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What changed in Nine Energy Service, Inc.'s 10-K — 2024 vs 2025

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

+410 added−296 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-06)

Top changes in Nine Energy Service, Inc.'s 2025 10-K

410 paragraphs added · 296 removed · 186 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+29 added−11 removed132 unchanged
Biggest changeIn connection with these rules, substantial fines and penalties can be imposed and orders or injunctions limiting or prohibiting certain operations may be issued in connection with any failure to comply with laws and regulations relating to the safe operation of commercial motor vehicles. 9 Water Discharges The Federal Water Pollution Control Act (the “Clean Water Act”) and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States (“WOTUS”) and state waters.
Biggest changeIn connection with these rules, substantial fines and penalties can be imposed and orders or injunctions limiting or prohibiting certain operations may be issued in connection with any failure to comply with laws and regulations relating to the safe operation of commercial motor vehicles.
Air Emissions Through the federal Clean Air Act, as amended (“CAA”), and comparable state and local laws and regulations, the EPA regulates emissions of various air pollutants through the issuance of permits and the imposition of other requirements. The EPA has developed, and continues to develop, stringent regulations governing emissions of air pollutants at specified sources.
Air Emissions Through the federal Clean Air Act, as amended (the “CAA”), and comparable state and local laws and regulations, the EPA regulates emissions of various air pollutants through the issuance of permits and the imposition of other requirements. The EPA has developed, and continues to develop, stringent regulations governing emissions of air pollutants at specified sources.
In addition, the final rule establishes “Emissions Guidelines” in Subpart OOOOc, which requires states to develop plans to reduce methane emissions from existing sources that must be at least as effective as presumptive standards set by EPA.
In addition, the final rule establishes “Emissions Guidelines” in Subpart OOOOc, which requires states to develop plans to reduce methane emissions from existing sources that must be at least as effective as presumptive standards set by the EPA.
However, in January 2025, President Trump issued an executive order requiring CEQ to provide guidance on implementing NEPA and to propose rescinding and replacing CEQ’s NEPA regulations with implementing regulations at the agency level.
However, in January 2025, President Trump issued an executive order requiring the CEQ to provide guidance on implementing NEPA and to propose rescinding and replacing the CEQ’s NEPA regulations with implementing regulations at the agency level.
We believe that the principal competitive factors in the markets we serve are technology offerings, wellsite execution, service quality, technical expertise, equipment capacity, work force 6 competency, efficiency, safety record, reputation, and experience. Additionally, projects are often awarded on a bid basis, which tends to create a highly competitive environment.
We believe that the principal competitive factors in the markets we serve are technology offerings, wellsite execution, service quality, technical expertise, equipment capacity, work force competency, efficiency, safety record, reputation, and experience. Additionally, projects are often awarded on a bid basis, which tends to create a highly competitive environment.
The new rule phases out 10 flaring through Subpart OOOOb, which prohibits routine flaring from new oil wells after the phase-in period, and through a new Subpart OOOOc, which prohibits flaring absent a showing of technical infeasibility for existing wells with documented methane emissions of 40 tons per year or more.
The new rule phases out flaring through Subpart OOOOb, which prohibits routine flaring from new oil wells after the phase-in period, and through a new Subpart OOOOc, which prohibits flaring absent a showing of technical infeasibility for existing wells with documented methane emissions of 40 tons per year or more.
In light of concerns about seismic activity being triggered by the injection of produced waters into underground wells, certain regulators have also implemented or are considering implementing additional requirements related to seismic safety for hydraulic fracturing activities. A 2015 U.S.
In light of concerns about seismic activity being triggered by the injection of produced waters into underground wells, 14 certain regulators have also implemented or are considering implementing additional requirements related to seismic safety for hydraulic fracturing activities. A 2015 U.S.
In July 2020, the Council on Environmental Quality (“CEQ”) revised NEPA’s implementing regulations in an effort to streamline approvals for projects. In October 2021, the Council on Environmental Quality announced its Phase I rule, the first of two planned rules to roll back the 2020 rule, which was finalized in April 2022.
In July 2020, the Council on Environmental Quality (the “CEQ”) revised NEPA’s implementing regulations in an effort to streamline approvals for projects. In October 2021, the CEQ announced its Phase I rule, the first of two planned rules to roll back the 2020 rule, which was finalized in April 2022.
However, in January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources.
In January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources.
The following is a description of our primary service offerings and deployment methods: Cementing Services: Our cementing services consist of blending high-grade cement and water with various solid and liquid additives to create a cement slurry that is pumped between the casing and the wellbore of the well.
The following is a description of our primary service offerings and deployment methods: 5 Cementing Services: Our cementing services consist of blending high-grade cement and water with various solid and liquid additives to create a cement slurry that is pumped between the casing and the wellbore of the well.
In the course of such evaluations, an agency will evaluate the potential direct, indirect, and cumulative impacts of a proposed project and, if 13 necessary, will prepare a detailed Environmental Impact Statement that must be made available for public review and comment.
In the course of such evaluations, an agency will evaluate the potential direct, indirect, and cumulative impacts of a proposed project and, if necessary, will prepare a detailed Environmental Impact Statement that must be made available for public review and comment.
We currently operate 4 four high-quality laboratory facilities capable of designing and testing all of the current industry cement designs. The laboratory facilities operate twenty-four hours a day and are fully staffed by qualified technicians with the latest equipment and modeling software.
We currently operate four high-quality laboratory facilities capable of designing and testing all of the current industry cement designs. The laboratory facilities operate twenty-four hours a day and are fully staffed by qualified technicians with the latest equipment and modeling software.
Our “extended reach” units are capable of reaching the toe of wells with total measured depths of 27,000 feet and beyond, including lateral lengths in excess of 12,500 feet, keeping pace with the industry’s most challenging downhole environments.
Our “extended reach” units are capable of reaching the toe of wells with total measured depths of 27,000 6 feet and beyond, including lateral lengths in excess of 12,500 feet, keeping pace with the industry’s most challenging downhole environments.
Competition We provide our services and products across the U.S., Canada, and abroad, and we compete against different companies in each service and product line we offer. Our competition includes many large and small oilfield service companies, including the largest integrated oilfield services companies.
Competition We provide our services and products across the U.S., Canada, and abroad, and we compete against different companies in each service and product line we offer. Our competition includes many large and small oilfield service companies, 7 including the largest integrated oilfield services companies.
In June 2016, the EPA finalized regulations establishing New Source Performance Standards, known as Subpart OOOOa, for methane and volatile organic compounds from new and modified oil and natural gas production and natural gas processing and transmission facilities.
In June 2016, the EPA finalized regulations establishing New Source Performance Standards, known as Subpart OOOOa, for methane and volatile organic compounds from new and modified oil and natural gas production and natural gas 11 processing and transmission facilities.
These regulatory authorities exercise broad powers, governing activities such as the authorization to engage in motor carrier operations, regulatory safety, equipment testing, driver requirements and specifications, and insurance requirements.
These regulatory authorities exercise broad powers, governing activities such as the authorization to engage in motor carrier operations, regulatory safety, equipment testing, driver requirements and specifications, and insurance 10 requirements.
For example, at the state level, California enacted legislation in October 2023 that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third-party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.
For example, at the state level, California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third-party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.
Substantial fines and penalties can be imposed, and orders or injunctions limiting or prohibiting certain operations may be issued, in connection with any failure to comply with these laws and regulations. Transportation Safety and Compliance As of December 31, 2024, we operated a fleet in excess of 580 commercial motor vehicles.
Substantial fines and penalties can be imposed, and orders or injunctions limiting or prohibiting certain operations may be issued, in connection with any failure to comply with these laws and regulations. Transportation Safety and Compliance As of December 31, 2025, we operated a fleet in excess of 580 commercial motor vehicles.
The Inflation Reduction Act amends the CAA to include a Methane Emissions and Waste Reduction Incentive Program, which requires the EPA to impose a “Waste Emissions Charge” on certain natural gas and oil sources that are already required to report under the EPA’s Greenhouse Gas Reporting Program.
The Inflation Reduction Act of 2022 amends the CAA to include a Methane Emissions and Waste Reduction Incentive Program, which requires the EPA to impose a “Waste Emissions Charge” on certain natural gas and oil sources that are already required to report under the EPA’s Greenhouse Gas Reporting Program.
To implement the program, in May 2024, the EPA finalized revisions to the Greenhouse Gas Reporting Program for petroleum and natural gas facilities. The emissions reported under the Greenhouse Gas Reporting Program will be the basis for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending and litigation in the D.C.
To implement the program, in May 2024, the EPA finalized revisions to the Greenhouse Gas Reporting Program for petroleum and natural gas facilities. The emissions reported under the Greenhouse Gas Reporting Program would be the basis for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending and litigation in the D.C.
There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take other measures that may adversely impact our business or operations. 14
There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us or our customers to incur costs or take other measures that may adversely impact our business or operations. 15
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
These conditions can cause personal injury or loss of life; damage to, or destruction of, property, the environment, and wildlife; and the suspension of our and/or our customers’ operations. 7 In addition, claims for loss of oil and gas production and damage to formations can occur in the oilfield services industry.
These conditions can cause personal injury or loss of life; damage to, or destruction of, property, the environment, and wildlife; and the suspension of our and/or our 8 customers’ operations. In addition, claims for loss of oil and gas production and damage to formations can occur in the oilfield services industry.
The potential impact of further changes to the NEPA regulations and statutory text therefore remains uncertain and could have an effect on our customers’ business and operations, which could ultimately result in decreased demand for our services. Endangered Species Act and Migratory Bird Treaty Act The Endangered Species Act (“ESA”) was established to protect endangered and threatened species.
The potential impact of further changes to the NEPA regulations and statutory text could have an effect on our customers’ business and operations, which could ultimately result in decreased demand for our services. Endangered Species Act and Migratory Bird Treaty Act The Endangered Species Act (the “ESA”) was established to protect endangered and threatened species.
While we are not dependent on any single supplier for those materials, parts, or components, certain product lines depend on a limited number of third-party suppliers and vendors. During the year ended December 31, 2024, no supplier of the materials used in our services provided over 10% of our materials or equipment as a percentage of overall costs.
While we are not dependent on any single supplier for those materials, parts, or components, certain product lines depend on a limited number of third-party suppliers and vendors. During the year ended December 31, 2025, no supplier of the materials used in our services provided 10% or more of our materials or equipment as a percentage of overall costs.
In addition, due to our operations in Canada, we are subject to Canadian environmental statutes and regulations as well as Canada’s new anti-forced labor law.
In addition, due to our operations in Canada, we are subject to Canadian environmental statutes and regulations as well as Canada’s recent anti-forced labor law.
For the year ended December 31, 2024, our top five customers collectively accounted for approximately 25% of our revenues. Demand for our services and products is cyclical and substantially dependent upon activity levels in the oil and gas industry, particularly our customers’ willingness to spend capital on the exploration for and development of oil and natural gas.
For the year ended December 31, 2025, our top five customers collectively accounted for approximately 24% of our revenues. Demand for our services and products is cyclical and substantially dependent upon activity levels in the oil and gas industry, particularly our customers’ willingness to spend capital on the exploration for and development of oil and natural gas.
Through these reductions in cycle time, our dissolvable plugs can help increase our customers’ internal rate of return and provide a safer and more efficient working environment. From January 2018 through December 2024, we deployed approximately 557,700 isolation, stage one, and casing flotation tools.
Through these reductions in cycle time, our dissolvable plugs can help increase our customers’ internal rate of return and provide a safer and more efficient working environment. From January 2018 through December 2025, we deployed approximately 646,700 isolation, stage one, and casing flotation tools.
The Phase I final rule generally restores certain regulatory provisions that were in effect prior to the 2020 rule. In May 2024, CEQ finalized the Phase II rule, which accelerates NEPA reviews while maintaining consideration of relevant environmental, climate change, and environmental justice effects of a proposed project.
The Phase I final rule generally restored certain regulatory provisions that were in effect prior to the 2020 rule. In May 2024, the CEQ finalized the Phase II rule, which accelerated NEPA reviews while maintaining consideration of relevant environmental, climate change, and environmental justice effects of a proposed project.
A portion of completion tool revenue is generated from outside of North America, and international completion tools are an important part of our revenue stream. We believe that our strategic geographic diversity will benefit us as activity increases or decreases in select basins by helping to mitigate basin and commodity-risk.
A portion of completion tool revenue is generated from outside of the U.S., and international completion tools are an important part of our revenue stream. We believe that our strategic geographic diversity will benefit us as activity increases or decreases in select basins by helping to mitigate basin and commodity-risk.
This customized design significantly decreases our risk of downtime due to mechanical failure and eliminates the necessity of having an additional cementing unit on standby. We have invested in the highest quality cementing equipment. From January 2018 through December 2024, we completed approximately 26,000 cementing jobs, with an on-time rate of approximately 89%.
This customized design significantly decreases our risk of downtime due to mechanical failure and eliminates the necessity of having an additional cementing unit on standby. We have invested in the highest quality cementing equipment. From January 2018 through December 2025, we completed approximately 30,300 cementing jobs, with an on-time rate of approximately 89%.
The emissions fee and funding provisions of the law could increase operating costs within the oil and gas industry and accelerate the transition away from fossil fuels, which could in turn adversely affect our and our customers’ business and results of operations.
Emissions fees could increase operating costs within the oil and gas industry and accelerate the transition away from fossil fuels, which could in turn adversely affect our and our customers’ business and results of operations.
Employees As of December 31, 2024, we had 1,077 employees, all of which were full-time. We are not a party to any collective bargaining agreements.
Employees As of December 31, 2025, we had 1,072 employees, all of which were full-time. We are not a party to any collective bargaining agreements.
