UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20222023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-38183
rngr-logo.jpg
RANGER ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware81-5449572
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
10350 Richmond, Suite 550
Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
(713) 935-8900
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.01 par value RNGR New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐Accelerated filer ☐Filer ☒Non-accelerated Filer 
Smaller reporting company ☒Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 26, 2022,25, 2023, the registrant had 24,873,92624,412,713 shares of Class A Common Stock and zero shares of Class B Common Stock outstanding.



RANGER ENERGY SERVICES, INC.
TABLE OF CONTENTS
Page



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “may,” “should,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “outlook,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
We caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”), those set forth from time-to-time in other filings by the Company with the SEC, and those in this Form 10-Q, including the following factors:
interest rate risk as a result of our revolving credit facility and financing agreement to fund operations;
credit risk associated with our trade receivables;
commodity price risk due to fluctuations in the prices of oil and natural gas, and resulting impacts on the activity levels of our E&P customers;
general economic conditions or a weakening of the broader energy industry, including as a result of inflation or recession;
volatility of oil and natural gas prices;
reductions in capital spending by the oil and natural gas industry;
reduced demand for our services due to fuel conservation measures and resulting reduction in demand for oil and natural gas;
accidents, blowouts, explosions, craterings, fires, oil spills and releases of drilling, completion or fracturing fluids or hazardous materials or pollutants into the environment;
seasonal weather conditions, severe weather events and natural disasters that could severely disrupt normal operations and harm our business;
capital expenditures for new equipment as we grow our operations and capital expenditures resulting from environmental initiatives, new regulatory requirements, and advancements in oilfield services technologies;
intense competition that may cause us to lose market share and could negatively affect our ability to market our services and expand our operations;
increasing competition for workers, as well as labor shortages;
customer concentrations and reliance upon a few large customers that may adversely affect our revenue and operating results;
unsatisfactory safety performance that may negatively affect our current and future customer relationships, and adversely impact our revenue;
claims for personal injury and property damage, or for catastrophic events, which could materially and adversely affect our financial condition, results of operations and prospects;
environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities;
federal and state legislative and regulatory initiatives that could result in increased costs and additional operating restrictions or delays, as well as adversely affect demand for our support services;
risks arising from climate change, and increased attention to environmental, social, and governance (“ESG”) matters and conservation measures, which may adversely impact our or our customers’ business;
the impact of geopolitical, economic and market conditions on our industry and commodity prices;
cybersecurity and data privacy risks;



risks associated with growth of our business through potential future acquisitions or mergers;
our ability or intention to pay dividends or to effectuate repurchases of our Class A Common Stock; and
risks related to our ownership and capital structure.
Our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC, Those documents are available through our website or through the SEC’s Electronic Data Gathering and Analysis Retrieval (“EDGAR”) system at www.sec.gov. Should one or more of the risks or uncertainties described occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.



PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
RANGER ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions, except share amounts)
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
AssetsAssetsAssets
Cash and cash equivalentsCash and cash equivalents$5.2 $0.6 Cash and cash equivalents$8.2 $3.7 
Accounts receivable, netAccounts receivable, net95.0 80.8 Accounts receivable, net89.9 91.2 
Contract assetsContract assets38.7 13.0 Contract assets35.6 26.9 
InventoryInventory5.4 2.5 Inventory7.7 5.9 
Prepaid expensesPrepaid expenses12.6 8.3 Prepaid expenses8.6 9.2 
Assets held for saleAssets held for sale5.1 — Assets held for sale1.0 3.2 
Total current assetsTotal current assets162.0 105.2 Total current assets151.0 140.1 
Property and equipment, netProperty and equipment, net226.2 270.6 Property and equipment, net225.0 221.6 
Intangible assets, netIntangible assets, net7.2 7.8 Intangible assets, net6.5 7.1 
Operating leases, right-of-use assetsOperating leases, right-of-use assets11.6 6.8 Operating leases, right-of-use assets9.8 11.2 
Other assetsOther assets1.2 2.7 Other assets1.2 1.6 
Total assetsTotal assets$408.2 $393.1 Total assets$393.5 $381.6 
Liabilities and Stockholders' EquityLiabilities and Stockholders' EquityLiabilities and Stockholders' Equity
Accounts payableAccounts payable$36.7 $20.7 Accounts payable$32.6 $24.3 
Accrued expensesAccrued expenses34.0 30.3 Accrued expenses29.6 36.1 
Other financing liability, current portionOther financing liability, current portion0.8 2.2 Other financing liability, current portion0.6 0.7 
Long-term debt, current portionLong-term debt, current portion30.4 44.1 Long-term debt, current portion10.3 6.8 
Other current liabilitiesOther current liabilities6.1 5.4 Other current liabilities6.5 6.6 
Total current liabilitiesTotal current liabilities108.0 102.7 Total current liabilities79.6 74.5 
Operating leases, right-of-use obligationsOperating leases, right-of-use obligations10.1 5.8 Operating leases, right-of-use obligations8.0 9.6 
Other financing liabilityOther financing liability11.8 12.5 Other financing liability11.1 11.6 
Long-term debt, netLong-term debt, net12.9 18.4 Long-term debt, net— 11.6 
Other long-term liabilitiesOther long-term liabilities7.7 5.0 Other long-term liabilities14.3 8.1 
Total liabilitiesTotal liabilities150.5 144.4 Total liabilities113.0 115.4 
Commitments and contingencies (Note 15)
Commitments and contingencies (Note 14)Commitments and contingencies (Note 14)
Stockholders' equityStockholders' equityStockholders' equity
Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of September 30, 2022; 6,000,001 shares issued and outstanding as of December 31, 2021— 0.1 
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 25,425,754 shares issued and 24,873,926 shares outstanding as of September 30, 2022; 18,981,172 shares issued and 18,429,344 shares outstanding as of December 31, 20210.3 0.2 
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; no shares issued or outstanding as of September 30, 2022 and December 31, 2021— — 
Less: Class A Common Stock held in treasury at cost; 551,828 treasury shares as of September 30, 2022 and December 31, 2021(3.8)(3.8)
Accumulated deficit(0.5)(8.0)
Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022— — 
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 25,744,069 shares issued and 24,411,241 shares outstanding as of September 30, 2023; 25,446,292 shares issued and 24,894,464 shares outstanding as of December 31, 2022Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 25,744,069 shares issued and 24,411,241 shares outstanding as of September 30, 2023; 25,446,292 shares issued and 24,894,464 shares outstanding as of December 31, 20220.3 0.3 
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022— — 
Less: Class A Common Stock held in treasury at cost; 1,332,828 treasury shares as of September 30, 2023 and 551,828 treasury shares as of December 31, 2022Less: Class A Common Stock held in treasury at cost; 1,332,828 treasury shares as of September 30, 2023 and 551,828 treasury shares as of December 31, 2022(12.4)(3.8)
Retained earningsRetained earnings27.6 7.1 
Additional paid-in capitalAdditional paid-in capital261.7 260.2 Additional paid-in capital265.0 262.6 
Total stockholders' equityTotal stockholders' equity257.7 248.7 Total stockholders' equity280.5 266.2 
Total liabilities and stockholders' equityTotal liabilities and stockholders' equity$408.2 $393.1 Total liabilities and stockholders' equity$393.5 $381.6 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



35



RANGER ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except share and per share amounts)
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
September 30,September 30,September 30,September 30,
20222021202220212023202220232022
Revenues
RevenueRevenue
High specification rigsHigh specification rigs$79.7 $29.9 $220.6 $80.6 High specification rigs$79.2 $79.7 $234.3 $220.6 
Wireline servicesWireline services60.6 45.4 148.7 73.1 Wireline services53.2 60.6 157.6 148.7 
Processing solutions and ancillary servicesProcessing solutions and ancillary services36.7 6.4 84.9 16.3 Processing solutions and ancillary services32.0 36.7 93.2 84.9 
Total revenues177.0 81.7 454.2 170.0 
Total revenueTotal revenue164.4 177.0 485.1 454.2 
Operating expensesOperating expensesOperating expenses
Cost of services (exclusive of depreciation and amortization):Cost of services (exclusive of depreciation and amortization):Cost of services (exclusive of depreciation and amortization):
High specification rigsHigh specification rigs62.7 25.1 175.3 68.1 High specification rigs63.5 62.7 185.6 175.3 
Wireline servicesWireline services49.2 44.0 134.8 70.4 Wireline services45.8 49.2 140.3 134.8 
Processing solutions and ancillary servicesProcessing solutions and ancillary services26.2 4.9 66.0 13.7 Processing solutions and ancillary services25.5 26.2 76.1 66.0 
Total cost of servicesTotal cost of services138.1 74.0 376.1 152.2 Total cost of services134.8 138.1 402.0 376.1 
General and administrativeGeneral and administrative11.0 7.1 32.4 16.7 General and administrative7.0 11.0 22.7 32.4 
Depreciation and amortizationDepreciation and amortization10.8 8.7 33.8 24.9 Depreciation and amortization10.6 10.8 29.3 33.8 
Impairment of fixed assetsImpairment of fixed assets0.2 — 1.3 — Impairment of fixed assets0.4 0.2 0.4 1.3 
Gain (loss) on sale of assets(1.1)— — 0.1 
Gain on sale of assetsGain on sale of assets(0.1)(1.1)(1.6)— 
Total operating expensesTotal operating expenses159.0 89.8 443.6 193.9 Total operating expenses152.7 159.0 452.8 443.6 
Operating income (loss)18.0 (8.1)10.6 (23.9)
Operating incomeOperating income11.7 18.0 32.3 10.6 
Other (income) expensesOther (income) expensesOther (income) expenses
Interest expense, netInterest expense, net1.8 1.2 5.7 2.5 Interest expense, net0.7 1.8 2.8 5.7 
Loss on debt retirementLoss on debt retirement— — 2.4 — 
Gain on bargain purchase, net of taxGain on bargain purchase, net of tax(0.8)— (3.6)— Gain on bargain purchase, net of tax— (0.8)— (3.6)
Total other (income) expensesTotal other (income) expenses1.0 1.2 2.1 2.5 Total other (income) expenses0.7 1.0 5.2 2.1 
Income (loss) before income tax (benefit) expense17.0 (9.3)8.5 (26.4)
Tax (benefit) expense3.4 (0.2)1.0 0.1 
Net income (loss)13.6 (9.1)7.5 (26.5)
Less: Net loss attributable to noncontrolling interests— (3.5)— (10.7)
Net income (loss) attributable to Ranger Energy Services, Inc.$13.6 $(5.6)$7.5 $(15.8)
Income before income tax expenseIncome before income tax expense11.0 17.0 27.1 8.5 
Income tax expenseIncome tax expense1.6 3.4 5.4 1.0 
Net incomeNet income9.4 13.6 21.7 7.5 
Income (loss) per common share
Income per common shareIncome per common share
BasicBasic$0.55 $(0.51)$0.34 $(1.63)Basic$0.38 $0.55 $0.88 $0.34 
DilutedDiluted$0.54 $(0.51)$0.33 $(1.63)Diluted$0.38 $0.54 $0.86 $0.33 
Weighted average common shares outstandingWeighted average common shares outstandingWeighted average common shares outstanding
BasicBasic24,845,517 11,011,864 22,323,308 9,714,508 Basic24,500,607 24,845,517 24,758,890 22,323,308 
DilutedDiluted25,184,067 11,011,864 22,637,457 9,714,508 Diluted24,887,275 25,184,067 25,149,415 22,637,457 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
46


RANGER ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(in millions, except share amounts)
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021202220212022202120232022202320222023202220232022
QuantityAmountQuantityAmountQuantityAmountQuantityAmount
Shares, Series A Preferred StockShares, Series A Preferred StockShares, Series A Preferred Stock
Balance, beginning of periodBalance, beginning of period— — $— $— 6,000,001 — $0.1 $— Balance, beginning of period— — $— $— — 6,000,001 $— $0.1 
Shares converted to Class A Common StockShares converted to Class A Common Stock— — — — (6,000,001)— (0.1)— Shares converted to Class A Common Stock— — — — — (6,000,001)— (0.1)
Balance, end of periodBalance, end of period— — $— $— — — $— $— Balance, end of period— — $— $— — — $— $— 
Shares, Class A Common StockShares, Class A Common StockShares, Class A Common Stock
Balance, beginning of periodBalance, beginning of period25,268,856 10,682,388 $0.3 $0.1 18,981,172 9,093,743 $0.2 $0.1 Balance, beginning of period25,689,807 25,268,856 $0.3 $0.3 25,446,292 18,981,172 $0.3 $0.2 
Issuance of shares under share-based compensation plansIssuance of shares under share-based compensation plans57,263 150,432 — — 457,030 607,180 — — Issuance of shares under share-based compensation plans59,996 57,263 — — 390,612 457,030 — — 
Shares withheld for taxes on equity transactionsShares withheld for taxes on equity transactions(365)(15,824)— — (112,449)(139,927)— — Shares withheld for taxes on equity transactions(5,734)(365)— — (92,835)(112,449)— — 
Issuance of shares from Series A Preferred Stock conversionIssuance of shares from Series A Preferred Stock conversion— — — — 6,000,001 — 0.1 — Issuance of shares from Series A Preferred Stock conversion— — — — — 6,000,001 — 0.1 
Issuance in connection with acquisitionsIssuance in connection with acquisitions100,000 900,000 — — 100,000 2,156,000 — — Issuance in connection with acquisitions— 100,000 — — — 100,000 — — 
Balance, end of periodBalance, end of period25,425,754 11,716,996 $0.3 $0.1 25,425,754 11,716,996 $0.3 $0.1 Balance, end of period25,744,069 25,425,754 $0.3 $0.3 25,744,069 25,425,754 $0.3 $0.3 
Shares, Class B Common Stock
Balance, beginning of period— 6,866,154 $— $0.1 — 6,866,154 $— $0.1 
Balance, end of period— 6,866,154 $— $0.1 — 6,866,154 $— $0.1 
Treasury StockTreasury StockTreasury Stock
Balance, beginning of periodBalance, beginning of period(551,828)(551,828)$(3.8)$(3.8)(551,828)(551,828)$(3.8)$(3.8)Balance, beginning of period(1,099,928)(551,828)$(9.7)$(3.8)(551,828)(551,828)$(3.8)$(3.8)
Repurchase of Class A Common StockRepurchase of Class A Common Stock(232,900)— (2.7)— (781,000)— (8.6)— 
Balance, end of periodBalance, end of period(551,828)(551,828)$(3.8)$(3.8)(551,828)(551,828)$(3.8)$(3.8)Balance, end of period(1,332,828)(551,828)$(12.4)$(3.8)(1,332,828)(551,828)$(12.4)$(3.8)
Accumulated deficit
Retained Earnings (accumulated deficit)Retained Earnings (accumulated deficit)
Balance, beginning of periodBalance, beginning of period$(14.1)$(28.6)$(8.0)$(18.4)Balance, beginning of period$19.5 $(14.1)$7.2 $(8.0)
Net income (loss) attributable to controlling interest13.6 (5.6)7.5 (15.8)
Net incomeNet income9.4 13.6 21.7 7.5 
Dividends declaredDividends declared(1.3)— (1.3)— 
Balance, end of periodBalance, end of period$(0.5)$(34.2)$(0.5)$(34.2)Balance, end of period$27.6 $(0.5)$27.6 $(0.5)
Additional paid-in capitalAdditional paid-in capitalAdditional paid-in capital
Balance, beginning of periodBalance, beginning of period$260.7 $139.5 $260.2 $123.9 Balance, beginning of period$263.9 $260.7 $262.6 $260.2 
Equity based compensationEquity based compensation0.9 0.3 2.6 2.1 Equity based compensation1.1 0.9 3.4 2.6 
Shares withheld for taxes on equity transactionsShares withheld for taxes on equity transactions0.1 (0.2)(1.1)(0.9)Shares withheld for taxes on equity transactions— 0.1 (1.0)(1.1)
Share issuance for acquisitions— 8.7 — 16.4 
Impact of transactions affecting noncontrolling interest— 3.9 — 10.7 
Balance, end of period$261.7 $152.2 $261.7 $152.2 
Total controlling interest shareholders’ equity
Balance, beginning of period$243.1 $107.3 $248.7 $101.9 
Net income (loss) attributable to controlling interest13.6 (5.6)7.5 (15.8)
Equity based compensation0.9 0.3 2.6 2.1 
Shares withheld for taxes on equity transactions0.1 (0.2)(1.1)(0.9)
Share issuance for acquisition— 8.7 — 16.4 
Impact of transactions affecting noncontrolling interest— 3.9 — 10.7 
Balance, end of period$257.7 $114.4 $257.7 $114.4 
Noncontrolling interest
Balance, beginning of period$— $68.9 $— $82.9 
Net loss attributable to noncontrolling interest— (3.5)— (10.7)
Impact of transactions affecting noncontrolling interest— (3.9)— (10.7)
Balance, end of period$— $61.5 $— $61.5 
Total Stockholders' Equity
Balance, beginning of period$243.1 $176.2 $248.7 $184.8 
Net income (loss)13.6 (9.1)7.5 (26.5)
Equity based compensation0.9 0.3 2.6 2.1 
Shares withheld for taxes on equity transactions0.1 (0.2)(1.1)(0.9)
Share issuance from acquisition— 8.7 — 16.4 
Balance, end of periodBalance, end of period$257.7 $175.9 $257.7 $175.9 Balance, end of period$265.0 $261.7 $265.0 $261.7 
Total shareholders’ equityTotal shareholders’ equity
Balance, beginning of periodBalance, beginning of period$274.0 $243.1 $266.3 $248.7 
Net incomeNet income9.4 13.6 21.7 7.5 
Dividends declaredDividends declared(1.3)— (1.3)— 
Equity based compensationEquity based compensation1.1 0.9 3.4 2.6 
Shares withheld for taxes on equity transactionsShares withheld for taxes on equity transactions— 0.1 (1.0)(1.1)
Repurchase of Class A Common StockRepurchase of Class A Common Stock(2.7)— (8.6)— 
Balance, end of periodBalance, end of period$280.5 $257.7 $280.5 $257.7 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
57


