourly basis for our high specification rigs services.
Income tax expense increased $7.1 million, or 115%, to an expense of $0.9 million for the year ended December 31, 2022 from a tax benefit of $6.2 million for the year ended December 31, 2021. The increase in income tax expense was attributable to the increased operational activity during the year ended December 31, 2022.
Income tax expense increased $6.3 million, or 700%, to $7.2 million for the year ended December 31, 2023 from $0.9 million for the year ended December 31, 2022. The increase in income tax expense was attributable to the increased operational activity during the year ended December 31, 2023. Net Income.
Financing Activities Net cash flows from financing activities decreased $126.3 million, or 172%, to cash used of $52.7 million for the year ended December 31, 2022 compared to cash provided of $73.6 million for the year ended December 31, 2021.
Financing Activities Net cash flows used in financing activities decreased $3.6 million, or 7%, to cash used of $49.1 million for the year ended December 31, 2023 compared $52.7 million for the year ended December 31, 2022.
Investing Activities Net cash flows from investing activities increased $47.7 million to cash generated of $11.3 million for the year ended December 31, 2022 compared to cash used of $36.4 million for the year ended December 31, 2021.
Investing Activities Net cash flows from investing activities decreased $41.0 million to cash used of $29.7 million for the year ended December 31, 2023 compared to cash generated of $11.3 million for the year ended December 31, 2022.
Judgments and assumptions We estimate the fair value of our performance stock units using an option pricing model that includes certain assumptions, such as volatility, dividend yield and the risk-free interest rate.
Judgments and assumptions We estimate the fair value of our performance stock units using an option pricing model that includes certain assumptions, such as volatility, dividend yield and the risk-free interest rate. Changes in these assumptions could change the fair value of our unit-based awards and associated compensation expense in our consolidated statements of operations.
Our primary sources of liquidity have historically been cash generated from operations and borrowings under our EBC Credit Facility. As of December 31, 2022, we had total liquidity of $61.0 million, consisting of $3.7 million of cash on hand and availability under our Revolving Credit Facility of $57.3 million.
Our primary sources of liquidity have historically been cash generated from operations and borrowings under our credit facilities. As of December 31, 2023, we had total liquidity of $85.1 million, consisting of $15.7 million of cash on hand and availability under our Wells Fargo Revolving Credit Facility of $69.4 million.
Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 4.5% to 5.0% in excess of SOFR and 3.5% to 4.0% in excess of the Base Rate, dependent on the fixed cost coverage ratio, through January 1, 2023. The weighted average applicable margin for the loan was 6.6% for the year ended December 31, 2022.
Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 7.0% for the year ended December 31, 2023.
Borrowings under the Secured Promissory Note bear interest at a rate of 8.5% per annum and is scheduled to mature in January 2024. 42 Other Installment Purchases During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral.
Other Installment Purchases During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral.
Secured Promissory Note In connection with the PerfX Acquisition, on July 8, 2021, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger Services, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. Certain of the assets acquired serve as collateral under the Secured Promissory Note.
In connection with the PerfX acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. Borrowings under the Secured Promissory Note bear interest at a rate of 8.5% per annum and was scheduled to mature in January 2024.
The borrowings of the Revolving Credit Facility, therefore, are classified as current maturities of long-term debt on the Consolidated Balance Sheet. Under the Revolving Credit Facility, the maximum borrowing capacity was $60.3 million, which was based on a borrowing base certificate in effect as of December 31, 2022.
The borrowings of the Wells Fargo Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet. Under the Wells Fargo Revolving Credit Facility, the total loan capacity is $72.6 million, which is based on a borrowing base certificate in effect as of December 31, 2023.
The rates for which the customer is billed is generally predetermined based upon a contractual agreement. Costs of Conducting Our Business The principal costs associated with conducting our business are personnel, repairs and maintenance, general and administrative, and depreciation expense. Cost of Services.
Costs of Conducting Our Business The principal costs associated with conducting our business are personnel, repairs and maintenance, general and administrative, and depreciation expense. Cost of Services.