We deploy proprietary specialized tools like our fully-composite, hybrid, and dissolvable frac plugs through our wireline units. From January 2018 through December 2024, we completed approximately 189,500 wireline stages with a success rate of over 99%.
We deploy proprietary specialized tools like our fully-composite, hybrid, and dissolvable frac plugs through our wireline units. From January 2018 through December 2025, we completed approximately 221,200 wireline stages with a success rate of over 99%.
While we specialize in larger-diameter (2 3/8” and 2 5/8”) coiled tubing units, we also offer 2” and 1 1/4” 5 diameter solutions to our customers. From January 2018 through December 2024, we have performed approximately 8,300 jobs and deployed more than 218 million running feet of coiled tubing, with a success rate of over 99%.
While we specialize in larger-diameter (2 3/8” and 2 5/8”) coiled tubing units, we also offer 2” and 1 1/4” diameter solutions to our customers. From January 2018 through December 2025, we have performed approximately 9,400 jobs and deployed approximately 250 million running feet of coiled tubing, with a success rate of over 99%.
In turn, governments and civil society are increasingly focused on limiting the emissions of greenhouse gases (“GHGs”), including emissions of carbon dioxide from the use of oil and natural gas.
In turn, governments and civil society are focused on limiting the emissions of GHGs, including emissions of carbon dioxide from the use of oil and natural gas.
Regulations requiring the disclosure of GHG emissions, and other climate-related information or information substantiating climate-related claims, are also increasingly being adopted or proposed at the federal and state level.
Regulations requiring the disclosure of GHG emissions, and other climate-related information or information substantiating climate-related claims, are also being adopted or proposed.
President Trump also issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources. Consequently, future implementation and enforcement of the rules impacting the ESA and the MBTA are uncertain.
President Trump also issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources.
The EPA has determined that emissions of GHGs, including carbon dioxide and methane, present a danger to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the Earth’s atmosphere and other climatic changes.
In 2009, the EPA issued the Endangerment Finding, stating that emissions of GHGs, including carbon dioxide and methane, present a danger to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the Earth’s atmosphere and other climatic changes.
However, such legislation has periodically been introduced in the U.S. Congress and may be proposed or adopted in the future, and energy legislation and other regulatory initiatives have been proposed that are relevant to GHG emissions issues.
Congress and may be proposed or adopted in the future, and energy legislation and other regulatory initiatives have been proposed that are relevant to GHG emissions issues.
Under certain of such laws and regulations, we could be held strictly and jointly and severally liable for the removal or remediation of previously released materials or property contamination, regardless of whether we were responsible for the release or contamination and even if our operations met previous standards in the industry at the time they were conducted. 8 The following is a summary of some of the existing laws, rules, and regulations to which we are subject.
Under certain of such laws and regulations, we could be held strictly and jointly and severally liable for the removal or remediation of previously released 9 materials or property contamination, regardless of whether we were responsible for the release or contamination and even if our operations met previous standards in the industry at the time they were conducted.
The discharge of pollutants into, and other impacts to, regulated waters, including jurisdictional wetlands, is prohibited, except in accordance with the terms of a permit issued by the EPA, the U.S. Army Corps of Engineers (the “Corps”) or an analogous state agency.
The discharge of pollutants into, and other impacts to, regulated waters, including jurisdictional wetlands, is prohibited, except in accordance with the terms of a permit issued by the EPA, the U.S. Army Corps of Engineers (the “Corps”) or an analogous state agency. The scope of federal jurisdictional reach over WOTUS has been subject to substantial revision in recent years.
However, in January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources. Consequently, future implementation and enforcement of the final rule remains uncertain at this time.
Additionally, in January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development, or use of domestic energy resources.
However, in January 2025, President Trump issued an executive order directing the immediate notice to the United Nations of the United States’ withdrawal from the Paris Agreement and all other agreements made under the United Nations Framework Convention on Climate Change. The full impact of these actions remains unclear at this time.
However, in January 2025, President Trump 12 issued an executive order directing the immediate notice to the United Nations of the United States’ withdrawal from the Paris Agreement and all other agreements made under the United Nations Framework Convention on Climate Change. The withdrawal became effective in January 2026.
If our customers were to have areas within their business and operations designated as critical or suitable habitat for a protected species, it could decrease demand for our services and have a material adverse effect on our business.
Consequently, future implementation and enforcement of the rules impacting the ESA and the MBTA are uncertain. If our customers were to have areas within their business and operations designated as critical or suitable habitat for a protected species, it could decrease demand for our services and have a material adverse effect on our business.
However, various state and local governments in the U.S. have publicly committed to furthering the goals of the Paris Agreement. 11 The U.S. Congress has from time to time considered adopting legislation to reduce emissions of GHGs, but no comprehensive federal laws regulating the emission of GHGs or directly imposing a price of carbon have been adopted in recent years.
Congress has from time to time considered adopting legislation to reduce emissions of GHGs, but no comprehensive federal laws regulating the emission of GHGs or directly imposing a price of carbon have been adopted in recent years. However, such legislation has periodically been introduced in the U.S.
Hazardous Substances and Waste Handling The Resource Conservation and Recovery Act (“RCRA”) and comparable state statutes regulate the management, generation, transportation, treatment, storage, disposal, and cleanup of hazardous and non-hazardous wastes. Under the guidance issued by the U.S.
The following is a summary of some of the existing laws, rules, and regulations to which we are subject. Hazardous Substances and Waste Handling The Resource Conservation and Recovery Act (“RCRA”) and comparable state statutes regulate the management, generation, transportation, treatment, storage, disposal, and cleanup of hazardous and non-hazardous wastes. Under the guidance issued by the U.S.
The EPA has also issued effluent limitation guidelines that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants. Also, from time to time, legislation has been introduced, but not enacted, in Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the hydraulic fracturing process.
Also, from time to time, legislation has been introduced, but not enacted, in Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the hydraulic fracturing process.
We encourage investors and other interested parties to review the information we may publish through our investor relations website, in addition to our SEC filings, press releases, conference calls, and webcasts. Our Services We derive revenue by providing services integral to the completion of unconventional wells through a full range of tools and methodologies.
We encourage investors and other interested parties to review the information we may publish through our investor relations website, in addition to our SEC filings, press releases, conference calls, and webcasts.
For example, 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 fuels in fracturing fluids and has issued permitting guidance that applies to such 12 activities. There is considerable uncertainty surrounding regulation of the emissions of methane, which may be released during hydraulic fracturing.
However, federal agencies have asserted regulatory authority over certain aspects of the process. For example, 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 fuels in fracturing fluids and has issued permitting guidance that applies to such activities.
A coalition of states and cities, environmental groups, and agricultural groups challenged the NWPR, which was vacated by a federal district court in August 2021. In January 2023, the EPA and the Corps issued a final rule that based the definition of WOTUS on the pre-2015 definition. Separately, in May 2023, the U.S. Supreme Court’s decision in Sackett v.
In January 2023, the EPA and the Corps issued a final rule that based the definition of WOTUS on the pre-2015 definition. Separately, in May 2023, the U.S. Supreme Court’s decision in Sackett v.
However, in May 2024, the states of North Dakota, Texas, Montana, Wyoming, and Utah challenged the rule. In September 2024, the U.S. District Court for the District of North Dakota granted a motion prohibiting the BLM from enforcing the rule against those states pending the outcome of the litigation.
District Court for the District of North Dakota granted a motion prohibiting the BLM from enforcing the rule against those states pending the outcome of the litigation.
The scope of federal jurisdictional reach over waters of the United States has been subject to substantial revision in recent years. In 2015, the EPA and the Corps issued a rule defining the scope of federal jurisdiction over WOTUS, which never took effect before being replaced by the Navigable Waters Protection Rule (the “NWPR”) in 2020.
In 2015, the EPA and the Corps issued a rule defining the scope of federal jurisdiction over WOTUS, which never took effect before being replaced by the Navigable Waters Protection Rule (the “NWPR”) in 2020. A coalition of states and cities, environmental groups, and agricultural groups challenged the NWPR, which was vacated by a federal district court in August 2021.
The process, which involves the injection of water, sand, and chemicals under pressure into formations to fracture the surrounding rock and stimulate production, is typically regulated by state oil and natural gas commissions. However, federal agencies have asserted regulatory authority over certain aspects of the process.
Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from tight formations, including shales. The process, which involves the injection of water, sand, and chemicals under pressure into formations to fracture the surrounding rock and stimulate production, is typically regulated by state oil and natural gas commissions.
In addition to the EPA’s new Subpart OOOO regulations discussed above, other federal agencies have promulgated rules regulating methane. In April 2024, the U.S. Bureau of Land Management (the “BLM”) finalized a rule to reduce the waste of natural gas during the production of oil and gas on federal and tribal lands. The final rule took effect in June 2024.
Bureau of Land Management (the “BLM”) finalized a rule to reduce the waste of natural gas during the production of oil and gas on federal and tribal lands. The final rule took effect in June 2024. However, in May 2024, the states of North Dakota, Texas, Montana, Wyoming, and Utah challenged the rule. In September 2024, the U.S.
The executive order also instructs federal agencies to adhere to only the relevant legislated requirements for environmental reviews and to prioritize efficiency and certainty over any other objectives in such reviews. In February 2025, CEQ sent an interim final rule to the White House Office of Management and Budget that would immediately withdraw the NEPA implementing regulations.
The executive order also instructed federal agencies to adhere to only the relevant legislated requirements for environmental reviews and to prioritize efficiency and certainty over any other objectives in such reviews.
Circuit Court of Appeals has commenced. In November 2024, the EPA finalized a rule implementing the Inflation Reduction Act’s Waste Emissions Charge, which became effective on January 1, 2025.
Circuit Court of Appeals has commenced. In January 2025, industry associations challenged the Waste Emissions Charge rule in the D.C. Circuit Court of Appeals.
Consequently, future implementation and enforcement of the final rule remains uncertain at this time.
Consequently, future implementation and enforcement of the final rule remains uncertain at this time. The EPA has also issued effluent limitation guidelines that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants.
Removed
In November 2020, under the first Trump Administration, the U.S. withdrew from the Paris Agreement; however, various corporations, investors, and U.S. state and local governments continued to publicly pledge to further the goals of the Paris Agreement. In February 2021, under the Biden Administration, the United States rejoined the Paris Agreement and set a target to reduce U.S.
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Current Bankruptcy Proceedings On February 1, 2026 (the “Petition Date”), we and our domestic and Canadian subsidiaries (the “Company Parties”) filed voluntary petitions (the “Chapter 11 Cases”) under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to implement a prepackaged Chapter 11 plan of reorganization (the “Plan”) to effectuate a financial restructuring of the Company Parties’ existing indebtedness (the “Restructuring”).
Removed
GHG emissions by 50-52% by the year 2030 as compared with 2005 levels. In addition, in September 2021, the Biden Administration publicly announced the Global Methane Pledge, a pact that commits its signatories to the collective goal of reducing global methane emissions at least 30% below 2020 levels by 2030, including “all feasible reductions” in the energy sector.
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Prior to filing the Chapter 11 Cases, on February 1, 2026, the Company 4 Parties entered into a restructuring support agreement (the “Restructuring Support Agreement”) with an ad hoc group (collectively, the “Consenting Stakeholders”) of certain holders of our 13.000% Senior Secured Notes due 2028 (the “2028 Notes”) and the lenders (the “Prepetition ABL Lenders”) under the Loan and Security Agreement, dated as of May 1, 2025 (the “Prepetition ABL Loan and Security Agreement”), by and among us and certain of our subsidiaries, each as a borrower or guarantor, as applicable, White Oak Commercial Finance, LLC, as agent for the lenders, and the lenders from time to time party thereto.
Removed
At the 27th Conference of the Partie s, the United States agreed, in conjunction with the European Union and a number of other partner countries, to develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity natural gas.
Added
Pursuant to the Restructuring Support Agreement, the Consenting Stakeholders agreed, subject to certain terms and conditions, to support the Plan.
Removed
At the 28th Conference of the Parties, member countries agreed to the first “global stocktake,” which calls on countries to contribute to global efforts, including a tripling of renewable energy capacity and doubling energy efficiency improvements by 2030, accelerating efforts toward the phase-down of unabated coal power, phasing out inefficient fossil fuel subsidies, and transitioning away from fossil fuels in energy systems.
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The material terms of the Plan include, among other things: • the Prepetition ABL Lenders providing the Company Parties with a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount of revolving credit commitments (the “DIP ABL Facility”), including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which will, upon the satisfaction of customary closing conditions, convert into the Exit ABL Facility (as defined below) on the effective date of the Plan (the “Plan Effective Date”) or as soon as reasonably practicable thereafter; • on the Plan Effective Date, the Company (as reorganized, the “Reorganized Company”) issuing 100% of a single class of common equity interests to the holders of the 2028 Notes and the 2028 Notes being canceled; and • on the Plan Effective Date, the Company’s currently existing common stock being canceled.
Removed
Most recently, at the 29th Conference of the Parties, delegates approved rules to operationalize international carbon markets under Article 6 of the Paris Agreement, including a new Paris Agreement Crediting Mechanism to trade UN-approved carbon credits.
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On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility and the Company Parties entered into a loan and security agreement (the “DIP Loan and Security Agreement”) with White Oak Commercial Finance, LLC, as agent (the “DIP Agent”), and White Oak ABL 3, LLC and White Oak Europe ABL Limited, as lenders (the “DIP Lenders”), which provides the Company Parties with the DIP ABL Facility.
Removed
The fee imposed under the Methane Emissions and Waste Reduction Incentive Program for 2024 is $900 per ton emitted over annual methane emissions thresholds and increases to $1,200 in 2025 and $1,500 in 2026. In January 2025, industry associations challenged the Waste Emissions Charge rule in the D.C. Circuit Court of Appeals.