RANGER ENERGY SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
Nine Months Ended September 30,
20222021
Cash Flows from Operating Activities
Net income (loss)$7.5 $(26.5)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization33.8 24.9 
Equity based compensation2.8 2.1 
Impairment of fixed assets1.3 — 
Gain on bargain purchase, net of tax(3.6)— 
Other expense, net0.9 1.4 
Changes in operating assets and liabilities, net effects of business acquisitions
Accounts receivable(14.3)(24.5)
Contract assets(25.7)(6.7)
Inventory(2.9)2.5 
Prepaid expenses and other current assets(4.2)(6.7)
Other assets(3.6)(0.6)
Accounts payable16.0 (7.8)
Accrued expenses3.7 23.8 
Other current liabilities0.8 41.3 
Other long-term liabilities6.0 0.2 
Net cash provided by operating activities18.5 23.4 
Cash Flows from Investing Activities
Purchase of property and equipment(8.7)(3.9)
Proceeds from disposal of property and equipment20.4 0.4 
Purchase of businesses, net of cash received0.8 (2.4)
Net cash provided by (used in) investing activities12.5 (5.9)
Cash Flows from Financing Activities
Borrowings under Credit Facility431.0 74.7 
Principal payments on Credit Facility(433.2)(52.5)
Principal payments under Eclipse Term Loan B(12.4)— 
Principal payments on financing lease obligations(3.4)(2.4)
Principal payments on Secured Promissory Note(3.3)(0.6)
Principal payments on other financing liabilities(2.2)(1.3)
Principal payments on Eclipse M&E Term Loan(1.5)— 
Shares withheld on equity transactions(1.1)(1.0)
Payments on Installment Purchases(0.3)(0.4)
Principal payments on Encina Master Financing Agreement— (17.7)
Deferred financing costs on Eclipse— (2.4)
Proceeds from financing of sale-leasebacks— 15.6 
Borrowings under Eclipse M&E Term Loan— 12.5 
Net cash provided by (used in) financing activities(26.4)24.5 
Increase in cash and cash equivalents4.6 42.0 
Cash and cash equivalents, Beginning of Period0.6 2.8 
Cash and cash equivalents, End of Period$5.2 $44.8 
Supplemental Cash Flow Information
Interest paid$0.8 $1.3 
Supplemental Disclosure of Non-cash Investing and Financing Activities
Capital expenditures$(0.7)$(0.1)
Additions to fixed assets through installment purchases and financing leases$(3.5)$(2.5)
Issuance of Class A Common Stock for acquisitions$— $(16.4)
Secured Promissory Note$— $(11.4)

Nine Months Ended September 30,
20232022
Cash Flows from Operating Activities
Net income$21.7 $7.5 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization29.3 33.8 
Equity based compensation3.6 2.8 
Gain on disposal of property and equipment(1.6)— 
Impairment of fixed assets0.4 1.3 
Gain on bargain purchase, net of tax— (3.6)
Deferred income tax expense4.8 — 
Loss on debt retirement2.4 — 
Other expense, net2.3 0.9 
Changes in operating assets and liabilities
Accounts receivable0.1 (14.3)
Contract assets(8.7)(25.7)
Inventory(2.0)(2.9)
Prepaid expenses and other current assets0.6 (4.2)
Other assets1.2 (3.6)
Accounts payable8.3 16.0 
Accrued expenses(7.7)3.7 
Other current liabilities— 0.8 
Other long-term liabilities(1.6)6.0 
Net cash provided by operating activities53.1 18.5 
Cash Flows from Investing Activities
Purchase of property and equipment(27.9)(8.7)
Proceeds from disposal of property and equipment4.9 20.4 
Purchase of businesses, net of cash received— 0.8 
Net cash provided by (used in) investing activities(23.0)12.5 
Cash Flows from Financing Activities
Borrowings under Revolving Credit Facility315.6 431.0 
Principal payments on Revolving Credit Facility(308.1)(433.2)
Principal payments under Eclipse Term Loan B Facility— (12.4)
Principal payments on financing lease obligations(4.0)(3.4)
Principal payments on Secured Promissory Note(6.2)(3.3)
Principal payments on other financing liabilities(0.7)(2.2)
Principal payments on Eclipse M&E Term Loan Facility(10.4)(1.5)
Dividends paid to Class A Common Stock shareholders(1.2)— 
Shares withheld on equity transactions(1.0)(1.1)
Payments on Other Installment Purchases(0.3)(0.3)
Repurchase of Class A Common Stock(8.6)— 
Deferred financing costs on Wells Fargo(0.7)— 
Net cash used in financing activities(25.6)(26.4)
Increase in cash and cash equivalents4.5 4.6 
Cash and cash equivalents, Beginning of Period3.7 0.6 
Cash and cash equivalents, End of Period$8.2 $5.2 
Supplemental Cash Flow Information
Interest paid$1.0 $0.8 
Supplemental Disclosure of Non-cash Investing and Financing Activities
Capital expenditures included in accounts payable and accrued liabilities$— $(0.7)
Additions to fixed assets through installment purchases and financing leases$(5.6)$(3.5)
Additions to fixed assets through asset trades$(1.1)$— 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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RANGER ENERGY SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 — Organization and Business Operations
Business
Ranger Energy Services, Inc. (“Ranger, Inc.,” “Ranger,” “we,” “us” or the “Company”) is a provider of onshore high specification (“high-spec”) well service rigs, wireline services, and complementaryadditional processing solutions and ancillary services in the United States.States (“U.S.”). The Company also provides an extensive range of well site services to leading United States (“U.S.”) exploration and production (“E&P”) companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.
Our service offerings consist of well completion support, workover, well maintenance, wireline, fluid management,and other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:
High Specification Rigs. Provides high-spechigh specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.
Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production, and pump down lines of business.
Processing Solutions and Ancillary Services. Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services include equipment rentals, snubbing and coil tubing, plug and abandonment, logistics, hauling,snubbing and coil tubing, and processing solutions.
The Company’s operations take place in most of the active oil and natural gas basins in the U.S., including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend, Anadarko Basin, and Canadian and Kingfisher Counties plays.
Organization
Ranger, Inc. was incorporated as a Delaware corporation in February 2017. Ranger, Inc. is a holding company, and its sole material assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”). Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”), and Torrent Energy Services, LLC (“Torrent Services”), and Ranger Energy Acquisition, LLC (“Ranger Acquisitions”), the other subsidiaries through which it operates its assets. Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services, its subsidiaries, and Torrent Services’ business and consolidates the financial results of Ranger Services, its subsidiaries, and Torrent Services and their subsidiaries.Services.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The Condensed Consolidated Balance Sheet as of December 31, 2021 has been derived from audited financial statements and theunaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X.10-Q. Accordingly, certain notesinformation and other informationdisclosures have been condensed or omitted. The Condensed Consolidated Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results of operations for the interim periods. These interim financial statements should be read in conjunction with theour audited consolidated financial statements and related notes for the years ended December 31, 2021 and 2020, included in the Annual Report filed on Form 10-K for the year ended December 31, 2021 (the “Annual Report”).Report. Interim results for the periods presented may not be indicative of results that will be realized for future periods.
Investments in which the Company exercises control are consolidated and the noncontrolling interests of such investments, which are not attributable directly or indirectly to the Company are presented as a separate component of net income or loss and equity in the accompanying Condensed Consolidated Financial Statements. The Company had ownership interests in Ranger LLC, which was consolidated within the Company’s consolidated financial statements, but was not wholly owned by the Company through October 1, 2021. Pursuant to the TRA Termination Agreement (as defined herein) all noncontrolling interests in Ranger LLC were eliminated. Changes in the Company’s ownership interest in Ranger LLC, while it retains its controlling interest, are accounted for as equity transactions.
We have made certain reclassifications to our prior period operating revenue and cost of sales amounts due to the change in reportable segments whereby our Wireline and Ancillary Services were bifurcated from our historical Completion and Other
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Services segment as a result of our fourth quarter 2021 operating segment changes. The Ancillary Services are now combined with the historical Processing Solutions segment. Other immaterial reclassifications have been made for comparability purposes. None of these reclassifications have an impact on our consolidated operating results, cash flows or financial position.
Significant Accounting Policies
The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report.
Use of Estimates
The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Management uses historical and other pertinent information to determine these estimates. Actual results could differ from such estimates.
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Areas where critical accounting estimates are made by management include:
Depreciation and amortization of property and equipment and intangible assets;
Assets acquired and liabilities assumed in business combinations;
Impairment of property and equipment and intangible assets;
Revenue recognition;
Income taxes; and
Equity-based compensation.
Emerging Growth Company Status and Smaller Reporting Company Status
The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). In accordance with the JOBS Act, the Company will remain an EGC until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of its initial public offering (“IPO”), (b) in which its total annual gross revenue is at least $1.24 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, or (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. The Company will lose its EGC status on December 31, 2022, as this will represent the last day of the fiscal year following the fifth anniversary of our first Form S-1, which was filed in August 2017.
An EGC may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. The Company has irrevocably opted out of the extended transition period and, as a result, the Company has and will continue to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
The Company is also a “smaller reporting company” (“SRC”) as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as Amended. SRC means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a SRC and that has (i) market value of common stock held by non-affiliates of less than $250 million; or (ii) annual revenues of less than $100 million and either no common stock held by non-affiliates or a market value of common stock held by non-affiliates of less than $700 million. SRC status is determined on an annual basis.
New Accounting Pronouncements
Recently IssuedAdopted Accounting Standards
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASUAccounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses,, which replaces the incurred loss impairment methodology to reflect expected credit losses. The amendment requires the measurement of all expected credit losses for financial assets held at the reporting date to be performed based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022, with early2022. The Company adopted this standard on January 1, 2023. This adoption permitted. After consideration of the guidance changes, the Company doesdid not believe the changes in the accounting standard will result inhave a material impact on its Condensedthe Company’s Consolidated Financial Statements. The Company expects to adopt the standard on a prospective basis.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for accounting contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference the London Interbank Offering Rate (“LIBOR”) or another
8


reference rate expected to be discontinued due to the reference rate reform. ASU 2020-04 became effective as of March 12, 2020 and can be applied through December 31, 2022.2022, recently amended by ASU 2022-06 which has delayed the application date through December 31, 2024. On September 23, 2022, the Company entered into the Fourth Amendment to the Loan and Security Agreement (the Eclipse Loan and Security Agreement, as amended through and including the Fourth Amendment, the “Amended Loan Agreement”) with EBCEclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC where the Secured Overnight Financing Rate (“SOFR”) replaced LIBOR as the reference rate for interest on borrowings, effective October 1, 2022. On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo, NA. with SOFR as the reference rate for interest on borrowings.
New Accounting Standards
With the exception of the standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s Condensed Consolidated Financial Statements.
Note 3 — Business Combinations
The Company completed three acquisitions during the year ended December 31, 2021 where all purchases were accounted for using the acquisition method of accounting under the FASB Accounting Standards Codification 805, Business Combinations (“ASC 805”). The results of operations for each of the acquisitions are included in the accompanying Condensed Consolidated Statements of Operations from the respective date of each acquisition. Under the acquisition method of accounting, the assets and liabilities have been recorded at their respective estimated fair values as of the date of completion of the acquisition and reported into Ranger’s Condensed Consolidated Balance Sheets.
Patriot Well Solutions (“Patriot”) Acquisition
On May 14, 2021, the Company acquired all of the outstanding stock of Patriot, a provider of wireline evaluation and intervention services that operate in the Permian, Denver-Julesburg and Powder River Basins and Bakken Shale.
As consideration for the Patriot Acquisition the Company paid an aggregate of $11.0 million, which included 1.3 million shares of Class A Common Stock and cash payments of $3.3 million, net of cash acquired. The financial results of Patriot are included in the Wireline Services reporting segment. The Company finalized the purchase price allocation in the fourth quarter of 2021.
PerfX Wireline Services (“PerfX”) Acquisition
On July 8, 2021, the Company acquired the assets of PerfX, a provider of wireline services that operate in Williston, North Dakota and Midland, Texas. Following the acquisition of PerfX the Company significantly expanded its scale and scope of the existing wireline business. The financial results of PerfX are included within the Wireline Services reporting segment.
The aggregate consideration for the PerfX Acquisition was $20.1 million, which included 1,000,000 shares of Class A Common Stock and a Secured Promissory Note of $11.4 million. The Class A Common Stock issuance includes 100,000 shares that were issued by the Company on July 8, 2022, the 12-month anniversary of the acquisition date.
The Secured Promissory Note bears an interest rate of 8.5% per annum and holds certain assets as collateral through the scheduled maturity date of January 31, 2024. Refer to “Note 10 — Debt” for further details related to the Secured Promissory Note.
The PerfX purchase price includes a warrant to acquire a 30% ownership in the XConnect Business (“XConnect”), which expires on July 8, 2031. XConnect is the manufacturer of a perforating gun system developed by the PerfX sellers alongside the PerfX wireline service business. The warrant requires the Company to maintain a specific minimum level of purchases of XConnect’s manufactured products. Should the Company fail to maintain the specified minimum level of purchases, a forfeiture event would occur. The Company may elect to cure the forfeiture event through a cash payment to XConnect. If the Company elects to not cure the forfeiture event, the ownership percentage would reduce to 15%. Upon the occurrence of a second uncured forfeiture event, the warrant is deemed to be cancelled. The value of the warrant by the Company is negligible as of September 30, 2022. The Company finalized the purchase price allocation in the fourth quarter of 2021.