For further details, see “—Our Debt Obligations.” 40 Cash Flows The following table presents our cash flows for the periods indicated: Year Ended December 31, Variance 2022 2021 $ % (in millions) Net cash provided by (used in) operating activities $ 44.5 $ (39.4) $ 83.9 213 % Net cash provided by (used in) investing activities 11.3 (36.4) 47.7 131 % Net cash provided by (used in) financing activities (52.7) 73.6 (126.3) (172) % Net change in cash $ 3.1 $ (2.2) $ 5.3 241 % Operating Activities Net cash flows from operating activities increased $83.9 million to cash generated of $44.5 million for the year ended December 31, 2022 compared to cash used of $39.4 million for the year ended December 31, 2021.
For further details, see “— Debt Agreements.” Cash Flows The following table presents our cash flows for the periods indicated: Year Ended December 31, Variance 2023 2022 $ % (in millions) Net cash provided by operating activities $ 90.8 $ 44.5 $ 46.3 104 % Net cash provided by (used in) investing activities (29.7) 11.3 (41.0) (363) % Net cash used in financing activities (49.1) (52.7) 3.6 7 % Net change in cash $ 12.0 $ 3.1 $ 8.9 287 % Operating Activities Net cash flows from operating activities increased $46.3 million to $90.8 million for the year ended December 31, 2023 compared to $44.5 million for the year ended December 31, 2022.
The increase in processing solutions and ancillary services is primarily attributable to our coil tubing, rentals and plugging and abandonment services which accounted for $25.6 million, $18.2 million and $18.4 million of the segment increase, respectively, and aligns with the increased revenue. Of the total segment cost of services increase, $46.1 million is attributable to the Basic Acquisition.
The increase in processing solutions and ancillary services revenue is primarily attributable to our plugging and 34 abandonment, coil tubing and logistics services which accounted for $7.0 million, $4.1 million, and $1.3 million of the segment increase, respectively.
General and administrative. General and administrative expenses increased $5.3 million, or 15%, to $39.9 million for the year ended December 31, 2022 from $34.6 million for the year ended December 31, 2021.
General and administrative expenses decreased $10.4 million, or 26%, to $29.5 million for the year ended December 31, 2023 from $39.9 million for the year ended December 31, 2022.
Processing Solutions and Ancillary Services Adjusted EBITDA increased $19.3 million to $25.5 million from $6.2 million due to an increase in revenue of $83.2 million partially offset by a corresponding increase in cost of services of $63.9 million. Other.
Processing Solutions and Ancillary Services Adjusted EBITDA decreased $3.1 million to $22.4 million from $25.5 million due to an increase in cost of services of $9.0 million, driven by increasing operational activity, partially offset by an increase in revenue of $5.9 million. Other.
See “—Results of Operations” and “—Note Regarding Non‑GAAP Financial Measure” for more information and reconciliations of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP. 36 Results of Operations The Year Ended December 31, 2022 compared to the Year Ended December 31, 2021 The following is an analysis of our operating results.
The following table presents reconciliations of net income to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. The Year Ended December 31, 2023 compared to The Year Ended December 31, 2022 The following is an analysis of our Adjusted EBITDA. See “Item 1.
Other Adjusted EBITDA decreased $8.1 million for the year ended December 31, 2022 to a loss of $25.1 million from a loss of $17.0 million due to increased general and administrative expenses, which was related to increased employee costs and professional fees.
Other Adjusted EBITDA improved $2.9 million for the year ended December 31, 2023 to a loss of $22.2 million from a loss of $25.1 million due to decreased general and administrative expenses, which was related to elevated acquisition and integration costs in legal, accounting and professional fees in the latter half of the prior year.
Supplemental Cash Flow Disclosures During the year ended December 31, 2022, the Company added fixed assets of $5.5 million which were finance leased arrangements across all operating segments. Additionally, the Company paid approximately $1.2 million in interest related to debt and finance leased assets.
Supplemental Cash Flow Disclosures During the year ended December 31, 2023, the Company added fixed assets of $10.0 million and $1.1 million primarily related to finance leased assets and asset trades, respectively, across all operating segments.
