10q10k10q10k.net

What changed in TETRA TECHNOLOGIES INC's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of TETRA TECHNOLOGIES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+304 added−326 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in TETRA TECHNOLOGIES INC's 2024 10-K

304 paragraphs added · 326 removed · 223 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

34 edited+13 added−19 removed84 unchanged
Biggest changeBromine is a key mineral component in zinc-bromide energy storage systems and our TETRA PureFlow is an ultra-pure zinc bromide, which has been qualified by several battery technology companies. The lithium battery market is a rapidly growing market, affording us the potential opportunity to participate in a meaningful way.
Biggest changeIn August 2021, we announced completion of a preliminary technical assessment by an independent geological consulting firm to assess lithium and bromine exploration targets in our Southwest Arkansas brine leases. Bromine is a key mineral component in zinc-bromide energy storage systems and our TETRA PureFlow is an ultra-pure zinc bromide, which has been qualified by several battery technology companies.
Gulf of Mexico, the North Sea, Mexico and certain countries in South America, Europe, Asia, the Middle East, and Africa. Customers with deepwater operations frequently use high volumes of CBFs, which can be subject to harsh downhole conditions, such as high pressure and high temperatures. Demand for CBF products is generally driven by offshore completion and workover activity.
Gulf of America, the North Sea, Mexico and certain countries in South America, Europe, Asia, the Middle East, and Africa. Customers with deepwater operations frequently use high volumes of CBFs, which can be subject to harsh downhole conditions, such as high pressure and high temperatures. Demand for CBF products is generally driven by offshore completion and workover activity.
This review of executive talent determines readiness to take on additional leadership roles and identifies developmental opportunities needed to prepare our executives for greater responsibilities. Our short and long-term business strategy is considered when evaluating candidates and their skills. 6 Compensation and Benefits The Company’s compensation programs are designed to incentivize performance, maximize returns, and build shareholder value.
This review of executive talent determines readiness to take on additional leadership roles and identifies developmental opportunities needed to prepare our executives for greater responsibilities. Our short and long-term business strategy is considered when evaluating candidates and their skills. Compensation and Benefits The Company’s compensation programs are designed to incentivize performance, maximize returns, and build shareholder value.
Halliburton and Schlumberger are competitors in the international production testing markets we serve although we provide these services to their customers on a subcontract basis from time to time. Customers for the Water & Flowback Services Division include major integrated and independent U.S. and international oil and gas producers that are active in the areas in which we operate.
Halliburton and Schlumberger are competitors in the international production testing markets we serve although we provide these services to their customers on a subcontract basis from time to time. Customers for the Water & 5 Flowback Services Division include major integrated and independent U.S. and international oil and gas producers that are active in the areas in which we operate.
The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry, and markets TETRA PureFlow an ultra-pure zinc bromide as well as TETRA PureFlow Plus, an ultra-pure zinc bromide/zinc chloride blend; both to several battery technology companies.
The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry, and markets TETRA PureFlow, an ultra-pure zinc bromide as well as TETRA PureFlow Plus, an ultra-pure zinc bromide/zinc chloride blend, to several battery technology companies.
Our operations outside the United States are subject to various foreign governmental laws and regulations relating to the environment, health and safety, and other regulated activities in the countries in which we operate, which may in some cases impose more stringent requirements than applicable laws in the United States. Our operations routinely involve the handling of hydrocarbons and produced water.
Our operations outside the United States are subject to various foreign governmental laws and regulations relating to the environment, health and safety, and other regulated activities in the countries in which we operate, which may in some cases impose more stringent requirements than applicable laws in the United States. 7 Our operations routinely involve the handling of hydrocarbons and produced water.
If an incident takes place, we investigate all serious occurrences to determine root causes and implement corrective actions to ensure we expand our capacity to operate safely. Driving is one of the highest exposure activities that we undertake in our day-to-day operations.
If an incident takes place, we investigate all serious occurrences to determine root causes and implement corrective actions to ensure we expand our capacity to operate safely. 6 Driving is one of the highest exposure activities that we undertake in our day-to-day operations.
Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “TTI.” Our Corporate Governance Guidelines, Code of Business Conduct, Code of Ethics for Senior Financial Officers, Policy on Trading in Company Securities, Audit Committee Charter, Human Capital Management and Compensation Committee Charter, and Nominating, Governance and Sustainability Committee Charter, as well as our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and all amendments to those reports are all available, free of charge, on our website at www.tetratec.com as soon as practicable after we file the reports with the SEC.
Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “TTI.” Our Corporate Governance Guidelines, Code of Business Conduct, Code of Ethics for Senior Financial Officers, Policy on Trading in Company Securities, Audit Committee Charter, Human Capital Management and Compensation Committee Charter, and Nominating, Governance and Sustainability Committee Charter, as well as our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and all amendments to those reports are all available, free of charge, on our website at www.onetetra.com as soon as practicable after we file the reports with the SEC.
In addition, the Clean Water Act, and comparable state laws and regulations thereunder, also prohibit the discharge of pollutants into regulated waters without a permit, including industrial wastewater discharges and storm water runoff, and establish limits on the levels of pollutants contained in such discharges.
The Clean Water Act, and comparable state laws and regulations thereunder, also prohibit the discharge of pollutants into regulated waters without a permit, including industrial wastewater discharges and storm water runoff, and establish limits on the levels of pollutants contained in such discharges.
Our insurance program is reviewed not less than annually with our insurance brokers and underwriters. Such insurance policies may not cover, or may only partially cover, certain losses or claims, which could result in a material adverse effect on our business and operations.
Our insurance 8 program is reviewed not less than annually with our insurance brokers and underwriters. Such insurance policies may not cover, or may only partially cover, certain losses or claims, which could result in a material adverse effect on our business and operations.
Compliance with such laws and regulations may 7 expose us to significant costs and liabilities, and cause us to incur significant capital expenditures in our operations.
Compliance with such laws and regulations may expose us to significant costs and liabilities, and cause us to incur significant capital expenditures in our operations.
Our operations include providing services and materials to oil and gas operators for the use of TCW fluids in the Gulf of Mexico. The EPA’s most recent NPDES permits for Region 6 for oil and gas operations in the federal waters of the western and central Gulf of Mexico went into effect on May 11, 2023.
Our operations include providing services and materials to oil and gas operators for the use of TCW fluids in the Gulf of America. The EPA’s most recent NPDES permits for Region 6 for oil and gas operations in the federal waters of the western and central Gulf of America went into effect on May 11, 2023.
In accordance with Section 402 of the Clean Water Act, the EPA is authorized to issue National Pollutant Discharge Elimination System (“NPDES”) General Permits to regulate offshore discharges in the Gulf of Mexico which includes Treatment, Completion and Workover (“TCW”) fluids.
In accordance with Section 402 of the Clean Water Act, the EPA is authorized to issue National Pollutant Discharge Elimination System (“NPDES”) General Permits to regulate offshore discharges in the Gulf of America which includes Treatment, Completion and Workover (“TCW”) fluids.
These systems include the TETRA SwiftWater Automated Treatment (SWAT) system that chemically treats produced water through a clarification process and the TETRA oil recovery after production technology ORAPT (Orapt™) mobile oil separation system that recovers oil from produced water.
These systems include the TETRA SwiftWater Automated Treatment (“SWAT”) system that chemically treats produced water through a clarification process and the TETRA Oil Recovery After Production Technology (ORAPT) mobile oil separation system that recovers oil from produced water.
Our corporate headquarters are located at 24955 Interstate 45 North, The Woodlands, Texas, 77380. Our phone number is 281-367-1983 and our website is www.tetratec.com.
Our corporate headquarters are located at 24955 Interstate 45 North, The Woodlands, Texas, 77380. Our phone number is 281-367-1983 and our website is www.onetetra.com.
No single customer provided 10% or more of our total consolidated revenues during the years ended December 31, 2023, 2022, or 2021. Other Business Matters Human Capital Management We collaborate as a team to execute for each other, our customers, and our shareholders. As of December 31, 2023, we employed approximately 1,500 people worldwide.
No single customer provided 10% or more of our total consolidated revenues during the years ended December 31, 2024, 2023, or 2022. Other Business Matters Human Capital Management We collaborate as a team to execute for each other, our customers, and our shareholders. As of December 31, 2024, we employed approximately 1,400 people worldwide.
The committee also assists the talent management group to attract, retain, develop, and reward a high-performing and diverse workforce, provide forums and sponsor training activities to share best practices concerning diversity and inclusion education, and develop communication platforms to share information about diversity and inclusion and promote the committee’s activities.
The committee also assists the talent management group to attract, retain, develop, and reward a high-performing workforce, provide forums and sponsor training activities to share best practices concerning employment practices education, and develop communication platforms to share information about and promote the committee’s activities.
We ask questions around diversity and inclusion, if employees would consider working for the company again, or if they recommend working for the company. Based on results, we believe that our relations with our employees are good.
We ask questions around company culture, if employees would consider working for the company again, or if they recommend working for the company. Based on results, we believe that our relations with our employees are good.
We work with consultants to benchmark our compensation and benefits programs to help us offer competitive compensation packages to attract and retain high-performing talent. We also offer competitive benefits to attract and retain exceptional talent.
We work with consultants to perform market-based assessments of our compensation and benefits programs to help us offer competitive compensation packages to attract and retain high-performing talent. We also offer competitive benefits to attract and retain exceptional talent.
Additionally, we have not historically sold any significant volumes of product to Russia, Ukraine, Israel or, the Gaza region and have discontinued all transactions with customers and suppliers in Russia and Ukraine.
Additionally, we have not historically sold any significant volumes of product to Russia, Ukraine, Israel or, the Gaza region and have discontinued all transactions with customers and suppliers in Russia and Ukraine. However, one of our raw material providers sourced one of their raw materials from Russia or Ukraine.
Our executive management sponsored Diversity & Inclusion Committee focuses on sharing information and promoting key initiatives across the company to educate and create awareness about the importance of a diverse and inclusive culture.
Our executive management sponsored Corporate Social Responsibility Committee focuses on sharing information and promoting key initiatives across the company to educate and create awareness about the importance of a multi-faceted and welcoming culture.
Separately, in December 2023, EPA finalized a rule that, established more stringent OOOO(b) new source and OOOO(c) first-time existing source standards of performance for methane and volatile organic compound emissions for oil and gas facilities.
For example, from time to time the EPA has taken certain steps to regulate methane emissions from the oil gas sector. Most recently, in December 2023, EPA finalized a rule that, established more stringent OOOO(b) new source and OOOO(c) first-time existing source standards of performance for methane and volatile organic compound emissions for oil and gas facilities.
In December, 2021, we announced a strategic agreement with Eos Energy Enterprises, Inc. ("Eos") (NASDAQ: EOSE) involving a long-term supply and collaboration agreement to supply our ultra-pure zinc bromide TETRA PureFlow to Eos.
The lithium battery market is a rapidly growing market, affording us the potential opportunity to participate in a meaningful way. In December, 2021, we announced a strategic agreement with Eos Energy Enterprises, Inc. ("Eos") (NASDAQ: EOSE) involving a 2 long-term supply and collaboration agreement to supply our ultra-pure zinc bromide TETRA PureFlow to Eos.
Diversity and Inclusion The diversity of our global workforce stimulates creativity and innovation as we use our collective talents to develop unique solutions to address the world's energy challenges.
Equal Employment Opportunity We value equal employment opportunity to stimulate creativity and innovation in our workforce as we use our collective talents to develop unique solutions to address the world's energy challenges.
Demand for products and services of our Completion Fluids & Products Division remained resilient despite pandemic impacts on commodity prices in 2020. Following a period of depressed commodity prices during 2020, prices experienced significant recoveries beginning in the second half of 2021 and continuing through 2022, but declined slightly during 2023.
Following a period of depressed commodity prices during 2020, prices experienced significant recoveries beginning in the second half of 2021 and continued through 2022, but declined slightly during 2023 and remained consistent during 2024.
Our principal competitors in the non-energy related calcium chloride markets include Occidental Chemical Corporation and Vitro Corporation in North America and Nedmag B.V. in Europe. 5 Water & Flowback Services Division The Water & Flowback Services Division provides comprehensive water management and frac flowback services to a wide-range of onshore oil and gas operators located in all active North America unconventional oil and gas basins.
Water & Flowback Services Division The Water & Flowback Services Division provides comprehensive water management and frac flowback services to a wide-range of onshore oil and gas operators located in all active North America unconventional oil and gas basins.
Standard Lithium delivered a notice to exercise this option to acquire those lithium rights in a portion of our Arkansas leases located outside of the Evergreen Brine Unit on October 6, 2023. See Note 2 - “Basis of Presentation and Significant Accounting Policies” and Note 14 - “Fair Value Measurements” in the Notes to Consolidated Financial Statements for further information.
Standard Lithium delivered a notice to exercise this option to acquire those lithium rights in a portion of our Arkansas leases located outside of the Evergreen Brine Unit on October 6, 2023.
We do, however, continue to evaluate our strategy related to the Arkansas assets and their future development. In addition, we are party to agreements with Standard Lithium Ltd.
The long-term LANXESS bromine supply agreement discussed above provides a secure supply of bromine to support a majority of the Division’s current manufacturing levels. We do, however, continue to evaluate our strategy related to the Arkansas assets and their future development. In addition, we are party to agreements with Standard Lithium Ltd.
Because of these risks, there can be no assurance that significant costs and liabilities will not be incurred now or in the future. Changes in environmental and health and safety laws and regulations could subject us to more rigorous standards and could affect demand for our customers’ products which in turn would impact demand for our products.
Changes in environmental and health and safety laws and regulations could subject us to more rigorous standards and could affect demand for our customers’ products which in turn would impact demand for our products.
The Water & Flowback Services Division purchases water management and production testing equipment and components from third-party manufacturers. Market Overview and Competition Our operations are highly dependent upon the demand for, and production of, natural gas and oil in the various domestic and international locations in which we operate.
Market Overview and Competition Our operations are highly dependent upon the demand for, and production of, natural gas and oil in the various domestic and international locations in which we operate. Demand for products and services of our Completion Fluids & Products Division remained resilient despite pandemic impacts on commodity prices in 2020.
Although this constraint has since resolved, we experienced decreased production volumes of calcium chloride in the first half of 2022. Should we experience similar supply constraints in the future, we may experience future financial impact, the magnitude of which is uncertain. We currently lease over 40,000 gross acres of brine leases near Magnolia, Arkansas, which contain bromine and lithium.
Should we experience similar supply constraints in the future, we may experience future financial impact, the magnitude of which is uncertain. We currently lease over 40,000 gross acres of brine leases near Magnolia, Arkansas, which contain bromine and lithium. See our disclosures titled “Bromine and Lithium Resources” set forth in Part I, “Item 2. Properties” of this Annual Report.
See Note 3 - “Discontinued Operations” in the Notes to Consolidated Financial Statements for further information. Sources of Raw Materials Our Completion Fluids & Products Division manufactures calcium chloride, calcium bromide, zinc bromide, zinc calcium bromide, and sodium bromide for sale to its customers.
The Division also has locations in certain countries in Latin America and the Middle East. Sources of Raw Materials Our Completion Fluids & Products Division manufactures calcium chloride, calcium bromide, zinc bromide, zinc calcium bromide, and sodium bromide for sale to its customers.