9


The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):
Cash$1.0 
Accounts receivable4.6 
Inventory2.4 
Prepaid and other current assets0.1 
Operating leases, right-of-use asset1.1 
Property and equipment18.4 
Total assets acquired27.6
Accounts payable5.4 
Accrued expenses1.0 
Operating lease right-of-use obligation1.1 
Total liabilities assumed7.5
Allocated purchase price$20.1
The following unaudited pro-forma financial results considers that the PerfX Acquisition occurred as of January 1, 2021 (in millions):
Nine Months Ended September 30, 2021
Revenue$224.9 
Operating loss$(27.2)
Net loss$(30.1)
Basic and diluted loss per share$(1.90)
The supplemental pro forma information presented above are being provided for information purposes only and may not necessarily reflect what the results of operations would have been had the Company owned and operation the PerfX Acquisition assets since January 1, 2021. There were no material non-recurring pro-forma adjustments present. The financial results of PerfX are included in the Wireline Services reporting segment. The Company reported revenue and operating income during the three and nine months ended September 30, 2021 that included approximately $27.9 million and $0.5 million, respectively. During the nine months ended September 30, 2021 the transaction costs related to the PerfX Acquisition approximated $0.7 million.
Basic Energy Services, Inc. (���Basic”) Acquisition
On September 15, 2021, Ranger Acquisitions entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries (the “Basic Sellers”), which closed on October 1, 2021. Ranger Acquisitions purchased assets associated with Basic’s well servicing, fishing and rental, coiled tubing operations, and rolling stock assets required to support the operating assets being purchased and real property locations inclusive of, but not limited to, real property owned in New Mexico, North Dakota, Oklahoma, and Texas.
All assets associated with the Basic Acquisition, were recorded at their fair value. The Company used the market approach as of the closing date, October 1, 2021, to apply fair values to the assets purchased based on the selling price of similar assets. As a result of comparing the purchase price to the fair value of the assets acquired, the Company realized a $40.0 million bargain purchase gain, net of tax. The bargain purchase gain is primarily attributable Basic’s distressed financial position and lack of financing options available to avoid liquidation.
While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed as of the closing date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one-year from the closing date, the Company recorded adjustments to the assets acquired and liabilities assumed, with the corresponding offset to the bargain purchase. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in the operating results in the period in which the adjustment is identified. As of the date of this report the Company has finalized the purchase price allocation in the fourth quarter of 2022.
During the three and nine months ended September 30, 2022, adjustments were made within the permitted measurement period that resulted in an increase to the bargain purchased recognized of $0.8 million and $3.6 million, respectively, net of tax, due to updated information regarding facts and circumstances which existed as of the date of the business combination. The measurement period adjustments primarily impacted the bargain purchase gain and property and equipment.
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The Company reported revenue and operating income during the three months ended September 30, 2022 of approximately $60.8 million and $12.1 million, respectively, and $157.3 million and $30.9 million for the nine months ended September 30, 2022 attributable to the assets acquired from Basic.
The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):
Property and equipment$93.5 
Total assets acquired93.5
Finance lease obligations3.9 
Bargain purchase deferred tax liability11.7 
Total liabilities assumed15.6
Net assets acquired77.9
Bargain purchase40.8 
Purchase price$37.1
The following unaudited pro-forma financial results considers that the Basic Acquisition occurred as of January 1, 2021 (in millions, except per share amounts):
Nine Months Ended September 30, 2021
Revenue$300.1 
Operating loss$(24.6)
Net income (loss)$(27.3)
Basic earnings (loss) per share$(1.68)
Diluted earnings (loss) per share$(1.68)
The supplemental pro forma information presented above are being provided for information purposes only and may not necessarily reflect what the results of operations would have been had the Company owned and operation the Basic Acquisition assets since January 1, 2021. There were no material non-recurring pro-forma adjustments present. The financial results of Basic are primarily included in the High-Specification Rigs reporting segment.
Note 4 — Property and Equipment, Net
Property and equipment, net include the following (in millions):
Estimated Useful Life
(years)
September 30, 2022December 31, 2021
High specification rigs20$130.5 $145.4 
High specification rigs machinery and equipment5 - 1061.5 63.1 
Wireline services machinery and equipment5 - 1054.3 53.1 
Processing solutions and ancillary services machinery and equipment3 - 3066.9 69.4 
Vehicles3 - 1545.1 46.3 
Other property and equipment5 - 2521.0 30.9 
Property and equipment379.3 408.2 
Less: accumulated depreciation(157.1)(140.5)
Construction in progress4.0 2.9 
Property and equipment, net$226.2 $270.6 
Depreciation expense was $10.5 million and $8.6 million for the three months ended September 30, 2022 and 2021, respectively and $33.2 million and $24.4 million for the nine months ended September 30, 2022 and 2021.
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Note 5 — Assets Held for Sale
Assets held for sale includesinclude the net book value of assets the Company plans to sell within the next 12 months and are primarily related to excess assets acquired from the Basic Acquisition.Energy Services, Inc. (“Basic”) acquisition. Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value less estimated costs to sell. The Company intends to sell the excess assets to fund the repayments under the Eclipse Loan and Security Agreement. Refer to “Note 10 — Debt” for further details.
As of September 30, 2022,2023, the Company classified $1.0 million of land and buildings within our High Specification Rigs and Processing Solutions and Ancillary Services segments whichas held for sale as they are being actively marketed,marketed. For the nine months ended September 30, 2023, the Company recognized a gain on assets previously classified as held for sale of $1.8 million and recognized a loss on the sale of assets previously held in Property and equipment, net of $0.2 million, which nets to the $1.6 million gain on sale of assets on the Condensed Consolidated Statements of Operations.
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Note 4 — Property and Equipment, Net
Property and equipment, net include the following (in millions):
Estimated Useful Life
(years)
September 30, 2023December 31, 2022
High specification rigs15$138.9 $138.0 
Machinery and equipment3 - 30185.6 179.3 
Vehicles3 - 1550.4 46.9 
Other property and equipment5 - 2519.7 21.3 
Property and equipment394.6 385.5 
Less: accumulated depreciation(188.0)(167.2)
Construction in progress18.4 3.3 
Property and equipment, net$225.0 $221.6 
On August 9, 2023, pursuant to an asset purchase agreement dated August 4, 2023, the Company closed on the acquisition of certain fixed assets from Pegaso Energy Services, LLC (“Pegaso acquisition”) for consideration of $7.3 million paid in cash. The fixed assets acquired from Pegaso were primarily engaged in pump down services for its customers. Under ASC 805 Business Combination, the Company accounted for the Pegaso acquisition as an asset acquisition. The consideration paid is similar to the fair value of the assets acquired and the Company allocated the consideration paid to each of the assets following the cost accumulation model. As of September 30, 2023, two of the acquired pumps are in service. Given the materiality of these assets to the overall acquisition, all acquired assets are classified as construction in progress.
Depreciation expense was $10.4 million and $10.5 million for the three months ended September 30, 2023 and 2022, respectively and $28.7 million and $33.2 million for the nine months ended September 30, 2023 and 2022. For the nine months ended September 30, 2023, the Company reclassified $0.6 million of property and equipment to Assets held for sale.
Impairment expense on fixed assets consists of non-cash impairment charges relating to long-lived assets. Impairments are determined using management’s judgment about our anticipated ability to continue to use fixed assets in-service and under development, current economic and market conditions and their effects based on information available as of the date of these unaudited interim condensed financial statements. During the three and nine months ended September 30, 2022,2023, the Company recorded anrecognized a fixed assets impairment charge of $0.2$0.4 million and $1.3 million, respectively, to assets held for sale asreduce the carrying value exceeded the fair value less estimated costs to sell. Assets held for sale at September 30, 2022 consisted of the following (in millions):
September 30, 2022
Land and buildings$3.0 
Other PP&E2.1 
Assets held for sale$5.1 
property to estimated net realizable value.
Note 65 — Intangible Assets, Net
Definite lived intangible assets are comprised of the following (in millions):
Estimated Useful Life
(years)
September 30, 2022December 31, 2021Estimated Useful Life
(years)
September 30, 2023December 31, 2022
Customer relationshipsCustomer relationships10-18$11.4 $11.4 Customer relationships10-18$11.4 $11.4 
Less: accumulated amortizationLess: accumulated amortization(4.2)(3.6)Less: accumulated amortization(4.9)(4.3)
Intangible assets, netIntangible assets, net$7.2 $7.8 Intangible assets, net$6.5 $7.1 
Amortization expense was $0.3$0.2 million and $0.1$0.3 million for the three months ended September 30, 20222023 and 20212022, respectively and $0.6 million and $0.5$0.6 million for the nine months ended September 30, 20222023 and 2021.2022. Amortization expense for the future periods is expected to be as follows (in millions):
For the twelve months ending September 30,For the twelve months ending September 30,AmountFor the twelve months ending September 30,Amount
2023$0.7 
202420240.7 2024$0.7 
202520250.7 20250.7 
202620260.7 20260.7 
202720270.7 20270.7 
202820280.6 
ThereafterThereafter3.7 Thereafter3.1 
TotalTotal$7.2 Total$6.5 
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Note 76 — Accrued Expenses
Accrued expenses include the following (in millions):
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
Accrued payablesAccrued payables$11.0 $12.5 Accrued payables$14.6 $15.9 
Accrued compensationAccrued compensation12.2 12.7 Accrued compensation12.6 12.5 
Accrued taxesAccrued taxes2.3 2.1 Accrued taxes1.8 2.1 
Accrued insuranceAccrued insurance8.5 3.0 Accrued insurance0.6 5.6 
Accrued expensesAccrued expenses$34.0 $30.3 Accrued expenses$29.6 $36.1 
Note 87 — Leases
Operating Leases
The Company has operating leases, primarily for real estate and equipment, with terms that vary from one to nine years, included in operating lease costs in the table below. The operating leases are included in Operating leases, right-of-use assets, Other current liabilities and Operating leases, right-of-use obligations in the Condensed Consolidated Balance Sheets.
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Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations. Lease costs and other information related to operating leases for the three and nine months ended September 30, 20222023 and 2021,2022, are as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Short-term lease costsShort-term lease costs$4.4 $1.1 $9.9 $1.9 Short-term lease costs$3.4 $3.3 $13.0 $10.0 
Operating lease costsOperating lease costs$1.1 $0.5 $2.2 $1.3 Operating lease costs$0.8 $1.1 $2.4 $2.2 
Operating cash outflows from operating leasesOperating cash outflows from operating leases$0.7 $0.4 $1.9 $1.1 Operating cash outflows from operating leases$0.7 $0.7 $2.3 $1.9 
Weighted average remaining lease termWeighted average remaining lease term4.7 years5.2 yearsWeighted average remaining lease term3.7 years4.7 years
Weighted average discount rateWeighted average discount rate7.9 %8.8 %Weighted average discount rate8.2 %7.9 %
Aggregate future minimum lease payments under operating leases are as follows (in millions):
For the twelve months ending September 30,For the twelve months ending September 30,TotalFor the twelve months ending September 30,Total
2023$3.0 
202420243.0 2024$3.3 
202520253.0 20253.4 
202620262.9 20263.0 
202720272.3 20272.3 
Thereafter0.3 
202820280.2 
Total future minimum lease paymentsTotal future minimum lease payments14.5 Total future minimum lease payments12.2 
Less: amount representing interestLess: amount representing interest(2.2)Less: amount representing interest(1.7)
Present value of future minimum lease paymentsPresent value of future minimum lease payments12.3 Present value of future minimum lease payments10.5 
Less: current portion of operating lease obligationsLess: current portion of operating lease obligations(2.2)Less: current portion of operating lease obligations(2.5)
Long-term portion of operating lease obligationsLong-term portion of operating lease obligations$10.1 Long-term portion of operating lease obligations$8.0 
Finance Leases
The Company leases certain assets, primarily automobiles, under finance leases with terms that are generally three to five years. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. The finance leases are included in Property and equipment, net, Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.
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Lease costs and other information related to finance leases for the three and nine months ended September 30, 20222023 and 2021,2022, are as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
20222021202220212023202220232022
Amortization of finance leasesAmortization of finance leases$0.5 $0.6 $1.5 $2.2 Amortization of finance leases$1.0 $0.5 $2.7 $1.5 
Interest on lease liabilitiesInterest on lease liabilities$0.2 $0.1 $0.6 $0.3 Interest on lease liabilities$0.5 $0.2 $1.1 $0.6 
Financing cash outflows from finance leasesFinancing cash outflows from finance leases$1.1 $0.2 $3.4 $2.4 Financing cash outflows from finance leases$1.3 $1.1 $4.0 $3.4 
Weighted average remaining lease termWeighted average remaining lease term1.4 years1.5 yearsWeighted average remaining lease term2.1 years1.4 years
Weighted average discount rateWeighted average discount rate2.6 %2.8 %Weighted average discount rate5.2 %2.6 %
Aggregate future minimum lease payments under finance leases are as follows (in millions):
For the twelve months ending September 30,For the twelve months ending September 30,TotalFor the twelve months ending September 30,Total
2023$4.0 
202420242.1 2024$4.7 
202520250.8 20253.3 
202620260.1 20261.7 
202720270.8 
Total future minimum lease paymentsTotal future minimum lease payments7.0 Total future minimum lease payments10.5 
Less: amount representing interestLess: amount representing interest(0.4)Less: amount representing interest(1.2)
Present value of future minimum lease paymentsPresent value of future minimum lease payments6.6 Present value of future minimum lease payments9.3 
Less: current portion of finance lease obligationsLess: current portion of finance lease obligations(3.8)Less: current portion of finance lease obligations(4.0)
Long-term portion of finance lease obligationsLong-term portion of finance lease obligations$2.8 Long-term portion of finance lease obligations$5.3 
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Note 98 — Other Financing Liabilities
During the three and nine months ended September 30, 2021, theThe Company entered into an agreement to sell a parcel ofhas sale, lease-back agreements for land and a building attached thereto, and subsequently leased back the property. The Company received cash of $12.1 million from the sale, and the lease has a 15-year term with an annual rent escalation of two percent per annum.
During the three and nine months ended September 30, 2021, the Company entered into an agreement to sell certain other fixed assets and subsequently leased back such assets.with terms that vary from 18 months to 13 years. The Company received cash of $3.5 million to be paid over 18 to 60 months.
These sales did not qualify for sale accounting, therefore these leases were classified as finance leases and no gain or loss was recorded. The net book value of the assets remained in Property and equipment, net and are depreciating over their original useful lives.
As of September 30, 2022,2023, aggregate future lease payments of the financing liabilities are as follows (in millions):
For the twelve months ending September 30,For the twelve months ending September 30,TotalFor the twelve months ending September 30,Total
2023$0.8 
202420240.6 2024$0.6 
202520250.7 20250.7 
202620260.7 20260.7 
202720270.8 20270.8 
202820280.8 
ThereafterThereafter9.0 Thereafter8.1 
Total future minimum lease paymentsTotal future minimum lease payments$12.6 Total future minimum lease payments$11.7 
Note 109 — Debt
The aggregate carrying amounts, net of issuance costs, of the Company’s debt consists of the following (in millions):
September 30, 2022December 31, 2021September 30, 2023December 31, 2022
Wells Fargo Revolving Credit FacilityWells Fargo Revolving Credit Facility$10.1 $— 
Eclipse Revolving Credit FacilityEclipse Revolving Credit Facility$24.9 $27.0 Eclipse Revolving Credit Facility— 1.4 
Eclipse M&E Term Loan, netEclipse M&E Term Loan, net10.8 12.2 Eclipse M&E Term Loan, net— 10.4 
Eclipse Term Loan B— 11.9 
Secured Promissory NoteSecured Promissory Note7.0 10.4 Secured Promissory Note— 6.1 
Installment PurchasesInstallment Purchases0.6 1.0 Installment Purchases0.2 0.5 
Total DebtTotal Debt43.3 62.5 Total Debt10.3 18.4 
Current portion of long-term debtCurrent portion of long-term debt(30.4)(44.1)Current portion of long-term debt(10.3)(6.8)
Long term-debt, netLong term-debt, net$12.9 $18.4 Long term-debt, net$— $11.6 
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Wells Fargo Bank, N.A. Credit Agreement
On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo Bank, N.A., providing the Company with a secured credit facility (“Wells Fargo Revolving Credit Facility”) in an aggregate principal amount of $75 million. Debt under the Credit Agreement is secured by a lien on substantially all of the Company’s assets. The Company was in compliance with the Credit Agreement covenant by maintaining a fixed charge coverage ratio of greater than 1.0 as of September 30, 2023.
In addition, on September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A. which designated an additional Letter of Credit in the amount of $1.6 million to be utilized for insurance deductibles, as needed. This line of credit falls under the Wells Fargo Revolving Credit Facility aggregate principal amount and matures on September 25, 2024. The interest rate for this Letter of Credit was approximately 1.8% for the month ended September 30, 2023.
The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to repay the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note, as defined below. The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause whereby certain restrictions and covenants become applicable beginning when excess availability is 20% or less. The most significant associated restriction is cash dominion, which permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility, to be instituted if excess availability is 12.5% or less.
Under the Wells Fargo Revolving Credit Facility, the total loan capacity was $75.0 million, which was based on a borrowing base certificate in effect as of September 30, 2023. The Company had $10.1 million in borrowings under the Wells Fargo Revolving Credit Facility and $3.2 million of Letters of Credit open under the facility, leaving a residual $61.7 million available for borrowings as of September 30, 2023. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 7.0% for the nine months ended September 30, 2023.
Eclipse Loan and Security Agreement
On September 27, 2021, the Company entered into a Loan and Security Agreement with Eclipse Business Capital LLC (“EBC”)EBC and Eclipse Business Capital SPV, LLC, as administrative agent, providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”). Debt under the Eclipse Loan and Security Agreement is secured by a lien on substantially all of the Company’s assets. The Company was in compliance with the Eclipse Loan and Security Agreement covenants as of September 30, 2022.
On January 7, 2022, the Company entered into the First Amendment to Loan and Security Agreement with EBC and Eclipse Business Capital SPV, LLC, which increased the Maximum Revolving Credit Facility Amount (as defined in the Amended Loan Agreement (as defined below)) to $65.0 million, among other things.
On September 23, 2022, the Company entered into the AmendedFourth Amendment to the Loan and Security Agreement with EBC and Eclipse Business Capital SPV, LLC,pursuant to which, among other things, designatedSOFR replaced LIBOR as the change in reference rate from LIBOR to SOFR, and designated a Letter of Credit infor interest on borrowings, effective October 1, 2022.
On May 31, 2023, the amount of $1.6 million to be utilized for working capital and general corporate purposes, as needed.
Revolving Credit Facility
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TheCompany extinguished the Eclipse Revolving Credit Facility was drawn in part on September 27, 2021, to repayand Eclipse M&E Term Loan Facility, paying the indebtedness underremaining principal amount of $10.4 million associated with the existing EBC CreditEclipse M&E Term Loan Facility which was terminated in connection with such repayment, and to pay for the fees, costsfive months ended May 31, 2023. Of this amount, $8.4 million was outstanding at the time of debt extinguishment, and expenses incurredrepaid utilizing funds from the Wells Fargo Revolving Credit Facility. The Company recognized a loss on the retirement of debt of $2.4 million in connection with the EBC Credit Facility. The undrawn portioninitiation of the Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments. The Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Revolving Credit Facility, which is scheduled to mature in September 2025. The Revolving Credit Facility includes a subjective acceleration clause and cash dominion provisions that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under theWells Fargo Revolving Credit Facility. The borrowings of the Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet.
Under the Revolving Credit Facility, the total loan capacity was $57.0 million, which was based on a borrowing base certificate in effect as of September 30, 2022. The Company had outstanding borrowings of $24.9 million under the Revolving Credit Facility, leaving a residual $30.5 million available for borrowings as of September 30, 2022. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 4.5% to 5% in excess of the LIBOR Rate and 3.5% to 4% in excess of the Base Rate, dependent on the fixed cost coverage ratio, through October 1, 2022. The weighted average interest rate for the loan was approximately 5.9% forFor the nine months ended September 30, 2022.
The Company capitalized fees of $1.8 million associated with the Revolving Credit Facility, which are included in Other assets in the Condensed Consolidated Balance Sheets. Such fees will continue to be amortized through maturity and are included in Interest expense, net on the Condensed Consolidated Statement of Operations. Unamortized debt issuance costs as of September 30, 2022 were $1.4 million.
On September 14, 2022, the Company issued a letter of credit inmade principal payments totaling $12.4 million towards the amount of $1.6 millionEclipse Term Loan B Facility, which was issued for insurance related purposes. The $1.6fully repaid on August 16, 2022, and $1.5 million was drawn undertowards the Company’s Revolving Credit Facility and thereby reduces the availability thereunder. The Letter of Credit bears an interest rate of 4.5% per annum and is scheduled to mature in September 2023, however the terms of such Letter of Credit provide that it may be automatically extended without written consent of any of the parties thereto.
Eclipse M&E Term Loan Facility
Under the M&E Term Loan Facility, the Company had outstanding borrowings of $11.0 million where the monthly principal and interest installments commenced on March 1, 2022. Borrowings under the M&E Term Loan Facility bear interest at a rate per annum equal to 8% in excess of the LIBOR Rate and 7% in excess of the Base Rate. The weighted average interest rate for the M&E Term Loan was 9.0% for the nine months ended September 30, 2022. The M&E Term Loan Facility is scheduled to mature in September 2025. Any principal amounts repaid may not be reborrowed.
The Company capitalized fees of $0.3 million associated with this M&E Term Loan Facility, which are included in the Consolidated Balance Sheets as a discount to the Long-term debt, net. Such fees will continue to be amortized through maturity and are included in Interest expense, net on the Condensed Consolidated Statement of Operations. Unamortized debt issuance costs as of September 30, 2022 were $0.2 million.
Term Loan B
On October 1, 2021, Term Loan B was finalized in connection with the closing of the Basic Acquisition. Borrowings under Term Loan B bear interest at a rate per annum equal to 13% in excess of the LIBOR Rate and 11% in excess of the Base Rate. Term Loan B was scheduled to mature in September 2022. The weighted average interest rate for Term Loan B was 12.4% through the maturity date of August 16, 2022.
On October 1, 2021, Term Loan B was drawn in full to repay borrowings under the Revolving Credit Facility as of September 30, 2022. Cash proceeds generated from the sale of Basic assets were utilized to make payments on Term Loan B and were not available to be reborrowed. The Company capitalized fees of $0.6 million associated with Term Loan B.
On August 16, 2022, the outstanding balance of Term Loan B was terminated. At this time, the remaining balance of the loan was $0.3 million, which was paid utilizing funds from the Revolving Credit Facility. At the time of the termination, the Company had capitalized fees associated with Term Loan B of $0.1 million, which was charged to interest expense on the Condensed Consolidated Statement of Operations.