Added
The DIP Loan and Security Agreement includes certain terms and conditions (including the Plan becoming effective) providing for the conversion of the DIP ABL Facility into an exit senior secured asset-based revolving credit facility consisting of up to $135.0 million in aggregate principal amount of revolving commitments (the “Exit ABL Facility”) on the Plan Effective Date or as soon as reasonably practicable thereafter.
Removed
In addition, based on the timing of the rule’s finalization and statements from congressional Republicans, the Waste Emissions Charge rule is potentially vulnerable to repeal by Congress under the Congressional Review Act, and the Inflation Reduction Act may also be subject to amendment or repeal through Congressional budget reconciliation.
Added
Since the Petition Date, the Company Parties have been operating their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Removed
Hydraulic Fracturing Our businesses are dependent on hydraulic fracturing and horizontal drilling activities. Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from tight formations, including shales.
Added
The Company Parties have requested and obtained relief from the Bankruptcy Court that enables them to continue their ordinary course operations during the Chapter 11 Cases and uphold their commitments to their stakeholders, including employees, customers, and vendors, during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.
Removed
Several states and environmental groups have challenged the Phase II rule in federal district court. The CEQ’s changes could result in increased NEPA review timelines for projects involving agency action regarding federal lands, federal funds, or federal permits or approvals.
Added
Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed the continuation of most legal proceedings and the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estate unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim.
Removed
Additionally, in November 2024, a federal appeals court found that CEQ lacks statutory authority to issue NEPA regulations binding on other federal agencies. However, the court’s holding was confined to striking down the agencies’ action under review on separate grounds, and CEQ’s Phase I and II rules remain in effect.
Added
In particular, although the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the indenture governing the 2028 Notes (the “Indenture”) and the Prepetition ABL Loan and Security Agreement (together with the Indenture, the “Debt Instruments”) and caused the principal and interest due thereunder to be immediately due and payable, any efforts to enforce such payment obligations are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.
Removed
In January 2021, the DOI finalized a rule limiting application of the MBTA; however, the DOI revoked the rule in October 2021 and issued an advance notice of proposed rulemaking seeking comment on the DOI’s plan to develop regulations that authorize incidental take under certain prescribed conditions. The DOI has not yet issued a proposed rule.
Added
Notwithstanding the general application of the automatic stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers. On March 4, 2026, the Bankruptcy Court entered an order confirming the Plan (the “Confirmation Order”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, for example, our bylaws (i) establish limitations on the removal of directors and on the ability of our stockholders to call special meetings, (ii) include advance notice requirements for nominations for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings, (iii) provide that our board of directors is expressly authorized to adopt, or to alter or repeal, our bylaws, and (iv) provide for a classified board of directors, consisting of three classes of approximately equal size, each class serving staggered three-year terms, so that only approximately one-third of our directors will be elected each year.
Biggest changeAdditionally, for example, our bylaws (i) include advance notice requirements for nominations for election to our Board and for proposing matters that can be acted upon at stockholder meetings and (ii) provide that our Board is expressly authorized to adopt, or to alter or repeal, our bylaws.
If prices of oil and natural gas decline or our customers do not increase capex and activity levels, our business, financial condition, results of operations, cash flows, and prospects may be materially and adversely affected.
If prices of oil and natural gas decline or our customers do not increase capex and activity levels, our business, financial condition, results of operations, cash flows, and prospects may be materially adversely affected.
Increased attention to climate change from governmental and regulatory bodies, investors, consumers, industry and other stakeholders, changes in consumer behavior and related demand for alternatives to oil and natural gas, societal expectations on companies to address climate change, preferences and attitudes with respect to the generation and consumption of energy, the use of hydrocarbons, and the use of products manufactured with, or powered by, hydrocarbons, may result in the enactment of climate change-related regulations, policies and initiatives (at the government, regulator, corporate and/or investor 16 community levels), including alternative energy requirements, new fuel consumption standards, energy conservation and emissions reductions measures and responsible energy development, technological advances with respect to the generation, transmission, storage and consumption of energy, and increased availability and competitiveness of alternative energy sources (such as wind, solar geothermal, tidal, fuel cells, and biofuels).
Increased attention to climate change from governmental and regulatory bodies, investors, consumers, industry and other stakeholders, changes in consumer behavior and related demand for alternatives to oil and natural gas, societal expectations on companies to address climate change, preferences and attitudes with respect to the generation and consumption of energy, the use of hydrocarbons, and the use of products manufactured with, or powered by, hydrocarbons, may result in the enactment of climate change-related regulations, policies and initiatives (at the government, regulator, corporate and/or investor community levels), including alternative energy requirements, new fuel consumption standards, energy conservation and emissions reductions measures and responsible energy development, technological advances with respect to the generation, transmission, storage and consumption of energy, and increased availability and competitiveness of alternative energy sources (such as wind, solar geothermal, tidal, fuel cells, and biofuels).
Recently, the United States has proposed changes in trade policies that include export control restrictions, the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the United States, increased economic sanctions on individuals, companies, or countries, and other government 23 regulations affecting trade between the United States and other countries where we have business relationships, including with suppliers, and a number of other nations have proposed similar measures directed at trade with the United States in response.
Recently, the United States has proposed changes in trade policies that include export control restrictions, the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the United States, increased economic sanctions on individuals, companies, or countries, and other government regulations affecting trade between the United States and other countries where we have business relationships, including with suppliers, and a number of other nations have proposed similar measures directed at trade with the United States in response.
Any enhanced climate disclosure obligations could result in increased compliance burden and operating costs as well as increased litigation risk related to the required disclosures. 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.
Any enhanced climate disclosure obligations could result in increased compliance burden and operating costs as well as increased litigation risk related to the required disclosures. 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- 32 intensive sectors.
Our charter and bylaws also impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. For example, our charter authorizes our board of directors to determine the rights, preferences, privileges, and restrictions of unissued series of preferred stock without any vote or action by our stockholders.
Our charter and bylaws also impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. For example, our charter authorizes our Board to determine the rights, preferences, privileges, and restrictions of unissued series of preferred stock without any vote or action by our stockholders.
As the federal government continues to develop and propose regulations relating to fuel quality, engine efficiency, and GHG emissions, we may experience an increase in costs related to truck purchases and maintenance, impairment of equipment productivity, a decrease in the residual value of vehicles, unpredictable fluctuations in fuel prices, and an increase in operating expenses.
As the federal government continues to develop and propose regulations 33 relating to fuel quality, engine efficiency, and GHG emissions, we may experience an increase in costs related to truck purchases and maintenance, impairment of equipment productivity, a decrease in the residual value of vehicles, unpredictable fluctuations in fuel prices, and an increase in operating expenses.
Our charter and bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees, or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our charter or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
Our charter provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees, or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our charter or our bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
The energy extraction sector is one of the sectors designated for increased enforcement by the EPA, which will continue to regulate our industry in the years to come, potentially resulting in additional regulations that could have a material adverse impact on our business, prospects, or financial condition.
The energy extraction sector is one of the sectors designated for 31 increased enforcement by the EPA, which will continue to regulate our industry in the years to come, potentially resulting in additional regulations that could have a material adverse impact on our business, prospects, or financial condition.
While we create and publish voluntary disclosures regarding sustainability matters from time to time, some of the 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.
While we create and publish voluntary disclosures regarding sustainability matters from time to time, some of the 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 25 risks or events, including the costs associated therewith.
In addition, we may not be able to retain key employees of entities that we acquire in the future, which may impact our ability to successfully integrate or operate the assets we acquire. 29 We may be unable to employ, or maintain the employment of, a sufficient number of key employees, technical personnel, and other skilled and qualified workers.
In addition, we may not be able to retain key employees of entities that we acquire in the future, which may impact our ability to successfully integrate or operate the assets we acquire. We may be unable to employ, or maintain the employment of, a sufficient number of key employees, technical personnel, and other skilled and qualified workers.
In addition, the enactment of climate change-related regulations, policies, and initiatives (at the government, corporate, and/or investor community levels) may in the future result in increases in our compliance costs and other operating costs and have other adverse effects (e.g., greater potential for governmental investigations or litigation).
In addition, the enactment of climate change-related regulations, policies, and initiatives (at the government, corporate, and/or investor community levels) may in the future result in increases in our compliance costs and other operating costs and 24 have other adverse effects (e.g., greater potential for governmental investigations or litigation).
In addition, any litigation or claim, even if fully indemnified or insured, could negatively affect our reputation with our customers and the public, which could cause us to lose customers and substantial revenue, make it more difficult for us to compete effectively, or obtain adequate 21 insurance in the future.
In addition, any litigation or claim, even if fully indemnified or insured, could negatively affect our reputation with our customers and the public, which could cause us to lose customers and substantial revenue, make it more difficult for us to compete effectively, or obtain adequate insurance in the future.
Additionally, if we expand the size or scope of our operations, we could be subject to regulatory requirements that are more stringent than the requirements under which we are currently allowed to 25 operate or require additional authorizations to continue operations. Compliance with this additional regulatory burden could increase our operating or other costs.
Additionally, if we expand the size or scope of our operations, we could be subject to regulatory requirements that are more stringent than the requirements under which we are currently allowed to operate or require additional authorizations to continue operations. Compliance with this additional regulatory burden could increase our operating or other costs.
We are also required to obtain federal, state, local, and/or third-party permits and authorizations in some 24 jurisdictions in connection with our wireline services and trucking operations. The requirements for permits or authorizations vary depending on the location where the associated activities will be conducted.
We are also required to obtain federal, state, local, and/or third-party permits and authorizations in some jurisdictions in connection with our wireline services and trucking operations. The requirements for permits or authorizations vary depending on the location where the associated activities will be conducted.
Any dispute resolution or litigation proceeding concerning intellectual property could be protracted and costly, is inherently unpredictable, and could have an adverse effect on our business, regardless of its outcome. Our success may be affected by our ability to implement new technologies and services.
Any dispute resolution or litigation 34 proceeding concerning intellectual property could be protracted and costly, is inherently unpredictable, and could have an adverse effect on our business, regardless of its outcome. Our success may be affected by our ability to implement new technologies and services.
Future events or new information, including 30 regarding the general economic environment, E&P activity levels, our financial performance and trends, and our strategies and business plans, may change management’s valuation of long-lived assets, other intangible assets, or other assets in a short amount of time.
Future events or new information, including regarding the general economic environment, E&P activity levels, our financial performance and trends, and our strategies and business plans, may change management’s valuation of long-lived assets, other intangible assets, or other assets in a short amount of time.
Our future success depends in substantial part on our ability to hire and retain our executive officers and other key personnel. In particular, we are highly dependent on certain of our executive officers, particularly our President and Chief Executive Officer, Ann G. Fox, and the Chief Operating Officer, David Crombie.
Our future success depends in substantial part on our ability to hire and retain our executive officers and other key personnel. In particular, we are highly dependent on certain of our executive officers, particularly our President and Chief 35 Executive Officer, Ann G. Fox, and the Chief Operating Officer, David Crombie.
In addition, most scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such as increased frequency and severity of storms, droughts, floods, extreme temperatures, and other climatic events.
Most scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such as increased frequency and severity of storms, droughts, floods, extreme temperatures, and other climatic events.
Thus, our board of directors can authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of holders of our capital stock. These rights may have the effect of delaying or deterring a change of control of our company.
Thus, our Board can authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of holders of our capital stock. These rights may have the effect of delaying or deterring a change of control of our company.
For example, our debt agreements contain restrictive covenants that limit our ability to, among other things: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions or repurchase or redeem our capital stock; • transfer or sell assets; • make loans and investments; • incur liens; • enter into agreements that restrict dividends or other payments from any non-guarantor restricted subsidiaries to us; • consolidate, merge, or sell all or substantially all of our assets; • prepay, redeem, or repurchase certain debt; • issue certain preferred stock or similar equity securities; • make certain acquisitions and investments; • engage in transactions with affiliates; and • create unrestricted subsidiaries.
For example, it will contain restrictive covenants that limit our ability to, among other things: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions or repurchase or redeem our capital stock; • transfer or sell assets; • make loans and investments; • incur liens; • enter into agreements that restrict dividends or other payments from any non-guarantor restricted subsidiaries to us; • consolidate, merge, or sell all or substantially all of our assets; • prepay, redeem, or repurchase certain debt; • issue certain preferred stock or similar equity securities; • make certain acquisitions and investments; • engage in transactions with affiliates; and • create unrestricted subsidiaries.
The Court of Chancery of the State of Delaware has recently held that a Delaware corporation can only use its constitutive documents to bind a plaintiff to a particular forum where the claim involves rights or relationships that were established by or under the DGCL.
The Court of Chancery of the State of Delaware has held that a Delaware corporation can only use its constitutive documents to bind a plaintiff to a particular forum where the claim involves rights or relationships that were established by or under the DGCL.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters (or meet sustainability goals and targets that we have set) as they continue to evolve, or if we are perceived to have not responded 17 appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially and adversely affected.
If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters (or meet sustainability goals that we have set) as they continue to evolve, or if we are perceived to have not responded appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or stock price could be materially adversely affected.
The greater size of many of our competitors provides them with cost advantages as a result of their 20 economies of scale and their ability to obtain volume discounts and purchase raw materials at lower prices.
The greater size of many of our competitors provides them with cost advantages as a result of their economies of scale and their ability to obtain volume discounts and purchase raw materials at lower prices.
In addition, adverse weather conditions, such as hurricanes, tropical storms, and severe cold weather, may interrupt or curtail our operations or our customers’ operations, cause supply disruptions, and damage our equipment and facilities, which may or may not be insured.