In Europe, our Completion Fluids & Products Division’s calcium chloride operations market, distribute, sell or offer to sell calcium chloride products in certain European industries.
In Europe, our Completion Fluids & Products Division’s calcium chloride operations market, distribute, sell or offer to sell calcium chloride products in certain European industries. Our principal competitors in the non-energy related calcium chloride markets include Occidental Chemical Corporation and Vitro Corporation in North America and Nedmag B.V. in Europe.
However, one of our raw material providers sourced one of their raw materials from Russia or Ukraine. 4 Because of the ongoing conflict between Russia and Ukraine, during early 2022, we experienced supply constraints with our primary European supplier of certain raw materials.
Because of the ongoing conflict between Russia and Ukraine, during early 2022, we experienced supply constraints with our primary European supplier of certain raw materials. Although this constraint has since resolved, we experienced decreased production volumes of calcium chloride in the first half of 2022.
Removed
Properties” of this Annual Report), and our leading calcium chloride production capabilities. In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree Chemicals Holdings, LLC (“CarbonFree”), a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.
Added
Properties” of this Annual Report), and our leading calcium chloride production capabilities. The Completion Fluids & Products Division manufactures and sells zinc bromide battery electrolyte for the long-duration energy battery storage market.
Removed
Although the MOU expired in May 2022 at the end of its twelve-month term, we have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies. In December 2021, we invested $5.0 million in a convertible note issued by CarbonFree.
Added
In December 2024, we announced the commercial launch of TETRA Oasis TDS, an end-to-end water treatment and desalination technology for beneficial re-use and mineral extraction applications for oil and gas well produced water.
Removed
This was an investment alongside other investors that provided CarbonFree the necessary capital to construct the first SkyCycle facility.
Added
During the fourth quarter of 2024, the Water & Flowback Services Division completed a commercial pilot project for the desalination of Delaware Basin produced water for a major North America oil and gas operator. The desalinated water was tested against published Texas Railroad Commission standards for beneficial re-use water at both TETRA's laboratory and an independent third-party laboratory.
Removed
We have also reached agreement with CarbonFree on the potential use of a unique solution proposed by TETRA to produce low carbon calcium chloride to support their SkyCycle emissions technology. 2 In August 2021, we announced completion of a preliminary technical assessment by an independent geological consulting firm to assess lithium and bromine exploration targets in our Southwest Arkansas brine leases.
Added
Subsequently, the treated water was sent to a third party for Whole Effluent Toxicity testing where it successfully passed all test parameters.
Removed
The Division also has locations in certain countries in Latin America, Europe, and the Middle East. Former Compression Division Our former Compression Division provided compression services and equipment for natural gas and oil production, gathering, artificial lift, transmission, processing, and storage. O ur former Compression Division’s operations were conducted through our partially-owned CSI Compressco LP (“CSI Compressco”) subsidiary.
Added
See Note 2 - “Basis of Presentation and Significant Accounting Policies” and Note 14 - “Fair Value Measurements” in the Notes to Consolidated Financial Statements for further information. 4 The Water & Flowback Services Division purchases water management and production testing equipment and components from third-party manufacturers.
Removed
Through one of our former wholly-owned subsidiaries, CSI Compressco GP LLC (f/k/a CSI Compressco GP Inc.) (the “general partner”), we managed and controlled CSI Compressco, and accordingly, we consolidated CSI Compressco’s results of operations in our consolidated results of operations through January 31, 2021.
Added
Because of these risks, there can be no assurance that significant costs and liabilities will not be incurred now or in the future. While from time to time there have been periods of deregulation under certain U.S. presidential administrations, the general trend has been towards more stringent changes in environmental laws and regulations.
Removed
On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners, LP and Energy Holdco, LLC (together, “Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the incentive distribution rights (“IDRs”) in CSI Compressco and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, in exchange for $13.9 million in cash.
Added
Fines and penalties for violations of these rules can be substantial. The rules have been subject to legal challenge and, most recently, the D.C. Circuit Court granted the EPA’s motion to hold the cases in abeyance while the agency reviews the final rule.
Removed
On December 31, 2023, we held an interest in CSI Compressco consisting of approximately 3.7% of their outstanding common units at that time. Throughout this Annual Report, we refer to the transaction with Spartan as the “GP Sale.” We have reflected the operations of our former Compression Division as discontinued operations for all periods presented.
Added
The final rule may be repealed or modified by the Trump administration, though we cannot predict the substance or timing of such changes, if any.
Removed
See our disclosures titled “Bromine and Lithium Resources” set forth in Part I, “Item 2. Properties” of this Annual Report. The long-term LANXESS bromine supply agreement discussed above provides a secure supply of bromine to support a majority of the Division’s current manufacturing levels.
Added
The Region 4 permit for the eastern Gulf of America went into effect on April 3, 2024. Delays in issuing these permits or otherwise obtaining coverage under them could adversely impact our customers’ operations and reduce demand for our services.
Removed
West Texas Intermediate oil prices declined from an average of $94.90 per barrel during 2022 to an average of $77.58 per barrel during 2023.
Added
Executive Officers and Directors The following table sets forth certain information with respect to our executive officers and directors: Executive Officers: Brady M. Murphy President, Chief Executive Officer, and board member Elijio V. Serrano Senior Vice President and Chief Financial Officer Matthew J. Sanderson Executive Vice President and Chief Commercial Officer Timothy C.
Removed
For example, in June 2016, the EPA adopted regulations under its New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants that establish air emission controls for natural gas and natural gas liquids production, processing and transportation activities.
Added
Moeller Senior Vice President – Global Supply Chain and Chemicals Roy E. McNiven Senior Vice President – Energy Services Operations Alicia P. Boston General Counsel and Chief Compliance Officer Jacek M. Mucha Vice President – Finance, Treasurer, and Assistant Secretary Directors: Mark E. Baldwin Former executive vice president and chief financial officer of Dresser-Rand Group, Inc. Thomas R. Bates, Jr.
Removed
These rules establish specific requirements associated with volatile organic compounds and methane emissions from certain hydraulically fractured natural gas wells, production-related wet seal and reciprocating compressors, and pneumatic controllers and storage vessels, and further require that most hydraulically fractured natural gas wells use so-called “green” completions.
Added
Adjunct professor in the Finance Department at Texas Christian University Christian A. Garcia Former executive vice president and chief financial officer of BrandSafway John F. Glick Former chief executive officer of Lufkin Industries, Inc. Angela D. John Former director of innovation and strategy for New Energy Ventures with the Williams Companies, Inc. Sharon B.
Removed
While the EPA under the Trump Administration finalized rules to rescind or modify certain of these requirements in September 2020, subsequently, the United States Congress approved, and President Biden signed into law, a resolution under the Congressional Review Act to repeal the September 2020 revisions, effectively reinstating the prior standards.
Added
McGee Founder SDBM Executive and Strategic Advisory, LLC and former vice president at Albemarle Corporation Shawn D. Williams Former chief executive officer of Nexeo Plastics Holdings, Inc.
Removed
Under the final rules, operators of affected facilities will have two years to prepare and submit their plans to impose methane emission controls on existing sources.
Removed
The presumptive standards under the final rule are generally the same for both new and existing sources, including enhanced leak detection using optical gas imaging and subsequent repair requirement, and reduction of emissions by 95% through capture and control systems.
Removed
The rule also revises requirements for fugitive emissions monitoring and repair, as well as equipment leaks and the frequency of monitoring surveys, establishes a “super-emitter” response program to timely mitigate emissions events as detected by governmental agencies or qualified third 8 parties, triggering certain investigation and repair requirements, and provides additional options for the use of advanced monitoring to encourage the deployment of innovative technologies to detect and reduce methane emissions.
Removed
Any additional or more stringent regulations that impose new air permitting or pollution control requirements on our equipment could require us to incur material costs.
Removed
The Region 4 permit for the eastern Gulf of Mexico expired January 19, 2023, but the EPA is proposing to reissue the expired permit. This decision is currently pending following an extension of the public comment period to August 2023. The Region 4 permit remains in administratively continued status pending finalization of the reissuance.
Removed
While the terms of any subsequent NPDES General Permit applicable to our customers’ operations are uncertain at this time, any additional restrictions on oil and gas operation in the Gulf of Mexico under the Clean Water Act, could have an indirect effect on us.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

117 edited+30 added−42 removed104 unchanged
Biggest changeAs a result, this could increase the risk that we may be required to step in and satisfy remaining decommissioning liabilities of Maritech and any buyer of the Maritech properties, including Orinoco, through our third-party indemnity agreements and private guarantees, which obligations could be significant and could adversely affect our business, results of operations, financial condition and cash flows. 16 We are exposed to significant credit risks.
Biggest changeMoreover, the changes to the bonding and financial assurance program for the Gulf of America (to include loss of supplemental bonding waivers, exceedances of the surety bond market’s ability to meet current demands, and resultant bankruptcies) could increase the risk that we may be required to step in and satisfy remaining decommissioning liabilities of Maritech and any buyer of the Maritech properties, including Orinoco, through our third-party indemnity agreements and private guarantees.
The New Term Credit Agreement also requires the Company to maintain a Leverage Ratio (as defined in the new term loan credit agreement) of not more than 4.0 to 1.0 as of the end of each fiscal quarter and Liquidity (as defined in the New Term Credit Agreement) of not less than $50.0 million at all times.
The Term Credit Agreement also requires the Company to maintain a Leverage Ratio (as defined in the new term loan credit agreement) of not more than 4.0 to 1.0 as of the end of each fiscal quarter and Liquidity (as defined in the New Term Credit Agreement) of not less than $50.0 million at all times.
For more information, see our risk factor titled “Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.” Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, certain statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.
For more information, see our risk factor titled “Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.” Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, certain statements in those voluntary disclosures may be based on expectations and assumptions and hypothetical scenarios 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.
Our business and future profitability could be affected by numerous factors, including the availability of tax credits, exemptions, refunds and other benefits to reduce our tax liabilities, changes in the relative amount of our earnings subject to tax in the various jurisdictions in which we operate or have subsidiaries, the potential expansion of our 24 business into or otherwise becoming subject to tax in additional jurisdictions, changes to our existing business structure and operations, the extent of our intercompany transactions, and the extent to which taxing authorities in the relevant jurisdictions respect those intercompany transactions.
Our business and future profitability could be affected by numerous factors, including the availability of tax credits, exemptions, refunds and other benefits to reduce our tax liabilities, changes in the relative amount of our earnings subject to tax in the various jurisdictions in which we operate or have subsidiaries, the potential expansion of our business into or otherwise becoming subject to tax in additional jurisdictions, changes to our existing business structure and operations, the extent of our intercompany transactions, and the extent to which taxing authorities in the relevant jurisdictions respect those intercompany transactions.
The New Term Credit Agreement contains certain affirmative and negative covenants, including covenants that restrict the ability of the Company and certain of its subsidiaries to take certain actions including, among other things and subject to certain significant exceptions, the incurrence of debt, the granting of liens, engaging in mergers and other fundamental changes, the making of investments, entering into transactions with affiliates, the payment of dividends and other restricted payments, the prepayment of other indebtedness and the sale of assets.
The Term Credit Agreement contains certain affirmative and negative covenants, including covenants that restrict the ability of the Company and certain of its subsidiaries to take certain actions including, among other things and subject to certain significant exceptions, the incurrence of debt, the granting of liens, engaging in mergers and other fundamental changes, the making of investments, entering into transactions with affiliates, the payment of dividends and other restricted payments, the prepayment of other indebtedness and the sale of assets.
The adoption of any federal, state or local laws or the implementation of additional regulations regarding hydraulic fracturing could potentially cause a decrease in the completion of new oil and gas wells and an associated decrease in demand for our services and increased compliance costs and time, which could have a material adverse effect on our liquidity, consolidated results of operations, and consolidated financial condition.
The adoption of any federal, state or local laws or the implementation of additional regulations regarding hydraulic fracturing or oil and gas operations on federal lands could potentially cause a decrease in the completion of new oil and gas wells and an associated decrease in demand for our services and increased compliance costs and time, which could have a material adverse effect on our liquidity, consolidated results of operations, and consolidated financial condition.
Under Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation experiences an “ownership change,” any NOLs, losses or deductions attributable to a “net unrealized 14 built-in loss” and other tax attributes (“Tax Attributes”) could be substantially limited, and timing of the usage of such Tax Attributes could be substantially delayed.
Under Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation experiences an “ownership change,” any NOLs, losses or deductions attributable to a “net unrealized built-in loss” and other tax attributes (“Tax Attributes”) could be substantially limited, and timing of the usage of such Tax Attributes could be substantially delayed.
If new or more stringent federal, state, or local legal restrictions relating to the hydraulic fracturing process are adopted, our customers could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from 23 drilling wells.
If new or more stringent federal, state, or local legal restrictions relating to the hydraulic fracturing process are adopted, our customers could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.
As a result of these uncertainties, no assurance can be given that any future exploration programs will result in the discovery of commercially viable mineral resources or reserves. 12 Failure to effectively and timely execute any of our low carbon energy initiatives could have an adverse effect on our business and financial condition.
As a result of these uncertainties, no assurance can be given that any future exploration programs will result in the discovery of commercially viable mineral resources or reserves. Failure to effectively and timely execute any of our low carbon energy initiatives could have an adverse effect on our business and financial condition.
Furthermore, execution of our low carbon initiatives are subject to a number of permitting, real estate, and project development risks, which could delay, limit, or even prevent the successful execution of these initiatives. Moreover, we cannot guarantee that the low carbon initiatives we may identify will meet the expectations of our various stakeholders.
Furthermore, execution of our low carbon initiatives are subject to a number of permitting, real estate, and project development risks, which could delay, limit, or even prevent the 12 successful execution of these initiatives. Moreover, we cannot guarantee that the low carbon initiatives we may identify will meet the expectations of our various stakeholders.
Furthermore, competing or new technologies may accelerate the obsolescence of our products or services and reduce the value of our intellectual property. 17 Limitations on our ability to obtain, maintain, protect, or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.
Furthermore, competing or new technologies may accelerate the obsolescence of our products or services and reduce the value of our intellectual property. Limitations on our ability to obtain, maintain, protect, or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenue and any competitive advantage we hold.
Also, despite any voluntary actions, we may receive pressure from certain investors, lenders, or other groups to adopt more aggressive climate or other ESG-related goals or policies, but we cannot guarantee that we will be able to implement such goals because of potential costs or technical or operational obstacles.
Also, despite any voluntary actions, we may receive pressure from certain investors, lenders, or other groups to adopt more aggressive climate or other ESG-related goals or policies, but we cannot guarantee that we will be able to pursue or implement such goals because of potential costs or technical or operational obstacles.
Economic sanctions and other regulations imposed by the United States and other international countries as a result of the conflict involving Russia and Ukraine, Israel and 11 Gaza region, hostilities in the Middle East, or maritime piracy attacks may disrupt supplies or affect the prices of certain raw materials.
Economic sanctions and other regulations imposed by the United States and other international countries as a result of the conflict involving Russia and Ukraine, Israel and Gaza region, hostilities in the Middle East, or maritime piracy attacks may disrupt supplies or affect the prices of certain raw materials.