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Secured Promissory Note
On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas. In connection with the PerfX Acquisition, on July 8, 2021,acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. Certain of the assets acquired serve as collateral under the Secured(the “Secured Promissory Note. As of September 30, 2022, the aggregate principal balance outstanding was $7.0 million.Note”). Borrowings under the Secured Promissory Note bearbore interest at a rate of 8.5% per annum and iswas scheduled to mature in January 2024.
For the five months ended May 31, 2023, the Company made principal payments to the Secured Promissory Note totaling $6.2 million, of which $5.4 million was related to the debt extinguishment and was repaid utilizing funds from the Wells Fargo Revolving Credit Facility.
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Other Installment Purchases
During the three and nine months ended September 30, 2021 reporting periods, theThe Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral. As of September 30, 2022,2023, the aggregate principal balance outstanding under the Installment Agreements was $0.6$0.2 million and is payable ratably over 36 months from the time of each purchase. For the nine months ended September 30, 2023, the Company paid down the Installment Agreements by $0.3 million. The monthly installment payments contain an imputed interest rate that are consistent with the Company’s incremental borrowing rate and is not significant to the Company.
Debt Obligations and Scheduled Maturities
As of September 30, 2022,2023, aggregate future principal payments of total debt are as follows (in millions):
For the twelve months ending September 30,For the twelve months ending September 30,TotalFor the twelve months ending September 30,Total
2023$30.4 
202420247.1 2024$10.3 
20252.5 
20263.5 
TotalTotal$43.5 Total$10.3 
Note 1110 — Equity
Series A Preferred Stock
On September 10, 2021, the Company consummated the private placement, under the Securities Purchase Agreement, with certain accredited investors of 6.0 million newly issued shares of Series A Convertible Preferred Stock, par value $0.01 per share, in exchange for cash consideration in an aggregate amount of $42 million. The transaction closed on October 1, 2021 and during the nine months ended September 30, 2022, the Preferred Stock automatically converted into shares of the Company’s Class A Common Stock, on April 18, 2022, upon effectiveness of the registration statement filed on Form S-1 by the Company on March 31, 2022 (File No. 001-699-039).
Equity-Based Compensation
In 2017, the Company adopted the Ranger Energy Services, Inc. 2017 Long Term Incentive Plan (the “2017 Plan”). The Company has granted shares of restricted stock (“restricted shares” or “RSAs”) and performance-based restricted stock units (“performance stock units” or “PSUs”) under the 2017 Plan.
Restricted Stock Awards
The Company has granted RSAs, which generally vest in three equal annual installments beginning on the first anniversary date of the grant. During the three and nine months ended September 30, 2022, the Company granted approximately 67,400 and 484,600436,200 RSAs, respectively, with an approximated aggregate value of $4.8 million. During the three and nine months ended September 30, 2021, the Company granted approximately 145,200 and 645,300 RSAs, respectively, with an aggregate value of $4.2$4.7 million. As of September 30, 2022,2023, there was an aggregate $5.2$5.0 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of 1.8 years.
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Performance Stock Units
The performance criteria applicable to performance stock units that have been granted by the Company are based on relative total shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of a designated peer group, and absolute total shareholder return. Generally, the performance stock units are subject to an approximated three-year performance period. During the nine months ended September 30, 2022,2023, the Company granted approximately 91,500110,400 target shares of market-based performance stock units, of which 55,200 were granted at a relative grant date fair value of approximately $15.71 per share and 55,200 were granted at an absolute grant date fair value of approximately $14.11 and $12.69$13.12 per share. Additionally, the Company granted approximately 55,200 target shares of market-based performance stock units with a specified floor price per share, respectively,of which 27,600 were granted a relative grant date fair value of approximately $15.22 and 27,600 were granted at an absolute grant date fair value of approximately $10.85 per share. Shares granted during the nine months ended September 30, 2023 are expected to vest (if at all) following the completion of the applicable performance period on December 31, 2024. During the three and nine months ended September 30, 2021, the Company granted approximately 100,900 and 246,200 target shares, respectively, of market-based performance stock units at a relative and absolute grant date fair value of $9.24 per share and $7.45 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on March 15, 2024.2025. As of September 30, 2022,2023, there was an aggregate $1.4$2.5 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 1.71.5 years.
Share Repurchases
On March 7, 2023, the Company announced a share repurchase program allowing the Company to purchase Class A Common Stock held by non-affiliates, not to exceed $35.0 million in aggregate value. Share repurchases may take place in any transaction form as allowable by the Securities and Exchange Commission. Approval of the program by the Board of Directors of the Company is specific for the next 36 months.
During the three and nine months ended September 30, 2023, the Company repurchased 232,900 and 781,000 shares, respectively, of the Company’s Class A Common Stock for an aggregate $2.7 million and $8.6 million, respectively, on the open market.
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Dividends
On August 7, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of Class A Common Stock. On September 8, 2023, the Company paid dividend distributions totaling $1.2 million to stockholders of record as of the close of business on August 18, 2023. The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.
Warrant from PerfX Acquisition
The PerfX acquisition purchase price included a warrant to acquire a 30% ownership in the XConnect Business (“XConnect”), which expires on July 8, 2031. XConnect is the manufacturer of a perforating gun system developed by the PerfX sellers alongside the PerfX wireline service business. The warrant requires the Company to maintain a specific minimum level of purchases of XConnect’s manufactured products. Should the Company fail to maintain the specified minimum level of purchases, a forfeiture event would occur; however, the Company may elect to cure the forfeiture event through a cash payment to XConnect. If the Company elects to not cure the forfeiture event, the ownership percentage would reduce to 15%. Upon the occurrence of a second uncured forfeiture event, the warrant is deemed to be cancelled. The value of the warrant by the Company is negligible as of September 30, 2023. The Company finalized the purchase price allocation in the fourth quarter of 2021.
Note 1211 — Risk Concentrations
Customer Concentrations 
During the three and nine months ended September 30, 2022, Occidental Petroleum Corporation (“Oxy”)2023, one customer accounted for approximately 11% and 10%, respectively, of the Company’s consolidated revenues, respectively.revenues. As of September 30, 2022,2023, approximately 15%7% of the net accounts receivable balance was due from this customer.
During the three and nine months ended September 30, 2021, two customers, EOG Resources (“EOG”) and Pioneer Natural Resources (“Pioneer”),2022, one customer accounted for 16%approximately 11% and 12%10%, respectively, of the Company’s consolidated revenues. During the nine months ended September 30, 2021, three customers, EOG Resources, Pioneer, and Conoco Phillips accounted for 19%, 11% and 11%, respectively, of the Company’s consolidated revenues.revenue. As of September 30, 2021,2022, approximately 32%15% of the net accounts receivable balance, in aggregate, was due from these customers.this customer.
Note 1312 — Income Taxes
Effective Tax Rate
The Company is a corporation and is subject to U.S. federal income tax. The Company uses an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating the estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and other income tax related estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates. The effective U.S. federal income tax rate applicable to the Company for the nine months ended September 30, 2023 and 2022 was 20.0% and 2021 was 11.6% and (0.2)%, respectively. The Company is subject to the Texas Margin Tax, which requires tax payments at a maximum statutory effective rate of 0.75% on the taxable margin of each taxable entity that does business in Texas.
Tax Attributes
Historically, utilization of a portion of the Company's net operating loss ("NOL") carryforwards has been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986 (“Section 382”), as amended. The Company may be subject to additional limitations due toincurred an ownership changes that could occur.change, triggering another Section 382 loss limitation, during the three months ended June 30, 2023. The Company reviews changesis currently in the ownershipprocess of its shares as such information becomes availableconducting an analysis to determine whether changes that would result in further limitation have occurred. Given the availability and timingfull tax consequence of such ownership informationlimitation and does not expect this will have a material cash impact to taxes for the underlying analysis required to evaluate such changes, there can be no assurance that existing NOL carry-forwards or credits will not be subject to limitation asremainder of the end of a reporting period.2023.
As a result of the initial public offering and subsequent reorganization, and incurred losses, the Company recordedcontinues to experience increasing profits and no longer has a deferred tax asset. However, a valuation allowance (“VA”) has been recorded to reduce the Company’s net deferred tax assets to an amounttrailing 3-year cumulative taxable loss, we currently believe that it is more likely than not to be realized. The VA is based upon the uncertainty of the realization of certain federal and statefully utilize all deferred tax assets related toincluding those associated with the net operating loss carryforwards and othercarry-forward. Accordingly, the Company released all valuation allowances previously recorded resulting in a discrete tax attributes.benefit for the period ended September 30, 2023.
Other Tax Matters
Total income tax expense for the threenine months ended September 30, 20222023 and 20212022 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income or loss primarily due to the release of the valuation allowanceVA on deferred tax assets, the impact of permanent differences between bookpermanently non-deductible expenses, state income taxes and taxable income, and income attributable to noncontrolling interest that is not subject to federal income taxes.certain discrete tax benefits recognized during the nine months ended September 30, 2023.
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The Company is subject to the following material taxing jurisdictions: the United States and Texas. As of September 30, 2022,2023, the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2016 through 2021.
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2022.
The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination. Therefore, as of September 30, 2022,2023, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.
The Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. There have been no material tax impacts to the Condensed Consolidated Financial Statements as it relates to COVID-19 measures. However, the Company has deferred payroll tax payments of $1.1 million as of September 30, 2022 and such amounts are included in Accrued expenses on the Condensed Consolidated Balance Sheet. The Company will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.
In August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA 2022”) (Public Law Number 117-169) into law. ThisThe Company is still evaluating the impact of this legislation is not expectedas it relates to have a material impact on our financial statements.the Employee Retention Credit.
Note 1413 — Earnings (Loss) per Share
Earnings or loss per share is based on the amount of net income or loss allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock. The numerator and denominator used to compute earnings or loss per share were as follows (in millions, except share and per share data):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Income (loss) (numerator):
Basic:
Income (loss) attributable to Ranger Energy Services, Inc.$13.6 $(5.6)$7.5 $(15.8)
Net income (loss) attributable to Class A Common Stock$13.6 $(5.6)$7.5 $(15.8)
Diluted:
Income (loss) attributable to Ranger Energy Services, Inc.$13.6 $(5.6)$7.5 $(15.8)
Net income (loss) attributable to Class A Common Stock$13.6 $(5.6)$7.5 $(15.8)
Weighted average shares (denominator):
Weighted average number of shares - basic24,845,517 11,011,864 22,323,308 9,714,508 
Effect of share-based awards338,550 — 314,149 — 
Weighted average number of shares - diluted25,184,067 11,011,864 22,637,457 9,714,508 
Basic income (loss) per share$0.55 $(0.51)$0.34 $(1.63)
Diluted income (loss) per share$0.54 $(0.51)$0.33 $(1.63)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Income (numerator):
Basic:
Income attributable to Ranger Energy Services, Inc.$9.4 $13.6 $21.7 $7.5 
Net income attributable to Class A Common Stock$9.4 $13.6 $21.7 $7.5 
Diluted:
Income attributable to Ranger Energy Services, Inc.$9.4 $13.6 $21.7 $7.5 
Net income attributable to Class A Common Stock$9.4 $13.6 $21.7 $7.5 
Weighted average shares (denominator):
Weighted average number of shares - basic24,500,607 24,845,517 24,758,890 22,323,308 
Effect of share-based awards386,668 338,550 390,525 314,149 
Weighted average number of shares - diluted24,887,275 25,184,067 25,149,415 22,637,457 
Basic income per share$0.38 $0.55 $0.88 $0.34 
Diluted income per share$0.38 $0.54 $0.86 $0.33 
During the three and nine months ended September 30, 2022, the Company excluded 0.1 million of equity-based awards in calculating diluted income per share, as the effect was anti-dilutive. During the three and nine months ended September 30, 2021, the Company excluded 1.1 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share, as the effect was anti-dilutive.
Note 1514 — Commitments and Contingencies
Legal Matters
From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its condensed consolidated financial position or results of operations.
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Note 1615 — Segment Reporting
The Company’s operations are located in the United States and organized into three reportable segments: High Specification Rigs, Wireline Services and Processing Solutions and Ancillary Services. The reportable segments comprise the structure used by the Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance during the years presented in the accompanying Condensed Consolidated Financial Statements. The CODM evaluates the segments’ operating performance based on multiple measures including Operatingoperating income, rig hours and statestage counts. The tables below present the operating income measurement, as the Company believes this is most consistent with the principals used in measuring the Condensed Consolidated Financial Statements.
The following is a description of each operating segment:
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High Specification Rigs. Provides high-spechigh specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.
Wireline Services.  Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production and pump down lines of business.
Processing Solutions and Ancillary Services.  Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services include equipment rentals, plug and abandonment, logistics, hauling, processing solutions, as well as snubbing and coil tubing.
Other. The Company incurs costs, indicated as Other, that are not allocable to any of the operating segments or lines of business and include corporate general and administrative expenses as well as depreciation of office furniture and fixtures and other corporate assets.
1918