In addition, adverse weather conditions, such as hurricanes, tropical storms, droughts, and severe cold weather, may interrupt or curtail our operations or our customers’ operations, cause supply disruptions, and damage our equipment and facilities, which may or may not be insured.
Terrorist activities and the threat of potential terrorist activities and any resulting economic downturn could adversely affect our results of operations, impair our ability to raise capital, or otherwise adversely impact our ability to realize certain business strategies.
Terrorist activities and the 36 threat of potential terrorist activities and any resulting economic downturn could adversely affect our results of operations, impair our ability to raise capital, or otherwise adversely impact our ability to realize certain business strategies.
Although we take measures to ensure that we use advanced technologies, changes in technology or improvements in our competitors’ 28 equipment could make our equipment less competitive or require significant capital investments to keep our equipment competitive.
Although we take measures to ensure that we use advanced technologies, changes in technology or improvements in our competitors’ equipment could make our equipment less competitive or require significant capital investments to keep our equipment competitive.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the forum selection provisions of our charter and bylaws.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the forum selection provisions of our charter.
Defects or other performance problems in the products that we sell or services that we offer could result in our customers seeking damages from us for losses associated with these defects or other performance problems.
Defects or other performance problems in the products that we sell or services that we offer could result in our 27 customers seeking damages from us for losses associated with these defects or other performance problems.
Also, during the spring thaw, which normally starts in late March and continues through June, some areas, primarily in western Canada, impose transportation restrictions to prevent damage caused by the spring thaw. For both the years ended December 31, 2024 and 2023, we generated approximately 0.3% of our revenue from our operations in western Canada.
Also, during the spring thaw, which normally starts in late March and continues through June, some areas, primarily in western Canada, impose transportation restrictions to prevent damage caused by the spring thaw. For both the years ended December 31, 2025 and 2024, we generated approximately 0.3% of our revenue from our operations in western Canada.
In recent years, oilfield services companies have been the subject of a significant volume of wage and hour-related litigation, including claims brought under the Fair Labor Standards Act (“FLSA”), in which employee pay practices have been challenged. We have been named as defendants in these lawsuits, and we do not maintain insurance for alleged wage and hour-related litigation.
In recent years, oilfield services companies have been the subject of a significant volume of wage and hour-related litigation, including claims brought under the Fair Labor Standards Act, in which employee pay practices have been challenged. 30 We have been named as defendants in these lawsuits, and we do not maintain insurance for alleged wage and hour-related litigation.
Our long-term success depends, in part, on our ability to effectively address changing customer demands, as well as government regulation and required disclosure regarding ESG. These demands and regulations include, but are not limited to, the creation of ESG-related policies and procedures, the quantification of our greenhouse gas emissions, and evaluation of risk and opportunities.
Our long-term success depends, in part, on our ability to effectively address changing customer demands, as well as government regulation and required disclosure regarding ESG matters. These demands and regulations may include, but are not limited to, the creation of ESG-related policies and procedures, the quantification of our greenhouse gas emissions, and evaluation of risk and opportunities.
For example, California enacted legislation in October 2023 that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.
For example, California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures.
Our business is cyclical, and we depend on our customers’ willingness to make operating and capital expenditures to explore for, develop, and produce oil and natural gas, which, in turn, largely depends on prevailing industry and financial market conditions that are influenced by numerous factors beyond our control, including: • the level of prices, and expectations about future prices, for oil and natural gas; • the domestic and foreign supply of, and demand for, oil and natural gas and related products; • the level of global and domestic oil and natural gas production; • the supply of, and demand for, hydraulic fracturing and other oilfield services and equipment; • governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; • the cost of exploring for, developing, producing, and delivering oil and natural gas; • available pipeline, storage, and other transportation capacity; • worldwide political, military, and economic conditions; • lead times associated with acquiring equipment and products and availability of qualified personnel; • the discovery rates of new oil and natural gas reserves; • federal, state, and local regulation of hydraulic fracturing and other oilfield service activities, as well as E&P activities, including public pressure on governmental bodies and regulatory agencies to regulate our industry; • economic and political conditions in oil and natural gas producing countries; • actions of OPEC, its members, and other state-controlled oil companies relating to oil price and production levels, including announcements of potential changes to such levels; • advances in exploration, development, and production technologies or in technologies affecting energy consumption; • activities by non-governmental organizations to restrict the exploration, development, and production of oil and natural gas so as to minimize emissions of carbon dioxide, a GHG; • the price and availability of alternative fuels and energy sources; • global weather conditions and natural disasters, including those related to the physical effects of climate change; and • uncertainty in capital and commodities markets and the ability of oil and natural gas producers to access capital. 15 A decline in oil and natural gas commodity prices may adversely affect the demand for our products and services and the rates we are able to charge.
Our business is cyclical, and we depend on our customers’ willingness to make operating and capital expenditures to explore for, develop, and produce oil and natural gas, which, in turn, largely depends on prevailing industry and financial market conditions that are influenced by numerous factors beyond our control, including: • the level of prices, and expectations about future prices, for oil and natural gas; • the domestic and foreign supply of, and demand for, oil and natural gas and related products; • the level of global and domestic oil and natural gas production; • the supply of, and demand for, hydraulic fracturing and other oilfield services and equipment; • governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; • the cost of exploring for, developing, producing, and delivering oil and natural gas; • available pipeline, storage, and other transportation capacity; • worldwide political, military, and economic conditions; • lead times associated with acquiring equipment and products and availability of qualified personnel; • the discovery rates of new oil and natural gas reserves; • federal, state, and local regulation of hydraulic fracturing and other oilfield service activities, as well as E&P activities, including public pressure on governmental bodies and regulatory agencies to regulate our industry; • economic and political conditions in oil and natural gas producing countries; • actions of OPEC, its members, and other state-controlled oil companies relating to oil price and production levels, including announcements of potential changes to such levels; • advances in exploration, development, and production technologies or in technologies affecting energy consumption; • activities by non-governmental organizations to restrict the exploration, development, and production of oil and natural gas so as to minimize emissions of carbon dioxide, a GHG; • the price and availability of alternative fuels and energy sources; • global weather conditions and natural disasters, including those related to the physical effects of climate change; and • uncertainty in capital and commodities markets and the ability of oil and natural gas producers to access capital.
Our charter and bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or agents.
Our charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or agents.
Alternatively, if a court were to find these provisions of our charter or bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.
Alternatively, if a court were to find these provisions of our charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations. 37 Item 1B.
The loss of one or more significant customers could adversely affect our financial condition, prospects, and results of operations. Our customers are engaged in the oil and natural gas E&P business, which has been historically volatile. For the year ended December 31, 2024, our five largest customers collectively accounted for approximately 25% of total revenues.
The loss of one or more significant customers could adversely affect our financial condition, prospects, and results of operations. Our customers are engaged in the oil and natural gas E&P business, which has been historically volatile. For the year ended December 31, 2025, our five largest customers collectively accounted for approximately 24% of total revenues.
For example, oil and natural gas E&P may decline as a result of environmental requirements, including land use policies responsive to environmental concerns (e.g., numerous cities, including in Colorado, New York, Massachusetts, and Maryland, have, to varying degrees, banned the use of natural gas in new construction, and other cities are considering similar initiatives).
For example, oil and natural gas E&P may decline as a result of environmental requirements, including land use policies responsive to environmental concerns (e.g., numerous cities, including in Colorado, New York, Massachusetts, and Maryland, have, to varying degrees, enacted ordinances banning the use of natural gas in new construction, and other cities are considering similar initiatives).
Our current or future level of indebtedness could have significant adverse consequences on our business and future prospects, including in the following ways: • requiring us to dedicate a substantial portion of our cash flow from operations to service our existing debt, thereby reducing the cash available to finance our operations and other business activities; • limiting management’s discretion in operating our business and our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increasing our vulnerability to downturns and adverse developments in our business and the economy generally; • limiting our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures, or acquisitions or to refinance existing indebtedness; • placing us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and • making it more difficult for us to satisfy our obligations under our debt instruments and increase the risk that we may default on our debt obligations. 18 Additionally, borrowings under the ABL Credit Facility bear interest at variable rates exposing us to interest rate risk.
The expected borrowings under the Exit ABL Facility could have significant adverse consequences on our business and future prospects, including in the following ways: • requiring us to dedicate a substantial portion of our cash flow from operations to service our existing debt, thereby reducing the cash available to finance our operations and other business activities; • limiting management’s discretion in operating our business and our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increasing our vulnerability to downturns and adverse developments in our business and the economy generally; • limiting our ability to access the capital markets to raise capital on favorable terms or to obtain additional financing for working capital, capital expenditures, or acquisitions or to refinance existing indebtedness; • placing us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size or less restrictive terms governing their indebtedness; and • making it more difficult for us to satisfy our obligations under our debt instruments and increase the risk that we may default on our debt obligations. 20 Borrowings under the Exit ABL Facility will bear interest at variable rates, which will expose us to interest rate risk.
Our assets require capital for maintenance, upgrades, and refurbishment, and we may require capital expenditures for new equipment. Our equipment requires capital investment in maintenance, upgrades, and refurbishment to maintain their competitiveness. For the years ended December 31, 2024 and 2023, we spent approximately $10.4 million and $12.6 million, respectively, on capital expenditures related to maintenance.
Our assets require capital for maintenance, upgrades, and refurbishment, and we may require capital expenditures for new equipment. Our equipment requires capital investment in maintenance, upgrades, and refurbishment to maintain their competitiveness. For the years ended December 31, 2025 and 2024, we spent approximately $10.7 million and $10.4 million, respectively, on capital expenditures related to maintenance.
The U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act (“UKBA”), Canada’s Corruption of Foreign Public Officials Act (the “CFPOA”), and similar anti-bribery and anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or improperly providing anything of value for the purpose of obtaining or retaining business.
Bribery Act (“UKBA”), Canada’s Corruption of Foreign Public Officials Act (the “CFPOA”), and similar anti-bribery and anti-corruption laws generally prohibit companies and their intermediaries from making improper payments or improperly providing anything of value for the purpose of obtaining or retaining business.
For example, in April 2020, a third party filed a lawsuit asserting that our BreakThru Casing Flotation Device TM infringed its intellectual property rights, and in January 2022, a jury in the Western District of Texas, Waco Division, found in the third party’s favor. However, we intend to appeal the jury’s verdict.
For example, in April 2020, a third party filed a lawsuit asserting that our BreakThru Casing Flotation Device TM infringed its intellectual property rights, and in January 2022, a jury in the Western District of Texas, Waco Division, found in the third party’s favor.
We may not prevail in such appeal or in any other proceedings relating to intellectual property rights, and our intellectual property rights may be found invalid or unenforceable or our products and services may be found to infringe, impair, misappropriate, dilute, or otherwise violate the intellectual property rights of others, in which case we may be required to pay damages or other compensation to the other party (which could be costly) and/or cease use of such intellectual property.
If our intellectual property rights are found invalid or unenforceable or our products and services are found to infringe, impair, misappropriate, dilute, or otherwise violate the intellectual property rights of others in any proceeding relating to intellectual property rights, we may be required to pay damages or other compensation to the other party (which could be costly) and/or cease use of such intellectual property.
Federal, state, and local agencies have been evaluating climate-related legislation and other regulatory initiatives that would restrict emissions of GHGs in areas in which we conduct business.
Federal, state, and local agencies may also be evaluating climate-related legislation and other regulatory initiatives that would restrict emissions of GHGs in areas in which we conduct business.
The average WTI price for 2024 was $76.63. Moreover, the theme of capital discipline for E&P operators in the energy industry has led to a disconnect between commodity prices and market activity.
The average WTI price for 2025 was $65.39. Moreover, the theme of capital discipline for E&P operators in the energy industry has led to a disconnect between commodity prices and market activity.
A portion of our revenue is derived from sales to customers outside of the U.S., which exposes us to risks inherent in doing business internationally. In 2024, we derived 4.6% of our revenue from sales to customers outside of the U.S.
A portion of our revenue is derived from sales to customers outside of the U.S., which exposes us to risks inherent in doing business internationally. In 2025, we derived 5.2% of our revenue from sales to customers outside of the U.S.
The restrictions in our debt agreements could also impact our ability to obtain capital to withstand a downturn in our 19 business or the economy in general, or to otherwise conduct necessary corporate activities.
The restrictions in the Exit ABL Facility could also impact our ability to obtain capital to withstand a downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.
During the five years ending December 31, 2024, the posted price for West Texas Intermediate (“WTI”) oil has ranged from a low of $(36.98) per barrel in April 2020 to a high of $123.64 per barrel in March 2022, and the Henry Hub spot market price of gas has ranged from a low of $1.21 per MMBtu in November 2024 to a high of $23.86 per MMBtu in February 2021.
During the five years ending December 31, 2025, the posted price for West Texas Intermediate (“WTI”) oil has ranged 23 from a low of $47.47 per barrel in January 2021 to a high of $123.64 per barrel in March 2022, and the Henry Hub spot market price of gas has ranged from a low of $1.21 per million British thermal units (“MMBtu”) in November 2024 to a high of $23.86 per MMBtu in February 2021.
If any of these companies or manufacturers terminate our right to sell some or all of their products, modify or terminate our exclusive distribution arrangement, or change the applicable terms and conditions of sale, our business and results of operations could be adversely affected.
If any of these companies or manufacturers terminate our right to sell some or all of their products, modify or terminate our exclusive distribution arrangement, or change the applicable terms and conditions of sale, our business and results of operations could be adversely affected. 29 Tariffs and other trade measures could adversely affect our business, results of operations, financial position, and cash flows.
Restrictions in our debt agreements could limit our growth and our ability to engage in certain activities. The ABL Credit Facility and the indenture governing our 2028 Notes have, and future financing agreements could have, restrictive covenants that could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.