There is also a growing trend of the SEC or parties suing public companies for “greenwashing,” which is where a company makes unsubstantiated statements designed to mislead consumers or shareholders into thinking that the company’s products or practices are more environmentally friendly than they are.
There is also a growing trend of parties suing public companies for “greenwashing,” which is where a company makes unsubstantiated statements designed to mislead consumers or shareholders into thinking that the company’s products or practices are more environmentally friendly than they are.
Additionally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations. Such ESG matters may also impact our customers, which may result in reduced demand for certain of our products and services.
Additionally, to the extent ESG matters negatively impact our 21 reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations. Such ESG matters may also impact our customers, which may result in reduced demand for certain of our products and services.
The volatility of our common stock may make it difficult to resell shares of our common stock at attractive prices. Our long-term debt agreements contain covenants and other provisions that restrict our ability to take certain actions and may limit our ability to operate or grow our business in the future.
The volatility of our common stock may make it difficult to resell shares of our common stock at attractive prices. 13 Our long-term debt agreements contain covenants and other provisions that restrict our ability to take certain actions and may limit our ability to operate or grow our business in the future.
Due to the unique nature of many of these assets, finding a suitable or acceptable replacement may be difficult and/or cost prohibitive. The replacement or enhancement of these assets over the next several years may be necessary in order for us to effectively compete in the current marketplace.
Due to the unique nature of many of these assets, finding a suitable or acceptable replacement may be difficult and/or cost prohibitive. The replacement or enhancement of these assets over the next several years may be necessary for us to effectively compete in the current marketplace.
We encounter, and expect to continue to encounter, intense competition in the sale of our products and services. We compete with numerous companies in each of our operating segments, many of which have substantially greater financial and other resources than we have.
We encounter, and expect to continue to encounter, intense competition in the sale of our products and services. We compete with numerous companies in each of our operating segments, many of which have substantially greater financial and other resources than us.
New drilling, completion, and production technologies and equipment are constantly evolving. If we are unable to adapt to new advances in technology or replace older assets with new assets, we are at risk of losing customers and market share.
New drilling, completion, and production technologies and equipment are constantly evolving. If we are unable to adapt to new advances in technology or replace older assets with new assets, we are at risk of losing 11 customers and market share.
The Board of Directors has adopted the Tax Plan to protect the availability of the Company’s Tax Attributes. The Tax Plan is designed to reduce the likelihood that we experience an ownership change by deterring certain acquisitions of our common stock.
The Board of Directors has adopted the Tax Plan to protect the availability of the Company’s Tax Attributes. The Tax Plan is designed to reduce the likelihood that we experience an ownership change by deterring certain 14 acquisitions of our common stock.
While we cannot predict the final form or substance of these rules, this may result in additional costs to comply with any such disclosure requirements.
While we cannot predict the final form or substance of these various rules, this may result in additional costs to comply with any such disclosure requirements.
Further, United States federal, state, and local and non-U.S. tax laws, policies, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us, in each case, possibly with retroactive effect, and may have an adverse effect on our business and future profitability. Item 1B. Unresolved Staff Comments. Not applicable.
Further, U.S. federal, state, and local and non-U.S. tax laws, policies, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us, in each case, possibly with retroactive effect, and may have an adverse effect on our business and future profitability. Item 1B. Unresolved Staff Comments. Not applicable.
To the extent severe drought or other weather-related conditions prevent our customers from obtaining needed water, frac water operations may not be possible and our Water & Flowback Services Division business may be negatively affected. Further, a portion of our operations is susceptible to adverse weather conditions in the Gulf of Mexico, including hurricanes and other extreme weather conditions.
To the extent severe drought or other weather-related conditions prevent our customers from obtaining needed water, frac water operations may not be possible and our Water & Flowback Services Division business may be negatively affected. Further, a portion of our operations is susceptible to adverse weather conditions in the Gulf of America, including hurricanes and other extreme weather conditions.
Mandatory ESG-related disclosure is also emerging as an area where we may be, or may become, subject to required disclosures in certain jurisdictions, and any such mandatory 21 disclosures may similarly necessitate the use of hypothetical, projected or estimated data, some of which is not controlled by us and is inherently subject to imprecision.
Mandatory ESG-related disclosure is also emerging as an area where we may be, subject to required disclosures in certain jurisdictions, and any such mandatory disclosures may similarly necessitate the use of hypothetical, projected or estimated data, some of which is not controlled by us and is inherently subject to imprecision.
Additionally, we cannot predict how financial institutions and investors might consider information disclosed under such rule, and as a result it is possible that we could face increases with respect to the costs of, or restrictions imposed on, our access to capital.
Additionally, we cannot predict how financial institutions and investors might consider information disclosed under such rules, and as a result it is possible that we could face increases with respect to the costs of, or restrictions imposed on, our access to capital.
Disclosures reliant upon such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Disclosures reliant upon such expectations and assumptions and hypothetical scenarios are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Our Arkansas brine leases currently contain inferred, indicated and measured resources of lithium and bromine, and we may never convert any of these resources to proven mineral reserves on these properties, or enough of them to justify the decision to engage in the extraction of lithium and/or bromine.
In addition to proven bromine reserves, our Arkansas brine leases currently contain probable bromine reserves and inferred, indicated and measured resources of lithium and bromine, and we may never convert any of these resources to proven mineral reserves on these properties, or enough of them to justify the decision to engage in the extraction of lithium and/or bromine.
The operations of certain of our subsidiaries are exposed to fluctuations between the U.S. dollar and certain foreign currencies, particularly the euro, the British pound, the Mexican peso, and the Argentinian peso. Our plans to grow our international operations could cause this exposure from fluctuating currencies to increase.
The operations of certain of our subsidiaries are exposed to fluctuations between the U.S. dollar and certain foreign currencies, particularly the euro, the British pound, the Brazilian Real, the Argentinian peso and the Mexican peso. Our plans to grow our international operations could cause this exposure from fluctuating currencies to increase.
Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect our business and future profitability. We are subject to various complex and evolving United States federal, state, and local and non-U.S. taxes.
Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect our business and future profitability. We are subject to various complex and evolving U.S. federal, state, and local and non-U.S. taxes.
Other factors affecting our operating results and activity levels include oil and natural gas industry spending levels for exploration, completion, production, development, and acquisition activities, and impairments of long-lived assets. Customer consolidation may also lead to reductions in capital spending that could have a material adverse effect on our business.
Other factors affecting our operating results and activity levels include oil and natural gas industry spending levels for exploration, completion, production, development, and acquisition activities, and impairments of long-lived assets. Customer consolidation may also lead to reductions in capital spending that could have an adverse effect on our business.
Some of these fluctuations have been unrelated to operating performance and are attributable, in part, to outside factors such as general economic conditions, including the impact of the COVID-19 pandemic, the ongoing Russia-Ukraine conflict, conflict in the Israel-Gaza region, continued hostilities in the Middle East, maritime piracy attacks, and fear of a global recession.
Some of these fluctuations have been unrelated to operating performance and are attributable, in part, to outside factors such as general economic conditions, including the impact of the ongoing Russia-Ukraine conflict, conflict in the Israel-Gaza region, continued hostilities in the Middle East, maritime piracy attacks, and fear of a global recession.
This may force lease owners and operators of leases and other infrastructure in the Gulf of Mexico to obtain additional surety bonds or other forms of financial assurance, the costs of which could be significant.
This may force lease owners and operators of leases and other infrastructure in the Gulf of America to obtain additional surety bonds or other forms of financial assurance, the costs of which could be significant.
Such physical risks may also impact our suppliers, which may adversely affect our ability to provide our products and services. Increasing attention to ESG matters and conservation measures may adversely impact our or our customers’ business.
Such physical risks may also impact our suppliers, which may adversely affect our ability to provide our products and services. Increased attention to ESG matters and conservation measures may adversely impact our or our customers’ business.
In those countries and states in which NOLs are subject to an expiration period, our NOLs, if not utilized, will expire at various dates from 2024 through 2043. We may be limited in the portion of our NOLs that we can use in the future to offset taxable income for United States, federal, state, and foreign income tax purposes.
In those countries and states in which NOLs are subject to an expiration period, our NOLs, if not utilized, will expire at various dates beginning in 2025 through 2043. We may be limited in the portion of our NOLs that we can use in the future to offset taxable income for United States, federal, state, and foreign income tax purposes.
In particular, the focus on GHGs and climate change, including incentives to conserve energy or use alternative energy sources, such as those contained in recently passed laws like the Inflation Reduction Act (“IRA 2022”), could have a negative impact on our financial results if such laws, regulations, treaties, or international agreements reduce the worldwide demand for oil and natural gas or otherwise result in reduced economic activity generally.
In particular, the focus on GHGs and climate change, including incentives to conserve energy or use alternative energy sources, such as those contained in laws like the Inflation Reduction Act (“IRA 2022”), unless amended or otherwise superseded, could have a negative impact on our financial results if such laws, regulations, treaties, or international agreements reduce the worldwide demand for oil and natural gas or otherwise result in reduced economic activity generally.
Our business in the countries in which we currently operate and those in which we may operate in the future could be limited or disrupted by: • restrictions on repatriating cash back to the United States; • the impact of compliance with anti-corruption laws on our operations and competitive position in affected countries and the risk that actions taken by us or our agents may violate those laws; • government controls and government actions, such as expropriation of assets and changes in legal and regulatory environments; • import and export license requirements; • political, social, or economic instability; • trade restrictions; • changes in tariffs and taxes; and 22 • our limited knowledge of these markets or our inability to protect our interests.
Our business in the countries in which we currently operate and those in which we may operate in the future could be limited or disrupted by: • restrictions on repatriating cash back to the United States; • the impact of compliance with anti-corruption laws on our operations and competitive position in affected countries and the risk that actions taken by us or our agents may violate those laws; • government controls and government actions, such as expropriation of assets and changes in legal and regulatory environments; • import and export license requirements; • political, social, or economic instability; • trade restrictions; • changes in tariffs, which could impact raw material prices and the cost of component parts, and taxes; and • our limited knowledge of these markets or our inability to protect our interests.
Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for oil and natural gas products and additional governmental investigations and private litigation against us or our customers.
Increased attention to climate change and 20 environmental conservation, for example, may result in demand shifts for oil and natural gas products and additional governmental investigations and private litigation against us or our customers.
Department of the Interior also recently increased its estimates for decommissioning liabilities in the Gulf of Mexico, causing the potential need for additional supplemental bonding and/or other financial assurances to be dramatically increased.
Department of the Interior also increased its estimates for decommissioning liabilities in the Gulf of America, causing the potential need for additional supplemental bonding and/or other financial assurances to be dramatically increased.
During the three-year period ending December 31, 2023, we recorded a total of $6.4 million of impairments and other charges for certain right-of-use lease assets, inventory and long-lived assets other than goodwill. See Note 6 - “Impairments and other charges” in the Notes to Consolidated Financial Statements for further discussion of impairments.
During the three-year period ending December 31, 2024, we recorded a total of $5.9 million of impairments and other charges for certain right-of-use lease assets, inventory and long-lived assets other than goodwill. See Note 6 - “Impairments and other charges” in the Notes to Consolidated Financial Statements for further discussion of impairments.
Department of the Interior’s supplemental bonding process could result in demands for the posting of increased financial assurances by owners and operators in the Gulf of Mexico, including Maritech, Orinoco and the other entities to whom Maritech divested its Gulf of Mexico assets, but such demands cannot be directly placed on us due to the fact that we are only a former parent company of Maritech and are only a guarantor as opposed to an actual lease owner or operator.
Department of the Interior’s supplemental bonding requirements that increase their stringency could result in demands for the posting of increased financial assurances by owners and operators in the Gulf of America, including Maritech, Orinoco and the other entities to whom Maritech divested its Gulf of America assets, but such demands cannot be directly placed on us due to the fact that we are only a former parent company of Maritech and are only a guarantor as opposed to an actual lease owner or operator.
If additional levels of regulation or permitting requirements were imposed on oil and gas operators through the adoption of new laws and regulations, the demand for certain of our products and services could be decreased or subject to delays. 18 We operate in the U.S. Gulf of Mexico.
If additional levels of regulation or permitting requirements are imposed on oil and gas operators through the adoption of new laws and regulations, the demand for certain of our products and services could be decreased or subject to delays. We operate in the U.S. Gulf of America.
Our future success may depend on our ability to effectively execute on our low carbon energy initiatives. This strategy depends on our ability to effectively identify, develop, and scale new technologies, expand application of our global infrastructure and chemistry expertise and on the economic viability of the extraction of lithium and bromine from the leased acreage.
Our future success may depend on our ability to effectively execute on our low carbon energy initiatives. This strategy depends on our ability to effectively identify, develop, and scale new technologies, expand application of our global infrastructure and chemistry expertise and on the economic viability of the extraction of lithium and bromine from our Arkansas brine leases.
President Biden issued an executive order on January 27, 2021, that effectively paused new leasing activities for oil and gas exploration and production on non-Indian federal lands and offshore waters pending completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practices that take into consideration potential climate and other impacts associated with oil and gas activities on such lands and waters.
For example, President Biden previously issued an executive order that effectively paused new leasing activities for oil and gas exploration and production on non-Indian federal lands and offshore waters pending completion of a comprehensive 22 review and reconsideration of federal oil and gas permitting and leasing practices that take into consideration potential climate and other impacts associated with oil and gas activities on such lands and waters.
Our low carbon energy initiatives may also depend in part on successful development of partnerships with other companies, such as our partnership and investment in CarbonFree and our MOU and potential joint venture partnership with Saltwerx, and such partners’ execution of their own respective projects and business strategies.
Our low carbon energy initiatives may also depend in part on successful development of partnerships with other companies, such as our partnership and investments in privately-held companies and our MOU and potential joint venture partnership with Saltwerx, and such partners’ execution of their own respective projects and business strategies.
Additional legislation or regulation could also lead to operational delays or increased operating costs for our customers in the production of oil and gas, including from the developing shale plays, or could make it more difficult to perform hydraulic fracturing.
Additional legislation or regulation could also lead to operational delays or increased operating costs for our customers in the production of oil and gas, including from the developing shale plays, or could make it more difficult to perform hydraulic fracturing or otherwise operate on federal lands.
Environmental Protection Agency (“EPA”), including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories. The methane emissions charge would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025, and be set at $1,500 for 2026 and each year after.
Environmental Protection Agency (“EPA”), including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories. The methane emissions charge began in calendar year 2024 at $900 per ton of methane, increases to $1,200 in 2025, and will be set at $1,500 for 2026 and each year after.
The ABL Credit Agreement contains certain affirmative and negative covenants, including covenants that restrict the ability of TETRA and certain of its subsidiaries to take certain actions including, among other things and subject to certain significant exceptions, (i) incurring debt, (ii) granting liens, (iii) engaging in mergers and other fundamental changes, (iv) making investments, (v) entering into, or amending, transactions with affiliates, (vi) paying dividends and making other restricted payments, (vii) prepaying other indebtedness, and (viii) selling assets.
The ABL Credit Agreement contains certain affirmative and negative covenants, including covenants that restrict the ability of TETRA and certain of its subsidiaries to take certain actions including, among other things and subject to certain significant exceptions, incurring debt, granting liens, engaging in mergers and other fundamental changes, making investments, entering into, or amending, transactions with affiliates, paying dividends and making other restricted payments, prepaying other indebtedness and selling assets.