Business Outlook We are a provider of onshore high specification (“high-spec”) well service rigs and complementary services in the United States. We provide an extensive range of well site services to leading U.S. exploration and production (“E&P”) companies that are fundamental to establishing and enhancing the flow of oil and natural gas throughout the productive life of a well.
We provide an extensive range of well site services to leading U.S. exploration and production (“E&P”) companies that are fundamental to establishing, maintaining and enhancing the flow of oil and natural gas throughout the productive life of a well. Additionally, we serve to assist our customers in decommissioning wells at the end of their economic life.
This discussion contains “forward‑looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward‑looking statements due to a number of factors.
This discussion contains “forward‑looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. These statements include certain risks and uncertainties.
The operating results of Basic are included within the High Specification Rigs and Processing Solutions and Ancillary Services segments. On July 8, 2021, the Company acquired the assets of PerfX, a provider of wireline services that operate in Williston, North Dakota and Midland, Texas.
Secured Promissory Note On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas.
The stage count metric has become increasingly important with the update in our external reporting segments. Rig hours represent the aggregate number of hours that our well service rigs actively worked, whereas stage counts represent the number of completed stages during the periods presented.
Rig hours represent the aggregate number of hours that our well service rigs actively worked, whereas stage counts represent the number of completed stages during the periods presented for the completion service line within our Wireline Services segment.
We believe this is a key financial metric as it provides insight on profitability and operational performance based on the historical cost basis of our assets. Adjusted EBITDA We view Adjusted EBITDA, which is a non‑GAAP financial measure, as an important indicator of performance.
Operating Income or Loss We analyze our operating income or loss by segment, which we have defined as revenue less cost of services and depreciation expense. We believe this is a key financial metric as it provides insight on profitability and operational performance based on the historical cost basis of our assets.
The undrawn portion of the Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments. The Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves.
The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments, such as dividends and share repurchases.
Wireline Services revenue increased $79.1 million, or 67%, to $197.0 million for the year ended December 31, 2022 from $117.9 million for the year ended December 31, 2021.
Total rig hours decreased 5% to 446,000 for the year ended December 31, 2023 from 469,000 for the year ended December 31, 2022. Wireline Services. Wireline Services revenue increased $2.1 million, or 1%, to $199.1 million for the year ended December 31, 2023 from $197.0 million for the year ended December 31, 2022.
Changes in these assumptions could change the fair value of our unit-based awards and associated compensation expense in our consolidated statements of operations. 45 Recent Accounting Pronouncements For information regarding new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements, please refer to Recent Accounting Pronouncements included in “Item 8.
Recent Accounting Pronouncements For information regarding new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements, please refer to Recent Accounting Pronouncements included in “Item 8.
The increased wireline services revenue was primarily attributable to completion services which accounted for $44.3 million of the segment revenue increase and included a 15% increase in completed stage count to 31,400 for the year ended December 31, 2022 from 27,200 for the year ended December 31, 2021.
The increase in revenue in production and pump down service lines was offset by a decrease in completion services which accounted for $8.9 million of the segment revenue decrease and included an 18% decrease in completed stage count to 25,600 for the year ended December 31, 2023 from 31,400 for the year ended December 31, 2022.
The increase was primarily attributable to an increase in variable expenses, notably employee-related labor costs, fuel and repair and maintenance costs of $69.0 million, $10.9 million and $10.4 million, respectively. Additionally, the increased costs correspond with the increase in rig hours and revenue. Of the segment cost of services increase, $94.6 million is attributable to the Basic Acquisition. Wireline Services.
The increase was primarily attributable to an increase in variable expenses, notably employee-related labor costs, travel costs, and repair and maintenance costs of $10.6 million, $3.7 million and $2.4 million, respectively. As a percentage of revenue, cost of services increased 1% from the prior year, mostly due to an increase in medical costs of $1.9 million.
As of December 31, 2022, the aggregate principal balance outstanding under the Installment Agreements was $0.5 million and is payable ratably over 36 months from the time of each purchase. The monthly installment payments contain an imputed interest rate that is consistent with the Company’s incremental borrowing rate and is not significant to the Company.
As of December 31, 2023, the aggregate principal balance outstanding under the Installment Agreements was $0.1 million and is payable ratably over 36 months from the time of each purchase. For the year ended December 31, 2023, the Company paid down the Installment Agreements by $0.4 million.