Restrictions in the Exit ABL Facility could limit our growth and our ability to engage in certain activities. The Exit ABL Facility will have restrictive covenants that could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities.
In addition, any future significant cancellations or deferrals of orders or the return of previously sold products could materially and adversely affect profit margins, increase 22 inventory obsolescence, and restrict our ability to fund our operations.
In addition, any future significant cancellations or deferrals of orders or the return of previously sold products could materially adversely affect profit margins, increase inventory obsolescence, and restrict our ability to fund our operations. We are exposed to the credit risk of our customers, and the deterioration of the financial condition of our customers could adversely affect our financial results.
Likewise, such restrictions may result in additional compliance obligations with respect to the release, capture, sequestration, and use of GHGs that could have a material adverse effect on our business, results of operations, prospects, and financial condition.
Likewise, such restrictions may result in additional compliance obligations with respect to the release, capture, sequestration, and use of GHGs that could have a material adverse effect on our business, results of operations, prospects, and financial condition. Additionally, regulations requiring the disclosure of GHG emissions and other climate-related information are being adopted or proposed.
Any regulation that restricts the ability of our customers to dispose of produced waters or increases their cost of doing business could cause them to curtail operation, which in turn could decrease demand for our products and services and have a material adverse effect on our business. 26 We are subject to complex U.S. and foreign laws and regulations governing anti-corruption and export controls and economic sanctions .
Any regulation that restricts the ability of our customers to dispose of produced waters or increases their cost of doing business could cause them to curtail operation, which in turn could decrease demand for our products and services and have a material adverse effect on our business.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remains the same, and our net income and cash available to finance our operations and other business activities would decrease. We may not be able to generate sufficient cash to service all of our indebtedness.
Under the Exit ABL Facility, if interest rates increased, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remains the same, and our net income and cash available to finance our operations and other business activities would decrease.
If the amounts we are able to charge customers for our dissolvable plug products decline further or are insufficient to cover our costs, that could have a material adverse effect on our financial condition, results of operations, and cash flows.
If the amounts we are able to charge customers for our dissolvable plug products decline further or are insufficient to cover our costs, that could have a material adverse effect on our financial condition, results of operations, and cash flows. 26 Our current and potential competitors may have longer operating histories, significantly greater financial or technical resources, and greater name recognition than we do.
Additional risk factors not presently known to us or which we currently consider immaterial may also adversely affect our business, financial condition, or future results. If any of these risks were actually to occur, our business, financial condition, or results of operations could be materially adversely affected.
Additional risk factors not presently known to us or which we currently consider immaterial may also adversely affect our business, financial condition, or future results.
Under such circumstances, we may incur operating losses and experience negative operating cash flow. Our future financial condition and results of operations could be adversely impacted by long-lived assets or other asset impairment charges.
Our future financial condition and results of operations could be adversely impacted by long-lived assets or other asset impairment charges.
We cannot predict whether, or in what form, any legislative or regulatory changes or municipal ordinances applicable to our logistics operations will be enacted and to what extent any such legislation or regulations could increase our costs or otherwise adversely affect our business or operations. 27 Risks Related to Technology Our success may be affected by the use and protection of our proprietary technology as well as our ability to enter into license agreements.
We cannot predict whether, or in what form, any legislative or regulatory changes or municipal ordinances applicable to our logistics operations will be enacted and to what extent any such legislation or regulations could increase our costs or otherwise adversely affect our business or operations.
Our current and potential competitors may have longer operating histories, significantly greater financial or technical resources, and greater name recognition than we do. The oilfield services industry is highly competitive and fragmented and includes several large companies that compete in many of the markets we serve, as well as numerous small companies that compete with us on a local basis.
The oilfield services industry is highly competitive and fragmented and includes several large companies that compete in many of the markets we serve, as well as numerous small companies that compete with us on a local basis.
For example, in June 2020, the FMCSA revised its Hours-of-Service Rule to modify break requirements for drivers and the number of hours they may drive in adverse conditions; and in November 2024, the FMCSA’s rules were updated to require state driver licensing agencies to query the Clearinghouse before issuing, renewing, or upgrading a commercial driver’s license to confirm compliance with FMCSA rules.
For example, in November 2024, the FMCSA’s rules were updated to require state driver licensing agencies to query the Clearinghouse before issuing, renewing, or upgrading a commercial driver’s license to confirm compliance with FMCSA rules.
Conversely, if we underestimate customer demand or if insufficient manufacturing capacity is available, we would miss revenue opportunities and potentially lose market share and damage our customer relationships.
As a result, we would hold excess or obsolete inventory, which would reduce gross margin and adversely affect financial results. Conversely, if we underestimate customer demand or if insufficient manufacturing capacity is available, we would miss revenue opportunities and potentially lose market share and damage our customer relationships.
We have in the past experienced periods of low demand for our products and services and have incurred operating losses. In the future, we may not be able to reduce our costs, increase our revenues, or reduce our debt service obligations sufficiently to achieve or maintain profitability and generate positive operating income.
In the future, we may not be able to reduce our costs, increase our revenues, or reduce our debt service obligations sufficiently to achieve or maintain profitability and generate positive operating income. Under such circumstances, we may incur operating losses and experience negative operating cash flow.
We often place orders with our suppliers based on forecasts of customer demand. Anticipating customer demand is difficult because our customers face unpredictable demand for their own products and are increasingly focused on cash preservation and tighter inventory management. Our forecasts of customer demand are based on multiple assumptions, each of which may introduce errors into the forecasts.
Conversely, insufficient inventory would result in lost revenue opportunities and potentially loss of market share and damaged customer relationships. We often place orders with our suppliers based on forecasts of customer demand. Anticipating customer demand is difficult because our customers face unpredictable demand for their own products and are increasingly focused on cash preservation and tighter inventory management.
We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under our debt arrangements may impose on us.
We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under our debt arrangements may impose on us. Our actual financial results after emergence from bankruptcy may not be comparable to our projections filed with the Bankruptcy Court in the course of the Chapter 11 Cases.
There are limitations to our intellectual property rights and, thus, our right to exclude others from the use of our proprietary technology. Our success may be affected by our development and implementation of new product designs and improvements and by our ability to protect, obtain, and maintain intellectual property assets related to these developments.
Risks Related to Technology Our success may be affected by the use and protection of our proprietary technology as well as our ability to enter into license agreements. There are limitations to our intellectual property rights and, thus, our right to exclude others from the use of our proprietary technology.
If we overestimate customer demand, we may allocate resources to the purchase of material or manufactured products that we may not be able to sell when we expect to, if at all. As a result, we would hold excess or obsolete inventory, which would reduce gross margin and adversely affect financial results.
Our forecasts of customer demand are based on multiple assumptions, each of which may introduce errors into the forecasts. If we overestimate customer demand, we may allocate resources to the purchase of material or manufactured products that we may not be able to sell when we expect to, if at all.
You should carefully consider each of the following risk factors and all of the other information set forth in this Annual Report, including under the section titled “Cautionary Note Regarding Forward-Looking Statements.” The risks and uncertainties described are not the only ones we face.
You should carefully consider each of the following risk factors, which make an investment in us speculative or risky, as well as all of the other information set forth in this Annual Report, including under the section titled “Cautionary Note Regarding Forward-Looking Statements.” The discussion below reflects our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future.
Risks Related to Our Customers and Suppliers If we are unable to accurately predict customer demand or if customers cancel their orders on short notice, we may hold excess or obsolete inventory, which would reduce gross margins. Conversely, insufficient inventory would result in lost revenue opportunities and potentially loss of market share and damaged customer relationships.
In addition, we typically have experienced a pause by our customers around the holiday season in the fourth quarter, which may be compounded as our customers exhaust their annual capital spending budgets towards year end. 28 Risks Related to Our Customers and Suppliers If we are unable to accurately predict customer demand or if customers cancel their orders on short notice, we may hold excess or obsolete inventory, which would reduce gross margins.
Lastly, throughout the year heavy rains adversely affect activity levels because well locations and dirt access roads can become impassible in wet conditions. In addition, we typically have experienced a pause by our customers around the holiday season in the fourth quarter, which may be compounded as our customers exhaust their annual capital spending budgets towards year end.
Lastly, throughout the year heavy rains adversely affect activity levels because well locations and dirt access roads can become impassible in wet conditions.
We rely on a combination of patents and trade secret laws to establish and protect this proprietary technology.
Our success may be affected by our development and implementation of new product designs and improvements and by our ability to protect, obtain, and maintain intellectual property assets related to these developments. We rely on a combination of patents and trade secret laws to establish and protect this proprietary technology.
If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust and thereby affect our brand and reputation.
At the same time, others may disagree with the ESG initiatives we have set, and recent political developments could subject us to increased risk of criticism or litigation risks from certain “anti-ESG” parties. If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust and thereby affect our brand and reputation.
We cannot predict the size of future issuances or sales of our common stock or the effect, if any, that future issuances and sales of shares of our common stock could have on the market price of our common stock. We have operated at a loss in the past, and there is no assurance of our profitability in the future.
Other Material Risks We have operated at a loss in the past, and there is no assurance of our profitability in the future. We have in the past experienced periods of low demand for our products and services and have incurred operating losses.
In that case, the trading price of our common stock could decline, and a stockholder could lose all or part of its investment. Risks Related to Our Industry Our business is cyclical and depends on capital spending and well completions by the onshore oil and natural gas industry, and the level of such activity is volatile.
While the ultimate effect of the attribute reduction is uncertain because, among other things, it will depend on the amount of COD income we realize, loss of these tax attributes may have an adverse effect on our future cash flow. 22 Risks Related to Our Industry Our business is cyclical and depends on capital spending and well completions by the onshore oil and natural gas industry, and the level of such activity is volatile.
Removed
Risks Related to Our Indebtedness Our substantial debt obligations could have significant adverse consequences on our business and future prospects.
Added
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. In addition, the risks and uncertainties described below are not the only ones we face.
Removed
As of December 31, 2024, we had $300.0 million of 13.000% Senior Secured Notes due 2028 (the “2028 Notes”) outstanding, and we had $47.0 million of borrowings outstanding under the ABL Credit Facility (as defined and described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in Item 7 of Part II of this Annual Report).
Added
Risks Related to the Chapter 11 Cases During the pendency of the Chapter 11 Cases, trading in our securities (including our common stock) is highly speculative and poses substantial risks, and the Plan contemplates that all shares of our common stock will be canceled for no consideration.
Removed
Subject to the restrictions in the ABL Credit Agreement (as defined and described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in Item 7 of Part II of this Annual Report) and the indenture governing the 2028 Notes, we may incur substantial additional indebtedness (including secured indebtedness) in the future.
Added
Trading prices for our securities may bear little or no relationship to the actual recovery, if any, by the holders of our securities in the Chapter 11 Cases. We expect that holders of our securities could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 Cases.
Removed
Our ability to make scheduled payments with respect to our indebtedness depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business, and other factors beyond our control.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have established a Security Committee (the “SC”), comprised of senior departmental leadership including our Chief Financial Officer, Executive Vice President and General Counsel, Senior Vice President – Strategic Development and Investor Relations, Vice President – IT, Vice President – Internal Audit, and Vice President – Corporate Operations, each of whom has between 10 to 20 years of experience managing risks at the Company and at similar companies, including risks arising from cybersecurity threats.
Biggest changeWe have established a Security Committee (the “SC”), comprised of senior departmental leadership including our Executive Vice President and Chief Financial Officer, Executive Vice President and General Counsel, Senior Vice President – Strategic Development and Investor Relations, Vice President – IT, Vice President – Internal Audit, Vice President – Corporate Operations, and Director – IT Applications and Compliance, each of whom has between 10 to 20 years of experience managing our risks and those at similar companies, including risks arising from cybersecurity threats.
The SC meets quarterly to discuss and review cybersecurity concerns that arise during the 33 year. The SC also identifies areas that should be addressed and reviews and updates security policies, as necessary. The SC has primary management oversight responsibility for assessing and managing risks from cybersecurity threats.
The SC meets quarterly to discuss and review cybersecurity concerns that arise during the year. The SC also identifies areas that should be addressed and reviews and updates security policies, as necessary. The SC has primary management oversight responsibility for assessing and managing risks from cybersecurity threats.
Our IT team is led by our Vice President – IT, who has over 13 years of experience managing global IT operations, including strategy, applications, infrastructure, information security, support, and execution.
Our IT team is led by our Vice President – IT, who has over 13 years of experience managing global IT operations, including strategy, applications, infrastructure, information security, support, and execution. 38
Board Oversight and Management ’ s Role Our Board of Directors (the “Board”) considers cybersecurity risk as part of its risk oversight function and has assigned oversight of cybersecurity risk management to the Audit Committee. The Audit Committee regularly receives reports from our management, including the SC (defined below) and our senior IT leadership and third parties on cybersecurity matters.