There are also increasing financial risks for companies in the fossil fuel sector as shareholders currently invested in such companies may elect in the future to shift some or all of their investments into other sectors.
There have also recently been increasing financial risks for companies in the fossil fuel sector as certain shareholders currently invested in such companies may elect in the future to shift some or all of their investments into other sectors.
Supreme Court finding that GHG emissions constitute a pollutant under the CAA, the EPA has adopted regulations that, among other things, 19 establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, and together with the DOT, implementing GHG emissions limits on vehicles manufactured for operation in the United States.
Supreme Court finding that GHG emissions constitute a pollutant under the CAA, the EPA adopted regulations that, among other things, established construction and operating permit reviews for GHG emissions from certain large stationary sources, required the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, and together with the DOT, implemented GHG emissions limits on vehicles manufactured for operation in the United States.
While we continue to evaluate the next steps regarding the potential development of our brine leases, we have only very recently completed a technical resources report for our Evergreen Brine Unit, and we are not currently able to determine the economic viability of the extraction of the lithium and bromine from the leased acreage.
While we continue to evaluate the next steps regarding the potential development of our brine leases, we have only very recently completed a definitive feasibility study with respect to bromine and an updated technical resources report for our Evergreen Brine Unit, and we are not currently able to determine the economic viability of the extraction of the lithium and bromine from the leased acreage.
Pursuant to a Bonding Agreement entered into as part of the Orinoco transactions (the “Bonding Agreement”), Orinoco provided non-revocable performance bonds in an aggregate amount of $46.8 million to cover the performance by Orinoco and Maritech of the asset retirement obligations of Maritech (the “Initial Bonds”) and agreed to replace the Initial Bonds with other non-revocable performance bonds in the aggregate sum of $47.0 million (collectively, the “Replacement Bonds”).
Pursuant to a Bonding Agreement entered into as part of the Orinoco transactions (the “Bonding Agreement”), Orinoco provided non-revocable performance bonds in an aggregate amount of $46.8 million to cover the Orinoco Lease Liabilities (the “Initial Bonds”) and agreed to replace the Initial Bonds with other non-revocable performance bonds in the aggregate sum of $47.0 million (collectively, the “Replacement Bonds”).
The amount of cash necessary to satisfy these obligations could be significant and, and if Maritech or Orinoco is unable to cover deficiency between any bond payment and the decommissioning liability, our financial condition and results of operations may be negatively affected.
The amount of cash necessary to satisfy these obligations could be significant and, if Maritech or Orinoco is unable to cover any deficiency between any bond payment and the decommissioning liability, we may be liable for a portion of the costs and our financial condition and results of operations may be negatively affected.
At the state level, some states, including Texas, Oklahoma and New Mexico, have adopted, and other states are considering adopting legal requirements that could impose new or more stringent permitting, public disclosure, or well construction requirements on hydraulic fracturing activities.
At the state level, some states, including Texas, Oklahoma and New Mexico, have adopted, and other states are considering adopting legal requirements that could impose new or more stringent permitting, public disclosure, or well construction requirements on hydraulic fracturing activities. States could elect to prohibit high volume hydraulic fracturing altogether.
Factors affecting the prices of oil and natural gas include: the level of supply and demand for oil and natural gas, worldwide; governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics; worldwide political, military, and economic conditions such as the Russia-Ukraine conflict, the conflict in the Israel-Gaza region and continued hostilities in the Middle East; the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and non-OPEC countries, such as Russia, to set and maintain oil production levels; the levels of oil production in the U.S. and by other non-OPEC countries; oil refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas; the cost of producing and delivering oil and natural gas; and acceleration of the development of, and demand for, alternative energy sources.
Such potential impairment charges could have a material adverse impact on our operating results. 9 Factors affecting the prices of oil and natural gas include: the level of supply and demand for oil and natural gas, worldwide; governmental regulations, including the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves; weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics; worldwide political, military, and economic conditions such as the Russia-Ukraine conflict, the conflict in the Israel-Gaza region and continued hostilities in the Middle East; the ability or willingness of the Organization of Petroleum Exporting Countries (“OPEC”) and non-OPEC countries, such as Russia, to set and maintain oil production levels; the levels of oil production in the U.S.; oil refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural gas; the cost of producing and delivering oil and natural gas; and acceleration of the development of, and demand for, alternative energy sources.
When coupled with the volatile prices of oil and gas, it is difficult to predict the impact of the rule and regulatory changes already promulgated and as may be forthcoming by the U.S. Department of the Interior relating to financial assurance for decommissioning liabilities. Any revisions to the U.S.
When coupled with any volatility with respect to the prices of oil and gas, it is difficult to predict the impact of BOEM’s 2024 rule and regulatory changes already promulgated, and any other changes as may be forthcoming by the U.S. Department of the Interior relating to financial assurance for decommissioning liabilities.
Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
While such ratings do not impact all investors’ investment or voting decisions, unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
The market price of our common stock has fluctuated in the past and is subject to significant fluctuations in response to many factors, some of which are beyond our control, including the following: • our operational performance; • supply, demand, and prices of oil and natural gas; • the activity levels of our customers; • deviations in our earnings from publicly disclosed forward-looking guidance or analysts’ projections; • recommendations by research analysts that cover us and other companies in our industry; • risks related to acquisitions, divestitures and our growth strategy; • uncertainty about current global economic conditions; and • other general economic conditions. 13 During 2023, the closing price for our common stock ranged from a high of $6.54 per share to a low of $2.48 per share.
The market price of our common stock has fluctuated in the past and is subject to significant fluctuations in response to many factors, some of which are beyond our control, including the following: • our operational performance; • supply, demand, and prices of oil and natural gas; • the activity levels of our customers; • deviations in our earnings from publicly disclosed forward-looking guidance or analysts’ projections; • recommendations by research analysts that cover us and other companies in our industry; • risks related to acquisitions, divestitures and our growth strategy; • uncertainty about current global economic conditions; and • other general economic conditions.
Additionally, we may announce various targets or product and service offerings in an attempt to improve our ESG profile.
Additionally, we may announce various targets or product and service offerings in an attempt to improve our ESG profile, which are often aspirational.
Consequently, we face credit risk associated with the ability of these companies to satisfy their decommissioning liabilities. If these companies are unable to satisfy their obligations, it will increase the possibility that we will become liable for such decommissioning obligations in the future. Our operating results and cash flows for certain of our subsidiaries are subject to foreign currency risk.
If these companies are unable to satisfy their obligations, it will increase the possibility that we will become liable for such decommissioning obligations in the future. 16 Our operating results and cash flows for certain of our subsidiaries are subject to foreign currency risk.
However, we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our ESG profile, including but not limited to as a result of unforeseen costs, consequences, or technical difficulties associated with such targets or offerings.
However, we cannot guarantee that we will be able to meet any such targets or that such targets or offerings will have the intended results on our ESG profile, including but not limited to any unforeseen costs, consequences, changes to relevant accounting methodologies or technical difficulties associated with such targets or offerings.
We own numerous patents, patent applications, and unpatented trade secret technologies in the U.S. and certain foreign countries. There can be no assurance that the steps we have taken to protect our proprietary rights will be adequate to deter misappropriation of these rights. In addition, independent third parties may develop competitive or superior technologies.
We own numerous patents, patent applications, and unpatented trade secret technologies in the U.S. and certain foreign countries. There can be no assurance that the steps we have taken to protect our proprietary rights will be adequate to deter misappropriation of these rights.
This note will be subject to fair value measurement adjustments which will affect our financial results and there can be no assurance that it will ultimately be repaid or converted into equity of CarbonFree. Changes in the economic environment have resulted, and could further result, in significant impairments of certain of our long-lived assets.
These investments will be subject to fair value measurement adjustments which will affect our financial results and there can be no assurance that the convertible notes will ultimately be repaid or converted in equity of the issuers. Changes in the economic environment have resulted, and could further result, in significant impairments of certain of our long-lived assets.
Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and gas production activities using hydraulic fracturing techniques.
Increased regulation and attention given to the hydraulic fracturing process or oil and gas operations on federal lands could lead to greater opposition to oil and gas production activities using hydraulic fracturing techniques.
West Texas Intermediate oil prices averaged $68.14, $94.90, and $77.58 per barrel during 2021, 2022, and 2023, respectively. Over this same period, U.S. natural gas prices have also been volatile, with the Henry Hub price averaging $3.89, $6.45, and $2.53 per MMBtu during 2021, 2022, and 2023, respectively.
For example, West Texas Intermediate oil prices averaged $94.90, $77.58, and $76.63 per barrel during 2022, 2023, and 2024, respectively. Over this same period, U.S. natural gas prices have also been volatile, with the Henry Hub price averaging $6.45, $2.53, and $2.15 per MMBtu during 2022, 2023, and 2024, respectively.
Although we cannot predict the effects of these actions, such limitation of investments in and financing for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities, which could reduce demand for our products and services.
Limitation of investments in and financing for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities, which could reduce demand for our products and services.
In addition, the tools, techniques, methodologies, programs, and components we use to provide our services and products may infringe upon or otherwise violate the intellectual property rights of others or be challenged on that basis.
In addition, independent third parties may develop competitive or superior technologies. 17 Additionally, the tools, techniques, methodologies, programs, and components we use to provide our services and products may infringe upon or otherwise violate the intellectual property rights of others or be challenged on that basis.
We also have availability under our Asset-Based Credit Agreement (the “ABL Credit Agreement”), which we entered into in September 2018, and under our revolving credit facility for seasonal working capital needs of subsidiaries in Sweden (“Swedish Credit Facility”), which was entered into in January 2022.
We also have availability under our Asset-Based Credit Agreement (the “ABL Credit Agreement”), and under our revolving credit facility for seasonal working capital needs of subsidiaries in Sweden (“Swedish Credit Facility”).
Our revenues and profitability are particularly dependent upon oil and natural gas industry activity and spending levels in this region. Our operations may also be affected by technological advances, cost of capital, and tax policies.
Our revenues and profitability are particularly dependent upon oil and natural gas industry activity and spending levels in this region. Our operations may also be affected by technological advances, cost of capital, and tax policies. Adverse changes in any of these other factors may have a material adverse effect on our revenues and profitability.
We have adopted a Tax Benefits Preservation Plan (the “Tax Plan”) that is designed to protect our Tax Attributes. As of December 31, 2023, we had federal, state, and foreign net operating loss carryforwards/carrybacks (“NOLs”) equal to approximately $75.8 million, $10.3 million, and $8.9 million, respectively.
We have adopted a Tax Benefits Preservation Plan (the “Tax Plan”) that is designed to protect our Tax Attributes. As of December 31, 2024, we had deferred tax assets associated with federal, state, and foreign net operating loss carryforwards/carrybacks (“NOLs”) equal to approximately $72.4 million, $9.0 million, and $7.7 million, respectively.
This could decrease demand for oil and gas and consequently adversely affect the business of our customers, thereby reducing demand for our other services. Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.
To the extent that the methane emissions charge is implemented as originally promulgated, it could decrease demand for oil and gas and consequently adversely affect the business of our customers, thereby reducing demand for our other services. Our operations, and those of our suppliers and customers, are subject to a series of risks arising from climate change.
Should the conflict in Ukraine or other international locations further escalate, it is difficult to anticipate the extent to which current or future sanctions could increase our costs, disrupt our supplies, reduce our sales or otherwise affect our operations.
Should the conflict in Ukraine or other international locations further escalate, it is difficult to anticipate the extent to which current or future sanctions could increase our costs, disrupt our supplies, reduce our sales or otherwise affect our operations. Additionally, new or increased tariffs could impact raw material prices and the cost of component parts.
Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and a variety of other economic factors that are beyond our control. 9 Although oil prices steadily rose during 2021 through early 2022, they fell slightly during 2023.
Prices for oil and natural gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, and a variety of other economic factors that are beyond our control.
Regulatory initiatives related to hydraulic fracturing in the countries where we and our customers operate could result in operating restrictions or delays in the completion of oil and gas wells that may reduce demand for our services. Although we do not directly engage in hydraulic fracturing, our operations support many of our exploration and production customers in such activities.
Regulatory initiatives related to hydraulic fracturing or operations on public lands in the countries where we and our customers operate could result in operating restrictions or delays in the completion of oil and gas wells that may reduce demand for our services.
See Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for further discussion of decommissioning liabilities and the Bonding Agreement.
See Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for further discussion of decommissioning liabilities, the Bonding Agreement, and the process for replacement of the Orinoco bonds. 15 From time to time the U.S.
We do carry insurance against these risks, although the potential damages we might incur could exceed our available insurance coverage. We also invest in security technology, perform penetration tests from time to time, and design our business processes to attempt to mitigate the risk of such breaches. However, there can be no assurance that future security breaches will not occur.
We also invest in security technology, perform penetration tests from time to time, and design our business processes to attempt to mitigate the risk of such breaches. 23 However, there can be no assurance that future security breaches will not occur.
These changes have the potential to adversely impact the financial condition of lease owners and operators in the Gulf of Mexico and increase the number of such owners and operators seeking bankruptcy protection, given current oil and gas prices. In July 2016, the U.S.
These changes have the potential to adversely impact the financial condition of lease owners and operators in the Gulf of America and increase the number of such owners and operators seeking bankruptcy protection.
These inflationary pressures have resulted and may in the future result in increases to the costs of our goods, services and labor, which in turn has caused and may cause our capital expenditures and operating costs to rise.
In addition, the United States has experienced higher inflation in recent years which has resulted and may in the future result in increases to the costs of our goods, services and labor, and in turn has caused and may cause our capital expenditures and operating costs to rise.
In addition, the extraction of lithium and bromine from these brine leases will likely require a significant amount of time and capital, which we are not able to estimate at this time and which may not be available to us on acceptable terms or at all.
In addition, the extraction of lithium and bromine from these brine leases will likely require a significant amount of time and capital, which may exceed current estimates and which may not be available to us on acceptable terms or at all. In August 2024, we published a definitive feasibility study for the production of bromine from our Evergreen Unit.
Utilization of these NOLs depends on many factors, including our future taxable income, which cannot be assured.
Utilization of these NOLs depends on many factors, including our future taxable income, which cannot be assured and our future assessments may be materially different from the current estimate.
In some cases, we provided guaranties of certain liabilities retained by Maritech, and we provided guaranties to the entities which originally sold the properties to Maritech. To the extent that a buyer, or subsequent buyer, of these properties fails to perform the decommissioning work required, Maritech or we may be required to perform operations to satisfy the Legacy Liabilities.
To the extent that a buyer, or subsequent buyer, of these properties fails to perform the decommissioning work required, Maritech or we may be required to perform operations to satisfy the Legacy Liabilities.

… 109 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−0 removed13 unchanged
Biggest changeRisk Assessment Assessments are conducted across our systems, networks, and data infrastructure to identify potential cybersecurity threats and vulnerabilities. These assessments may include one or a combination of penetration testing, security audits, incident response planning, vendor risk assessments, and regulatory compliance assessments.
Biggest changeThese assessments may include one or a combination of penetration testing, security audits, incident response planning, vendor risk assessments, and regulatory compliance assessments. Feedback from our maturity and technical assessments is incorporated into our systems and procedures through upgrades intended to further improve our security posture.