Certain segment information as of September 30, 2022 and December 31, 2021 and for the three and nine months ended September 30, 20222023 and 20212022 is as follows (in millions):
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
Three Months Ended September 30, 2022
Revenues$79.7 $60.6 $36.7 $— $177.0 
Cost of services62.7 49.2 26.2 — 138.1 
General and administrative— — — 11.0 11.0 
Depreciation and amortization6.3 2.8 1.3 0.4 10.8 
Impairment of fixed assets— — — 0.2 0.2 
(Gain) loss on sale of assets— — — (1.1)(1.1)
Operating income (loss)10.7 8.6 9.2 (10.5)18.0 
Interest expense, net— — — 1.8 1.8 
Income tax expense (benefit)— — — 3.4 3.4 
Gain on bargain purchase— — — (0.8)(0.8)
Net income (loss)$10.7 $8.6 $9.2 $(14.9)$13.6 
Capital expenditures$2.8 $0.4 $2.0 $— $5.2 
Nine Months Ended September 30, 2022
Revenues$220.6 $148.7 $84.9 $— $454.2 
Cost of services175.3 134.8 66.0 — 376.1 
General and administrative— — — 32.4 32.4 
Depreciation and amortization20.8 8.3 3.3 1.4 33.8 
Impairment of fixed assets— — — 1.3 1.3 
(Gain) loss on sale of assets— — — — — 
Operating income (loss)24.5 5.6 15.6 (35.1)10.6 
Interest expense, net— — — 5.7 5.7 
Income tax expense (benefit)— — — 1.0 1.0 
Gain on bargain purchase— — — (3.6)(3.6)
Net income (loss)$24.5 $5.6 $15.6 $(38.2)$7.5 
Capital expenditures$5.7 $2.0 $5.2 $— $12.9 
As of September 30, 2022
Accounts receivable, net$49.0 $29.7 $16.3 $— $95.0 
Property and equipment, net$128.8 $34.4 $45.7 $17.3 $226.2 
Total assets$227.3 $77.3 $79.6 $24.0 $408.2 
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
Three Months Ended September 30, 2023
Revenue$79.2 $53.2 $32.0 $— $164.4 
Cost of services63.5 45.8 25.5 — 134.8 
Depreciation and amortization5.1 3.1 2.0 0.4 10.6 
Operating income (loss)10.6 4.3 4.5 (7.7)11.7 
Net income (loss)$10.6 $4.3 $4.5 $(10.0)$9.4 
Capital expenditures$5.6 $9.2 $2.4 $— $17.2 
Nine Months Ended September 30, 2023
Revenue$234.3 $157.6 $93.2 $— $485.1 
Cost of services185.6 140.3 76.1 — 402.0 
Depreciation and amortization14.7 8.4 5.0 1.2 29.3 
Operating income (loss)34.0 8.9 12.1 (22.7)32.3 
Net income (loss)$34.0 $8.9 $12.1 $(33.3)$21.7 
Capital expenditures$11.4 $13.7 $9.5 $— $34.6 
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
Three Months Ended September 30, 2022
Revenue$79.7 $60.6 $36.7 $— $177.0 
Cost of services62.7 49.2 26.2 — 138.1 
Depreciation and amortization6.3 2.8 1.3 0.4 10.8 
Operating income (loss)10.7 8.6 9.2 (10.5)18.0 
Net income (loss)$10.7 $8.6 $9.2 $(14.9)$13.6 
Capital expenditures$2.8 $0.4 $2.0 $— $5.2 
Nine Months Ended September 30, 2022
Revenue$220.6 $148.7 $84.9 $— $454.2 
Cost of services175.3 134.8 66.0 — 376.1 
Depreciation and amortization20.8 8.3 3.3 1.4 33.8 
Operating income (loss)24.5 5.6 15.6 (35.1)10.6 
Net income (loss)$24.5 $5.6 $15.6 $(38.2)$7.5 
Capital expenditures$5.7 $2.0 $5.2 $— $12.9 
Note 16 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date the financial statements are issued. Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.
On October 31, 2023, the Board of Directors declared a quarterly cash dividend of $0.05 per share payable December 1, 2023 to common stockholders of record at the close of business on November 13, 2023.
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High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
Three Months Ended September 30, 2021
Revenues$29.9 $45.4 $6.4 $— $81.7 
Cost of services25.1 44.0 4.9 — 74.0 
General and administrative— — — 7.1 7.1 
Depreciation and amortization4.1 2.7 1.5 0.4 8.7 
Operating income (loss)0.7 (1.3)— (7.5)(8.1)
Interest expense, net— — — 1.2 1.2 
Income tax expense (benefit)— — — (0.2)(0.2)
Net income (loss)$0.7 $(1.3)$— $(8.5)$(9.1)
Capital expenditures$2.2 $0.6 $0.2 $— $3.0 
Nine Months Ended September 30, 2021
Revenues$80.6 $73.1 $16.3 $— $170.0 
Cost of services68.1 70.4 13.7 — 152.2 
General and administrative— — — 16.7 16.7 
Depreciation and amortization13.6 5.5 4.7 1.1 24.9 
Operating income (loss)(1.1)(2.8)(2.1)(17.9)(23.9)
Interest expense, net— — — 2.5 2.5 
Income tax expense (benefit)— — — 0.1 0.1 
Net income (loss)$(1.1)$(2.8)$(2.1)$(20.5)$(26.5)
Capital expenditures$4.6 $1.4 $0.5 $— $6.5 
As of December 31, 2021
Accounts receivable, net$40.9 $26.8 $13.1 $— $80.8 
Property and equipment, net$155.0 $41.5 $48.9 $25.2 $270.6 
Total assets$219.1 $76.4 $69.4 $28.2 $393.1 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the historical financial statements and related notes included in Part I, Item 1. Financial Statements of this Quarterly Report on Form 10-Q (the “Quarterly Report”). This discussion contains “forward-looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, market prices for oil and natural gas, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. Please read the Cautionary NoteStatement Regarding Forward-Looking Statements. Also, please read the risk factors and other cautionary statements described under Part II, Item 1A.-“Risk“Risk Factors” included elsewhere in this Quarterly Report and in our Annual Report filed on Form 10-K for the year ended December 31, 20212022 (our “Annual Report”). We assume no obligation to update any of these forward-looking statements. Except as otherwise indicated or required by the context, all references in this Quarterly Report to the “Company,” “Ranger,” “we,” “us,” or “our” relate to Ranger Energy Services, Inc. (“Ranger, Inc.”) and its consolidated subsidiaries.
How We Evaluate Our Operations
Our service offerings consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as well installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:
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High Specification Rigs. Provides high-specification (“high-spec”)high specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.
Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production and pump down lines of business.service lines.
Processing Solutions and Ancillary Services. Provides othercomplimentary services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services primarily include equipment rentals, coil tubing, plug and abandonment, logistics hauling, processing solutions, as well as snubbing, and coil tubing.processing solutions.
Other. Other represents costs not allocable to the reporting segments and includes corporate general and administrative expense and depreciation of corporate furniture and fixtures, amortization, impairments, debt retirements and other items similar in nature.
For additional financial information about our segments, please see “Item 1. Financial Information — Note 1615 — Segment Reporting.”
Recent Events andBusiness Outlook
The outlook for our business remains stable. Despite drilling and completion activity declines in the first three quarters of 2023, we have continued to show mild increases in operating activity through redeployment of idled assets. Going forward, we anticipate the global economy and, commodity prices as a consequence, will show further stabilization and eventual improvement. OPEC+ production cuts have continued and are expected to keep commodity prices at a stable level through the remainder of 2023. Furthermore, both EIA and OPEC+ are projecting for oil demand to rise in 2024 driving continued investment and growth in the sector. Consolidation occurring at the Exploration and Production operator level within the energy industry is expected to impact U.S. onshore activity levels. The full extent of this impact is not yet known, but the Company recognizesexpects that it may be varied and include favorable preference from larger organizations where the various global events—including COVID-19,well-established processes and systems of Ranger are more valued over the ongoing conflictlonger term, while also potentially involving a temporary reduction in Ukraine, rising rates of inflation andactivity levels in the possibility of recession—that have an impact on its operational and financial performance. Significant progress has been made to combat COVID-19 and its multiple variants, however, it remains a global challenge and continuesnear term.
The Company also believes the current geopolitical events will continue to have an impact on our financial results. The direct impact to our operations began to take affect atindustry. Considering the close of the first quarter ended March 31, 2020, and has continued through September 30, 2022, however the extent of the COVID-19 outbreak on the Company’s operational and financial performance will significantly depend on further developments, including the duration and spread of the outbreak and continued impact on our personnel, customer activity and third-party providers. Although commodity prices were lower in the quarter ended September 30, 2022, they, as well as our stock price and operational activity, have improved during the nine months ended September 30, 2022. We expect this global market volatility to continue at least until the outbreak of COVID-19, including any new variants, stabilizes, if not longer.
Heightened levels of inflationrapidly evolving events and the potential worseninginterplay of macro-economic conditions, including the possibility of recession, may present a risk for our business, our supplierssupply and the stability of the broaderdemand within oil and gas industry. Due to the cyclical nature of the oil and gas industry, fluctuating demand for oilfield goods and services can put pressure on the pricing structure within our industry. As commodity prices rise, the cost of oilfield goods and services generally also increase, while during periods of commodity price declines, oilfield costs typically lag and do not adjust downward as fast as oil prices do. In addition, the U.S. inflation rate has been steadily increasing since 2021 and into 2022. These inflationary pressures may also result in increases to the costs of our goods, services and personnel, which would in turn cause our capital expenditures and operating costs to rise. Sustained levels of high inflation will continue to cause the U.S. Federal Reserve and other central banks to increase interest rates, which could have the effects of raining the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt our business.
The U.S. government implemented a number of programs in the early wake of the impacts of COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the largest relief package in U.S. history, and the Main Street Lending Program established by the Federal Reserve. We qualified for limited aid under the CARES Act and have deferred payroll tax payments of $1.1 million as of September 30, 2022 under the CARES Act, which will become due on December 31, 2022.
In August 2022, President Biden signed the Inflation Reduction Act of 2022 (Public Law Number 117-169) into law. This legislation is not expected to have a material impact on our financial statements.
In February 2022, Russia invaded neighboring Ukraine. The conflict has caused turmoil in global markets, resulting in higher oil prices, and injected even more uncertainty into a worldwide economy recovering from the effects of COVID-19. Given the evolving conflict, there are manycommodities sector, numerous unknown factors and events that could materially impact our operations. These events have already, and are likely to continue, to impactinfluencing commodity prices, whichcausing volatility that could have a material effect on our earnings, cash flows, and financial condition. In the short-term, commodity price fluctuations are highly uncertain. Actual price outcomes will be dependent on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia’s oil production or the sale of Russia’s oil in the global market. In addition, the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months.
Financial Metrics
How We Generate RevenuesRevenue
Rig hours and stage counts, as it relates to our High Specification Rigs and Wireline Services segments, respectively, are important indicators of our activity levels and profitability. The stage count metric has become increasingly important with the update in our external reporting segments. Rig hours represent the aggregate number of hours that our well service rigs actively worked, whereas stage counts represent the number of completed stages during the periods presented. Generally, during thepresented for
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the completion service line within our Wireline Services segment. Generally, during the period our services are being provided, our customers are billed on an hourly basis for our high-spechigh specification rig services or, asservices. As it relates to our wireline services, theyservices are billed upon the earlier of the completion of the well, on a monthly basis, or on a monthlyper job basis. The rates for such rig hours and completed wells at which the customer is billed is generally predetermined based upon a contractual agreement.
Costs of Conducting Our Business
The principal costs associated with conducting our business are personnel, repairs and maintenance, general and administrative, and depreciation expense.
Cost of Services. OurThe primary costs associated with our cost of services are related to personnel expenses, repairs and maintenance of our fixed assets and, additionally, as it relates to our Wireline Services segment, perforating and gun costs. A significant portion of these expenses are variable, and therefore typically managed based on industry conditions and demand for our services. Further, there is generally a correlation between our revenuesrevenue generated and personnel and repairs and maintenance costs, which are dependent upon the operational activity.
Personnel costs associated with our operational employees represent athe most significant cost of our business. A substantial portion of our labor costs is attributable to our field crews and is partly variable based on the requirements of specific customers. A key component of personnel costs relates to the ongoing training of our employees, which improves safety rates and reduces attrition.
General & Administrative. As described above generalGeneral and administrative expenses are corporate in nature and are included within the Other segment.Other. These costs include the majority of centrally-located company management and administrative personnel and are not attributable to any of our lines of businesses nor reporting segments.
Operating Income or Loss
We analyze our operating income or loss by segment, which we have defined as revenuesrevenue less cost of services and depreciation expense. We believe this is a key financial metric as it provides insight on profitability and operational performance based on the historical cost basis of our assets.
Adjusted EBITDA
We view Adjusted EBITDA, which is a non‑GAAP financial measure, as an important indicator of performance. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, (benefit), depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, gain andor loss on disposal of assets, significant and unusual legal fees and settlements, and other non‑cash and certain other items that we do not view as indicative of our ongoing performance. See “—Results of Operations” and “—Note Regarding Non‑GAAP Financial Measure” for more information and reconciliations of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP.
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Results of Operations
Three Months Ended September 30, 20222023 compared to Three Months Ended September 30, 20212022
The following is an analysis of our operating results. See “—How We Evaluate Our Operations” for definitions of rig hours, stage counts and other analogous information.information, as well as key operating metrics.
Three Months EndedThree Months Ended
September 30,VarianceSeptember 30,Variance
20222021$%20232022$%
Revenues
RevenueRevenue
High specification rigsHigh specification rigs$79.7 $29.9 $49.8 167 %High specification rigs$79.2 $79.7 $(0.5)(1)%
Wireline servicesWireline services60.6 45.4 15.2 33 %Wireline services53.2 60.6 (7.4)(12)%
Processing solutions and ancillary servicesProcessing solutions and ancillary services36.7 6.4 30.3 473 %Processing solutions and ancillary services32.0 36.7 (4.7)(13)%
Total revenues177.0 81.7 95.3 117 %
Total revenueTotal revenue164.4 177.0 (12.6)(7)%
Operating expensesOperating expensesOperating expenses
Cost of services (exclusive of depreciation and amortization):Cost of services (exclusive of depreciation and amortization):Cost of services (exclusive of depreciation and amortization):
High specification rigsHigh specification rigs62.7 25.1 37.6 150 %High specification rigs63.5 62.7 0.8 %
Wireline servicesWireline services49.2 44.0 5.2 12 %Wireline services45.8 49.2 (3.4)(7)%
Processing solutions and ancillary servicesProcessing solutions and ancillary services26.2 4.9 21.3 435 %Processing solutions and ancillary services25.5 26.2 (0.7)(3)%
Total cost of servicesTotal cost of services138.1 74.0 64.1 87 %Total cost of services134.8 138.1 (3.3)(2)%
General and administrativeGeneral and administrative11.0 7.1 3.9 55 %General and administrative7.0 11.0 (4.0)(36)%
Depreciation and amortizationDepreciation and amortization10.8 8.7 2.1 24 %Depreciation and amortization10.6 10.8 (0.2)(2)%
Impairment of fixed assetsImpairment of fixed assets0.2 — 0.2 100 %Impairment of fixed assets0.4 0.2 0.2 100 %
Gain (loss) on sale of assets(1.1)— (1.1)(100)%
Gain on sale of assetsGain on sale of assets(0.1)(1.1)1.0 (91)%
Total operating expensesTotal operating expenses159.0 89.8 69.2 77 %Total operating expenses152.7 159.0 (6.3)(4)%
Operating income (loss)18.0 (8.1)26.1 (322)%
Operating incomeOperating income11.7 18.0 (6.3)(35)%
Other (income) expensesOther (income) expensesOther (income) expenses
Interest expense, netInterest expense, net1.8 1.2 0.6 50 %Interest expense, net0.7 1.8 (1.1)(61)%
Gain on bargain purchase, net of taxGain on bargain purchase, net of tax(0.8)— (0.8)(100)%Gain on bargain purchase, net of tax— (0.8)0.8 (100)%
Total other (income) expensesTotal other (income) expenses1.0 1.2 (0.2)(17)%Total other (income) expenses0.7 1.0 (0.3)(30)%
Income (loss) before income tax benefit17.0 (9.3)26.3 (283)%
Tax (benefit) expense3.4 (0.2)3.6 (1800)%
Net income (loss)$13.6 $(9.1)$22.7 (249)%
Income before income tax expenseIncome before income tax expense11.0 17.0 (6.0)(35)%
Income tax expenseIncome tax expense1.6 3.4 (1.8)(53)%
Net incomeNet income$9.4 $13.6 $(4.2)(31)%
Revenues.Revenue. RevenuesRevenue for the three months ended September 30, 2022 increased $95.32023 decreased $12.6 million, or 117%7%, to $177.0$164.4 million from $81.7$177.0 million for the three months ended September 30, 2021.2022. The change in revenuesrevenue by segment was as follows:
High Specification Rigs. High Specification Rig revenue for the three months ended September 30, 2022 increased $49.82023 decreased $0.5 million, or 167%1%, to $79.7$79.2 million from $29.9$79.7 million for the three months ended September 30, 2021.2022. The increase in rig services revenue included a 140% increase indecrease is attributable to decreased total rig hours to 123,000112,400 for the three months ended September 30, 2023 from 123,000 for three months ended September 30, 2022 from 51,200due to reduced rig activity in the South region offset by rig activity increases in other regions and improved pricing, as the average revenue per rig hour increased 8% to $700 for the three months ended September 30, 2021. The average revenue per rig hour increased 11% to2023 from $648 for the three months ended September 30, 2022 from $584 for the three months ended September 30, 2021. Of the total segment revenue increase, $40.5 million is attributable to the assets acquired in the Basic Acquisition. The increase in revenue, rig hours and average revenue per rig hour is also related to increased crude oil pricing driving higher levels of oilfield activity.2022.
Wireline Services. Wireline Services revenue for the three months ended September 30, 2022 increased $15.22023 decreased $7.4 million, or 33%12%, to $60.6$53.2 million from $45.4$60.6 million for the three months ended September 30, 2021.2022. The increased wireline servicesdecreased revenue was primarily attributable to a decrease in completion services revenue of $4.3$6.5 million related to increased pricing and the addition of standby charges, offset bywhere there was a 19%26% decrease in completed stage counts to 6,800 for the three months ended September 30, 2023 from 9,200 for the three months ended September 30, 2022 from 11,400 for the three months ended September 30, 2021. Additional increased wireline services revenue was attributable to production services of $7.3 million, primarily related to increased pricing and utilization of assets from the acquisition of Patriot and PerfX.2022.
Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services revenue for the three months ended September 30, 2022 increased $30.32023 decreased $4.7 million, or 473%13%, to $36.7$32.0 million from $6.4$36.7 million for the three months ended September 30, 2022. The decrease in revenue is primarily attributable to decreased activity in our rentals service, coil tubing service lines, and snubbing services, which amounted to decreased revenue of $2.3 million, $1.8 million, and $1.4 million, respectively. These activity declines were partially offset by increased revenues within plugging and abandonment services of $0.7 million.
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September 30, 2021. Of the total segment revenue increase, $20.3 million is attributable to the Basic Acquisition. The increase in processing solutions and ancillary services is primarily attributable to our coil tubing, equipment rentals and plugging and abandonment services, which amounted to $12.7 million, $9.8 million and $7.5 million, respectively.
Cost of services (exclusive of depreciation and amortization). Cost of services (exclusive of depreciation and amortization) for the three months ended September 30, 2022 increased $64.12023 decreased $3.3 million, or 87%2%, to $138.1$134.8 million from $74.0$138.1 million for the three months ended September 30, 2021.2022. As a percentage of revenue, cost of services was 78%82% and 91%78% for the three months ended September 30, 20222023 and 2021,2022, respectively. The change in cost of services by segment was as follows:
High Specification Rigs. High Specification Rig cost of services for the three months ended September 30, 20222023 increased $37.6$0.8 million, or 150% to $62.7$63.5 million from $25.1$62.7 million for the three months ended September 30, 2021. The increase was primarily attributable to an increase in variable expenses, notably employee related labor costs and fuel costs, which amounted to $22.4 million and $3.2 million, respectively, coupled with a $4.2 million increase in expense related to general operating expenses. Additionally, the increase corresponds with the increase in rig hours and revenues. Of the segment cost2022. Costs of services $31.9 million is attributableincreased year over year primarily due to the Basic Acquisition.labor and other cost increases year over year due to inflationary pressures.
Wireline Services. Wireline Services cost of services for the three months ended September 30, 2022 increased $5.22023 decreased $3.4 million, or 12%7%, to $49.2$45.8 million from $44.0$49.2 million for the three months ended September 30, 2021.2022. Wireline Services cost of services as a percentage of revenue decreasedincreased from 97% for the three months ended September 30, 2021 to 81% for the three months ended September 30, 2022 to 86% for the three months ended September 30, 2023 due to the increase in revenues attributed to increased utilizationdecreased activity levels. Increasing costs as a percent of assets from the acquisition of Patriot and PerfX. The increase was primarily attributable to increased employee costs of $3.5 million primarilyrevenue is due to the acquisitions of PerfX and Patriot, and, to a lesser extent, maintenance costs of approximately $2.1 million.reduction in operating leverage.
Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services cost of services for the three months ended September 30, 2022 increased $21.32023 decreased $0.7 million, or 435%3%, to $26.2$25.5 million from $4.9$26.2 million for the three months ended September 30, 2021.2022. The increasedecrease was primarily attributable to increaseddecreased employee, fuel, and maintenance costs with the upturndownturn in operational activity which amounted to approximately $9.4 million and $3.6 million, respectively. Additionally, cost of service expense increased by $3.7 million primarily related to increased activity in our rental, coil tubing, and plugging and abandonmentsnubbing services. Of the segment cost of services increase, $16.5 million is attributable to the Basic Acquisition.
General & Administrative. General and administrative expenses for the three months ended September 30, 2022 increased $3.92023 decreased $4.0 million, or 55%36%, to $7.0 million from $11.0 million from $7.1 million.for the three months ended September 30, 2022. The increasedecrease in general and administrative expenses is primarily due to corporate employee costs added subsequentdecreased in accounting, legal, and professional expenses related to the Basic Acquisition and increased professional fees duringacquisition for the three months ended September 30, 2022.2022, coupled with decreased employee costs during the three months ended September 30, 2023.
Depreciation and Amortization. Depreciation and amortization for the three months ended September 30, 2022 increased $2.12023 decreased $0.2 million, or 24%2%, to $10.8$10.6 million from $8.7$10.8 million for the three months ended September 30, 2021.2022. The decrease was attributable to assets disposed of during three months ended September 30, 2023.
Impairment of Fixed Assets. Impairment of fixed assets for the three months ended September 30, 2023 increased $0.2 million, or 100%, to $0.4 million from $0.2 million for the three months ended September 30, 2022. The increase was attributable to assets acquired through the business combinationsimpairment recognized on a property during the last half ofthree months ended September 30, 2023, which was greater than the year ended December 31, 2021. This was partially offset by depreciation expense related to fixedimpairment recognized on certain assets disposed of during the three months ended September 30, 2022.
Interest Expense, net. Interest expense, net for the three months ended September 30, 2022 increased $0.62023 decreased $1.1 million, or 50%61%, to $1.8$0.7 million from $1.2$1.8 million for the three months ended September 30, 2021.2022. The increasedecrease to net interest expense was attributable to the increased principal balance on our Revolving Credit Facility (as defined below)reduced borrowings.
Income Tax Expense. Income tax expense for the three months ended September 30, 2023 decreased $1.8 million, or 53%, higher interest rates on each tranche ofto $1.6 million from $3.4 million for the Loanthree months ended September 30, 2022. The decrease in tax expense was attributable to the increase in net operating loss utilization in the current quarter, coupled with a decrease in net income.
Net Income. Net income for the three months ended September 30, 2023 decreased $4.2 million, or 31%, to $9.4 million from $13.6 million for the three months ended September 30, 2022. The decrease in net income was primarily driven by reduced activity in wireline and Security Agreement that closed on September 27, 2021.processing and ancillary services segments.
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Nine Months Ended September 30, 20222023 compared to Nine Months Ended September 30, 20212022
The following is an analysis of our operating results. See “—How We Evaluate Our Operations” for definitions of rig hours, stage counts and other analogous information.information, as well as key operating metrics.
Nine Months EndedNine Months Ended
September 30,VarianceSeptember 30,Variance
20222021$%20232022$%
Revenues
RevenueRevenue
High specification rigsHigh specification rigs$220.6 $80.6 $140.0 174 %High specification rigs$234.3 $220.6 $13.7 %
Wireline servicesWireline services148.7 73.1 75.6 103 %Wireline services157.6 148.7 8.9 %
Processing solutions and ancillary servicesProcessing solutions and ancillary services84.9 16.3 68.6 421 %Processing solutions and ancillary services93.2 84.9 8.3 10 %
Total revenues454.2 170.0 284.2 167 %
Total revenueTotal revenue485.1 454.2 30.9 %
Operating expensesOperating expensesOperating expenses
Cost of services (exclusive of depreciation and amortization):Cost of services (exclusive of depreciation and amortization):Cost of services (exclusive of depreciation and amortization):
High specification rigsHigh specification rigs175.3 68.1 107.2 157 %High specification rigs185.6 175.3 10.3 %
Wireline servicesWireline services134.8 70.4 64.4 91 %Wireline services140.3 134.8 5.5 %
Processing solutions and ancillary servicesProcessing solutions and ancillary services66.0 13.7 52.3 382 %Processing solutions and ancillary services76.1 66.0 10.1 15 %
Total cost of servicesTotal cost of services376.1 152.2 223.9 147 %Total cost of services402.0 376.1 25.9 %
General and administrativeGeneral and administrative32.4 16.7 15.7 94 %General and administrative22.7 32.4 (9.7)(30)%
Depreciation and amortizationDepreciation and amortization33.8 24.9 8.9 36 %Depreciation and amortization29.3 33.8 (4.5)(13)%
Impairment of fixed assetsImpairment of fixed assets1.3 — 1.3 100 %Impairment of fixed assets0.4 1.3 (0.9)(69)%
Gain (loss) on sale of assets— 0.1 (0.1)(100)%
Gain on sale of assetsGain on sale of assets(1.6)— (1.6)100 %
Total operating expensesTotal operating expenses443.6 193.9 249.7 129 %Total operating expenses452.8 443.6 9.2 %
Operating income (loss)10.6 (23.9)34.5 (144)%
Operating incomeOperating income32.3 10.6 21.7 (205)%
Other (income) expensesOther (income) expensesOther (income) expenses
Interest expense, netInterest expense, net5.7 2.5 3.2 128 %Interest expense, net2.8 5.7 (2.9)(51)%
Loss on debt retirementLoss on debt retirement2.4 — 2.4 (100)%
Gain on bargain purchase, net of taxGain on bargain purchase, net of tax(3.6)— (3.6)(100)%Gain on bargain purchase, net of tax— (3.6)3.6 (100)%
Total other (income) expensesTotal other (income) expenses2.1 2.5 (0.4)(16)%Total other (income) expenses5.2 2.1 3.1 148 %
Income (loss) before income tax (benefit) expense8.5 (26.4)34.9 (132)%
Tax expense1.0 0.1 0.9 900 %
Net income (loss)$7.5 $(26.5)$34.0 (128)%
Income before income tax expenseIncome before income tax expense27.1 8.5 18.6 219 %
Income tax expenseIncome tax expense5.4 1.0 4.4 440 %
Net incomeNet income$21.7 $7.5 $14.2 189 %
Revenues.Revenue. RevenuesRevenue for the nine months ended September 30, 20222023 increased $284.2$30.9 million, or 167%7%, to $454.2$485.1 million from $170.0$454.2 million for the nine months ended September 30, 2021.2022. The change in revenuesrevenue by segment was as follows:
High Specification Rigs. High Specification Rig revenue for the nine months ended September 30, 20222023 increased $140.0$13.7 million, or 174%6%, to $220.6$234.3 million from $80.6$220.6 million for the nine months ended September 30, 2021.2022. The increase in rig services revenue included an increase in the average revenue per rig hour by 12% to $693 from $621 for the nine months ended September 30, 2022, offset by a 143% increase5% decrease in total rig hours to 338,100 for the nine months ended September 30, 2023 from 355,400 for the nine months ended September 30, 2022 from 146,300 for the nine months ended September 30, 2021. The average revenue per rig hour increased 13% to $621 from $551 for the nine months ended September 30, 2021. Of the total segment revenue increase, $112.4 million is attributable2022. Revenue improvement was driven by pricing improvements year over year offset by a decrease in activity levels during 2023 due to the assets acquired in the Basic Acquisition.redeployment of rigs between customers and regions.
Wireline Services. Wireline Services revenue for the nine months ended September 30, 20222023 increased $75.6$8.9 million, or 103%6%, to $148.7$157.6 million from $73.1$148.7 million for the nine months ended September 30, 2021.2022. The increasedincrease wireline services revenue was primarily attributable to production and pump down services accounting for $5.8 million and $4.5 million, respectively, and related to both increased pricing and utilization of assets. This is offset by decreased wireline services revenue within the completion services of $47.3service line totaling $1.4 million which includedcoupled with a 43% increase16% decrease in completed stage counts to 20,600 for the nine months ended September 30, 2023 from 24,600 for the nine months ended September 30, 2022 from 17,200 for the nine months ended September 30, 2021. Additional increased wireline services revenue was attributable to production services of $20.0 million, primarily related to increased pricing and utilization of assets from the acquisition of Patriot and PerfX.2022.
Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services revenue for the nine months ended September 30, 20222023 increased $68.6$8.3 million, or 421%10%, to $84.9$93.2 million from $16.3$84.9 million for the nine months ended September 30, 2021. Of the total segment2022. The increase in processing solutions and ancillary services revenue increase, $44.9 million is attributable to the Basic Acquisition. The increaseincreases of
2624