Board Oversight and Management ’ s Role Our Board considers cybersecurity risk as part of its risk oversight function and has assigned oversight of cybersecurity risk management to the Audit Committee. The Audit Committee regularly receives reports from our management, including the SC (defined below) and our senior IT leadership and third parties on cybersecurity matters.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Basin/Region Leased or Owned Principal/Most Significant Use Houston, TX — Leased Corporate Headquarters/Administrative Athens, TX — Leased Operations Baker, MT Bakken Owned Operations/Administrative Bergen, Norway — Leased Operations Charleroi, PA Marcellus/Utica Leased Operations Corpus Christi, TX — Leased Operations/Administrative Corpus Christi, TX — Leased Administrative Dickinson, ND Bakken Leased Operations/Administrative El Reno, OK SCOOP/STACK Leased Operations Fort Worth, TX — Leased Administrative Hobbs, NM Permian Leased Operations Jacksboro, TX Barnett Leased Operations Jacksboro, TX Barnett Leased Operations Kilgore, TX Haynesville Leased Operations Lacombe, AB, Canada WCSB Leased Operations/Administrative Longview, TX Haynesville Owned Operations Marietta, OH Marcellus/Utica Leased Operations/Administrative Marietta, OH Marcellus/Utica Leased Operations/Administrative Mead, CO Rockies Leased Operations Midland, TX Permian Leased Operations/Administrative Monahans, TX Permian Leased Operations/Administrative Oklahoma City, OK SCOOP/STACK Leased Operations Pleasanton, TX Eagle Ford Leased Operations Poolville, TX — Owned Operations Sweetwater, TX Permian Leased Operations Tyler, TX Haynesville Leased Operations Ulster, PA Marcellus/Utica Leased Operations Williston, ND Bakken Owned Operations/Administrative
Biggest changeLocation Basin/Region Leased or Owned Principal/Most Significant Use Houston, TX — Leased Corporate Headquarters/Administrative Athens, TX — Leased Operations Baker, MT Bakken Owned Operations/Administrative Bergen, Norway — Leased Operations Charleroi, PA Marcellus/Utica Leased Operations Corpus Christi, TX — Leased Operations/Administrative Corpus Christi, TX — Leased Administrative Dickinson, ND Bakken Leased Operations/Administrative El Reno, OK SCOOP/STACK Leased Operations Fort Worth, TX — Leased Administrative Hobbs, NM Permian Leased Operations Jacksboro, TX Barnett Leased Operations Jacksboro, TX Barnett Leased Operations Kilgore, TX Haynesville Leased Operations Lacombe, AB, Canada WCSB Leased Operations/Administrative Longview, TX Haynesville Owned Operations Marietta, OH Marcellus/Utica Leased Operations/Administrative Marietta, OH Marcellus/Utica Leased Operations/Administrative Mead, CO Rockies Leased Operations Midland, TX Permian Leased Operations/Administrative Monahans, TX Permian Leased Operations/Administrative Pleasanton, TX Eagle Ford Leased Operations Poolville, TX — Owned Operations Sweetwater, TX Permian Leased Operations Tyler, TX Haynesville Leased Operations Ulster, PA Marcellus/Utica Leased Operations Williston, ND Bakken Owned Operations/Administrative
Item 2. Properties The following table describes the material facilities owned or leased by us as of December 31, 2024.
Item 2. Properties The following table describes the material facilities owned or leased by us as of December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+4 added−0 removed2 unchanged
Biggest changeFor additional information related to legal proceedings, see Note 12 – Commitments and Contingencies included in Item 8 of Part II of this Annual Report. 34 Item 4. Mine Safety Disclosures Not applicable. 35 PART II
Biggest changeFor additional information related to legal proceedings, see Note 12 – Commitments and Contingencies included in Item 8 of Part II of this Annual Report.
Added
The Chapter 11 Cases On February 1, 2026, the Company Parties filed the Chapter 11 Cases under the Bankruptcy Code in the Bankruptcy Court to implement the prepackaged Plan to effectuate a financial restructuring of the Company Parties’ existing indebtedness.
Added
The material terms of the Plan include, among other things: (i) the Prepetition ABL Lenders providing the Company Parties with the DIP ABL Facility, which consists of up to $125.0 million in aggregate principal amount of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which will, upon the satisfaction of customary closing conditions, convert into the Exit ABL Facility on the Plan Effective Date or as soon as reasonably practicable thereafter; (ii) on the Plan Effective Date, the Reorganized Company issuing 100% of a single class of common equity interests to the holders of the 2028 Notes and the 2028 Notes being canceled; and (iii) on the Plan Effective Date, the Company’s currently existing common stock being canceled. 39 Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed the continuation of most legal proceedings and the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estate unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim.
Added
Notwithstanding the general application of the automatic stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers. For additional information on the Chapter 11 Cases, see “Business – Current Bankruptcy Proceedings” in Item 1 of Part I of this Annual Report. Item 4.
Added
Mine Safety Disclosures Not applicable. 40 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+2 added−4 removed0 unchanged
Biggest changeThe number of record holders does not include persons who held shares of our common stock in nominee or “street name” accounts through brokers. Dividend Policy We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future.
Biggest changeThe number of record holders does not include persons who held shares of our common stock in nominee or “street name” accounts through brokers. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] 41
Removed
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Nine Energy Service, Inc.’s common stock is traded on the NYSE under the symbol “NINE.” Holders As of March 3, 2025, we had 58 stockholders of record.
Added
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information On February 2, 2026, as a result of the Chapter 11 Cases, we were notified by the staff of NYSE Regulation of its determination to commence proceedings to delist our common stock from the NYSE and immediately suspend trading in our common stock on the NYSE.
Removed
We currently intend to retain future earnings, if any, to fund our operations and to develop and grow our business.
Added
On February 3, 2026, our common stock began trading on the Pink Limited Market operated by the OTC Markets Group Inc. under the symbol “NINEQ.” Any over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions. Holders As of March 2, 2026, we had 52 stockholders of record.
Removed
Our future dividend policy is within the discretion of our board of directors and will depend upon various factors our board of directors deems relevant, including our results of operations, financial condition, capital requirements, and investment opportunities, as well as any restrictions on our ability to pay cash dividends. Recent Sales of Unregistered Securities None.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] 36

Item 7. Management's Discussion & Analysis

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

47 edited+81 added−51 removed51 unchanged
Biggest changeFurthermore, although as noted above, our customers’ activity and spending levels, and thus demand for our services and products, are strongly influenced by current and expected oil and natural gas prices, even with price improvements in oil and natural gas, operator activity may not materially increase, as operators remain focused on operating within their capital plans, and uncertainty remains around supply and demand fundamentals. 39 Results of Operations Year Ended December 31, 2024 2023 Change Percentage Change (in thousands, except percentage change) Revenues $ 554,104 $ 609,526 $ (55,422) (9) % Cost of revenues (exclusive of depreciation and amortization shown separately below) 456,729 490,750 (34,021) (7) % Adjusted gross profit $ 97,375 $ 118,776 $ (21,401) (18) % General and administrative expenses $ 51,298 $ 59,817 $ (8,519) (14) % Depreciation 25,594 29,141 (3,547) (12) % Amortization of intangibles 11,183 11,516 (333) (3) % Loss on revaluation of contingent liability 104 437 (333) (76) % Loss on sale of property and equipment 256 292 (36) (12) % Income from operations 8,940 17,573 (8,633) (49) % Non-operating expenses 49,824 49,201 623 1 % Loss before income taxes (40,884) (31,628) (9,256) 29 % Provision for income taxes 198 585 (387) (66) % Net loss $ (41,082) $ (32,213) $ (8,869) 28 % Revenues Revenues decreased $55.4 million, or 9%, to $554.1 million in 2024.
Biggest changeResults of Operations Year Ended December 31, 2025 2024 Change Percentage Change (in thousands, except percentage change) Revenues $ 561,911 $ 554,104 $ 7,807 1 % Cost of revenues (exclusive of depreciation and amortization shown separately below) $ 467,360 $ 456,729 $ 10,631 2 % General and administrative expenses 59,747 51,298 8,449 16 % Depreciation 23,205 25,594 (2,389) (9) % Amortization of intangibles 11,183 11,183 — — % Loss on revaluation of contingent liability 217 104 113 109 % Loss (gain) on sale of property and equipment (2,149) 256 (2,405) 939 % Income from operations 2,348 8,940 (6,592) (74) % Non-operating expenses 53,841 49,824 4,017 8 % Loss before income taxes (51,493) (40,884) (10,609) 26 % Provision (benefit) for income taxes (171) 198 (369) 186 % Net loss $ (51,322) $ (41,082) $ (10,240) 25 % Revenues Revenues increased $7.8 million, or 1%, to $561.9 million in 2025.
We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC.
We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC.
We monitor our revenue to analyze trends in the performance of our operations compared to historical revenue drivers or market metrics. We are particularly interested in identifying positive or negative trends and investigating to understand the root causes. • Adjusted Gross Profit (Loss) : Adjusted gross profit (loss) is a key metric that we use to evaluate operating performance.
We monitor our revenue to analyze trends in the performance of our operations compared to historical revenue drivers or market metrics. We are 43 particularly interested in identifying positive or negative trends and investigating to understand the root causes. • Adjusted Gross Profit (Loss) : Adjusted gross profit (loss) is a key metric that we use to evaluate operating performance.
For additional information on our significant accounting policies, see Note 2 – Significant Accounting Policies included in Item 8 of Part II of this Annual Report. Property and Equipment Property and equipment is stated at cost and depreciated under the straight-line method over the estimated useful life of the asset.
For additional information on our significant accounting policies, see Note 2 – Significant Accounting Policies included in Item 8 of Part II of this Annual Report. 54 Property and Equipment Property and equipment is stated at cost and depreciated under the straight-line method over the estimated useful life of the asset.
Determining the appropriate fair value model and calculating the fair value of options requires the input of highly subjective assumptions, including the expected volatility of the price of our stock, the risk-free rate, the expected term of the options, and the expected dividend yield 48 of our common stock. These estimates involve inherent uncertainties and the application of management’s judgment.
Determining the appropriate fair value model and calculating the fair value of options requires the input of highly subjective assumptions, including the expected volatility of the price of our stock, the risk-free rate, the expected term of the options, and the expected dividend yield of our common stock. These estimates involve inherent uncertainties and the application of management’s judgment.
Under the Equity Distribution Agreement, we will set the parameters for the sale of the shares thereunder, including the number of shares to be sold, the time period during which sales are requested to be made, and any price below which sales may not be made.
Under the Equity Distribution Agreement, we set the parameters for the sale of the shares thereunder, including the number of shares to be sold, the time period during which sales are requested to be made, and any price below which sales may not be made.
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related 47 disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on a regular basis.
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on a regular basis.
Management believes Adjusted EBITDA provides useful information to us and our investors regarding our financial condition and results of operations because it allows us and them to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure and helps identify underlying trends in our operations that could otherwise be distorted by the effect of impairments, acquisitions and dispositions, and costs that are not reflective of the ongoing performance of our business.
Management believes Adjusted EBITDA provides useful information to us and our investors regarding our financial condition and results of operations because it allows us and them to evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure and helps identify underlying trends in our operations that could otherwise be distorted by the effect of impairments, acquisitions and dispositions, and costs that are not reflective of the ongoing performance of our business.
The following table also presents ROIC (defined as net income (loss), divided by average total capital) and a reconciliation of the non-GAAP financial measure of adjusted after-tax net operating profit (loss) to the most directly comparable GAAP measure of net income (loss), in each case for the years ended December 31, 2024 and 2023.
The following table also presents ROIC (defined as net income (loss), divided by average total capital) and a reconciliation of the non-GAAP financial measure of adjusted after-tax net operating profit (loss) to the most directly comparable GAAP measure of net income (loss), in each case for the years ended December 31, 2025 and 2024.
Our principal uses of cash are to fund capital expenditures, service our outstanding debt, and fund our working capital requirements. Due to our high level of variable costs and the asset-light make-up of our business, we have historically been able to quickly implement cost-cutting measures and will continue to adapt as the market dictates.
Our principal uses of cash are to fund capital expenditures, service our outstanding debt, and fund our working capital requirements. Due to our high level of variable costs and the asset-light make-up of our business, we have historically been able to quickly implement cost-cutting measures and adapt as the market dictates.
Significant factors that are likely to affect commodity prices moving forward include geopolitical and economic developments in the U.S. and globally, including conflicts, instability, acts of war or terrorism in oil producing countries or regions, particularly the Middle East, Russia, South America and Africa; actions of the members of OPEC and other oil exporting nations that relate to or impact oil production or supply; weather conditions; the effect of energy, monetary, and trade policies of the U.S.; the pace of economic growth in the U.S. and throughout the world, including the potential for macro weakness; changes to energy regulations and policies, including those of the EPA and other governmental bodies; and overall North American oil and natural gas supply and demand fundamentals, including the pace at which export capacity grows.
Significant factors that are likely to affect commodity prices moving forward include geopolitical and economic developments in the U.S. and globally, including conflicts, the pace of economic growth in the U.S. and throughout the world, including the potential for macro weakness; tariffs imposed by the U.S. and other countries or retaliatory trade measures; instability, acts of war or terrorism in oil producing countries or regions, particularly the Middle East, Russia, South America and Africa; actions of the members of OPEC and other oil exporting nations that relate to or impact oil production or supply; weather conditions; the effect of energy, monetary, and trade policies of the U.S.; changes to energy regulations and policies, including those of the EPA and other governmental bodies; and overall North American oil and natural gas supply and demand fundamentals, including the pace at which export capacity grows.
We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, depreciation, and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units offering and other refinancing activities, (iv) loss or gain on revaluation of contingent liabilities, (v) loss or gain on the extinguishment of debt, (vi) loss or gain on the sale of subsidiaries, (vii) restructuring charges, (viii) stock-based compensation and cash award expense, (ix) loss or gain on sale of property and equipment, and (x) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, depreciation, and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on the extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
The following table presents a reconciliation of adjusted gross profit (loss) to GAAP gross profit (loss) for the years ended December 31, 2024 and 2023.
The following table presents a reconciliation of adjusted gross profit (loss) to GAAP gross profit (loss) for the years ended December 31, 2025 and 2024.
For additional information, see “Non-GAAP Financial Measures” below. • Adjusted EBITDA : We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units (as defined and described below) offering and other refinancing activities, (iv) loss or gain on revaluation of contingent liabilities, (v) loss or gain on the extinguishment of debt, (vi) loss or gain on the sale of subsidiaries, (vii) restructuring charges, (viii) stock-based compensation and cash award expense, (ix) loss or gain on sale of property and equipment, and (x) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
For additional information, see “Non-GAAP Financial Measures” below. • Adjusted EBITDA : We define Adjusted EBITDA as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on the extinguishment of debt, (v) loss or gain on the sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
The following table provides our calculation of Adjusted ROIC for the years ended December 31, 2024 and 2023.