Board of Directors’ Oversight and Management’s Role Management is responsible for assessing, identifying, and managing risks from cybersecurity threats. The Company focuses on current and emerging cybersecurity matters. The Company’s cybersecurity processes are led by the Vice President of Information Technology, who reports to the Company’s Chief Financial Officer, including with respect to emerging cybersecurity incidents.
Board of Directors’ Oversight and Management’s Role Management is responsible for assessing, identifying, and managing risks from cybersecurity threats. The Company focuses on current and emerging cybersecurity matters. The Company’s cybersecurity processes are led by the Vice President of Information Technology, who reports to the Company’s Chief Financial Officer, including 25 with respect to emerging cybersecurity incidents.
Our training program includes computer-based training sessions assigned to employees and information sharing to educate employees on current cybersecurity-related topics. We also conduct phishing exercises to test and improve our employees’ awareness and response to potential cyber threats. 25 Access Controls User access controls are used to limit unauthorized access to sensitive information and critical systems.
Our training program includes computer-based training sessions assigned to employees and information sharing to educate employees on current cybersecurity-related topics. We also conduct phishing exercises to test and improve our employees’ awareness and response to potential cyber threats. Access Controls User access controls are used to limit unauthorized access to sensitive information and critical systems.
Feedback from our maturity and technical assessments is incorporated into our systems and procedures through upgrades intended to further improve our security posture. Incident Identification and Response A monitoring and detection system has been implemented to help identify cybersecurity incidents. Our network activity, logs, and system behavior are monitored for anomalous or unauthorized activity using threat detection technologies.
Incident Identification and Response A monitoring and detection system has been implemented to help identify cybersecurity incidents. Our network activity, logs, and system behavior are monitored for anomalous or unauthorized activity using threat detection technologies.
To assess, identify and manage material cybersecurity risks, we have endeavored to implement procedures, standards, and technical controls with the aim of protecting our networks and applications. We use internal and third-party tools and technologies to aid us in seeking to protect our network and internal systems from unauthorized access, intrusion, or disruption, including those described below.
To assess, identify and manage material cybersecurity risks, we have endeavored to implement procedures, standards, and technical controls with the aim of protecting our networks and applications.
Added
We use internal and third-party tools and technologies to aid us in seeking to protect our network and internal systems from unauthorized access, intrusion, or disruption, including those described below. 24 Risk Assessment Assessments are conducted across our systems, networks, and data infrastructure to identify potential cybersecurity threats and vulnerabilities.

Item 2. Properties

Properties — owned and leased real estate

10 edited+10 added−8 removed11 unchanged
Biggest changeWhile bromine can be commercially extracted, among other events that must take place before we can commercially produce lithium from the Evergreen Brine Unit, the AOGC will need to establish an agreeable lithium royalty. 27 The MOU with Saltwerx includes provisions relating to: (i) initial brine ownership percentages within the Evergreen Brine Unit, including the bromine and lithium contained in the brine, (ii) the transfer of certain leased acres outside the proposed Evergreen Brine Unit from us to Saltwerx, (iii) reimbursement by Saltwerx of certain expenses that we incurred for the development of leased acreage to be included in the Evergreen Brine Unit, and (iv) an allocation of certain future costs for the drilling of a brine production test well and other development operations, including front-end engineering and design studies for bromine and lithium production facilities.
Biggest changeThe MOU with Saltwerx includes provisions relating to: (i) initial brine ownership percentages within the Evergreen Brine Unit, including the bromine and lithium contained in the brine, (ii) the transfer of certain leased acres outside the proposed Evergreen Brine Unit from us to Saltwerx, (iii) reimbursement by Saltwerx of certain expenses that we incurred for the development of leased acreage to be included in the Evergreen Brine Unit, and (iv) an allocation of certain future costs for the drilling of a brine production test well and other development operations, including front-end engineering and design studies for bromine and lithium production facilities.
With respect to approximately 35,000 gross acres of that total acreage, we had previously entered into an agreement granting Standard Lithium an option to acquire the lithium rights in that acreage located outside of the Evergreen Brine Unit. The agreements governing this option contemplate a 2.5% royalty that Standard Lithium would pay us based on gross lithium revenues.
With respect to approximately 35,000 gross acres of that total acreage, we had previously entered into an agreement granting Standard Lithium an option to acquire the lithium rights in that acreage located outside of the Evergreen Brine Unit. The agreements governing this option contemplate a 2.5% royalty that 26 Standard Lithium would pay us based on gross lithium revenues.
We filed an amended unit application with the Arkansas Oil and Gas Commission (AOGC) covering approximately 6,138 acres, which combines brine acreage that is leased by each of TETRA and Saltwerx. On September 26, 2023, the AOGC held a public hearing and unanimously approved our application to establish the Evergreen Brine Unit.
We filed an amended unit application with the Arkansas Oil and Gas Commission (“AOGC”) covering approximately 6,138 acres, which combines brine acreage that is leased by each of TETRA and Saltwerx. On September 26, 2023, the AOGC held a public hearing and unanimously approved our application to establish the Evergreen Brine Unit.
We expect that we will be able to develop or utilize evolving commercial technologies to economically remove the bromine and lithium from the brine underlying our acreage before the brine is reinjected back down into the subsurface aquifer but whether we will ultimately be able to economically remove the bromine and lithium materials will depend on the outcome of further studies.
We expect that we will be able to develop or utilize evolving commercial technologies to economically remove the bromine and lithium from the brine underlying our acreage before the brine is reinjected back down into the 27 subsurface aquifer but whether we will ultimately be able to economically remove the bromine and lithium materials will depend on the outcome of further studies.
The following information describes facilities that we (i) leased or owned and (ii) leased acreage as of December 31, 2023.
The following information describes facilities that we (i) leased or owned and (ii) leased acreage as of December 31, 2024.
We have rights to the brine, including rights to the bromine and lithium contained in the brine underlying this acreage, pursuant to certain brine leases and brine deeds with various landowners.
This acreage is leased for possible future development and as a source of supply for our bromine and other raw materials. We have rights to the brine, including rights to the bromine and lithium contained in the brine underlying this acreage, pursuant to certain brine leases and brine deeds with various landowners.
The extraction of lithium and bromine from these brine leases would likely require a significant amount of time and capital, which we are not able to estimate at this time. We completed an initial preliminary economic assessment in early 2023 for a bromine extraction plant.
Any effort to pursue the extraction of lithium and bromine from these brine leases would likely require a significant amount of time and capital, which may exceed current estimates.
The two California locations consist of 29 square miles of leased mineral acreage and solar evaporation ponds, and related owned production and storage facilities. 26 In addition to the production facilities described above, the Completion Fluids & Products Division owns or leases multiple service center facilities in the United States and in other countries.
The two California locations consist of 29 square miles of leased mineral acreage and solar evaporation ponds, and related owned production and storage facilities. Our facilities also include a fluids plant in Brazil serving deepwater and ultra-deepwater operations in the South Atlantic.
Standard Lithium delivered a notice to exercise this option to acquire lithium rights in the optioned acreage on October 6, 2023. During the third quarter of 2022, the maiden inferred bromine and lithium brine resource estimation report for our leased acreage in the Smackover Formation in Southwest Arkansas was completed.
Standard Lithium delivered a notice to exercise this option to acquire lithium rights in the optioned acreage on October 6, 2023. Since acquiring this acreage, we have engaged in various exploratory activities with respect to our brine leases.
In August 2021, we announced the completion of a technical report for exploration results by an independent geological consulting firm, APEX Geoscience Ltd. to assess existing sampling results regarding lithium and bromine exploration targets in our approximately 40,000 gross acres of brine leases in the Smackover Formation in Southwest Arkansas.
In 2024, we continued to follow up on prior exploration work regarding bromine and lithium materials that may be present in our approximately 40,000 gross acres of brine leases in the Smackover Formation in Southwest Arkansas.
Removed
This acreage is leased for possible future development and as a source of supply for our bromine and other raw materials.
Added
The facility provides engineering, testing, blending, filtration, and storage for the full line of TETRA fluids, including clear-brine and zinc-free/formate-free fluids, as well as chemical additives. In addition to the production facilities described above, the Completion Fluids & Products Division owns or leases multiple service center facilities in the United States and in other countries.
Removed
The report indicated the brine resource underlying the approximately 40,000 gross acres where we hold bromine mineral rights was estimated to contain an inferred resource of 5.25 million short tons of elemental bromine; and the brine resource underlying the approximately 5,000 gross acres where we hold dedicated lithium mineral rights was estimated to contain an inferred resource of 44,000 short tons of elemental lithium.
Added
Building on an earlier maiden inferred bromine and brine resource estimation report from the third quarter of 2022 for this area, we completed a report for our Evergreen Brine Unit in Arkansas in January 2024 that identified proven and probable bromine reserves, and both “measured,” and “indicated” and “inferred” resources of bromine and lithium.
Removed
Using an elemental to Lithium Carbonate Equivalent (“LCE”) conversion ratio of 5.323, which is accepted in the industry, the acreage was estimated to contain 234,000 tons of LCE.
Added
Later, in August 2024, we announced the completion of a definitive feasibility study and an updated technical resources report (the “Resources Report”) for our Evergreen Brine Unit. The Resources Report updated the amounts previously reported in our January report issued in 2024 and incorporates the results of the definitive feasibility study, including bromine reserve determinations.
Removed
During the second quarter of 2023, we also contracted a third-party firm to execute a front-end engineering and design (FEED) study for a lithium production facility. On January 8, 2024, we announced the completion of the Resources Report for our Evergreen Brine Unit in Arkansas. The Resources Report includes both “measured” and “indicated” resources in addition to the “inferred” category.
Added
The Company is continuing to evaluate these assets and has not made any final decisions about whether to proceed to development stages but is instead still focusing on sampling and analysis and the consideration of the financial implications of proceeding to commence operations to produce these materials.
Removed
The Resources Report estimated that the Evergreen Brine Unit contains (i) a measured resource, indicated resource and inferred resource of 329,000 tons, 543,000 tons and 541,000 tons of elemental bromine, respectively, and (ii) a measured resource, indicated resource and inferred resource of 32,000 tons, 53,000 tons and 52,000 tons of lithium, respectively.
Added
While bromine can be commercially extracted, among other events that must take place before we can commercially produce lithium from the Evergreen Brine Unit, the AOGC will need to establish an agreeable lithium royalty.
Removed
Using an elemental to LCE conversion ratio of 5.323, the acreage is estimated to contain 729,000 tons of LCE. As of January 2024, the market price for lithium is approximately $13,500 per ton and the market price for bromine is approximately $3,400 per metric ton.
Added
Unless and until we finalize any contractual agreements with Saltwerx, including a joint venture agreement, our relationship with Saltwerx will be governed by the MOU and the Unit Operating Agreement and there can be no assurance that we will agree to terms beyond those of the MOU and the Unit Operating Agreement.
Removed
We expect an initial economic assessment to follow in the first half of 2024 for a lithium extraction plant, subject to the progress of early engineering.
Added
While we have completed a definitive feasibility study with respect to bromine and an updated technical resources report for our Evergreen Brine Unit, we must also complete a lithium FEED study and a feasibility study for our lithium acreage and validate the lithium technologies used in order to be in a position to determine whether to proceed.
Removed
Only upon completion of a pre-feasibility and/or feasibility study and attainment of capital commitment from either a joint venture partner, government grants or loans, or other cost-effective sources of capital that will not over-lever TETRA, in addition to confirmation of a successful recapitalization of the long-duration zinc-bromide battery storage manufacturers, would we proceed to a final investment decision.
Added
Should any such decision be made to pursue the development of either one or both of these materials, it would also be necessary to obtain permits for our extraction activities which could be subject to delays or onerous conditions, as well as finalize any contractual agreements with our potential joint venture partner, Saltwerx .
Added
Long term, we believe that lithium prices will rebound to levels that support increased investment in supply, especially from the United States, and we and our Evergreen Unit partner remain focused on completing all the engineering studies required to define the lithium project economics.
Added
Once these studies are completed, any future investments in our lithium initiatives will be evaluated at that time and subject to reaching agreement with our Evergreen Unit partner.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−4 removed1 unchanged
Biggest changeOn June 14, 2023, in light of the settlement agreement, and in response to the parties’ stipulated motion to dismiss, the arbitration panel issued an Order of Dismissal, which dismissed all claims in the arbitration with prejudice. 28 We are named defendants in numerous additional lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings. We are named defendants in numerous lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business.
See Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for further information. Item 4. Mine Safety Disclosures. None. 29 PART II
See Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements for further information. Item 4. Mine Safety Disclosures. None. 28 PART II
Removed
Item 3. Legal Proceedings. On May 31, 2022, TETRA filed a demand for arbitration with the American Arbitration Association (“AAA”) under a certain Bromine Requirements Sales Agreement between TETRA and LANXESS Corporation (formerly Chemtura Corporation, “LANXESS”) (the “Sales Agreement”). Under the Sales Agreement, TETRA agreed to purchase a certain volume of elemental bromine.
Removed
LANXESS notified TETRA of a proposed non-ordinary course increase to the price of bromine. After lengthy discussions, TETRA and LANXESS were unable to reach an agreement regarding the validity of the proposed price increase; therefore, TETRA filed for arbitration seeking declaratory relief, among other relief, declaring that the proposed price increase is invalid.
Removed
On September 19, 2022, LANXESS filed a counterclaim with the AAA seeking declaratory relief, among other relief. On May 25, 2023, TETRA entered into the Third Amendment to Bromine Requirements Sales Agreement (the “Amendment”) with LANXESS.
Removed
The Amendment was effective April 1, 2023 and was entered into in connection with the entry into a settlement agreement in the Company’s arbitration with LANXESS. The Amendment provides for, among other things, revised volume requirements and related terms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed3 unchanged
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans For additional information about common stock authorized for issuance under equity compensation plans, see Note 13 - “Equity-Based Compensation and Other” in the Notes to Consolidated Financial Statements. 30 Rule 10b5-1 Trading Arrangements During the three months ended December 31, 2023, no director or officer of TETRA adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K Item 6. [Reserved] 31
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans For additional information about common stock authorized for issuance under equity compensation plans, see Note 13 - “Equity-Based Compensation and Other” in the Notes to Consolidated Financial Statements. Item 6. [Reserved] 29
Market Price of Common Stock The following graph compares the five-year cumulative total returns of our common stock, the Russell 2000 Index (“Russell 2000”), the Philadelphia Oil Service Sector Index (“PHLX Oil Service”) and a Peer Group Total Stock Return (“Peer Group TSR”), assuming $100 invested in each stock, index or group on December 31, 2018, all dividends reinvested, and a fiscal year ending December 31 st .
Market Price of Common Stock The following graph compares the five-year cumulative total returns of our common stock, the Russell 2000 Index (“Russell 2000”), the Philadelphia Oil Service Sector Index (“PHLX Oil Service”) and a Peer Group Total Stock Return (“Peer Group TSR”), assuming $100 invested in each stock, index or group on December 31, 2019, all dividends reinvested, and a fiscal year ending December 31 st .