in processing solutions and ancillary services is primarily attributable to a $26.2 million increase in our coil tubing services, a $23.3 million increase in our equipment rentals services and a $19.2$5.6 million in our plugging and abandonment service lines, $4.2 million in our coil tubing service line, and $1.0 million in our logistics services.
Cost of services (exclusive of depreciation and amortization). Cost of services for the nine months ended September 30, 20222023 increased $223.9$25.9 million, or 147%7%, to $376.1$402.0 million from $152.2$376.1 million for the nine months ended September 30, 2021.2022. As a percentage of revenue, cost of services was 83% and 90% for both the nine months ended September 30, 20222023 and 2021, respectively.2022. The change in cost of services by segment was as follows:
High Specification Rigs. High Specification Rig cost of services for the nine months ended September 30, 20222023 increased $107.2$10.3 million, or 157%6%, to $175.3$185.6 million from $68.1$175.3 million for the nine months ended September 30, 2021.2022. The increase was primarily attributable to an increase in variable expenses, notablymost significant of which is employee-related labor costs and repair and maintenance costs, and general operating expensesaccounting for of $63.9 million, $9.7$7.1 million and $13.5$1.1 million, respectively. Additionally, the increase corresponds with the increase in rig hours and revenues. Of the segment cost of services, $87.3 million is attributable to the Basic Acquisition.
Wireline Services. Wireline Services cost of services for the nine months ended September 30, 20222023 increased $64.4$5.5 million, or 91%4%, to $134.8$140.3 million from $70.4$134.8 million for the nine months ended September 30, 2021. The increase was primarily attributable to the wireline business, which includes activity2022. Increase in costs from the acquisition of Patriotproduction and PerfX during the nine months ended September 30, 2022. The completion wireline activitypump down service lines accounted for approximately $57.0$6.2 million and $3.4 million, respectively, of the segment cost of services increase. These increases are offset by a decrease in costs from the completion services lines by approximately $4.1 million.
Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services cost of services for the nine months ended September 30, 20222023 increased $52.3$10.1 million, or 382%15%, to $66.0$76.1 million from $13.7$66.0 million for the nine months ended September 30, 2021.2022. The increase was primarily attributable to increased employee labor costs and maintenance and repairother costs associated with the upturn inhigher operational activity, which amounted to $23.7$4.0 million and $8.8$4.9 million, respectively. Of the segment cost of services increase, $38.9 million is attributable to the Basic Acquisition.
General & Administrative. General and administrative expenses for the nine months ended September 30, 2022 increased $15.72023 decreased $9.7 million, or 94%30%, to $32.4$22.7 million from $16.7$32.4 million. The increasedecrease in general and administrative expenses is primarily due to corporate employeehigher compensation costs added subsequent toin the Basic Acquisition,prior year, coupled with accounting, legal, and professional fees and transactional costs incurred during the nine months ended September 30, 2022 both largely related to the Basic Acquisition.acquisition.
Depreciation and Amortization. Depreciation and amortization for the nine months ended September 30, 2022 increased $8.92023 decreased $4.5 million, or 36%13%, to $33.8$29.3 million from $24.9$33.8 million for the nine months ended September 30, 2021.2022. The increasedecrease was attributable to assets acquired throughdisposed of during 2022.
Impairment of Fixed Assets. Impairment of fixed assets for the business combinationsnine months ended September 30, 2023 decreased $0.9 million, or 69%, to $0.4 million from $1.3 million for the nine months ended September 30, 2022. The decrease was attributable impairment recognized on a property during the last half ofnine months ended September 30, 2023, which was less than the year ended December 31, 2021. This was partially offset by depreciation expense related to fixedimpairment recognized on certain assets disposed of during the nine months ended September 30, 2022.
Interest Expense, net. Interest expense, net for the nine months ended September 30, 2022 increased $3.22023 decreased $2.9 million, or 128%51%, to $5.7$2.8 million from $2.5$5.7 million for the nine months ended September 30, 2021.2022. The increasedecrease to net interest expense was attributable to the decreased levels of borrowings year over year.
Income Tax Expense. Income tax expense for the nine months ended September 30, 2023 increased principal balance on our Revolving Credit Facility (as defined below)$4.4 million, or 440%, higher interest rates on each tranche ofto $5.4 million from $1.0 million for the Loannine months ended September 30, 2022. The increase in tax expense was attributable to the increase in income from the prior year.
Net Income. Net income for the nine months ended September 30, 2023 increased $14.2 million, or 189%, to $21.7 million from $7.5 million for the nine months ended September 30, 2022. The increase in net income was primarily driven by an increase in operating activity and Security Agreement that closed on September 27, 2021,pricing improvements across high specification rigs and interest paid on the Secured Promissory Note issued in connection with the PerfX Acquisition.wireline services segments.
Note Regarding Non-GAAP Financial Measure
Adjusted EBITDA is not a financial measure determined in accordance with U.S. GAAP. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, (benefit), depreciation and amortization, equity-based compensation, acquisition-related and severance costs, gain or loss on disposal of assets, legal fees and settlements, and other non-cash andor certain other items that we do not view as indicative of our ongoing performance.
25


We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with U.S. GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of net income (loss) to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
2726


Three Months Ended September 30, 20222023 compared to Three Months Ended September 30, 20212022
The following is an analysis of our Adjusted EBITDA. See “Item 1. Financial Information—Note 15—Segment Reporting” and “—Results of Operations” for further details.details (in millions).
Three Months Ended September 30, 2022
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotalHigh Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
(in millions)Three Months Ended September 30, 2023
Net income (loss)Net income (loss)$10.7 $8.6 $9.2 $(14.9)$13.6 Net income (loss)$10.6 $4.3 $4.5 $(10.0)$9.4 
Interest expense, netInterest expense, net— — — 1.8 1.8 Interest expense, net— — — 0.7 0.7 
Tax (benefit) expense— — — 3.4 3.4 
Income tax expenseIncome tax expense— — — 1.6 1.6 
Depreciation and amortizationDepreciation and amortization6.3 2.8 1.3 0.4 10.8 Depreciation and amortization5.1 3.1 2.0 0.4 10.6 
EBITDAEBITDA15.7 7.4 6.5 (7.3)22.3 
Impairment of fixed assetsImpairment of fixed assets— — — 0.2 0.2 Impairment of fixed assets— — — 0.4 0.4 
Equity based compensationEquity based compensation— — — 1.1 1.1 Equity based compensation— — — 1.3 1.3 
Loss on retirement of debt— — — — — 
Gain on disposal of property and equipmentGain on disposal of property and equipment— — — (1.1)(1.1)Gain on disposal of property and equipment— — — (0.1)(0.1)
Bargain purchase gain, net of tax— — — (0.8)(0.8)
Severance and reorganization costs— — — 1.1 1.1 
Acquisition related costsAcquisition related costs— — — — — Acquisition related costs— — — 0.1 0.1 
Legal fees and settlements— — — 0.2 0.2 
Adjusted EBITDAAdjusted EBITDA$17.0 $11.4 $10.5 $(8.6)$30.3 Adjusted EBITDA$15.7 $7.4 $6.5 $(5.6)$24.0 
Three Months Ended September 30, 2021
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotalHigh Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
(in millions)Three Months Ended September 30, 2022
Net income (loss)Net income (loss)$0.7 $(1.3)$— $(8.5)$(9.1)Net income (loss)$10.7 $8.6 $9.2 $(14.9)$13.6 
Interest expense, netInterest expense, net— — — 1.2 1.2 Interest expense, net— — — 1.8 1.8 
Tax (benefit) expense— — — (0.2)(0.2)
Income tax expenseIncome tax expense— — — 3.4 3.4 
Depreciation and amortizationDepreciation and amortization4.1 2.7 1.5 0.4 8.7 Depreciation and amortization6.3 2.8 1.3 0.4 10.8 
EBITDAEBITDA17.0 11.4 10.5 (9.3)29.6 
Impairment of fixed assetsImpairment of fixed assets— — — — — Impairment of fixed assets— — — 0.2 0.2 
Equity based compensationEquity based compensation— — — 0.3 0.3 Equity based compensation— — — 1.1 1.1 
Loss on retirement of debt— — — 0.2 0.2 
Gain on disposal of property and equipmentGain on disposal of property and equipment— — — — — Gain on disposal of property and equipment— — — (1.1)(1.1)
Bargain purchase gain, net of taxBargain purchase gain, net of tax— — — — — Bargain purchase gain, net of tax— — — (0.8)(0.8)
Severance and reorganization costsSeverance and reorganization costs— — — 0.5 0.5 Severance and reorganization costs— — — 1.1 1.1 
Acquisition related costs— — — 0.8 0.8 
Legal fees and settlementsLegal fees and settlements— — — 0.9 0.9 Legal fees and settlements— — — 0.2 0.2 
Adjusted EBITDAAdjusted EBITDA$4.8 $1.4 $1.5 $(4.4)$3.3 Adjusted EBITDA$17.0 $11.4 $10.5 $(8.6)$30.3 
2827


Variance ($)
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotalHigh Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
(in millions)Variance ($)
Net income (loss)Net income (loss)$10.0 $9.9 $9.2 $(6.4)$22.7 Net income (loss)$(0.1)$(4.3)$(4.7)$4.9 $(4.2)
Interest expense, netInterest expense, net— — — 0.6 0.6 Interest expense, net— — — (1.1)(1.1)
Tax (benefit) expense— — — 3.6 3.6 
Income tax expenseIncome tax expense— — — (1.8)(1.8)
Depreciation and amortizationDepreciation and amortization2.2 0.1 (0.2)— 2.1 Depreciation and amortization(1.2)0.3 0.7 — (0.2)
EBITDAEBITDA(1.3)(4.0)(4.0)2.0 (7.3)
Impairment of fixed assetsImpairment of fixed assets— — — 0.2 0.2 Impairment of fixed assets— — — 0.2 0.2 
Equity based compensationEquity based compensation— — — 0.8 0.8 Equity based compensation— — — 0.2 0.2 
Loss on retirement of debt— — — (0.2)(0.2)
Gain on disposal of property and equipmentGain on disposal of property and equipment— — — (1.1)(1.1)Gain on disposal of property and equipment— — — 1.0 1.0 
Bargain purchase gain, net of taxBargain purchase gain, net of tax— — — (0.8)(0.8)Bargain purchase gain, net of tax— — — 0.8 0.8 
Severance and reorganization costsSeverance and reorganization costs— — — 0.6 0.6 Severance and reorganization costs— — — (1.1)(1.1)
Acquisition related costsAcquisition related costs— — — (0.8)(0.8)Acquisition related costs— — — 0.1 0.1 
Legal fees and settlementsLegal fees and settlements— — — (0.7)(0.7)Legal fees and settlements— — — (0.2)(0.2)
Adjusted EBITDAAdjusted EBITDA$12.2 $10.0 $9.0 $(4.2)$27.0 Adjusted EBITDA$(1.3)$(4.0)$(4.0)$3.0 $(6.3)
Adjusted EBITDA for the three months ended September 30, 2022 increased $27.02023 decreased $6.3 million to $30.3$24.0 million from $3.3$30.3 million for the three months ended September 30, 2021.2022. The change by segment was as follows:
High Specification Rigs. High Specification Rigs Adjusted EBITDA for the three months ended September 30, 2022 increased $12.22023 decreased $1.3 million to $17.0$15.7 million from $4.8$17.0 million for the three months ended September 30, 2021, primarily2022, due to increased revenuesdecreased revenue of $49.8$0.5 million partially offset by a correspondingas well as an increase in cost of services of $37.6 million.$0.8 million driven by inflationary pressures year over year and gaps in rig scheduling during the three months ended September 30, 2023.
Wireline Services. Wireline Services Adjusted EBITDA for the three months ended September 30, 2022 increased $10.02023 decreased $4.0 million to $11.4$7.4 million from $1.4$11.4 million for the three months ended September 30, 2021, primarily2022, due to increased revenuesdecreased revenue of $15.2$7.4 million, partially offset by a corresponding increasedecrease in cost of services of $5.2$3.4 million.
Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services Adjusted EBITDA for the three months ended September 30, 2022 increased $9.02023 decreased $4.0 million to $10.5$6.5 million from $1.5$10.5 million for the three months ended September 30, 2021,2022, due to increased revenuesdecreased revenue of $30.3$4.7 million, partially offset by a corresponding increasedecrease in cost of services of $21.3$0.7 million.
Other. Other Adjusted EBITDA for the three months ended September 30, 2022 increased $4.22023 improved $3.0 million to a loss of $8.6$5.6 million from a loss of $4.4$8.6 million for the three months ended September 30, 2021.2022 due to lower general and administrative costs year over year. The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services.