The following table provides our calculation of Adjusted ROIC for the years ended December 31, 2025 and 2024.
We define adjusted after-tax net operating profit (loss), which is a non-GAAP financial measure, as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units offering and other refinancing activities, (iv) interest expense (income), (v) restructuring charges, (vi) loss (gain) on the sale of subsidiaries, (vii) loss (gain) on the extinguishment of debt, and (viii) the provision (benefit) for deferred income taxes.
We define adjusted after-tax net operating profit (loss), which is a non-GAAP financial measure, as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on the extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes.
We define adjusted after-tax net operating profit (loss) as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our Units offering and other refinancing activities, (iv) interest expense (income), (v) restructuring charges, (vi) loss (gain) on the sale of subsidiaries, (vii) loss (gain) on the extinguishment of debt, and (viii) the provision (benefit) for deferred income taxes.
We define adjusted after-tax net operating profit (loss) as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on the extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes.
The Agent will receive a commission equal to 3.0% of the gross sale price of any shares sold under the Equity Distribution Agreement.
The ATM Agent received a commission equal to 3.0% of the gross sale price of any shares sold under the Equity Distribution Agreement.
Expected Dividend Yield – We do not anticipate paying cash dividends on our shares of common stock; therefore, the expected dividend yield is assumed to be zero. Fair value of the stock-based compensation for all of the performance share units as well as the fair value of the performance cash awards was measured using a Monte Carlo simulation model.
Expected Dividend Yield – We do not anticipate paying cash dividends on our shares of common stock; therefore, the expected dividend yield is assumed to be zero. Fair value of the performance cash awards was measured using a Monte Carlo simulation model.
Industry Trends and Outlook Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices.
Industry Trends and Outlook Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable.
During the three months ended December 31, 2024, no shares were sold under the Equity Distribution Agreement. During the year ended December 31, 2024, 5,380,164 shares were sold under the Equity Distribution Agreement, which generated net proceeds to us of $8.2 million after deducting commissions of $0.3 million.
During the year ended December 31, 2024, 5,380,164 shares were sold under the Equity Distribution Agreement, which generated net proceeds of $8.2 million after deducting commissions of $0.3 million, and during the year ended December 31, 2025, no shares were sold under the Equity Distribution Agreement. No additional shares may be sold under the Equity Distribution Agreement.
Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies.
See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA. 46 Non-GAAP Financial Measures Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies.
The decrease was also partially attributed to a $11.8 million decrease in cash provided by operations driven mainly by an increased net loss in comparison to 2023. Investing Activities Net cash used in investing activities was $14.2 million in 2024 compared to $23.2 million in net cash used in investing activities in 2023.
The overall change was also partly attributed to a $7.6 million decrease in cash flow provided by operations driven mainly by an increased net loss in comparison to 2024. Investing Activities Net cash used in investing activities was $13.6 million in 2025 compared to $14.2 million in 2024.
Year Ended December 31, 2024 2023 (in thousands) Calculation of gross profit: Revenues $ 554,104 $ 609,526 Cost of revenues (exclusive of depreciation and amortization shown separately below) 456,729 490,750 Depreciation (related to cost of revenues) 25,095 27,101 Amortization of intangibles 11,183 11,516 Gross profit $ 61,097 $ 80,159 Adjusted gross profit reconciliation: Gross profit $ 61,097 $ 80,159 Depreciation (related to cost of revenues) 25,095 27,101 Amortization of intangibles 11,183 11,516 Adjusted gross profit $ 97,375 $ 118,776 44 Liquidity and Capital Resources Sources and Uses of Liquidity Historically, we have met our liquidity needs principally from cash on hand, cash flows from operations and, if needed, external borrowings and issuances of debt securities.
Year Ended December 31, 2025 2024 (in thousands) Calculation of gross profit: Revenues $ 561,911 $ 554,104 Cost of revenues (exclusive of depreciation and amortization shown separately below) 467,360 456,729 Depreciation (related to cost of revenues) 22,752 25,095 Amortization of intangibles 11,183 11,183 Gross profit $ 60,616 $ 61,097 Adjusted gross profit reconciliation: Gross profit $ 60,616 $ 61,097 Depreciation (related to cost of revenues) 22,752 25,095 Amortization of intangibles 11,183 11,183 Adjusted gross profit $ 94,551 $ 97,375 50 Financial Condition, Liquidity, and Capital Resources Historically, we have met our liquidity needs principally from cash on hand, cash flows from operations and, if needed, external borrowings and issuances of debt securities.
Another key component of labor costs relates to the ongoing training of our field service employees, which improves safety rates and reduces employee attrition. 37 How We Evaluate Our Operations We evaluate our performance based on a number of financial and non-financial measures, including the following: • Revenue : We compare actual revenue achieved each month to the most recent projection for that month and to the annual plan for the month established at the beginning of the year.
How We Evaluate Our Operations We evaluate our performance based on a number of financial and non-financial measures, including the following: • Revenue : We compare actual revenue achieved each month to the most recent projection for that month and to the annual plan for the month established at the beginning of the year.
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. 41 The following table presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss) for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in thousands) Net loss $ (41,082) $ (32,213) Interest expense 51,321 51,119 Interest income (849) (1,270) Provision for income taxes 198 585 Depreciation 25,594 29,141 Amortization of intangibles 11,183 11,516 EBITDA $ 46,365 $ 58,878 Adjusted EBITDA reconciliation: EBITDA $ 46,365 $ 58,878 Loss on revaluation of contingent liability (1) 104 437 Certain refinancing costs (2) — 6,396 Restructuring charges 701 2,027 Stock-based compensation expense 2,946 2,169 Cash award expense 2,832 2,698 Loss on sale of property and equipment 256 292 Legal fees and settlements (3) — 69 Adjusted EBITDA $ 53,204 $ 72,966 (1) Amounts relate to the revaluation of contingent liability associated with a 2018 acquisition.
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. 47 The following table presents a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income (loss) for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Net loss $ (51,322) $ (41,082) Interest expense 55,208 51,321 Interest income (683) (849) Provision (benefit) for income taxes (171) 198 Depreciation 23,205 25,594 Amortization of intangibles 11,183 11,183 EBITDA $ 37,420 $ 46,365 Adjusted EBITDA reconciliation: EBITDA $ 37,420 $ 46,365 Loss on revaluation of contingent liability (1) 217 104 Restructuring charges and other expenses 7,539 701 Stock-based compensation expense 2,211 2,946 Cash award expense 4,169 2,832 Loss (gain) on sale of property and equipment (2,149) 256 Adjusted EBITDA $ 49,407 $ 53,204 (1) Amounts relate to the revaluation of contingent liability associated with a 2018 acquisition.
ATM Program On November 6, 2023, we entered into the Equity Distribution Agreement with Piper Sandler & Co., as the Agent, pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $30.0 million t hrough the Agent acting as the Company’s sales agent .
Pursuant to the Equity Distribution Agreement, we were able to sell, from time to time, shares of our common stock having an aggregate offering price of up to $30.0 million through the ATM Agent acting as our sales agent (our “ ATM program ” ) .
We continually evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including expected industry activity levels and company initiatives.
Capital expenditures for growth and company initiatives are discretionary. We continually evaluate our capital expenditures, and the amount we ultimately spend will depend on a number of factors, including expected industry activity levels and company initiatives. Although we do not budget for acquisitions, pursuing growth through acquisitions may continue to be a part of our business strategy.
Cash Flows Our cash flows for the years ended December 31, 2024, and 2023 are presented below: Year Ended December 31, 2024 2023 (in thousands) Operating activities $ 13,195 $ 45,509 Investing activities (14,178) (23,157) Financing activities (1,683) (8,893) Impact of foreign exchange rate on cash (294) (64) Net change in cash and cash equivalents $ (2,960) $ 13,395 Operating Activities Net cash provided by operating activities was $13.2 million in 2024 compared to $45.5 million in net cash provided by operating activities in 2023.
Refer to Part I, Item IA “Risk Factors – Risks Related to the Chapter 11 Cases” of this Annual Report. 53 Cash Flows Our cash flows for the years ended December 31, 2025, and 2024 are presented below: Year Ended December 31, 2025 2024 (in thousands) Operating activities $ (7,306) $ 13,195 Investing activities (13,594) (14,178) Financing activities 12,862 (1,683) Impact of foreign exchange rate on cash — (294) Net change in cash and cash equivalents $ (8,038) $ (2,960) Operating Activities Net cash used in operating activities was $7.3 million in 2025 compared to $13.2 million in net cash provided by operating activities in 2024.
Although we do not budget for acquisitions, pursuing growth through acquisitions may continue to be a part of our business strategy. Our ability to make significant additional acquisitions for cash will require us to obtain additional equity or debt financing, which we may not be able to obtain on terms acceptable to us or at all.
Our ability to make significant additional acquisitions for cash will require us to 52 obtain additional equity or debt refinancing, which we may not be able to obtain on terms acceptable to us or at all, particularly after recently emerging from the Chapter 11 cases.
Expected Life – The expected term of stock options represents the period the stock options are expected to remain outstanding and is based on the simplified method, which is the weighted average vesting term plus the original contractual term, divided by two. Expected Volatility – We develop our expected volatility based upon a weighted average volatility of our peer group.
The Black-Scholes option pricing model requires estimates of key assumptions based on both historical information and management judgment regarding market factors and trends. 55 Expected Life – The expected term of stock options represents the period the stock options are expected to remain outstanding and is based on the simplified method, which is the weighted average vesting term plus the original contractual term, divided by two.
If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. The Black-Scholes option pricing model requires estimates of key assumptions based on both historical information and management judgment regarding market factors and trends.
If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.
The nature of our capital expenditures is comprised of a base level of investment required to support our current operations and amounts related to growth and company initiatives. Capital expenditures for growth and company initiatives are discretionary.
For 2026, assuming successful emergence from the Chapter 11 Cases, our planned capital expenditure budget, excluding possible acquisitions, is expected to be between $15.0 million to $30.0 million. The nature of our capital expenditures is comprised of a base level of investment required to support our current operations and amounts related to growth and company initiatives.
Net Income (Loss) and Adjusted EBITDA Net loss increased $8.9 million, or 28%, to $41.1 million, and Adjusted EBITDA decreased $19.8 million, or 27%, to $53.2 million for 2024. The changes were primarily due to the fluctuations in revenue and expenses discussed above. See “Non-GAAP Financial Measures” below for further information regarding Adjusted EBITDA.
Net Income (Loss) and Adjusted EBITDA Net loss increased $10.2 million, or 25%, to $51.3 million, and Adjusted EBITDA decreased $3.8 million, or 7%, to $49.4 million for 2025. The changes were primarily due to the fluctuations in revenue and expenses discussed above.
The decrease was attributed to a $9.8 million decrease in cash purchases of property and equipment, partially offset by a $0.8 million decrease in proceeds from the sale of property and equipment (including insurance), each in comparison to 2023.
The $0.6 million decrease was primarily attributed to $2.2 million in cash proceeds from property and equipment casualty losses in 2025 that did not occur in 2024, partially offset by a $1.2 million increase in cash purchases of property and equipment in comparison to 2024 and a $0.4 million decrease in cash proceeds from the sale of property and equipment between periods.
(3) Amounts represent fees and legal settlements associated with legal proceedings brought pursuant to the FLSA and/or similar state laws. 42 Adjusted Return on Invested Capital Adjusted ROIC is a non-GAAP financial measure. We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital.
For the year ended December 31, 2024, amounts primarily relate to professional fees and expenses in connection with procurement and supply chain restructuring and other initiatives. 48 Adjusted Return on Invested Capital Adjusted ROIC is a non-GAAP financial measure. We define Adjusted ROIC as adjusted after-tax net operating profit (loss), divided by average total capital.
Year Ended December 31, 2024 2023 (in thousands) Net loss $ (41,082) $ (32,213) Add back: Interest expense 51,321 51,119 Interest income (849) (1,270) Certain refinancing costs (1) — 6,396 Restructuring charges 701 2,027 Adjusted after-tax net operating income $ 10,091 $ 26,059 Total capital as of prior period-end: Total stockholders’ deficit $ (35,630) $ (23,507) Total debt 359,859 341,606 Less cash and cash equivalents (30,840) (17,445) Total capital as of prior period-end $ 293,389 $ 300,654 Total capital as of period-end: Total stockholders’ deficit $ (66,064) $ (35,630) Total debt 350,580 359,859 Less cash and cash equivalents (27,880) (30,840) Total capital as of period-end $ 256,636 $ 293,389 Average total capital $ 275,013 $ 297,022 ROIC (14.9) % (10.8) % Adjusted ROIC 3.7 % 8.8 % (1) Amounts represent fees and expenses relating to our Units offering and other refinancing activities, including cash incentive compensation to employees following the successful completion of the Units offering, that were not capitalized. 43 Adjusted Gross Profit (Loss) GAAP defines gross profit (loss) as revenues less cost of revenues and includes depreciation and amortization in costs of revenues.