High Specification Rig revenue increased $153.1 million, or 109%, to $293.2 million for the year ended December 31, 2022 from $140.1 million for the year ended December 31, 2021. The increased rig services revenue included an 82% increase in total rig hours to 469,000 for the year ended December 31, 2022 from 257,900 for the year ended December 31, 2021.
High Specification Rig revenue increased $20.1 million, or 7%, to $313.3 million for the year ended December 31, 2023 from $293.2 million for the year ended December 31, 2022. The increased rig services revenue included an average per rig hour increase of 12% to $703 compared to $625 for the year ended December 31, 2022.
Note Regarding Non‑GAAP Financial Measure Adjusted EBITDA is not a financial measure determined in accordance with generally accepted accounting principles in the United States (“US GAAP”).
Net income for the year ended December 31, 2022 was impacted by expenses related to the Basic Acquisition and lower operating activity and profitability. 35 Note Regarding Non‑GAAP Financial Measure Adjusted EBITDA is not a financial measure determined in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).
Of the segment revenue increase, $63.8 million and $34.9 million is attributable to the assets acquired in the PerfX and Patriot Acquisitions, respectively. 37 Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services revenue increased $83.2 million, or 237%, to $118.3 million for the year ended December 31, 2022 from $35.1 million for the year ended December 31, 2021.
Processing Solutions and Ancillary Services revenue increased $5.9 million, or 5%, to $124.2 million for the year ended December 31, 2023 from $118.3 million for the year ended December 31, 2022.
The Company had outstanding borrowings of $1.4 million under the Revolving Credit Facility and a $1.6 million Letter of Credit, leaving a residual $57.3 million available for borrowings as of December 31, 2022.
The Company did not have any borrowings under the Wells Fargo Revolving Credit Facility. The Company does have a $3.2 million in Letters of Credit open under the facility, leaving a residual $69.4 million available for borrowings as of December 31, 2023.
The increase in processing solutions and ancillary services revenue is primarily attributable to our coil tubing, rentals and plugging and abandonment services which accounted for $32.9 million, $28.5 million and $21.2 million of the segment increase, respectively. Of the total segment revenue increase, $53.9 million is attributable to the Basic Acquisition. Cost of services.
The increase in processing solutions and ancillary services is primarily attributable to our plugging and abandonment, coil tubing and logistics services which accounted for $7.7 million, $3.9 million and $0.9 million of the segment increase, respectively. Cost increases in this segment were driven by increasing operational activity, inflationary pressures and growth initiatives. General and Administrative.
The following table presents reconciliations of net income (loss) to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with US GAAP.
See “—Results of Operations” and “—Note Regarding Non‑GAAP Financial Measure” for more information and reconciliations of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S.
Additionally, the increase was attributable to the production and pump down services which accounted for $25.2 million and $9.6 million of the segment increase, respectively. The increase in wireline services revenue included a 79% increase in average active wireline units to 41 units from 23 units for the year ended December 31, 2021.
The increased wireline services revenue was primarily attributable to the pump down and production services which accounted for $5.6 million and $5.4 million of the segment increase, respectively.
As described above, general and administrative expenses are corporate in nature and are included within Other. These costs are not attributable to any of our lines of businesses nor reporting segments. Operating Income or Loss We analyze our operating income or loss by segment, which we have defined as revenue less cost of services and depreciation expense.
General and administrative expenses are corporate in nature and are included within Other. These costs include the majority of centrally-located company management and administrative personnel and are not attributable to any of our lines of businesses nor reporting segments.
Depreciation and amortization increased $7.6 million, or 21%, to $44.4 million for the year ended December 31, 2022 from $36.8 million for the year ended December 31, 2021. The increase was attributable to assets acquired through the business combinations during the latter half of the year ended December 31, 2021.
Depreciation and amortization decreased $4.5 million, or 10%, to $39.9 million for the year ended December 31, 2023 from $44.4 million for the year ended December 31, 2022. The decrease was largely attributable to fixed assets disposed of during the year ended December 31, 2023. Impairment of Fixed Assets.