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Repurchases of Equity Securities. Common Stock Our common stock is traded on the New York Stock Exchange under the symbol “TTI.” As of February 23, 2024, there were approximately 200 holders of record of the common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Repurchases of Equity Securities. Common Stock Our common stock is traded on the New York Stock Exchange under the symbol “TTI.” As of February 24, 2025, there were approximately 200 holders of record of the common stock.
The Peer Group consists of Flotek Industries, Inc., Forum Energy Technologies, Inc., Newpark Resources, Inc., Nine Energy Service, Inc., Oil States International, Inc, Patterson-UTI Energy, Inc., Precision Drilling Corporation, RPC, Inc., and Select Energy Services, Inc., with each company equally weighted.
The Peer Group consists of Core Laboratories, Inc., Expro Group Holdings N.V., Flotek Industries, Inc., Forum Energy Technologies, Inc., Hawkins, Inc., KLX Energy Services Holdings, Inc., Mammoth Energy Services, Inc., National Energy Services Reunited Corp, Newpark Resources, Inc., Nine Energy Service, Inc., Oil States International, Inc., Ranger Energy Services, Inc., RPC, Inc., and Select Water Solutions, Inc., with each company equally weighted.

Item 7. Management's Discussion & Analysis

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

46 edited+26 added−28 removed18 unchanged
Biggest changeGAAP measures, understanding the differences between the measures, and incorporating this knowledge into management’s decision-making processes. 36 The following table reconciles net income (loss) to Adjusted EBITDA for the periods indicated: Year Ended December 31, 2023 Completion Fluids & Products Water & Flowback Services Corporate SG&A Other and Eliminations Total (In Thousands, Except Percents) Revenue $ 313,030 $ 313,232 $ — $ — $ 626,262 Net income (loss) before taxes and discontinued operations 78,314 25,724 (49,135) (23,204) 31,699 Insurance recoveries, net of related expenditures (2,678) — — — (2,678) Impairments and other charges 2,189 — 777 — 2,966 Exploration, pre-development costs and collaborative arrangements 2,838 — — — 2,838 Adjustment to long-term incentives — — 1,526 — 1,526 Former CEO stock appreciation right expense — — 237 — 237 Transaction, restructuring and other expenses — — 502 — 502 Unusual foreign exchange loss — 2,444 — — 2,444 Interest expense, net (647) 205 — 22,791 22,349 Depreciation, amortization and accretion 9,053 24,876 — 400 34,329 Equity-based compensation expense — — 10,622 — 10,622 Adjusted EBITDA $ 89,069 $ 53,249 $ (35,471) $ (13) $ 106,834 Adjusted EBITDA as % of revenue 28.5 % 17.0 % 17.1 % Year Ended December 31, 2022 Completion Fluids & Products Water & Flowback Services Corporate SG&A Other and Eliminations Total (In Thousands, Except Percents) Revenue $ 273,373 $ 279,840 $ — $ — $ 553,213 Net income (loss) before taxes and discontinued operations 57,366 15,732 (45,077) (16,855) $ 11,166 Insurance recoveries (3,750) — — — (3,750) Impairments and other charges 562 2,242 — — 2,804 Exploration and pre-development costs 6,635 — — — 6,635 Adjustment to long-term incentives — — 4,277 — 4,277 Former CEO stock appreciation right expense — — 233 — 233 Transaction, restructuring and other expenses 576 638 — — 1,214 Interest expense, net (1,346) 138 — 17,041 15,833 Depreciation, amortization and accretion 7,455 24,683 — 681 32,819 Equity-based compensation expense — — 6,880 — 6,880 Adjusted EBITDA $ 67,498 $ 43,433 $ (33,687) $ 867 $ 78,111 Adjusted EBITDA as % of revenue 24.7 % 15.5 % 14.1 % Liquidity and Capital Resources We believe that our capital structure allows us to meet our financial obligations and fund future growth as needed, despite uncertain operating conditions and financial markets.
Biggest changeThe following table reconciles net income (loss) to Adjusted EBITDA for the periods indicated: Year Ended December 31, 2024 Completion Fluids & Products Water & Flowback Services Corporate SG&A Other and Eliminations Total (In Thousands, Except Percents) Revenue $ 311,301 $ 287,810 $ — $ — $ 599,111 Net income (loss) before taxes and discontinued operations 82,895 10,700 (45,099) (19,754) 28,742 Completion fluids buy-back allowance adjustment (1,776) — — — (1,776) Impairments and other charges — — — 109 109 Former CEO stock appreciation right credit — — (701) — (701) Transaction, restructuring and other (income) expenses (26) 349 1,026 — 1,349 Loss on debt extinguishment — — — 5,535 5,535 Unusual foreign exchange loss — 1,387 — — 1,387 Interest (income) expense, net (713) 64 — 23,114 22,465 Depreciation, amortization, and accretion 9,733 25,631 — 357 35,721 Equity-based compensation expense — — 6,572 — 6,572 Adjusted EBITDA $ 90,113 $ 38,131 $ (38,202) $ 9,361 $ 99,403 Adjusted EBITDA as % of revenue 28.9 % 13.2 % 16.6 % Year Ended December 31, 2023 Completion Fluids & Products Water & Flowback Services Corporate SG&A Other and Eliminations Total (In Thousands, Except Percents) Revenue $ 313,030 $ 313,232 $ — $ — $ 626,262 Net income (loss) before taxes and discontinued operations 78,314 25,724 (49,135) (23,204) $ 31,699 Insurance recoveries (2,678) — — — (2,678) Impairments and other charges 2,189 — 777 — 2,966 Exploration, pre-development costs, and collaborative arrangements 2,838 — — — 2,838 Adjustment to long-term incentives — — 1,526 — 1,526 Former CEO stock appreciation right expense — — 237 — 237 Transaction, restructuring, and other expenses — — 502 — 502 Unusual foreign exchange loss — 2,444 — — 2,444 Interest (income) expense, net (647) 205 — 22,791 22,349 Depreciation, amortization, and accretion 9,053 24,876 — 400 34,329 Equity-based compensation expense — — 10,622 — 10,622 Adjusted EBITDA $ 89,069 $ 53,249 $ (35,471) $ (13) $ 106,834 Adjusted EBITDA as % of revenue 28.5 % 17.0 % 17.1 % Liquidity and Capital Resources We believe that our capital structure allows us to meet our financial obligations and fund future growth as needed, despite uncertain operating conditions and financial markets.
This measure may not be comparable to similarly titled financial metrics of other entities, as other entities may not calculate Adjusted EBITDA in the same manner as we do. Management compensates for the limitations of Adjusted EBITDA as analytical tools by reviewing the comparable U.S.
This measure may not be comparable to similarly titled financial metrics of other entities, as other entities may not calculate Adjusted EBITDA in the same manner as we do. Management compensates for the limitations of Adjusted EBITDA as analytical tools by reviewing 34 the comparable U.S.
See Note 2 - “Basis of Presentation and Significant Accounting Policies” and Note 9 - “Leases” in the Notes to Consolidated Financial Statements for further information on our lease obligations. Asset Retirement Obligations We operate facilities in various U.S. and foreign locations that are used in the manufacture, storage, and sale of our products, inventories, and equipment.
See Note 2 - “Basis of Presentation and Significant Accounting Policies” and Note 8 - “Leases” in the Notes to Consolidated Financial Statements for further information on our lease obligations. Asset Retirement Obligations We operate facilities in various U.S. and foreign locations that are used in the manufacture, storage, and sale of our products, inventories, and equipment.
For information on product purchase obligations, see - Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements. Off Balance Sheet Arrangements As of December 31, 2023, we do not have any off balance sheet arrangements that may have a current or future material effect on our consolidated financial condition or results of operations.
For information on product purchase obligations, see - Note 11 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements. Off Balance Sheet Arrangements As of December 31, 2024, we do not have any off balance sheet arrangements that may have a current or future material effect on our consolidated financial condition or results of operations.
Statements in the following discussion may include forward-looking statements. These forward-looking statements involve risks and uncertainties. See “Item 1A. Risk Factors” for additional discussion of these factors and risks. For discussion of 2022 compared to 2021, see disclosures titled “Results of Operations” set forth in Item 7.
Statements in the following discussion may include forward-looking statements. These forward-looking statements involve risks and uncertainties. See “Item 1A. Risk Factors” for additional discussion of these factors and risks. For discussion of 2023 compared to 2022, see disclosures titled “Results of Operations” set forth in Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 27, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 27, 2024.
The Finland Credit Agreement has been renewed by the Company through January 31, 2025. As of December 31, 2023, we are in compliance with all covenants of our debt agreements. See Note 10 - “Long-Term Debt and Other Borrowings” and Note 18 - “Subsequent Events” in the Notes to Consolidated Financial Statements for further information.
The Finland Credit Agreement has been renewed by the Company through January 31, 2026. As of December 31, 2024, we are in compliance with all covenants of our debt agreements. See Note 10 - “Long-Term Debt and Other Borrowings” and Note 18 - “Subsequent Events” in the Notes to Consolidated Financial Statements for further information.
As of December 31, 2023, we had no balance outstanding and availability of approximately $5.0 million under the Swedish Credit Facility. During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days. Borrowings bear interest at a rate of 2.95% per annum.
As of December 31, 2024, we had no balance outstanding and availability of approximately $4.5 million under the Swedish Credit Facility. During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days. Borrowings bear interest at a rate of 2.95% per annum.
The Swedish Credit Facility expires on December 31, 2024 and the Company intends to renew it annually. Finland Credit Agreement. In January 2022, the Company entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”). As of December 31, 2023, we had $1.5 million of letters of credit outstanding against the Finland Credit Agreement.
The Swedish Credit Facility expires on December 31, 2025 and the Company intends to renew it annually. Finland Credit Agreement. In January 2022, the Company entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”). As of December 31, 2024, we had $1.4 million of letters of credit outstanding against the Finland Credit Agreement.
Changes in demand for our products and services have an impact on our eligible accounts receivable, accrued receivables and the value of our inventory, which could result in significant changes to our borrowing base and therefore our availability under our ABL Credit Agreement. The ABL Credit Agreement is scheduled to mature on May 31, 2025.
Changes in demand for our products and services have an impact on our eligible accounts receivable, accrued receivables and the value of our inventory, which could result in significant changes to our borrowing base and therefore our availability under our ABL Credit Agreement. The ABL Credit Agreement is scheduled to mature on May 13, 2029.
Non-GAAP Financial Measures We use U.S. GAAP financial measures such as revenues, gross profit, income (loss) before taxes, and net cash provided by operating activities, as well as certain non-GAAP financial measures, including Adjusted EBITDA, as performance measures for our business. Adjusted EBITDA .
GAAP financial measures such as revenues, gross profit, income (loss) before taxes, and net cash provided by operating activities, as well as certain non-GAAP financial measures, including Adjusted EBITDA, as performance measures for our business. Adjusted EBITDA .
Operating cash flows increased compared to the prior year primarily due to increased activity levels and higher consolidated margins from changes in product mix, as well as the effect of working capital movements. We continue to monitor customer credit risk in the current environment and focus on serving larger capitalized oil and gas operators and national oil companies.
Operating cash flows decreased compared to the prior year primarily due to decreased activity levels from changes in market conditions and product mix, as well as the effect of working capital movements. We continue to monitor customer credit risk in the current environment and focus on serving larger capitalized oil and gas operators and national oil companies.
As of December 31, 2023, we had no balance outstanding under the ABL Credit Agreement and, subject to compliance with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings, we had availability of $68.8 million under the ABL Credit Agreement.
As of December 31, 2024, we had no balance outstanding under the ABL Credit Agreement and, subject to compliance with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings, we had availability of $65.7 million under the ABL Credit Agreement.
As of February 23, 2024, we have no outstanding borrowings under our ABL Credit Agreement and $0.5 million letters of credit, resulting in $70.5 million of availability. Swedish Credit Facility. In January 2022, the Company entered into a new revolving credit facility for seasonal working capital needs of subsidiaries in Sweden and Finland (“Swedish Credit Facility”).
As of February 25, 2025, we have no outstanding borrowings under our ABL Credit Agreement and $0.2 million letters of credit, resulting in $79.8 million of availability. Swedish Credit Facility. In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden and Finland (“Swedish Credit Facility”).
Investing Activities Total cash capital expenditures during 2023 were $38.2 million. Our Water & Flowback Services Division spent $26.6 million on capital expenditures, primarily to deploy additional SandStorm units to meet increased demands and maintain, automate and upgrade its water management and flowback equipment fleet.
Investing Activities Total cash capital expenditures during 2024 were $60.7 million. Our Water & Flowback Services Division spent $23.4 million on capital expenditures, primarily to deploy additional SandStorm units to meet increased demands and maintain, automate and upgrade its water management and flowback equipment fleet.
An increase of unpaid receivables would also negatively affect our borrowing availability under the ABL Credit Agreement and Swedish Credit Facility. 39 Leases We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment.
An increase of unpaid receivables would also negatively affect our borrowing availability under the ABL Credit Agreement and Swedish Credit Facility. Leases We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment, as well as a sales-type lease and subleases for certain facilities.
On January 12, 2024, the Company entered into a New Term Credit Agreement consisting of a $190.0 million funded term loan and a $75.0 million delayed-draw term loan that refinanced the Company’s Term Credit Agreement outstanding as of December 31, 2023 and provided capital to advance the Company’s Arkansas bromine processing project.
On January 12, 2024, the Company entered into a definitive agreement for a $265.0 million credit facility consisting of a $190.0 million funded term loan and a $75.0 million delayed-draw term loan (collectively the “Term Credit Agreement”) that refinanced the Company’s prior Term Credit Agreement and provided capital to advance the Company’s Arkansas bromine processing project.
If the forecasted demand for our products and services increases or decreases, or we proceed with development of brine resources in Arkansas, the amount of planned expenditures on growth and expansion may be adjusted.
However, we continue to review all capital expenditure plans carefully in an effort to conserve cash. If the forecasted demand for our products and services increases or decreases, or we proceed with development of brine resources in Arkansas, the amount of planned expenditures on growth and expansion may be adjusted.
We are committed to pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets and technologies, and our leading calcium chloride production capabilities.
We initiated a series of cost reduction actions in the second half of 2024 to adjust to market levels. We are committed to pursuing low-carbon energy initiatives that leverage our fluids and aqueous chemistry core competencies, our significant bromine and lithium assets and technologies, and our leading calcium chloride production capabilities.
Liquidity is defined as unrestricted cash plus availability under our revolving credit facilities. 37 Our consolidated sources and uses of cash for the years ended December 31, 2023 and 2022 are as follows: Year Ended December 31, 2023 2022 (In Thousands) Operating activities $ 70,206 $ 18,957 Investing activities $ (27,027) $ (36,504) Financing activities $ (4,663) $ 40 Operating Activities Consolidated cash flows provided by operating activities totaled $70.2 million during 2023 compared to $19.0 million during the prior year, an increase of $51.2 million.
Liquidity is defined as unrestricted cash plus availability under the delayed draw from our Term Credit Agreement and availability under our revolving credit facilities. 35 Our consolidated sources and uses of cash for the years ended December 31, 2024 and 2023 are as follows: Year Ended December 31, 2024 2023 (In Thousands) Operating activities $ 36,520 $ 70,206 Investing activities $ (59,059) $ (27,027) Financing activities $ 8,869 $ (4,663) Operating Activities Consolidated cash flows provided by operating activities totaled $36.5 million during 2024 compared to $70.2 million during the prior year, a decrease of $33.7 million.
