Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No x

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesx 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.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.Yes ¨ No x

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No ¨

The number of shares of the registrant's Class A ~~common stock~~Common Stock outstanding on March ~~4, 2022~~7, 2024 was ~~19,998,695~~20,174,135

~~The number of shares of the registrant's Class B common stock outstanding on March 4, 2022 was~~ ~~76,269~~

This Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) and other documents filed by us with the Securities and Exchange Commission (the “SEC”) contain, and future oral or written statements or press releases by us and our management may contain, forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks”, “will” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact included in this ~~Annual Report on~~ Form 10-K or such other materials regarding our financial position, financial performance, liquidity, strategic alternatives, market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by our management in light of their experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from such statements. Such risks and uncertainties include, but are not limited to:

These risks and other uncertainties related to our business are described in detail below in Part I, Item 1A of this Form 10-K. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after such statements are made, including for example the market prices of oil and gas and regulations affecting oil and gas operations, which we cannot control or anticipate. Further, we may make changes to our business strategies and plans (including our capital spending and capital allocation plans) at any time and without notice, based on any changes in the above-listed factors, our assumptions or otherwise, any of which could or will affect our results. For all these reasons, actual events and results may differ materially from those anticipated, estimated, projected or implied by us in our forward-looking statements. We undertake no obligation to update any of our forward-looking statements for any reason, notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

We ~~serve major, national and independent oil and natural gas exploration and production companies around the world and offer~~are a global oilfield products and services company with ~~respect~~a portfolio of premier rental and well servicing brands providing customers with robust inventory, expedient delivery, engineered solutions and expert consultative service — all aligned with enterprise-wide Shared Core Values for safe, sustainable operations, corporate citizenship and a commitment to ~~the various phases~~free cash flow generation and value creation.

From drilling equipment rentals to oilfield services, our portfolio of ~~a well’s economic life cycle.~~global companies provides highly specialized solutions for maintaining safety, efficiency, profitability, and ESG compliance.

~~2021 was a transformative year at Superior. Following our emergence from bankruptcy, we embarked on a diligent effort to reconfigure our operations~~Products and ~~organization to maximize shareholder value, enhance margin growth and have a more disciplined approach, both operationally and financially (the “Transformation Project”).~~Services

~~The Transformation Project has been~~Combining financial discipline with corporate services expertise, we maintain a strategy focused ~~around three sequential phases:~~

The evaluation and implementation of the Business Unit Review is substantially complete, which has resulted in lower revenue with increased margins. The Right Size Support and Geographic Focus components are ongoing and should be completed during 2022.

~~Historically, we provided a wide variety of services and products to many markets within the energy industry. During 2021, we realigned our core~~ businesses ~~to focus on products and services that we believe meet the criteria of (1) being~~ critical to our ~~customers’ oil~~customers' success. We support our portfolio of brands with the necessary resources and gas operations, (2) facing low or no competition from the three largest global oilfield service companies, (3) requiring deep technical expertise through the design or use of our product or service, and (4) being unlikely to become a commoditized product or serviceleadership so they can add value to our customers. The result of this approach is a portfolio of business lines grounded in our core mission of providing high quality products and services while maintaining the trust and serving the needs of our customers,customers’ operations with an emphasis on ~~free cash flow generation~~quality, safety, and ~~capital efficiency for us.~~sustainability.

Our rentals services brands offer value-added products and services to meet a wide range of project needs. With a long history of delivering maximum value, these brands help customers and vendor partners achieve safety, efficiency and sustainability goals. Our rental segment operates with low labor intensity and a substantial catalog of product offerings.

Our Well Services brands provide specialized solutions for drilling, production, completion and decommissioning. They have a proven track record of meeting operators’ expectations and delivering the products and expertise success demands. Among our ~~Transformation Project, our reportable segments were changed to Rentals~~customers and vendor partners, these brands have a history of strong, collaborative relationships.

~~Recent Developments~~On December 7, 2020, certain of our direct and indirect wholly-owned domestic subsidiaries filed petitions for reorganization under the provisions of Chapter 11 of the Bankruptcy Code and, in connection therewith, filed the proposed Joint Prepackaged Plan of Reorganization (as amended, modified or supplemented from time to time, the “Plan”). On February 2, 2021 (the “Emergence Date”), the conditions to the effectiveness of the Plan were satisfied and we emerged from Chapter 11.