Other represents costs not allocable to the reporting segments and includes corporate general and administrative expense and depreciation of corporate furniture and fixtures, amortization, impairments, debt retirements and other items similar in nature. 35 For additional financial information regarding our segments, please see “Part II—Item 8—Note 17 — Segment Reporting.” Financial Metrics How we Generate Revenue Rig hours and stage counts, as it relates to our High Specification Rigs and Wireline Services segments, respectively, are important indicators of our activity levels and profitability.
Financial Metrics How we Generate Revenue Rig hours and stage counts, as it relates to our High Specification Rigs and Wireline Services segments, respectively, are important indicators of our activity levels and profitability.
Working Capital Our working capital, which we define as total current assets less total current liabilities, was $65.6 million and $2.5 million as of December 31, 2022 and 2021, respectively. The increased accounts receivable and contract assets and assets considered to be held for sale, coupled with efforts to pay down debt, led to the working capital increase.
Additionally, the Company paid approximately $1.4 million in interest related to debt and finance leased assets. 38 Working Capital Our working capital, which we define as total current assets less total current liabilities, was $66.4 million and $65.6 million as of December 31, 2023 and 2022, respectively.
The significant increases in operational activity, across all segments, as well as corporate-related expenses, are related to the business combinations that took place, coupled with increased crude oil pricing and demand for our services, as described in “—Recent Events and Outlook.” Year Ended December 31, Variance 2022 2021 $ % Revenue High specification rigs $ 293.2 $ 140.1 $ 153.1 109 % Wireline Services 197.0 117.9 79.1 67 % Processing Solutions and Ancillary Services 118.3 35.1 83.2 237 % Total revenue 608.5 293.1 315.4 108 % Operating expenses Cost of services (exclusive of depreciation and amortization): High specification rigs 232.7 118.8 113.9 96 % Wireline Services 178.4 115.6 62.8 54 % Processing Solutions and Ancillary Services 92.8 28.9 63.9 221 % Total cost of services 503.9 263.3 240.6 91 % General and administrative 39.9 34.6 5.3 15 % Depreciation and amortization 44.4 36.8 7.6 21 % Impairment of fixed assets 1.3 — 1.3 100 % Gain on sale of assets (0.7) (1.1) 0.4 (36) % Total operating expenses 588.8 333.6 255.2 76 % Operating income (loss) 19.7 (40.5) 60.2 149 % Other income and expenses Interest expense, net 7.3 5.0 2.3 46 % Gain on bargain purchase, net of tax (3.6) (37.2) 33.6 (90) % Total other income and expenses 3.7 (32.2) 35.9 (111) % Income (loss) before income tax expense (benefit) 16.0 (8.3) 24.3 293 % Income tax expense (benefit) 0.9 (6.2) 7.1 115 % Net income (loss) $ 15.1 $ (2.1) $ 17.2 819 % Revenue .
Year Ended December 31, Variance 2023 2022 $ % Revenue High specification rigs $ 313.3 $ 293.2 $ 20.1 7 % Wireline Services 199.1 197.0 2.1 1 % Processing Solutions and Ancillary Services 124.2 118.3 5.9 5 % Total revenue 636.6 608.5 28.1 5 % Operating expenses Cost of services (exclusive of depreciation and amortization): High specification rigs 249.2 232.7 16.5 7 % Wireline Services 180.7 178.4 2.3 1 % Processing Solutions and Ancillary Services 101.8 92.8 9.0 10 % Total cost of services 531.7 503.9 27.8 6 % General and administrative 29.5 39.9 (10.4) (26) % Depreciation and amortization 39.9 44.4 (4.5) (10) % Impairment of fixed assets 0.4 1.3 (0.9) (69) % Gain on sale of assets (1.8) (0.7) (1.1) (157) % Total operating expenses 599.7 588.8 10.9 2 % Operating income 36.9 19.7 17.2 (87) % Other (income) expenses Interest expense, net 3.5 7.3 (3.8) (52) % Loss on debt retirement 2.4 — 2.4 (100) % Gain on bargain purchase, net of tax — (3.6) 3.6 (100) % Total other (income) expenses 5.9 3.7 2.2 59 % Income before income tax expense 31.0 16.0 15.0 94 % Income tax expense 7.2 0.9 6.3 700 % Net income $ 23.8 $ 15.1 $ 8.7 58 % Revenue .