The ABL Credit Agreement may be used for working capital needs, capital expenditures and other general corporate purposes. The amounts we may borrow under the ABL Credit Agreement are derived from our accounts receivable, certain accrued receivables and certain inventory.
The amounts we may borrow under the ABL Credit Agreement are derived from our accounts receivable, certain accrued receivables and certain inventory.
The extraction of lithium and bromine from these brine leases will likely require a significant amount of time and capital, which are subject to further analysis and consideration.
Additional information on these resources is described in Part I, “Item 2. Properties” in this Annual Report. The extraction of lithium and bromine from these brine leases will likely require a significant amount of time and capital, which are subject to further analysis and consideration.
We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.
We may supplement our existing cash balances and cash flow from operating activities with short-term borrowings, long-term borrowings, issuances of equity and debt securities, and other sources of capital. 38 Term Credit Agreement. As of December 31, 2023, the $163.1 million principal balance of the Term Credit Agreement was due on September 10, 2025.
We may supplement our existing cash balances and 36 cash flow from operating activities with short-term borrowings, long-term borrowings, issuances of equity and debt securities, and other sources of capital. Term Credit Agreement.
The credit facility is subject to a borrowing base to be determined by reference to the value of inventory and accounts receivable, and includes a sublimit of $20 million for letters of credit, a swingline loan sublimit of $11.5 million, and a $15 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom.
The credit facility is subject to a borrowing base determined monthly by reference to the value of inventory and accounts receivable, and includes a sublimit of $20.0 million for letters of credit, and a swingline loan sublimit of $11.5 million. The ABL Credit Agreement may be used for working capital needs, capital expenditures and other general corporate purposes.
Financing Activities During the year ended December 31, 2023, consolidated net cash used in financing activities was $4.7 million, consisting of $100.5 million borrowings and $97.5 million repayments of our revolving credit facilities, as well as $1.7 million of payments of finance lease obligations in Latin America.
Financing Activities During the year ended December 31, 2024, consolidated net cash used in financing activities was $8.9 million, consisting of $184.8 million borrowings under our new Term Credit Agreement and revolving credit facilities and $163.6 million repayments of our Term Credit Agreement and revolving credit facilities, $6.6 million debt issuance costs associated with our new term loan in January 2024 and the ABL Amendment in May 2024, as well as $1.4 million of payments of finance lease obligations.
Instability or volatility in the capital markets at the times we need to access capital may affect the cost of capital and the ability to raise capital for an indeterminable length of time. If it is necessary to issue additional equity to fund our capital needs, additional dilution of our common stockholders will occur.
Should additional capital be required, the ability to raise such capital through the issuance of additional debt or equity securities may currently be limited. Instability or volatility in the capital markets at the times we need to access capital may affect the cost of capital and the ability to raise capital for an indeterminable length of time.
In addition, as of December 31, 2023, the market value of our equity holdings of CSI Compressco and Standard Lithium were $8.5 million and $1.6 million, respectively, with no holding restrictions on our ability to monetize our investments.
In addition, as of December 31, 2024, the market value of our equity holdings of Kodiak and Standard Lithium were $18.4 million and $1.2 million, respectively, with no holding restrictions on our ability to monetize our investments. In January 2025, we sold our Kodiak shares for proceeds of $19.0 million, net of transaction and broker fees.
Water & Flowback Services Division Year Ended December 31, Period to Period Change 2023 2022 2023 vs. 2022 % Change (In Thousands, Except Percentages) Revenues $ 313,232 $ 279,840 $ 33,392 11.9 % Gross profit 47,138 35,074 12,064 34.4 % Gross profit as a percentage of revenue 15.0 % 12.5 % General and administrative expense 19,452 21,619 (2,167) (10.0) % General and administrative expense as a percentage of revenue 6.2 % 7.7 % Interest (income) expense, net 205 138 67 48.6 % Other (income) expense, net 1,757 (2,415) 4,172 NM (1) Income before taxes and discontinued operations $ 25,724 $ 15,732 $ 9,992 63.5 % Income before taxes and discontinued operations as a percentage of revenue 8.2 % 5.6 % (1) Percent change is not meaningful Water & Flowback Services Division revenues increased during 2023 compared to the prior year primarily due to improved market conditions.
Water & Flowback Services Division Year Ended December 31, Period to Period Change 2024 2023 2024 vs. 2023 % Change (In Thousands, Except Percentages) Revenues $ 287,810 $ 313,232 $ (25,422) (8.1) % Gross profit 31,014 47,138 (16,124) (34.2) % Gross profit as a percentage of revenue 10.8 % 15.0 % General and administrative expense 19,116 19,452 (336) (1.7) % General and administrative expense as a percentage of revenue 6.6 % 6.2 % Interest expense, net 64 205 (141) (68.8) % Other expense, net 1,134 1,757 (623) (35.5) % Income before taxes and discontinued operations $ 10,700 $ 25,724 $ (15,024) (58.4) % Income before taxes and discontinued operations as a percentage of revenue 3.7 % 8.2 % The Water & Flowback Services Division revenues decreased during 2024 compared to the prior year primarily due to an overall decline in the United States market from both our production testing and water management services.
Consolidated Comparisons Year Ended December 31, Period to Period Change 2023 2022 2023 vs. 2022 % Change (In Thousands, Except Percentages) Revenues $ 626,262 $ 553,213 $ 73,049 13.2 % Gross profit 153,645 121,111 32,534 26.9 % Gross profit as a percentage of revenue 24.5 % 21.9 % Exploration and pre-development costs 12,119 6,635 5,484 82.7 % General and administrative expense 96,590 91,942 4,648 5.1 % General and administrative expense as a percentage of revenue 15.4 % 16.6 % Interest expense, net 22,349 15,833 6,516 41.2 % Other income, net (9,112) (4,465) (4,647) 104.1 % Income before taxes and discontinued operations 31,699 11,166 20,533 183.9 % Income before taxes and discontinued operations as a percentage of revenue 5.1 % 2.0 % Provision for income taxes 6,220 3,565 2,655 74.5 % Income before discontinued operations 25,479 7,601 17,878 235.2 % Income from discontinued operations, net of taxes 278 195 83 42.6 % Net income 25,757 7,796 17,961 230.4 % Loss attributable to noncontrolling interest 27 43 (16) (37.2) % Net income attributable to TETRA stockholders $ 25,784 $ 7,839 $ 17,945 228.9 % Revenues Consolidated revenues for 2023 increased compared to the prior year due to higher activity in both our Completion Fluids & Products and Water & Flowback Services divisions, where revenue increased by $39.7 million and $33.4 million, respectively.
Consolidated Comparisons Year Ended December 31, Period to Period Change 2024 2023 2024 vs. 2023 % Change (In Thousands, Except Percentages) Revenues $ 599,111 $ 626,262 $ (27,151) (4.3) % Gross profit 139,853 153,645 (13,792) (9.0) % Gross profit as a percentage of revenue 23.3 % 24.5 % Exploration and pre-development costs — 12,119 (12,119) (100.0) % General and administrative expense 89,969 96,590 (6,621) (6.9) % General and administrative expense as a percentage of revenue 15.0 % 15.4 % Interest expense, net 22,465 22,349 116 0.5 % Loss on debt extinguishment 5,535 — 5,535 100.0 % Other income, net (6,858) (9,112) 2,254 (24.7) % Income before taxes and discontinued operations 28,742 31,699 (2,957) (9.3) % Income before taxes and discontinued operations as a percentage of revenue 4.8 % 5.1 % Provision (benefit) for income taxes (84,878) 6,220 (91,098) NM (1) Income before discontinued operations 113,620 25,479 88,141 345.9 % Income (loss) from discontinued operations, net of taxes (5,340) 278 (5,618) NM (1) Net income 108,280 25,757 82,523 320.4 % Loss attributable to noncontrolling interest 4 27 (23) (85.2) % Net income attributable to TETRA stockholders $ 108,284 $ 25,784 $ 82,500 320.0 % (1) Percent change is not meaningful Revenues Consolidated revenues for 2024 decreased compared to the prior year due to lower activity in both our Completion Fluids & Products and Water & Flowback Services divisions, where revenue decreased by $1.7 million and $25.4 million, respectively.
If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have an adverse effect on our liquidity.
In challenging economic environments, we may experience increased delays and failures by customers to pay our invoices. We could experience delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies. If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have an adverse effect on our liquidity.
We have rights to the brine underlying our approximately 40,000 gross acres of brine leases in the Smackover Formation in Southwest Arkansas, including rights to the bromine and lithium contained in the brine. Additional information on these resources is described in Part I, “Item 2. Properties” in this Annual Report.
We also made additional investments to support higher activity levels in the United States and Europe. We have rights to the brine underlying our approximately 40,000 gross acres of brine leases in the Smackover Formation in Southwest Arkansas, including rights to the bromine and lithium contained in the brine.
Other Income, net Consolidated other (income) expense, net increased during 2023 compared to the prior year primarily due to a $9.3 million reimbursement from our partner associated with the collaborative arrangement related to our Arkansas resource development opportunity, partially offset by a $4.5 million increase in foreign exchange losses, including the impact of currency volatility in Argentina.
Other Income, net Consolidated other income, net decreased during 2024 compared to the prior year primarily due to a $9.3 million reimbursement from our partner associated with the collaborative arrangement related to our Arkansas resource development opportunity prior to capitalization of net pre-development costs beginning in January 2024, and a $1.0 million increase in unrealized losses on our convertible note embedded option.
Provision for Income Tax Our consolidated provision for income taxes during 2023 was primarily attributable to taxes in certain foreign jurisdictions and state taxes. Our consolidated effective tax rate for the year ended December 31, 2023 and December 31, 2022 was 19.6% and 31.9% respectively.
Provision for Income Tax Our consolidated effective tax rate for the year ended December 31, 2024 and December 31, 2023 was (295.3)% and 19.6%, respectively. The increase in our tax benefit compared to the prior year tax provision was primarily due to the reversal of the valuation allowance related to our United States deferred tax assets (federal and state).
Divisional Comparisons Completion Fluids & Products Division Year Ended December 31, Period to Period Change 2023 2022 2023 vs. 2022 % Change (In Thousands, Except Percentages) Revenues $ 313,030 $ 273,373 $ 39,657 14.5 % Gross profit 107,684 86,718 20,966 24.2 % Gross profit as a percentage of revenue 34.4 % 31.7 % Exploration and pre-development costs 12,119 6,635 5,484 82.7 % General and administrative expense 28,003 25,246 2,757 10.9 % General and administrative expense as a percentage of revenue 8.9 % 9.2 % Interest (income) expense, net (647) (1,346) 699 (51.9) % Other income, net (10,104) (1,183) (8,921) 754.1 % Income before taxes and discontinued operations $ 78,313 $ 57,366 $ 20,947 36.5 % Income before taxes and discontinued operations as a percentage of revenue 25.0 % 21.0 % Completion Fluids & Products Division revenues increased primarily due to incremental brominated product sales in the United States and Latin America, an increase in European calcium chloride pricing, and higher volumes in Europe as a result of resolution of raw materials limitations as well as the Peacock acquisition in December 2022.
Divisional Comparisons Completion Fluids & Products Division Year Ended December 31, Period to Period Change 2024 2023 2024 vs. 2023 % Change (In Thousands, Except Percentages) Revenues $ 311,301 $ 313,030 $ (1,729) (0.6) % Gross profit 109,305 107,684 1,621 1.5 % Gross profit as a percentage of revenue 35.1 % 34.4 % Exploration and pre-development costs — 12,119 (12,119) (100.0) % General and administrative expense 25,754 28,003 (2,249) (8.0) % General and administrative expense as a percentage of revenue 8.3 % 8.9 % Interest income, net (713) (646) 67 10.4 % Other (income) loss, net 1,369 (10,106) 11,475 (113.5) % Income before taxes and discontinued operations $ 82,895 $ 78,314 $ 4,581 5.8 % Income before taxes and discontinued operations as a percentage of revenue 26.6 % 25.0 % The Completion Fluids & Products Division revenues decreased slightly primarily due to a decline of international brominated product sales, particularly in Europe and Latin America, offset by increased volumes and continued favorable pricing for industrial chemicals sales. 32 The Completion Fluids & Products Division gross profit during 2024 increased compared to the prior year despite slightly lower revenues due to pricing improvements.
Our liquidity at the end of the fourth quarter of 2023 was $126.3 million consisting of $52.5 million of unrestricted cash plus $73.8 million of availability under our credit agreements.
Our liquidity at the end of the fourth quarter of 2024 was $182.2 million consisting of $37.0 million of unrestricted cash, $75.0 million of availability under our delayed draw term loan and $70.2 million of availability under our credit agreements.
Other (income) expense, net moved from income to expenses due to a $3.9 million swing in foreign exchange losses caused by exchange rate devaluation in Argentina. 35 Corporate Overhead Year Ended December 31, Period to Period Change 2023 2022 2023 vs. 2022 % Change (In Thousands, Except Percentages) Depreciation and amortization $ 400 $ 692 $ (292) (42.2) % General and administrative expense 49,135 45,077 4,058 9.0 % Interest expense, net 22,790 17,041 5,749 33.7 % Impairments and other charges 777 — 777 100.0 % Other (income) expense, net (763) (867) 104 (12.0) % Loss before taxes and discontinued operations $ (72,339) $ (61,943) $ (10,396) (16.8) % Corporate Overhead loss before taxes increased during 2023 compared to the prior year primarily due to higher interest expense due to an increase in the interest rate on our Term Credit Agreement, an increase in general administrative expenses primarily due to $4.1 million of increased salary related expense driven by a $2.7 million increase in short and long-term incentive and equity-based compensation expenses, and a $0.8 million impairment of our corporate office lease.
The Water & Flowback Services Division income before taxes decreased during 2024 compared to the prior year primarily due the decrease in gross profit, partially offset by a $0.4 million increase in other income, a $0.3 million decrease in general and administrative expenses from headcount reductions, and a $0.2 million increase in unrealized gain on our investment. 33 Corporate Overhead Year Ended December 31, Period to Period Change 2024 2023 2024 vs. 2023 % Change (In Thousands, Except Percentages) Depreciation and amortization $ 357 $ 400 $ (43) (10.8) % General and administrative expense 45,099 49,135 (4,036) (8.2) % Interest expense, net 23,114 22,790 324 1.4 % Impairments and other charges 109 777 (668) (86.0) % Loss on debt extinguishment 5,535 — 5,535 100.0 % Other income, net (9,361) (763) 8,598 1,126.9 % Loss before taxes and discontinued operations $ (64,853) $ (72,339) $ 7,486 10.3 % Corporate Overhead loss before taxes decreased during 2024 compared to the prior year primarily due to an $8.3 million increase in unrealized gain on our investment in Kodiak, which acquired CSI Compressco in April 2024.
Gross Profit Consolidated gross profit as a percentage of revenue increased due to revenue and margin improvements in both our Completion Fluids & Products and Water & Flowback Services divisions. See Divisional Comparisons section below for additional discussion.