As used herein, ~~“Superior,”~~ “we,” ~~“us”,~~“us,” “our” and similar terms refer to (i) prior to the Emergence Date, ~~(as defined below),~~ SESI Holdings, Inc. ~~(formerly known as Superior Energy Services, Inc.) (“Predecessor”)~~ and its subsidiaries (“Predecessor”) and (ii) after the Emergence Date, Superior Energy Services, Inc. ~~(formerly known as Superior Newco, Inc.)~~ and its subsidiaries (“Successor”). ~~Additionally, the use~~

On December 4, 2020, we and certain of our direct and indirect wholly-owned domestic subsidiaries (the “Affiliate Debtors”) entered into an Amended and Restated Restructuring Support Agreement (the “Amended RSA”) that amended and restated in its entirety the Restructuring Support Agreement (the “RSA”), dated September 29, 2020, with certain holders of SESI, L.L.C.’s (“SESI”) outstanding (i) 7.125% senior unsecured notes due 2021 (the “7.125% Notes”) and (ii) 7.750% senior unsecured notes due 2024 (the “7.750% Notes”). The parties to the Amended RSA agreed to the principal terms of a proposed financial restructuring of the Affiliate Debtors, which was implemented through the Plan (as defined below).

On December 7, 2020, the Affiliate Debtors filed the Chapter 11 Cases under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, and, in connection therewith, the Affiliate Debtors filed with the Bankruptcy Court the proposed Joint Prepackaged Plan of Reorganization under the Bankruptcy Code (as amended, modified or supplemented from time to time, the “Plan”). After commencement of the Chapter 11 Cases, the Affiliate Debtors continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In connection with the Chapter 11 Cases, the Affiliate Debtors filed a motion for approval of a debtor-in-possession financing facility, and on December 8, 2020, the Bankruptcy Court approved such motion and entered an interim order approving the financing (the “Interim DIP Order”). In accordance with the Interim DIP Order, on December 9, 2020, we, as guarantor and SESI, as borrower, entered into a $120 million Senior Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Facility”). On January 19, 2021, the Bankruptcy Court approved the Affiliate Debtors’ entry into the DIP Credit Facility on a final basis.

~~On January 19, 2021, the Bankruptcy Court entered an order, Docket No. 289, confirming and approving the Plan.~~

~~On February 2, 2021 (the “Emergence Date”), the conditions to effectiveness of the Plan were satisfied or waived and we emerged from Chapter 11.~~

During the Chapter 11 Cases, the Affiliate Debtors filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Affiliate Debtors, subject to the assumptions filed in connection therewith. Certain holders of pre-petition claims that were not governmental units were required to file proofs of claim by the bar date of January 7, 2021. Certain holders of pre-petition claims that were governmental units were required to file proofs of claim by the bar date of June 7, 2021. The Affiliate Debtors’ have received proofs of claim, primarily representing general unsecured claims, of approximately $1.7 billion. The Bankruptcy Court disallows claims that have been acknowledged as duplicates. Claims totaling approximately $1.4 billion have been withdrawn or disallowed. As a result of the claims resolution process post-emergence, the Affiliate Debtors agreed to allow certain claims classified per the Plan as Class 6 General Unsecured Claims against the Parent. Per ASC 852-10, liabilities are measured at their allowed claim amount, and the result of allowing these claims increased liabilities subject to compromise prior to emergence.

~~registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.~~

~~The costs of our efforts to restructure our capital, prior to and during the Chapter 11 Cases, along with all other costs incurred in connection with the Chapter 11 Cases, have been material.~~

On the Emergence Date, pursuant to the terms of the Plan, we filed an Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and a Certificate of Amendment of Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”).

Also, on the Emergence Date, and pursuant to the terms of the Plan, we adopted the Amended and Restated Bylaws (the “Bylaws”). The descriptions of the Certificate of Incorporation and the Bylaws are qualified in their entirety by reference to the full texts of the Certificate of Incorporation, Bylaws, and Certificate of Amendment which are incorporated by reference herein.