Year Ended December 31, 2025 2024 (in thousands) Net loss $ (51,322) $ (41,082) Add back: Interest expense 55,208 51,321 Interest income (683) (849) Restructuring charges and other expenses (1) 7,539 701 Adjusted after-tax net operating income $ 10,742 $ 10,091 Total capital as of prior period-end: Total stockholders’ deficit $ (66,064) $ (35,630) Total debt 350,580 359,859 Less cash and cash equivalents (27,880) (30,840) Total capital as of prior period-end $ 256,636 $ 293,389 Total capital as of period-end: Total stockholders’ deficit $ (114,956) $ (66,064) Total debt 369,621 350,580 Less cash and cash equivalents (18,449) (27,880) Total capital as of period-end $ 236,216 $ 256,636 Average total capital $ 246,426 $ 275,013 ROIC (20.8) % (14.9) % Adjusted ROIC 4.4 % 3.7 % (1) For the year ended December 31, 2025, amounts primarily relate to the Chapter 11 Cases, including $4.5 million in employee retention payments approved by the Board and $2.7 million in professional fees and expenses.
The decrease was primarily attributed to a $20.5 million decrease in cash provided by working capital, driven mainly by a $9.8 million decrease in cash provided by accounts receivable collections in comparison to 2023.
The $20.5 million change was primarily attributed to a $12.9 million decrease in cash provided by working capital in comparison to 2024, driven mainly by an increased inventory balance in comparison to 2024 coupled with the fluctuation in the timing of certain prepaid expenses between periods.
The losses for both periods were related to increases in the fair value of the earnout associated with our acquisition Frac Technology AS. Non-Operating Expenses (Income) Non-operating expenses increased $0.6 million to $49.8 million in 2024.
The losses in both 2025 and 2024 were related to increases in the fair value of the earnout associated with our acquisition Frac Technology AS (the “Frac Tech Earnout”). The remaining amount associated with the Frac Tech Earnout was paid in the first quarter of 2026.
We were in compliance with the provision of the 2028 Notes Indenture on December 31, 2024. For additional information on the Units and the 2028 Notes, see Note 9 – Debt Obligations included in Item 8 of Part II of this Annual Report.
For additional information on the Prepetition ABL Facility and the 2028 Notes, see Note 9 – Debt Obligations included in Item 8 of Part II of this Annual Report. As noted above, the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations related to the 2028 Notes and the Prepetition ABL Facility.
As of December 31, 2024, we had $27.9 million of cash and cash equivalents and $24.2 million of availability under the ABL Credit Facility, which resulted in a total liquidity position of $52.1 million.
We do not have sufficient cash on hand or available liquidity to repay such outstanding debt. As of December 31, 2025, we had $18.4 million of cash and cash equivalents and $21.0 million of availability under the Prepetition ABL Facility, which resulted in a total liquidity position of $39.4 million.
Additionally, the decrease was partly attributed to a $2.0 million reduction in payments on the ABL Credit Facility between periods as well as an increase of $1.0 million in proceeds from short term debt, each in comparison to 2023.
The $14.6 million change was primarily attributed to a $62.9 million increase in proceeds received from revolving credit facilities and a $3.8 million increase in proceeds from short-term debt, each in comparison to 2024, partially offset by a $38.0 million increase in payments on revolving credit facilities in comparison to 2024, coupled with $8.2 million in proceeds received from the issuance of common stock under our ATM program in 2024, that did not reoccur in 2025, as well as $4.6 million in debt issuance costs associated with the Prepetition ABL Facility in 2025, that did not occur in 2024, and a $1.8 million increase in payments of short-term debt between periods.
Impairment losses are reflected in “Income (loss) from operations” in our Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Recognition of Provisions for Contingencies In the ordinary course of business, we are subject to various claims, suits, and complaints.
Based on these recoverability tests in the fourth quarter of 2025, we determined that the carrying amounts of each asset group was recoverable. Recognition of Provisions for Contingencies In the ordinary course of business, we are subject to various claims, suits, and complaints.
This sustained lower natural gas price environment resulted in decreased activity and lower rig counts, especially in natural gas-levered basins like the Haynesville. The Haynesville rig count declined by 30% between 2024 and 2023, from 44 rigs at the end of the year in 2023 to 31 rigs at the end of 2024.
However, despite a more supportive natural gas price environment in 2025, we have yet to see any meaningful activity increases in the natural gas-levered basins like the Haynesville and Northeast. For example, at the end of 2024, the rig count in the Haynesville was 31 rigs and at the end of 2025, the rig count was 42 rigs.
The decrease in comparison to 2023 was due to certain intangible assets being fully amortized over the last twelve months. (Gain) Loss on Revaluation of Contingent Liability We recorded a $0.1 million loss on the revaluation of contingent liability in 2024 compared to a $0.4 million loss in 2023.
Amortization of Intangibles We recorded approximately $11.2 million in amortization of intangibles expense (comprised of technology and customer relationships) in both 2025 and 2024. (Gain) Loss on Revaluation of Contingent Liability We recorded a $0.2 million loss on the revaluation of contingent liability in 2025 compared to a $0.1 million loss in 2024.
The decrease in comparison to 2023 was primarily driven by a reduction in activity for certain lines of service as described under “Revenues.” More specifically, the decrease was due to a $15.4 million decrease in materials installed and consumed while performing services, a $12.5 million decrease in employee related costs, and a $6.1 million decrease in other costs such as repair and maintenance, vehicle expense, and travel, in comparison to 2023.
The increase was primarily related to a $5.3 million increase in materials installed and consumed while performing services, a $2.6 million increase in vehicle costs, a $1.6 million increase in insurance costs, and a $0.8 million increase in repairs and maintenance costs, each in comparison to 2024.
The decrease was also partially attributed to an $0.7 million decrease in employee costs, a $0.8 million decrease in marketing expenses, and a $0.6 million decrease in professional fees, each in comparison to 2023. Depreciation Depreciation expense decreased $3.5 million to $25.6 million in 2024.
The overall increase was also partially attributed to a $1.4 million increase in other employee costs in comparison to 2024. Depreciation Depreciation expense decreased $2.4 million to $23.2 million in 2025. The decrease in comparison to 2024 was primarily due to an increase in fully depreciated assets and asset disposals across certain lines of service between periods.
Removed
In recent years, oil and natural gas prices have been extremely volatile, and commodity prices continued to be volatile in 2024. During 2024, natural gas prices continued to be extremely depressed, with average natural gas prices of $2.19 for 2024, which is 14% lower than average prices in 2023, which had already declined by over 60% as compared to 2022.
Added
Current Bankruptcy Proceedings On February 1, 2026, the Company Parties filed the Chapter 11 Cases in the Bankruptcy Court to implement the prepackaged Plan to effectuate a financial restructuring of the Company Parties’ existing indebtedness.
Removed
This decline was in addition to the previously sustained decline of 28 rigs, or 39%, between 2023 and 2022, from 72 rigs at the end of the year in 2022 to 44 rigs at the end of 2023. The decline in rig count between the end of the year 2024 and the end of the year 2022 was approximately 57%.
Added
Prior to filing the Chapter 11 Cases, on February 1, 2026, the Company Parties entered into the Restructuring Support Agreement with the Consenting Stakeholders, which includes certain holders of the 2028 Notes and the Prepetition ABL Lenders. Pursuant to the Restructuring Support Agreement, the Consenting Stakeholders agreed, subject to certain terms and conditions, to support the Plan.
Removed
It also led to pricing pressure from customers, impacting both revenue and margins. During the third quarter of 2024, WTI prices dropped below $70 compared to the highest price in 2024 of $87.69, due to OPEC and other oil exporting nations potentially 38 bringing production back.
Added
The material terms of the Plan include, among other things: • the Prepetition ABL Lenders providing the Company Parties with the DIP ABL Facility, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement, which will, upon the satisfaction of customary closing conditions, convert into the Exit ABL Facility on the Plan Effective Date or as soon as reasonably practicable thereafter; • on the Plan Effective Date, the Reorganized Company issuing 100% of a single class of common equity interests to the holders of the 2028 Notes and the 2028 Notes being canceled; and • on the Plan Effective Date, our currently existing common stock being canceled. 42 On February 3, 2026, the Bankruptcy Court, on an interim basis, approved the DIP ABL Facility, and the Company Parties entered into the DIP Loan and Security Agreement with the DIP Agent and the DIP Lenders.
Removed
The ongoing conflict in the Middle East and demand from China, if weaker than expected, could have an impact on oil prices moving forward as well. Nonetheless, as discussed below, activity levels have remained relatively stable in oil-levered basins.
Added
The DIP ABL Facility is a senior secured super-priority asset-based debtor-in-possession credit facility consisting of up to $125.0 million in aggregate principal amount of revolving credit commitments, including a roll-up or refinancing of all obligations under the Prepetition ABL Loan and Security Agreement.
Removed
Due to the spot-market nature of our business, our revenue and profitability generally moves very similarly to rig, frac, and stage counts in U.S. rig count. Since the end of 2023, the U.S. rig count declined by around 33 rigs, or approximately 5%, through the end of 2024.
Added
The DIP Loan and Security Agreement includes certain terms and conditions (including the Plan becoming effective) providing for the conversion of the DIP ABL Facility into an exit senior secured asset-based revolving credit facility consisting of up to $135.0 million in aggregate principal amount of revolving commitments on the Plan Effective Date or as soon as reasonably practicable thereafter.
Removed
This is following a rig count decline of over 150 rigs from the end of 2022 to the end of 2023, creating an already depressed oil and gas market. In 2024, most public operators with acreage in oil-levered basins, like the Permian, kept activity and capital expenditure levels relatively flat year-over-year.
Added
Since the Petition Date, the Company Parties have been operating their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Removed
However, both private and public operators with acreage in gas-levered basins, like the Haynesville and in the Northeast, maintained low activity levels in conjunction with low natural gas prices. During the second half of 2024, despite a declining rig count environment, we outperformed market drivers and improved our revenue in both the third and fourth quarter sequentially.
Added
The Company Parties have requested and obtained relief from the Bankruptcy Court that enables them to continue their ordinary course operations during the Chapter 11 Cases and uphold their commitments to their stakeholders, including employees, customers, and vendors, during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.
Removed
This improvement was driven in large part by market share gains achieved by our cementing division, which we believe differentiated itself in the market with its advanced cementing slurries and excellent wellsite execution. We also had market share gains in our completion tools division that positively impacted earnings in the fourth quarter of 2024.
Added
Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed the continuation of most legal proceedings and the filing of other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties’ bankruptcy estate unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim.
Removed
We did have minimal negative impacts in the fourth quarter of 2024 due to typical budget exhaustion, weather, and holiday slow-downs, specifically in the Northeast.
Added
In particular, although the filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the indenture governing the 2028 Notes (the “Indenture”) and the Prepetition ABL Loan and Security Agreement (together with the Indenture, the “Debt Instruments”) and caused the principal and interest due thereunder to be immediately due and payable, any efforts to enforce such payment obligations are automatically stayed as a result of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.
Removed
With our recent market share gains, our customers re-setting capital budgets, and supportive commodity prices, we anticipate revenue and profitability for the first quarter of 2025 will be up compared to the fourth quarter of 2024.
Added
Notwithstanding the general application of the automatic stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers. On March 4, 2026, the Bankruptcy Court entered the Confirmation Order.
Removed
We remain cautiously optimistic on the outlook for the energy sector, and we believe there is potential upside for North American activity levels, especially if natural gas prices remain supportive.
Added
The Company Parties anticipate emerging from the Chapter 11 Cases, and the Plan Effective Date occurring, on March 5, 2026; however, consummation of the Restructuring pursuant to the Plan is subject to the satisfaction or waiver of certain conditions set forth in the Plan. Accordingly, no assurance can be given that such transactions will be consummated.
Removed
We also believe that there could be a moderate increase in activity in 2025 over fourth quarter of 2024 levels if commodity prices are supportive and customer budgets are reset and believe that we are well-positioned to capitalize on an improving market, should it materialize.
Added
See “Risk Factors – Risks Related to the Chapter 11 Cases” in Item 1A of Part I of this Annual Report for a discussion of the risks related to the Chapter 11 Cases.
Removed
The decrease in comparison to 2023 was prevalent across all lines of service and was primarily due to pricing decreases coupled with changes in market conditions as the average U.S. rig count for 2024 decreased 5%, in comparison to 2023.
Added
Another key component of labor costs relates to the ongoing training of our field service employees, which improves safety rates and reduces employee attrition.
Removed
More specifically, cement revenue (including pump downs) decreased $24.7 million, or 11%, coiled tubing revenue decreased $12.2 million, or 10%, and wireline revenue also decreased $5.6 million, or 5%, all due to pricing pressure throughout the year, in comparison to 2023.
Added
During 2024, natural gas prices were extremely depressed, averaging approximately $2.19 per MMBtu for the year. In 2025, natural gas prices improved as compared to 2024, averaging approximately $3.52 per MMBtu.
Removed
In addition, tools revenue decreased $12.9 million, or 9%, due to a decrease of 11% in stages, in comparison to 2023. Cost of Revenues (Exclusive of Depreciation and Amortization) Cost of revenues decreased $34.0 million, or 7%, to $456.7 million in 2024.
Added
In the Marcellus and Utica at the end of 2024, there were a total of 34 rigs, and at the end of 2025, a total of 39 rigs. Nonetheless, the long-term outlook on natural gas demand remains positive due mostly to potential increased demand coming from power generation related to artificial intelligence.
Removed
Adjusted Gross Profit (Loss) Adjusted gross profit decreased $21.4 million to $97.4 million in 2024 as a result of the factors described above under “Revenues” and “Cost of Revenues.” General and Administrative Expenses General and administrative expenses decreased $8.5 million to $51.3 million in 2024.
Added
As for oil prices, towards the end of 2024, we began to see WTI oil prices decline, which was exacerbated by the announcement of new tariffs by the Trump Administration in April 2025 and OPEC communicating they would be increasing production.
Removed
The decrease in comparison to 2023 was primarily related to $6.4 million in costs associated with the Units offering in 2023 that did not occur in 2024.

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Other NINE 10-K year-over-year comparisons