See Divisional Comparisons section below for a more detailed discussion of the change in our revenues. Gross Profit Consolidated gross profit as a percentage of revenue decreased slightly due to a decrease in revenue, an increase in operating costs and the effect of changes in product mix. See Divisional Comparisons section below for additional discussion.
We periodically evaluate engaging in strategic transactions and may consider divesting non-core assets where our evaluation suggests such transaction is in the best interest of our business. In challenging economic environments, we may experience increased delays and failures by customers to pay our invoices. We could experience delayed customer payments and payment defaults associated with customer liquidity issues and bankruptcies.
If it is necessary to issue additional equity to fund our capital needs, additional dilution of our common stockholders will occur. We periodically evaluate engaging in strategic transactions and may consider divesting non-core assets where our evaluation 37 suggests such transaction is in the best interest of our business.
Completion Fluids & Products Division pretax income increased during 2023 compared to the prior year primarily due to the increase in gross profit, along with a $9.3 million increase in other income due to reimbursements from TETRA's partner for the Arkansas resource development, partially offset by the $0.8 million decrease in the unrealized gain on the CarbonFree convertible notes.
The Completion Fluids & Products Division pretax income increased during 2024 compared to the prior year primarily due to the increase in gross profit, along with a decrease in general and administrative expenses primarily due to a $1.9 million decrease in employee compensation and a $0.9 million decrease in professional services as well as a $0.6 million decrease in unrealized losses from our investment in Standard Lithium shares, which is included in other (income) loss, net.
The maturity date of the New Term Credit Agreement is January 12, 2030. As of February 23, 2024, $190.0 million in aggregate principal amount of our New Term Credit Agreement was outstanding. Asset-Based Credit Agreement . The amended ABL Credit Agreement provides for a senior secured revolving credit facility of up to $80 million, with a $20 million accordion.
The amended ABL Credit Agreement provides, with certain restrictions, for a senior secured revolving credit facility of up to $100.0 million with a $25.0 million accordion.
Exploration and Pre-Development Costs Exploration and pre-development costs increased $5.5 million compared to the prior year due to the increased activities surrounding our Arkansas strategic initiatives, which included additional front-end engineering design studies and completing a second exploration test well. 33 General and Administrative Expense Consolidated general and administrative expenses increased during 2023 compared to the prior year primarily due to a $5.1 million increase in employee compensation from additional headcount to support higher activity levels as well as merit and inflationary factors, and additional incentive compensation as a result of higher operational margin performance and the impact of increases in the company’s stock price on long-term incentive awards.
Exploration and Pre-Development Costs Exploration and pre-development costs decreased $12.1 million compared to the prior year due to the capitalization of costs beginning in January 2024 following project developments, including the completion of a technical resources report, compared to expensing of costs associated with the front-end engineering and design study and appraisal costs associated with the activity in the prior year. 31 General and Administrative Expense Consolidated general and administrative expenses decreased during 2024 compared to the prior year primarily due to a $7.4 million decrease in employee compensation from a reduction in equity-based compensation expense and incentive compensation as a result of lower operational margin performance.
The increase in our Completion Fluids & Products division is primarily due to an increase in industrial chemicals product pricing and incremental volumes.
The decrease in our Completion Fluids & Products division is primarily due to lower completion fluid sales volumes from international markets. The decrease in our Water & Flowback Services division is primarily from an overall decline in the US market for our production testing and water management services.
We operate through two reporting segments - Completion Fluids & Products Division and Water & Flowback Services Division. Completion Fluids & Products Division revenues increased during 2023 as a result of increased completions activity in the Gulf of Mexico and international markets, as well as higher volumes in Europe following resolution of raw materials limitations.
We operate through two reporting segments - Completion Fluids & Products Division and Water & Flowback Services Division. Completion Fluids & Products Division activity for 2024 decreased slightly compared to 2023. We were awarded a three-well TETRA CS Neptune fluids project in the Gulf of America that is expected to begin in the first quarter of 2025.
Revenues also include the sale of one early production facility to the operator in October 2023 for $5.4 million. The Water & Flowback Services Division gross profit improved primarily due to higher revenues resulting from the increased activity levels described above and pricing improvements as activity levels improved and new projects commenced.
This was partially offset by improved international market conditions in Latin America including an early production facility expansion as well as a full year of operation of an additional early production facility. The Water & Flowback Services Division gross profit decreased due to lower revenues resulting from the decreased activity levels described above and operating cost inflation.
Our Water & Flowback Services revenues increased compared to the prior year, due to margin expansion efforts driven by investments in technology, integration, digitalization, as well as the benefit of having two early production facilities in Latin America operating the entire year and a third beginning in May 2023.
Our Water & Flowback Services Division activity also decreased compared to 2023 reflecting a slowdown in onshore activity in the Unites States and lower offshore completions fluids activity, as well as lower service revenues following the sale of early production facilities in Latin America.
Removed
As the offshore market continues to improve, our pipeline of TETRA CS Neptune® completion fluid opportunities has continued to grow consistent with deepwater market growth. The division has also benefited from the December 2022 Peacock acquisition in Europe. We have also continued to successfully leverage opportunities to expand integrated services to completion fluids customers.
Added
TETRA CS Neptune fluids projects are historically higher revenue and margin projects. We also recently secured a significant multi-well, multi-year deep water completion fluids contract in Brazil.
Removed
The early production facilities are longer-term, high-margin projects with stable and predictable cash flows. Our fleet of TETRA SandStorm TM advanced cyclone technology separators remains at high utilization with continued market penetration and positive pricing progression.
Added
In August 2024, we published a definitive feasibility study and updated technical resources report with respect to bromine from our Evergreen Brine Unit.
Removed
Revenue growth was a result of the continued increase in the number of integrated projects and customers, high utilization of SandStorm units and market share gains with private oil and gas operators.
Added
We have ongoing negotiations with various bromine providers for bridging supply agreements that, if and when finalized, will give us flexibility on the timing of a plant start-up, allowing us to accumulate additional cash from our base business.
Removed
In June 2023, we entered into a MOU with Saltwerx, an indirect wholly owned subsidiary of ExxonMobil Corporation, relating to a newly formed Evergreen Brine Unit and potential bromine and lithium production from brine produced from the unit.
Added
These initiatives are expected to provide us the volumes necessary for the growing deepwater market plus the growing long-duration battery requirements, while deferring investments in Arkansas or scaling up our bromine production at lower levels than previously anticipated. If and when the bridging supply agreement is finalized, we will announce our revised Arkansas investment and timing plans.
Removed
The MOU with Saltwerx includes provisions relating to: (i) initial brine ownership percentages within the Evergreen Brine Unit, including the bromine and lithium contained in the brine, (ii) the transfer of certain leased acres outside the proposed Evergreen Brine Unit from us to Saltwerx, (iii) reimbursement by Saltwerx of certain expenses that we incurred for the development of leased acreage to be included in the Evergreen Brine Unit, and (iv) an allocation of certain future costs for the drilling of a brine production test well and other development operations, including front-end engineering and design studies for bromine and lithium production facilities.
Added
We are prioritizing our strategic investments on projects that can immediately impact our near-term results, with a focus on TETRA CS Neptune fluids in the Gulf of America, TETRA PureFlow+ electrolyte shipments to Eos Energy Enterprises, and further advancing our water desalination commercial pilot units that are expected to subsequently transition into long-term contracts for commercial desalination plants. 30 Results of Operations The following data should be read in conjunction with the Consolidated Financial Statements and the associated Notes contained elsewhere in this report.
Removed
The extraction of lithium and bromine from these brine leases would likely require a significant amount of time and capital, which we are not able to estimate at this time. We completed an initial preliminary economic assessment in early 2023 for a bromine extraction plant.
Added
Loss on Early Extinguishment of Debt Consolidated loss on debt extinguishment increased $5.5 million from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024.
Removed
We expect an initial economic assessment to follow in early 2024 for a lithium extraction plant, subject to the progress of early engineering.
Added
These decreases were partially offset by a $8.3 million increase in unrealized gains due to the change in the stock price of the Kodiak Gas Services, Inc. (NYSE: KGS) (“Kodiak”) shares we received in exchange for CSI Compressco LP (“CSI Compressco’) common units we owned in connection with Kodiak’s acquisition of CSI Compressco in April 2024.
Removed
Only upon completion of a pre-feasibility and/or feasibility study and attainment of capital commitment from either a joint venture partner, governments grants or loans, or other cost-effective sources of capital that will not over-lever TETRA, in addition to confirmation of a successful recapitalization of the long-duration zinc-bromide battery storage manufacturers, would we proceed to a final investment decision.
Added
As of December 31, 2024, in part because in the current year we achieved three years of cumulative pretax income in the United States tax jurisdiction, management determined that there is sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes of $97.5 million are realizable. We therefore reduced the valuation allowance accordingly.
Removed
Substantially all of our former Compression Division’s operations were conducted through our partially-owned CSI Compressco subsidiary.
Added
These changes were partially offset by a $12.1 million decrease in exploration and pre-development costs and a $9.3 million decrease in other income from reimbursements from our partner due to the capitalization of costs net of reimbursements beginning in January 2024.
Removed
On January 29, 2021, we closed the GP Sale of the general partner of CSI Compressco, which included the sale of the incentive distribution rights (“IDRs”) in CSI Compressco and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, referred to as the “GP Sale.” We have reflected the operations of our former Compression Division as discontinued operations for all periods 32 presented.
Added
In addition, the unrealized losses on our convertible notes embedded derivative increased $1.0 million as the notes approach their maturity.
Removed
See Note 3 – “Discontinued Operations” in the Notes to Consolidated Financial Statements for further information. Results of Operations The following data should be read in conjunction with the Consolidated Financial Statements and the associated Notes contained elsewhere in this report.
Added
General administrative expenses decreased primarily due to a $4.5 million decrease in salary related expenses. Impairments decreased $0.7 million primarily from an impairment of our corporate office lease in the prior year.
Removed
The increase in our Water & Flowback Services division is primarily from an entire year of operations of the first two early production facilities in Latin America which came on line beginning in the third quarter of 2022 and the third early production facility that came online during the second quarter of 2023.
Added
These were partially offset by a $5.5 million loss on debt extinguishment from non-cash unamortized finance costs expensed in connection with the repayment of our prior Term Credit Agreement in January 2024 and a $1.0 million increase in professional services. Non-GAAP Financial Measures We use U.S.
Removed
Interest Expense, Net Consolidated interest expense, net, increased in 2023 compared to the prior year primarily due to an increase in the interest rate on our Term Credit Agreement.
Added
GAAP measures, understanding the differences between the measures, and incorporating this knowledge into management’s decision-making processes.
Removed
The increase in our tax provision compared to the prior year was primarily due to the increase in income before taxes, while our effective tax rate decreased because a significant portion of the increase in income was in jurisdictions for which we were able to utilize net operating losses for which we had established valuation allowances.
Added
Water and Flowback Services Division capital expenditures also included expenditures for expansion of an early production facility in Argentina.
Removed
Included in our deferred tax assets are $95.0 million of net operating loss carryforwards that may be available to offset future income tax liabilities in the U.S. as well as in certain international jurisdictions where net operating loss carryforwards exist.
Added
Our Completion Fluids & Products Division spent $37.0 million on capital expenditures during 2024, including $22.4 million on our strategic initiatives in Arkansas, net of reimbursement from our Evergreen Unit partner, to advance engineering and reservoir studies and began laying the groundwork for plant site preparation and power infrastructure for our bromine project.
Removed
Improved market conditions lead to increased demand and volume and contributed to the increase in revenues compared to the prior period.
Added
In August 2024, we published a definitive feasibility study and updated technical resources report with respect to bromine from our Evergreen Brine Unit.
Removed
Revenues also increased through leveraging opportunities to expand services to completion fluids customers. 34 Completion Fluids & Products Division gross profit during 2023 increased compared to the prior year due to higher revenue and margin growth as described above, as well as pricing improvements.
Added
We have ongoing negotiations with various bromine providers for bridging supply agreements that, if and when finalized, will give us flexibility on the timing of a plant start-up, allowing us to accumulate additional cash from our base business.

… 20 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−2 removed2 unchanged
Biggest changeInterest December 31, Scheduled Maturity Rate 2023 (In Thousands) Term credit agreement September 10, 2025 11.70% $ 163,072 Asset-based credit agreement May 31, 2025 8.75% — Swedish credit facility December 31, 2024 2.95% — Total long-term debt $ 163,072 On January 12, 2024, the Company entered into a New Term Credit Agreement consisting of a $190.0 million funded term loan and a $75.0 million delayed-draw term loan that refinanced the Company’s Term Credit Agreement outstanding as of December 31, 2023.
Biggest changeOn January 12, 2024, the Company entered into a New Term Credit Agreement consisting of a $190.0 million funded term loan and a $75.0 million delayed-draw term loan that refinanced the Company’s Term Credit Agreement outstanding as of December 31, 2023. Borrowings under the New Term Credit Agreement bear interest at a rate per annum equal to SOFR plus 5.75%.
Accordingly, any change in the fair value of these derivative instruments during a period will be included in the determination of earnings for that period. As of December 31, 2023, we did not have any foreign currency exchange contracts outstanding. Item 8. Financial Statements and Supplementary Data.
Accordingly, any change in the fair value of these derivative instruments during a period will be included in the determination of earnings for that period. As of December 31, 2024, we did not have any foreign currency exchange contracts outstanding.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Interest Rate Risk The interest on our borrowings is subject to market risk exposure related to changes in applicable interest rates. Borrowings under the Term Credit Agreement bear interest at a rate per annum equal to SOFR plus a margin of 6.25% per annum.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Interest Rate Risk The interest on our borrowings is subject to market risk exposure related to changes in applicable interest rates.
We are not a party to an interest rate swap contract or other derivative instrument designed to hedge our exposure to interest rate fluctuation risk.
The following table sets forth as of December 31, 2024, the principal amount due under our long-term debt obligations and their respective weighted average interest rates. We are not a party to an interest rate swap contract or other derivative instrument designed to hedge our exposure to interest rate fluctuation risk.
Borrowings under the New Term Credit Agreement bear interest at a rate per annum equal to SOFR plus 5.75%. Exchange Rate Risk We have currency exchange rate risk exposure related to revenues, expenses, operating receivables, and payables denominated in foreign currencies.
Interest December 31, Scheduled Maturity Rate 2024 (In Thousands) Term credit agreement January 1, 2030 10.23% $ 190,000 Total long-term debt $ 190,000 Exchange Rate Risk We have currency exchange rate risk exposure related to revenues, expenses, operating receivables, and payables denominated in foreign currencies.
Removed
Borrowings under our Asset-Based Credit Agreement bear interest at an agreed-upon percentage rate spread above SOFR or an alternate base rate. The following table sets forth as of December 31, 2023, the principal amount due under our long-term debt obligations and their respective weighted average interest rates.
Added
The Company is required to pay a commitment fee on the unutilized commitments with respect to the delayed-draw term loan at the rate of 1.5% per annum. Borrowings under our Asset-Based Credit Agreement bear interest at an agreed-upon percentage rate spread above SOFR. Borrowings under our Swedish Credit Facility, if any, bear interest at fixed rates of 2.95%.
Removed
The financial statements and supplementary data required to be included in this Item 8 are set forth in Item 15 of this Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.

Other TTI 10-K year-over-year comparisons