2928



Nine Months Ended September 30, 20222023 compared to Nine Months Ended September 30, 20212022
TANine Months Ended September 30, 2022
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
(in millions)
Net income (loss)$24.5 $5.6 $15.6 $(38.2)$7.5 
Interest expense, net— — — 5.7 5.7 
Tax (benefit) expense— — — 1.0 1.0 
Depreciation and amortization20.8 8.3 3.3 1.4 33.8 
Impairment of fixed assets— — — 1.3 1.3 
Equity based compensation— — — 2.8 2.8 
Loss on retirement of debt— — — — — 
Loss on disposal of property and equipment— — — — — 
Bargain purchase gain, net of tax— — — (3.6)(3.6)
Severance and reorganization costs— — — 1.6 1.6 
Acquisition related costs— — — 6.5 6.5 
Legal fees and settlements— — — 1.3 1.3 
Adjusted EBITDA$45.3 $13.9 $18.9 $(20.2)$57.9 
The following is an analysis of our Adjusted EBITDA. See “Item 1. Financial Information—Note 15—Segment Reporting” and “—Results of Operations” for further details (in millions).
Nine Months Ended September 30, 2021
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotalHigh Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
(in millions)TANine Months Ended September 30, 2023
Net income (loss)Net income (loss)$(1.1)$(2.8)$(2.1)$(20.5)$(26.5)Net income (loss)$34.0 $8.9 $12.1 $(33.3)$21.7 
Interest expense, netInterest expense, net— — — 2.5 2.5 Interest expense, net— — — 2.8 2.8 
Tax (benefit) expense— — — 0.1 0.1 
Income tax expenseIncome tax expense— — — 5.4 5.4 
Depreciation and amortizationDepreciation and amortization13.6 5.5 4.7 1.1 24.9 Depreciation and amortization14.7 8.4 5.0 1.2 29.3 
EBITDAEBITDA48.7 17.3 17.1 (23.9)59.2 
Impairment of fixed assetsImpairment of fixed assets— — — — — Impairment of fixed assets— — — 0.4 0.4 
Equity based compensationEquity based compensation— — — 2.1 2.1 Equity based compensation— — — 3.6 3.6 
Loss on retirement of debtLoss on retirement of debt— — — 0.2 0.2 Loss on retirement of debt— — — 2.4 2.4 
Loss on disposal of property and equipment— — — 0.1 0.1 
Bargain purchase gain, net of tax— — — — — 
Gain on disposal of property and equipmentGain on disposal of property and equipment— — — (1.6)(1.6)
Severance and reorganization costsSeverance and reorganization costs— — — (0.6)(0.6)Severance and reorganization costs— — — 0.4 0.4 
Acquisition related costsAcquisition related costs— — — 1.4 1.4 Acquisition related costs— — — 1.6 1.6 
Legal fees and settlements— — — 0.9 0.9 
Adjusted EBITDAAdjusted EBITDA$12.5 $2.7 $2.6 $(12.7)$5.1 Adjusted EBITDA$48.7 $17.3 $17.1 $(17.1)$66.0 
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
Nine Months Ended September 30, 2022
Net income (loss)$24.5 $5.6 $15.6 $(38.2)$7.5 
Interest expense, net— — — 5.7 5.7 
Income tax expense— — — 1.0 1.0 
Depreciation and amortization20.8 8.3 3.3 1.4 33.8 
EBITDA45.3 13.9 18.9 (30.1)48.0 
Impairment of fixed assets— — — 1.3 1.3 
Equity based compensation— — — 2.8 2.8 
Bargain purchase gain, net of tax— — — (3.6)(3.6)(3.6)
Severance and reorganization costs— — — 1.6 1.6 
Acquisition related costs— — — 6.5 6.5 
Legal fees and settlements— — — 1.3 1.3 
Adjusted EBITDA$45.3 $13.9 $18.9 $(20.2)$57.9 
3029


Variance ($)
High Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotalHigh Specification RigsWireline ServicesProcessing Solutions and Ancillary ServicesOtherTotal
(in millions)Variance ($)
Net income (loss)Net income (loss)$25.6 $8.4 $17.7 $(17.7)$34.0 Net income (loss)$9.5 $3.3 $(3.5)$4.9 $14.2 
Interest expense, netInterest expense, net— — — 3.2 3.2 Interest expense, net— — — (2.9)(2.9)
Tax (benefit) expense— — — 0.9 0.9 
Income tax expenseIncome tax expense— — — 4.4 4.4 
Depreciation and amortizationDepreciation and amortization7.2 2.8 (1.4)0.3 8.9 Depreciation and amortization(6.1)0.1 1.7 (0.2)(4.5)
EBITDAEBITDA3.4 3.4 (1.8)6.2 11.2 
Impairment of fixed assetsImpairment of fixed assets— — — 1.3 1.3 Impairment of fixed assets— — — (0.9)(0.9)
Equity based compensationEquity based compensation— — — 0.7 0.7 Equity based compensation— — — 0.8 0.8 
Loss on retirement of debtLoss on retirement of debt— — — (0.2)(0.2)Loss on retirement of debt— — — 2.4 2.4 
Loss on disposal of property and equipment— — — (0.1)(0.1)
Gain on disposal of property and equipmentGain on disposal of property and equipment— — — (1.6)(1.6)
Bargain purchase gain, net of taxBargain purchase gain, net of tax— — — (3.6)(3.6)Bargain purchase gain, net of tax— — — 3.6 3.6 
Severance and reorganization costsSeverance and reorganization costs— — — 2.2 2.2 Severance and reorganization costs— — — (1.2)(1.2)
Acquisition related costsAcquisition related costs— — — 5.1 5.1 Acquisition related costs— — — (4.9)(4.9)
Legal fees and settlementsLegal fees and settlements— — — 0.4 0.4 Legal fees and settlements— — — (1.3)(1.3)
Adjusted EBITDAAdjusted EBITDA$32.8 $11.2 $16.3 $(7.5)$52.8 Adjusted EBITDA$3.4 $3.4 $(1.8)$3.1 $8.1 
Adjusted EBITDA for the nine months ended September 30, 20222023 increased $52.8$8.1 million to $57.9$66.0 million from $5.1$57.9 million for the nine months ended September 30, 2021.2022. The change by segment was as follows:
High Specification Rigs. High Specification Rigs Adjusted EBITDA for the nine months ended September 30, 20222023 increased $32.8$3.4 million to $45.3$48.7 million from $12.5$45.3 million for the nine months ended September 30, 2021,2022, primarily due to increased revenuesrevenue of $140.0$13.7 million, partially offset by a corresponding increase in cost of services of $107.2$10.3 million.
Wireline Services. Wireline Services Adjusted EBITDA for the nine months ended September 30, 20222023 increased $11.2$3.4 million to $13.9$17.3 million from $2.7$13.9 million for the nine months ended September 30, 2021,2022, primarily due to increased revenuesrevenue of $75.6$8.9 million, partially offset by an increase in cost of services of $64.4$5.5 million.
Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services Adjusted EBITDA for the nine months ended September 30, 2022 increased $16.32023 decreased $1.8 million to $18.9$17.1 million from $2.6$18.9 million for the nine months ended September 30, 2021,2022, primarily due to increased revenues of $68.6 million, partially offset by an increase in cost of services of $52.3$10.1 million, partially offset by increased revenue of $8.3 million.
Other. Other Adjusted EBITDA for the nine months ended September 30, 20222023 increased $7.5$3.1 million to a loss of $20.2$17.1 million from a loss of $12.7$20.2 million for the nine months ended September 30, 2021.2022. The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services.
Liquidity and Capital Resources
Overview
We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, investments and acquisitions. Our primary sources of liquidity have historically been cash generated from operations and borrowings under our EBC Credit Facility.credit facilities. As of September 30, 2022,2023, we had total liquidity of $35.7$69.9 million, consisting of $5.2$8.2 million of cash on hand and availability under our Wells Fargo Revolving Credit Facility of $30.5$61.7 million.
As of September 30, 2022, our borrowing base under Under the Wells Fargo Revolving Credit Facility, the total loan capacity was $75.0 million, net of $10.1 million in borrowings and $3.2 million of Letters of Credit open under the facility. This compares to the Company’s available borrowings under the EBC Revolving Credit Facility of $57.0 million compared to $37.5 million and $45.0$61.0 million as of September 30, 20212022 and December 31, 2021, respectively, as a result of increased operational activity and accounts receivable balances.2022, respectively. We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements that permit us to manage the cyclicality associated with our business. We currently expect to have sufficient funds to meet the Company’s short and long term liquidity requirements and comply with our covenants of our debt agreements. For further details, see “— Our Debt Agreements.”
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Cash Flows
The following table presents our cash flows for the periods indicated:
Nine Months Ended September 30,ChangeNine Months Ended September 30,Change
20222021$%20232022$%
(in millions)(in millions)
Net cash provided by operating activitiesNet cash provided by operating activities$18.5 $23.4 $(4.9)21 %Net cash provided by operating activities$53.1 $18.5 $34.6 187 %
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities12.5 (5.9)18.4 312 %Net cash provided by (used in) investing activities(23.0)12.5 (35.5)(284)%
Net cash provided by (used in) financing activities(26.4)24.5 (50.9)(208)%
Net cash used in financing activitiesNet cash used in financing activities(25.6)(26.4)0.8 %
Net change in cashNet change in cash$4.6 $42.0 $(37.4)(89)%Net change in cash$4.5 $4.6 $(0.1)(2)%
Operating Activities
Net cash from operating activities decreased $4.9increased $34.6 million to cash provided of $18.5$53.1 million for nine months ended September 30, 20222023 compared to cash provided of $23.4$18.5 million for the nine months ended September 30, 2021.2022. The change in cash flows from operating activities is primarily attributable to an increase in contract assetsoperating income for the nine months ended September 30, 20222023 compared to the nine months ended September 30, 2021.2022 and the building of working capital in the prior year period due to the absorption of the business associated with the Basic acquisition. The use of working capital cash increased $48.5decreased $17.2 million to $9.4 million for the nine months ended September 30, 2023, compared to $26.6 million for the nine months ended September 30, 2022 compareddue to cash generated of $21.9 million for the nine months ended September 30, 2021.aforementioned Basic acquisition working capital.
Investing Activities
Net cash from investing activities increased $18.4decreased $35.5 million to a cash providedused of $12.5$23.0 million for nine months ended September 30, 20222023 compared to cash used of $5.9 million for the nine months ended September 30, 2021. The change in cash flows from investing activities is attributable to the significant asset sales that took place during the nine months ended September 30, 2022, partially offset by fixed asset additions.
Financing Activities
Net cash from financing activities decreased $50.9 million from cash provided of $24.5 million for the nine months ended September 30, 2021 compared to cash used of $26.4$12.5 million for the nine months ended September 30, 2022. The change in cash flows from investing activities is largely attributable to the significant asset disposals occurring after the Basic asset acquisition during the nine months ended September 30, 2022, coupled with acquisition of certain fixed assets from Pegaso for consideration of $7.3 million during the three months ended September 30, 2023.
Financing Activities
Net cash from financing activities increased $0.8 million from cash used of $26.4 million for the nine months ended September 30, 2022 to cash used of $25.6 million for the nine months ended September 30, 2023. The Company centralized debt and repaid the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note with borrowings from the new Wells Fargo Revolving Credit Facility (see Item 1. Financial Information— Note 9 — Debt). The repayment along with a decrease in cash flows from financing activities is primarily attributable to cash from asset sales and operations being utilizedthe increased ability to pay down debt. During the three and nine months ended September 30, 2022 the Company retired Term Loan B and paid an aggregate of $25.3 million on all debt and financing liabilities.in 2023 with proceeds from operating activities.
Supplemental Disclosures
During the nine months ended September 30, 2022,2023, the Company added fixed assets of $4.2$5.6 million and $1.1 million primarily related to finance leased assets and asset trades, respectively, across all operating segments.
Working Capital
Our working capital, which we define as total current assets less total current liabilities, was $54.0$71.4 million as of September 30, 2022,2023, compared to $2.5$65.6 million as of December 31, 2021.2022. The increased accounts receivableincrease in working capital can be attributed to a higher cash balance and contract assets, coupledas well as a decrease in accrued expenses.
Debt Agreements
Wells Fargo Bank, N.A. Credit Agreement
On May 31, 2023, the Company entered into a Credit Agreement with assets consideredWells Fargo Bank, N.A., providing the Company with a secured credit facility (“Wells Fargo Revolving Credit Facility”) in an aggregate principal amount of $75 million. Debt under the Credit Agreement is secured by a lien on substantially all of the Company’s assets. The Company was in compliance with the Credit Agreement covenant by maintaining a fixed charge coverage ratio of greater than 1.0 as of September 30, 2023.
In addition, on September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A. which designated an additional Letter of Credit in the amount of $1.6 million as part of incremental collateral requirements for the Company’s 2023 insurance renewal. This line of credit falls under the Wells Fargo Revolving Credit Facility aggregate principal amount and matures on September 25, 2024. The interest rate for this Letter of Credit was approximately 1.8% for the month ended September 30, 2023.
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The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to be held for sale ledrepay the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note. The undrawn portion of the Wells Fargo Revolving Credit Facility is available to thefund working capital increase.and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments, such as dividends and share repurchases. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions under certain circumstances that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility. The borrowings of the Wells Fargo Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet.
Our Debt AgreementsUnder the Wells Fargo Revolving Credit Facility, the total loan capacity was $75.0 million, which was based on a borrowing base certificate in effect as of September 30, 2023. The Company had $10.1 million in borrowings under the Wells Fargo Revolving Credit Facility and $3.2 million in Letters of Credit open under the facility, leaving a residual $61.7 million available for borrowings as of September 30, 2023. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 7.0% for the nine months ended September 30, 2023.
Eclipse Loan and Security Agreement
On September 27, 2021, the Company entered into a Loan and Security Agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent, providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”). Debt under
On May 31, 2023, the Company extinguished the Eclipse Revolving Credit Facility and Eclipse M&E Term Loan and Security Agreement is secured by a lien on substantially allFacility, paying the remaining principal amount of the Company’s assets. The Company was in compliance$10.4 million associated with the Eclipse M&E Term Loan Facility for the five months ended May 31, 2023. Of this amount, $8.4 million was outstanding at the time of debt extinguishment, and Security Agreement covenants as of September 30, 2022.
On January 7, 2022,repaid utilizing funds from the Company entered into the First Amendment to Loan and Security Agreement with EBC and Eclipse Business Capital SPV, LLC, which increased the Maximum Revolving Facility Amount (as defined in the Amended Loan Agreement) to $65.0 million, among other things.
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On September 23, 2022, the Company entered into the Amended Loan Agreement with EBC and Eclipse Business Capital SPV, LLC, which, among other things, designated the change in reference rate from LIBOR to SOFR, and designated a Letter of Credit in the amount of $1.6 million to be utilized for working capital and general corporate purposes, as needed.
Wells Fargo Revolving Credit Facility
Facility. The Revolving Credit Facility was drawn in partCompany recognized a loss on September 27, 2021, to repay the indebtedness under the existing Credit Facility, which was terminated in connection with such repayment, and to pay for the fees, costs and expenses incurredretirement of debt of $2.4 million in connection with the EBC Credit Facility. The undrawn portioninitiation of the Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments. The Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Revolving Credit Facility, which is scheduled to mature in September 2025. The Revolving Credit Facility includes a subjective acceleration clause and cash dominion provisions that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under theWells Fargo Revolving Credit Facility. The borrowings of the Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet.
Under the Revolving Credit Facility, the total loan capacity was $57.0 million, which was based on a borrowing base certificate in effect as of September 30, 2022. The Company had outstanding borrowings of $24.9 million under the Revolving Credit Facility, leaving a residual $30.5 million available for borrowings as of September 30, 2022. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 4.5% to 5% in excess of the LIBOR Rate and 3.5% to 4% in excess of the Base Rate, dependent on the fixed cost coverage ratio, through July 1, 2022. The weighted average interest rate for the loan was approximately 5.9% forFor the nine months ended September 30, 2022.
The2022, the Company capitalized fees of $1.8made principal payments totaling $12.4 million associated withtowards the Revolving CreditEclipse Term Loan B Facility, which are included in Other assets inwas fully repaid on August 16, 2022, and $1.5 million towards the Condensed Consolidated Balance Sheets. Such fees will continue to be amortized through maturity and are included in Interest expense, net on the Condensed Consolidated Statement of Operations. Unamortized debt issuance costs as of September 30, 2022 were $1.4 million.
Eclipse M&E Term Loan Facility
Under the M&E Term Loan Facility, the Company had outstanding borrowings of $11.0 million where the monthly principal installments commenced on March 1, 2022. Borrowings under the M&E Term Loan Facility bear interest at a rate per annum equal to 8% in excess of the LIBOR Rate and 7% in excess of the Base Rate. The weighted average interest rate for the M&E Term Loan was 9.0% for the nine months ended September 30, 2022. The M&E Term Loan Facility is scheduled to mature in September 2025. Any principal amounts repaid may not be reborrowed.
The Company capitalized fees on $0.3 million associated with this M&E Term Loan Facility, which are included in the Condensed Consolidated Balance Sheets as a discount to the Long-term debt, net. Such fees will continue to be amortized through maturity and are included in Interest expense, net on the Condensed Consolidated Statement of Operations. Unamortized debt issuance costs as of September 30, 2022 were $0.2 million.
Term Loan B
On October 1, 2021, the Term Loan B, was finalized in connection with the closing of the Basic Acquisition. Borrowings under Term Loan B bear interest at a rate per annum equal to 13% in excess of the LIBOR Rate and 11% in excess of the Base Rate. Term Loan B is scheduled to mature in September 2022. The weighted average interest rate for Term Loan B was 12.4% through the maturity date of August 16, 2022.
On October 1, 2021, the Term Loan B was drawn in full to repay borrowings under the Revolving Credit Facility and as of September 30, 2022. Principal payments are generated from the proceeds from the sale of Basic assets, and may not be reborrowed. The Company capitalized fees of $0.6 million associated with Term Loan B, which are included in the Condensed Consolidated Balance Sheets as a discount to the Long-term debt, current portion. Such fees will continue to be amortized through maturity and are included in Interest Expense, net on the Condensed Consolidated Statement of Operations.
On August 16, 2022, the outstanding balance of Term Loan B was terminated. At this time, the remaining balance of the loan was $0.3 million, which was paid utilizing funds from the Revolving Credit Facility. At the time of the termination, the Company had capitalized fees associated with Term Loan B of $0.1 million. This amount was charged to interest expense on the Condensed Consolidated Statement of Operations.



