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New words:
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acceleration, acceptable, accessing, acute, administration, advisory, affecting, al, alleged, allegedly, alleging, announced, behalf, Biden, breach, captioned, closure, committee, complaint, composition, construction, court, delayed, delivery, Department, Deposit, description, deterioration, discontinuation, disposed, distributed, District, divestiture, downhole, downtime, event, exceed, external, failure, fashion, favorable, FDIC, fifteen, flowback, fluid, foregoing, frac, funding, FV, Holdco, hour, impaired, improvement, inability, inaccurate, inclusion, individually, institution, investigation, investor, involving, larger, lawsuit, lead, Logan, make, manufactured, misleading, necessitated, offering, optimal, overhead, payroll, perform, plaintiff, premature, promulgated, proposed, prospectively, putative, qualify, rapid, refund, reimbursement, reinvest, renamed, repositioning, resignation, Richard, rose, shortened, shorter, shut, Situated, standard, systemic, thereunder, tighter, transactional, travel, uninsured, vendor, wage, Western, widespread
Financial report summary
?Competition
Halliburton • Schlumberger • RPC • Superior Energy Services • FTS International • Snipp Interactive • King Merger Sub II • NexTier Oilfield Solutions • Liberty Energy Inc - Ordinary Shares • Ranger Energy Services Inc - Ordinary SharesRisks
- Our business and financial performance depends on the historically cyclical oil and natural gas industry and particularly on the level of capital spending and E&P activity within the United States and in the Permian Basin, and a decline in prices for oil and natural gas may cause fluctuation in operating results or otherwise have an adverse effect on our revenue, cash flows, profitability and growth.
- The cyclical nature of the oil and natural gas industry may cause our operating results to fluctuate.
- The IRA 2022 could accelerate the transition to a low carbon economy and could impose new costs on our customers’ operations.
- Our business may be adversely affected by a deterioration in general economic conditions or a weakening of the broader energy industry.
- New technology may cause us to become less competitive.
- Our operations require substantial capital and we may be unable to obtain needed capital or financing on satisfactory terms, or at all, which could limit our ability to grow.
- Concerns over general economic, business or industry conditions may have a material adverse effect on our results of operations, liquidity and financial condition.
- Our indebtedness and liquidity needs could restrict our operations and adversely affect our financial condition.
- Restrictions in our ABL Credit Facility and any future financing agreements may limit our ability to finance future operations or capital needs or capitalize on potential acquisitions and other business opportunities.
- We may record losses or impairment charges related to goodwill and long-lived assets including intangible assets.
- Our operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which we may not be adequately insured and which could cause us to lose customers and substantial revenue.
- A terrorist attack, armed conflict or political or civil unrest could harm our business.
- We may be subject to claims for personal injury and property damage, which could materially adversely affect our financial condition and results of operations.
- We are subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss.
- We may grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance.
- We may be adversely affected by the effects of inflation.
- Adverse developments affecting the financial services industry, such as events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations.
- Reliance upon a few large customers may adversely affect our revenue and operating results.
- We face significant competition that may cause us to lose market share, and competition in our industry has intensified during the industry downturn.
- We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our business, results of operations and financial condition.
- Our business depends upon the ability to obtain specialized equipment, parts and key raw materials, including sand and chemicals, from third‑party suppliers, and we may be vulnerable to delayed deliveries and future price increases.
- We may be required to pay fees to certain of our Sand Suppliers based on minimum volumes under long-term contracts regardless of actual volumes received.
- Disruption of our supply chain could adversely impact our ability to provide our services.
- We rely on a few key employees whose absence or loss could adversely affect our business.
- If we are unable to employ a sufficient number of skilled and qualified workers, our capacity and profitability could be diminished and our growth potential could be impaired.
- We are subject to environmental laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows.
- Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.
- Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.
- Increasing trucking regulations may increase our costs and negatively impact our results of operations.
- Increased attention to ESG matters, conservation measures, commercial development and technological advances could reduce demand for oil and natural gas and our services.
- Certain of our completion services, particularly our hydraulic fracturing services, are substantially dependent on the availability of water. Restrictions on our or our customers’ ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.
- Our ability to use our NOLs may be limited.
- Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could adversely affect our operating results and cash flows.
- We have identified a material weakness in our internal control over financial reporting with regard to segregation of certain accounting duties and management review controls. We may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements, cause us to fail to meet our reporting obligations, investors may lose confidence in our financial reporting, and our stock price may decline as a result or cause us to fail to meet our reporting obligations.
- Certain provisions of our certificate of incorporation, and bylaws, as well as Delaware law, may discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.
- Our business could be negatively affected as a result of the actions of activist shareholders.
- Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to pursue actions in another judicial forum for disputes with us or our directors, officers, employees or agents.
- The market price of our common stock is subject to volatility.
- There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock.
- There can be no assurance that our share repurchase program will be fully consummated or that such program will enhance the long-term value of our share price.
Management Discussion
- ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
- The financial information, discussion and analysis that follow should be read in conjunction with our consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 ("Form 10-K") as well as the financial and other information included therein.
- Unless otherwise indicated, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to the "Company," "we," "our," "us" or like terms refer to ProPetro Holding Corp. and its subsidiaries.