Income Taxes Policy description The Company provides for income tax expense based on the liability method of accounting for income taxes.
Key assumptions used to determine the undiscounted future cash flows include estimates of future fleet utilization and demands based on our assumptions around future commodity prices and capital expenditures of our customers. 41 Income Taxes Policy description The Company provides for income tax expense based on the liability method of accounting for income taxes.
The change in cash flow is attributable to the utilization of cash generated from operations and asset sales to pay debt outstanding. During the year ended December 31, 2022 the Company paid $25.6 million, net to the Credit Facility and paid $12.4 million to retire Term Loan B.
During the year ended December 31, 2023 the Company paid $2.5 million, net to the Credit Facility, $10.4 million to retire Term Loan A, $19.3 million, net of tax to repurchase Class A Common Stock, and $2.4 million in cash dividends to Class A Common Stock stockholders.
The Company’s eligible accounts receivable serves as collateral for the borrowings under the Revolving Credit Facility and is scheduled to mature in September 2025.
The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028.
(2) In addition to our right-of-use asset obligation, the operating leases include our obligations from contracts with terms of less than 12 months. Capital Returns Program On March 1, 2023, the Board of Directors authorized a $35 million share repurchase program that can be utilized for up to 36 months.
Capital Returns Program On March 7, 2023, the Company announced a share repurchase program authorizing the Company to purchase up to $35 million of Class A Common Stock that can be utilized for up to 36 months. Additionally, the Board of Directors announced an intention to initiate a quarterly dividend of $0.05 per share.
The services primarily include equipment rentals, coil tubing, plug and abandonment, snubbing and processing solutions. • Other.
The services primarily include equipment rentals, coil tubing, plug and abandonment, snubbing and processing solutions. • Other. Other represents costs not allocable to the reporting segments and includes corporate general and administrative expense and depreciation of corporate furniture and fixtures, amortization, impairments, debt retirements and other items similar in nature.
This was partially offset by depreciation expense related to fixed assets disposed of during the year ended December 31, 2022. Interest expense, net. Net interest expense increased $2.3 million, or 46%, to $7.3 million for the year ended December 31, 2022 from $5.0 million for the year ended December 31, 2021.
Interest Expense, net. Net interest expense decreased $3.8 million, or 52%, to $3.5 million for the year ended December 31, 2023 from $7.3 million for the year ended December 31, 2022. The decrease in net interest expense was attributable the decreased principal balances on the debt instruments offset by increases in interest rates across certain instruments. Income Tax Expense.
Based on its assessment, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2022 due to material weaknesses in our control environment whereby the Company did not maintain (1) adequate controls over segregation of duties related to the review of manual journal entries and account reconciliations.
Based on its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023. For further information, please see “Part II, Item 9A.
Removed
Factors that could cause or contribute to such differences include, but are not limited to, market prices for oil and natural gas, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. Please 33 read Cautionary Statement Regarding Forward‑Looking Statements.
Added
Please read “Cautionary Statement Regarding Forward‑Looking Statements” and he risk factors described under “Part I, Item 1A.-Risk Factors” for more details. 31 2023 Business Update Business Outlook We are a provider of onshore high specification well service rigs and complementary services in the United States.
Removed
Also, please read the risk factors and other cautionary statements described under “Part I, Item 1A.-Risk Factors.” We assume no obligation to update any of these forward‑looking statements, except as required by applicable law. 2022 Business Update Acquisitions and Integrations During the years ended December 31, 2022 and 2021, the Company integrated the businesses, operations and assets acquired from each of the acquisitions, described below, into current business processes.
Added
A comprehensive discussion of each of our reporting segments is included below in the section titled How We Evaluate Our Operations.
Removed
Through the integration, Ranger continued to refine business strategies and processes to focus on the performance of the Company. Please see “—Results of Operations” below and “Part II—Item 8—Note 3 — Business Combinations” for further information on each of the acquisitions.