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Secured Promissory Note
On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas. In connection with the PerfX Acquisition, on July 8, 2021,acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. Certain of the assets acquired serve as collateral under the Secured Promissory Note. As of September 30, 2022, the aggregate principal balance outstanding was $7.0 million. Borrowings under the Secured Promissory Note bear interest at a rate of 8.5% per annum and iswas scheduled to mature in January 2024. The
For the five months ended May 31, 2023, the Company made a cash payment of $1.5 million payment in February 2022 onprincipal payments to the Secured Promissory Note where such cashtotaling $6.2 million, of which $5.4 million was generatedrelated to the debt extinguishment and was repaid utilizing funds from the sale of assets with an attached lien.Wells Fargo Revolving Credit Facility.
Other Installment Purchases
During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral. As of September 30, 2022,2023, the aggregate principal balance outstanding under the Installment Agreements was $0.6$0.2 million and is payable ratably over 36 months from the time of each purchase. For the nine months ended September 30, 2023, the Company paid down the Installment Agreements by $0.3 million. The monthly installment payments contain an imputed interest rate that are consistent with the Company’s incremental borrowing rate and is not significant to the Company.
Tax Receivable Agreement (“TRA”)Capital Returns Program
During the year ended December 31, 2021,On March 7, 2023, the Company entered intoannounced a definitive agreement with affiliates of CSL Capital Management (“CSL”) and Bayou Holdings (“Bayou”) to terminate the TRA (such agreement, the “TRA Termination Agreement”). In consideration of the TRA Termination Agreement,share repurchase program authorizing the Company issued an aggregate of 376,185 sharesto purchase up to $35.0 million of Class A Common Stock that can be utilized for up to 36 months. Additionally, the Board of Directors
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announced an intention to initiate a quarterly dividend of $0.05 per share once the Company achieved a stated objective of being net debt zero. The Board of Directors approved the initiation of the quarterly dividend, which first became payable on September 8, 2023 to all stockholders of record as of August 18, 2023. The Company believes that a share repurchase and dividend framework provides the best overall value creation potential for investors and intends to affiliatesreturn at least 25% of CSL Capital Management and Bayou Holdings.
During the year ended December 31, 2021, pursuantannual cash flows to TRA Termination Agreement, Ranger LLC redeemed CSL’s and Bayou’s outstanding units in Ranger LLC, and the corresponding shares of the Company’s Class B Common Stock were exchanged for an equivalent number of shares of Class A Common Stock. Following these transactions, no shares of Class B Common Stock were issued or outstanding.investors going forward.
Critical Accounting Policies and Estimates
Our significant accounting policies are discussed in our Annual Report and have not materially changed since December 31, 2021.2022.
Off-Balance Sheet Arrangements
We currently have no material off-balance sheet arrangements.
Emerging Growth Company Status and Smaller Reporting Company Status
The Company is an “emerging growth company” as defined in the JOBS Act. The Company will remain an emerging growth company until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of the Offering, (b) in which its total annual gross revenue is at least $1.24 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, or (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable to public companies. The Company has irrevocably opted out of the extended transition period and, as a result, the Company will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. The Company will lose its EGC status on December 31, 2022, as this will represent the last day of the fiscal year following the fifth anniversary of our first Form S-1, which was filed in August 2017.
The Company is also a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act. Smaller reporting company means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that (i) has a market value of common stock held by non-affiliates of less than $250 million; or (i) has annual revenues of less than $100 million and either no common stock held by non-affiliates or a market value of common stock held by non-affiliates of less than $700 million. Smaller reporting company status is determined on an annual basis.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information in this Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, as amended and Section 21E of the Exchange Act. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in our Annual Report. These forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events.
Forward-looking statements may include statements about:
our business strategy;
our operating cash flows, the availability of capital and our liquidity;
our future revenue, income and operating performance;
general economic conditions, including the impact of continued inflation and associated changes in monetary policy;
the volatility in global crude oil demand and crude oil prices for an uncertain period of time that may lead to a significant reduction of domestic crude oil and natural gas production;
global or national health concerns, including pandemics such as the outbreak of COVID-19;
political and economic conditions and events in foreign oil, natural gas and NGL producing countries, including embargoes, continued hostilities in the Middle East and other sustained military campaigns, the armed conflict in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America and China and acts of terrorism or sabotage;
our ability to sustain and improve our utilization, revenues and margins;
our ability to maintain acceptable pricing for our services;
our future capital expenditures;
our ability to finance equipment, working capital and capital expenditures;
competition and government regulations, including new and proposed legislation by the Biden Administration aimed at reducing the impact of climate change;
our ability to obtain permits and governmental approvals;
pending legal or environmental matters;
marketing of oil and natural gas;
business or asset acquisitions;
credit markets;
our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements;
uncertainty regarding our future operating results; and
plans, objectives, expectations and intentions contained in this report that are not historical.
We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under “Risk Factors” in our Annual Report previously filed. Should one or more of the risks or uncertainties described occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by
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applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
Item 3. Quantitative and Qualitative Disclosures about Market Risks
Recent Events
The outbreak of COVID-19 has spread across the globe and has been declared a public health emergency by the WHO and a National Emergency by the President of the United States. The extent of the impact of the COVID-19 outbreak on our operationalWe continue to expect business opportunities and financial performanceresults to show mild increases assuming the global economy remains stable. OPEC+ production cuts have continued and are expected to keep commodity prices at a stable level through the remainder of 2023. OPEC+ also expects oil demand to rise by approximately 2.5 million barrels per day in 2024, an approximated 2.2% increase over 2.4 million barrels per day in 2023.
We believe that geopolitical events will significantly depend on certain developments, including the duration and spread of the outbreak and its continuedcontinue to have an impact on customer activitythe macroeconomic backdrop of our industry, most notably, China’s growth expectations and third-party providers.uncertainty regarding Russia’s oil supply while under sanctions. The direct impact2022 invasion of Ukraine by neighboring Russia has caused turmoil in global markets, generally driving oil prices higher while also injecting further uncertainty into a worldwide economy recovering from the effects of COVID-19. Additionally, recent events in the Middle East have contributed to our operations beganfurther uncertainty and created additional risk to take affect at the close of the first quarter ended March 31, 2020, and has continued through September 30, 2022, however the extent to which the COVID-19 outbreak may furtherglobal stability that could ultimately affect our financial condition or results of operations is uncertain. For more information, please see “Item 2. Management’s Discussionbusiness.
Given the continuing conflict globally, there are many unknown factors and Analysis of Results of Operations and Financial Condition — Recent Events and Outlook”.
Russia invaded neighboring Ukraine and theseevents that could materially impact our operations. These events have and continue to impact commodity prices, which could have a material effect on our earnings, cash flows, and financial condition. In the short-term, commodity price fluctuations are highly uncertain. Actual price outcomes will be dependent on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia’s oil production or the sale of Russia’s oil in the global market. In addition, the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months. The direct impact to our operations began to take affect at the close of the first quarter ended March 31, 2022, and has continued through September 30, 2022, however the extent to which the invasion may further affect our financial condition or results of operations is uncertain. For more information, please see “Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Events and Outlook”.
Heightened levels of inflation and the potential worsening of macro-economic conditions, including the possibility of recession, may present a risk for our business, our suppliers and the stability of the broader oil and gas industry. In addition, the U.S. inflation rate has been steadily increasing since 2021 and into 2022. The direct impact to our operations began to take affect at the close of the second quarter ended June 30, 2022, and has continued through September 30, 2022, however the extent to which the heightened levels of inflation may further affect our financial condition or results of operations is uncertain. For more information, please see “Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition — Recent Events and Outlook”.
Interest Rate Risk
We are exposed to interest rate risk primarilyas a result of borrowings associated with our Wells Fargo Revolving Credit Facility and Financing Agreement. For a complete discussion of our interest rate risk, see our Annual Report. As of September 30, 2022, weAgreement to fund operations. The Company had $24.9$10.1 million outstanding under ourthe Wells Fargo Revolving Credit Facility, with a weighted average interest rate of 5.9%. As of September 30, 2022, the aggregate principal balance outstanding under the M&E Term Loan was $11.0 million, with a weighted average interest rate of 9.0%7.0%. A hypothetical 1.0% increase or decrease in the weighted average interest rate would increase or decrease interest expense by less than $0.4$0.1 million per year. We do not currently hedge out interest rate exposure. We do not engage in derivative transactions for speculative or trading purposes. For a complete discussion of our interest rate risk, see our Annual Report.
Credit Risk
The majority of our trade receivables have payment terms of 30 days or less. As of September 30, 2022,2023, the top three trade receivable balances represented approximately 15%12%, 11%, and 8%7%, respectively, of consolidated net accounts receivable. Within our High Specification Rig segment, the top three trade receivable balances represented 20%, 19%13% and 14%12%, respectively, of total High Specification Rig net accounts receivable. Within our Wireline Services segment, the top three trade receivable balances represented 16%, 9%14%, and 9%12%, respectively, of total Wireline Services net accounts receivable. Within our Processing Solutions and Ancillary Services segment, the top three trade receivable balances represented 27%14%, 10%11%, and 9%10%, respectively, of total Processing Solutions and Ancillary Services net accounts receivable. We mitigate the associated credit risk by performing credit evaluations and monitoring the payment patterns of our customers.
Commodity Price Risk
The market for our services is indirectly exposed to fluctuations in the prices of oil and natural gas to the extent such fluctuations impact the activity levels of our E&P customers. See “— Recent Events” above for further details. Any prolonged substantial reduction in oil and natural gas prices would likely affect oil and natural gas production levels and therefore affect demand for our services. We do not currently intend to hedge our indirect exposure to commodity price risk.
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Item 4. Controls and Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report.
Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of September 30, 20222023 due to the material weaknesses previously disclosed in our 2022 Annual Report.
Material Weaknesses in Internal Control Over Financial Reporting
In connection with the evaluation of the Company’s internal control over financial reporting as described above, management has identified the following deficiencies in our control environment in the current period that constituted material weaknesses in the Company’s internal control over financial reporting as of December 31, 2022:
Ineffective controls over segregation of duties related to the review of manual journal entries and account reconciliations. Specifically, certain personnel had the ability to both (a) create and post journal entries within our general ledger system, and (b) review account reconciliations.
Ineffective information technology general controls related to administrative user access to the Company’s information systems that are relevant to the preparation of financial statements to ensure appropriate segregation of duties and to adequately restrict access to financial applications and data.
In addition, the following material weakness identified duringpreviously reporting in our 2021 Annual Report continued to exist as of December 31, 2022.
Ineffective controls over the accounting for complex transactions.
Notwithstanding we did not identify any material misstatements to the consolidated financial statements and there were no changes to previously released financial results as a result of these material weaknesses, the control deficiencies created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.
Remediation Efforts to Address the Material Weaknesses Existing in the Current Period
During the fourth quarter of 2022, management implemented a remediation plan to update its design and implementation of controls to remediate the deficiency related to manual journal entries and enhance the Company's internal control environment. The Company has designed and implemented controls to prevent or detect a material misstatement resulting from certain personnel with the ability to create and post journal entries within the Company’s general ledger system. Management has designed and implemented controls over the review of all manual journal entries initiated and approved to ensure appropriate segregation of duties.
Management has implemented measures to design information technology general controls related to administrative user access by restricting privileged access, implemented controls over user access and enforced proper segregation of duties within IT environments based on roles and responsibilities.
Management is enhancing processes and designing and implementing additional internal controls to properly account for complex transactions. Additionally, the Company has hired additional accounting personnel and implementing training of new and existing personnel on proper execution of designed control procedures.
During 2022 and 2023, significant remediation steps were taken to address the communicated material weaknesses in our Internal Control environment. These remediation actions have largely been completed and the Company expects to test the effectiveness of these remediation plans at the time of the full year financial reporting for the year ended December 31, 2021.2023.
The material weakness related to ineffectiveweaknesses will not be considered remediated until the controls over accountinghave operated effectively, as evidenced through testing, for non-routine and/or complex transactions. To address this material weakness, with the oversighta sufficient number of our audit committee, we are evaluating our controls over accounting for non-routine and/or complex transactions and are in the process of implementing additional controls in an effort to timely identify misstatements and strengthen our overall control environment as well as continuing to assess our accounting personnel staffing requirements.instances.
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Any failure to implement and maintain the improvements in the controls over our financial reporting, or difficulties encountered in the implementation of these improvements in our controls, could cause us to fail to meet our reporting obligations. Any failure to improve our internal controls to address these identified weaknesses could cause misstatements (whether or not material) in our consolidated financial statements and/or also cause investors to lose confidence in our reported financial information, which could have a negative impact on the trading price of our stock.
Changes in Internal Control over Financial Reporting
Other than the material weakness described above, thereThere were no other changes in our internal control over financial reporting during the quarter ended September 30, 20222023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
Item 1. Legal Proceedings
Our operations are subject to a variety of risks and disputes normally incident to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business. However, we are not currently subject to any material litigation and in the opinion of management, the outcome of any existing matters will not have a material adverse effect on the Company’s consolidated financial position or consolidated results of operations. We maintain insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisers and brokers, believe are reasonable and prudent. We cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that these levels of insurance will be available in the future at economical prices.
Item 1A. Risk Factors
Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A Common Stock are described under “Risk Factors,” included in our Annual Report. This information should be considered carefully, together with other information in the Quarterly Report and the other reports and materials we file with the SEC.
The ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and results of operations.
On February 24, 2022, Russian military forces invaded Ukraine, and sustained conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage.
Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to an unprecedented expansion of sanction programs imposed by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic, including, among others:
blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union;
blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians and those with government connections or involved in Russian military activities; and
blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets and bans on various Russian imports.
In retaliation against new international sanctions and as part of measures to stabilize and support the volatile Russian financial and currency markets, the Russian authorities also imposed significant currency control measures aimed at restricting the outflow of foreign currency and capital from Russia, imposed various restrictions on transacting with non-Russian parties, banned exports of various products and other economic and financial restrictions. The situation is rapidly evolving as a result of the conflict in Ukraine, and the United States, the European Union, the United Kingdom and other countries may implement additional sanctions, export controls or other measures against Russia, Belarus and other countries, regions, officials, individuals or industries in the respective territories. Such sanctions and other measures, as well as the existing and potential further responses from Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations.
We are actively monitoring the situation in Ukraine and assessing its impact on our business, including our business partners and customers. To date we have not experienced any material interruptions in our infrastructure, supplies, technology systems or networks needed to support our operations. We have no way to predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown
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period of time. Any of the above mentioned factors could affect our business, financial condition and results of operations. Any such disruptions may also magnify the impact of other risks described in this prospectus.
The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and could impose new costs on our customers’ operations.
In August 2022, President Biden signed the Inflation Reduction Act of 2022 into law. The IRA 2022 contains hundreds of billions in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions. These incentives could further accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for oil and gas and consequently adversely affect the business of our customers, thereby reducing demand for our services. In addition, the IRA 2022 imposes the first ever federal fee on the emission of greenhouse gases through a methane emissions charge. The IRA 2022 amends the federal Clean Air Act to impose a fee on the emission of methane from sources required to report their GHG emissions to the U.S. 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. Calculation of the fee is based on certain thresholds established in the IRA 2022. The methane emissions charge could increase our customers’ operating costs and adversely affect their businesses, thereby reducing demand for our services.
Continuing or worsening inflationary issue and associated changes in monetary policy may result in increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise.
The U.S. inflation rate has been steadily increasing since 2021 and into 2022. These inflationary pressures may result in increases to the costs of our oilfield goods, services and personnel, which would in turn cause our capital expenditures and operating costs to rise. Sustained levels of high inflation could likely cause the U.S. Federal Reserve and other central banks to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt the financial and operating results of our business.
Item 2. Unregistered Sales of Securities, and Use of Proceeds, and Issuer Purchases of Equity Securities
Issuer Purchases of Equity Securities
On March 7, 2023, the Company announced that its Board of Directors authorized a share repurchase program, allowing the Company to purchase currently outstanding Class A Common Stock held by non-affiliates, not to exceed $35.0 million in aggregate value. Share repurchases may take place from time to time on the open market or through privately negotiated transactions. The duration of the share repurchase program is 36 months and may be accelerated, suspended or discontinued at any time without notice.
The following table provides information with respect to Class A Common Stock purchases made by the Company during the three months ended September 30, 2022.2023.
Period
Total Number of Shares Repurchased (1)
Average Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Number of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2022 - July 31, 2022— $— — — 
August 1, 2022 - August 31, 202221,816 8.87 — — 
September 1, 2022 - September 30, 2022365 9.80 — — 
Total22,181 $8.89 — — 
Period
Total Number of Shares Repurchased (1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (3)
July 1, 2023 - July 31, 202368,200 $9.80 68,200 2,743,081 
August 1, 2023 - August 31, 202389,500 12.35 89,500 2,293,301 
September 1, 2023 - September 30, 202380,934 12.30 75,200 1,860,857 
Total238,634 $11.60 232,900 1,860,857 
_________________________
(1)    Total number of shares repurchased during the third quarter of 20222023 consists of 21,816 and 3655,734 shares settled in cash related to annual grants and sharesof Class A Common Stock, at an average price paid per share of $12.27, withheld by the Company in satisfaction of withholding taxes due respectively, upon the vesting of restricted shares granted to our employees under the Ranger Energy Services, Inc. 2017 Plan.Long-Term Incentive Plan and 232,900 shares of Class A Common Stock, at an average price paid per share of $12.30, repurchased pursuant to the repurchase program that was announced on March 7, 2023.

(2)     As of September 30, 2023, an aggregate of 781,000 shares of Class A Common Stock were purchased for a total of $8.6 million since the inception of the repurchase plan announced on March 7, 2023.


(3)    As of September 30, 2023, the maximum number of shares that may yet be purchased under the plan is 1,860,857 shares of Class A Common Stock. This is based on the closing price of $14.18 of Ranger Energy Services, Inc.’s Class A Common Stock on the New York Stock Exchange as of September 30, 2023.
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Item 6. Exhibits
    The following exhibits are filed as part of this Quarterly Report.
INDEX TO EXHIBITS
Exhibit
Number
 Description
2.1†
2.2†
2.3†
3.1
3.2
4.1
4.2
10.1*
31.1* 
31.2* 
32.1** 
32.2** 
101.CAL* iXBRL Calculation Linkbase Document
101.DEF* iXBRL Definition Linkbase Document
101.INS* iXBRL Instance Document
101.LAB* iXBRL Labels Linkbase Document
101.PRE* iXBRL Presentation Linkbase Document
101.SCH* iXBRL Schema Document
104*Cover page interactive data file (formatted in iXBRL and contained in Exhibit 101)
*    Filed as an exhibit to this Quarterly Report on Form 10-Q.
**    Furnished as an exhibit to this Quarterly Report on Form 10-Q.
†    Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish a supplemental copy of any omitted schedule or similar attachment to the SEC upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Ranger Energy Services, Inc.
/s/ Melissa CougleOctober 31, 20222023
Melissa CougleDate
Chief Financial Officer
(Principal Financial Officer)

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