Added
As the Company looks forward in 2024, we expect business opportunities to remain steady as both the U.S. and global economy continues to show resilience and we further expect our financial results to show slight improvement year over year.

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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 changeA hypothetical 1.0% increase or decrease in the weighted average interest rates would cause our interest expense to fluctuate by approximately $0.2 million per year. We do not currently hedge our interest rate exposure. We do not engage in derivative transactions for speculative or trading purposes.
Biggest changeAs of December 31, 2023, the Company had no debt outstanding under the Wells Fargo Revolving Credit Facility, with a weighted average interest rate of 7.0%. We do not currently hedge our interest rate exposure. We do not engage in derivative transactions for speculative or trading purposes.
We do not currently intend to hedge our indirect exposure to commodity price risk. 46
We do not currently intend to hedge our indirect exposure to commodity price risk. 43
Industry conditions are influenced by numerous factors over which we have no control, including, but not limited to: the supply of and demand for oil and natural gas; the level of prices, and expectations about future prices of oil and natural gas; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; the discovery rates of new oil and natural gas reserves; available pipeline and other transportation capacity; weather conditions; domestic and worldwide economic conditions; political instability in oil‑producing countries; environmental regulations; technical advances affecting energy consumption; the price and availability of alternative fuels; the ability of oil and natural gas producers to raise equity capital and debt financing; and merger and divestiture activity among oil and natural gas producers.
Industry conditions are influenced by numerous factors over which we have no control, including, but not limited to: the supply of and demand for oil and natural gas; the level of prices, and expectations about future prices of oil and natural gas; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; the discovery rates of new oil and natural gas reserves; available pipeline and other transportation capacity; weather conditions; domestic and worldwide economic conditions; political instability in oil‑producing countries; environmental regulations; technical advances affecting energy consumption; the price and availability of alternative fuels; the ability of oil and natural gas producers to raise equity capital and debt financing; and merger and divestiture activity among oil and natural gas producers. 42 Interest Rate Risk We are exposed to interest rate risk, primarily associated with our Wells Fargo Revolving Credit Facility and Financing Agreement.
Within our Processing Solutions and Ancillary Services segment, the top three trade receivable balances represented 14%, 10% and 7%, respectively, of total Processing Solutions and Ancillary Services net accounts receivable. We mitigate the associated credit risk by performing credit evaluations and monitoring the payment patterns of our customers.
Within our Processing Solutions and Ancillary Services segment, the top three trade receivable balances represented 15%, 13% and 11%, respectively, of total Processing Solutions and Ancillary Services net accounts receivable. We mitigate the associated credit risk by performing credit evaluations and monitoring the payment patterns of our customers.
Credit Risk The majority of our trade receivables have payment terms of 30 days or less. As of December 31, 2022, the top three trade net receivable balances represented 9%, 8% and 8%, respectively, of consolidated accounts receivable.
Credit Risk The majority of our trade receivables have payment terms of 30 days or less. As of December 31, 2023, the top three trade net receivable balances represented 14%, 13% and 7%, respectively, of consolidated accounts receivable.
Within our High Specification Rig segment, the top three net trade receivable balances represented 16%, 14% and 12%, respectively, of total High Specification Rig net accounts receivable. Within our Wireline Services segment, the top three net trade receivable balances represented 9%, 12% and 7%, respectively, of total Wireline Services net accounts receivable.
Within our High Specification Rig segment, the top three net trade receivable balances represented 20%, 20% and 12%, respectively, of total High Specification Rig net accounts receivable. Within our Wireline Services segment, the top three net trade receivable balances represented 13%, 10% and 10%, respectively, of total Wireline Services net accounts receivable.
Removed
Interest Rate Risk We are exposed to interest rate risk, primarily associated with our Revolving Credit Facility, Financing Agreement and certain finance leases. As of December 31, 2022, we had $1.4 million outstanding under our Revolving Credit Facility, with a weighted average interest rate of 6.6%.
Removed
As of December 31, 2022, the aggregate principal balance outstanding under the M&E Term Loan was $10.4 million with an interest rate of 9.9% and finance leases of $7.5 million with an interest rate of 3.7%.

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