On the Emergence Date, pursuant to the Plan, we entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders and letter of credit issuers named therein providing for a $120.0 million asset-based secured revolving Credit Facility, all of which is available for the issuance of letters of credit (the “Credit Facility”). The issuance of letters of credit will reduce availability under the Credit Facility dollar-for-dollar. On the Emergence Date, the Credit Facility replaced the DIP Credit Facility and the undrawn letters of credit outstanding under the former DIP Credit Facility were deemed outstanding under the Credit Facility. All accrued and unpaid fees and other amounts outstanding thereunder were paid in cash in full as well. The Credit Facility will mature on December 9, 2024.

The borrowing base under the Credit Facility is determined by reference to SESI’s and its subsidiary guarantors’ (i) eligible accounts receivable, (ii) eligible inventory, (iii) solely during the period from the Emergence Date until the earlier of December 9, 2022 and the date that unrestricted cash of SESI and its wholly-owned subsidiaries is less than $75.0 million, eligible premium rental drill pipe and (iv) so long as there are no loans outstanding at such time, certain cash of SESI and its subsidiary guarantors, less reserves established by the administrative agent in its permitted discretion.

Availability under the Credit Facility will be the lesser of (i) the commitments and (ii) the borrowing base. Subject to certain conditions, upon request and with the consent of the participating lenders, the total commitments under the Credit Facility may be increased to $170.0 million. SESI’s obligations under the Credit Facility are guaranteed by us and all of SESI’s material domestic subsidiaries and secured by substantially all of our, SESI’s and the subsidiary guarantors’ assets, other than real property.

Any borrowings under the Credit Facility will bear interest, at SESI’s option, at either an adjusted LIBOR rate plus an applicable margin ranging from 3.00% to 3.50% per annum, or an alternate base rate plus an applicable margin ranging from 2.00% to 2.50% per annum, in each case on the basis of the consolidated fixed charge coverage ratio. In addition, SESI is required to pay (i) a letter of credit fee, (ii) to the issuing lender of each letter of credit, a fronting fee and (iii) commitment fees. Upon the cessation of LIBOR, the Credit Facility provides for the use of alternative benchmark rates for the determination of the borrowing rate, and the cessation of LIBOR will not have a material impact on us.

Unless all loans are paid off and letters of credit outstanding are cash collateralized and the Credit Facility terminated, the Credit Facility requires, subject to permitted exceptions, compliance with various covenants, including, but not limited to, limitations on the incurrence of indebtedness, permitted investments, liens on assets, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. The Credit Facility also requires compliance with a fixed charge coverage ratio of 1.0 to 1.0 if (a) an event of default has occurred and is continuing or (b) availability under the Credit Facility is less than the greater of $20.0 million or 15% of the lesser of the aggregate commitments and the borrowing base.

On May 13, 2021, SESI, SESI Holdings, Inc. and the subsidiary guarantors party thereto entered into a first amendment and waiver to the Credit Facility (the “First Amendment and Waiver to the Credit Facility”) to, among other things, (i) extend the deadline thereunder for the delivery of our consolidated unaudited financial statements for the quarter ended March 31, 2021 to June 1, 2021 and (ii) obtain a limited waiver of potential defaults under the Credit Facility related to a delayed public filing of such financial statements after the original deadline for delivery of such financial statements.

On May 28, 2021, SESI, L.L.C., SESI Holdings, Inc. and the subsidiary guarantors party thereto entered into a waiver to the Credit Facility to (i) extend the deadline under the Credit Agreement for the delivery of Superior Energy Services, Inc.’s consolidated unaudited financial statements for the quarter ended March 31, 2021 and the calendar months ending April 30, 2021 and May 31, 2021 to July 15,

2021 and (ii) agree that until the unaudited financial statements and a revised borrowing base certificate in connection therewith are delivered, the lenders will not be required to make any advances requested. As discussed below, we have filed the required financial statements and delivered the revised borrowing base certificate in satisfaction of this requirement.

On July 15, 2021, SESI, the Former Parent, and the subsidiary guarantors party thereto entered into a waiver to the Credit Facility with JPMorgan Chase Bank, N.A., as administrative agent and lender, and certain other financial institutions and other parties thereto as lenders to (i) extend the deadline under the Credit Facility for the delivery of our consolidated unaudited financial statements (x) as of and for the quarter ended March 31, 2021 to September 30, 2021 and (y) as of and for the quarter ended June 30, 2021 and the calendar months ending April 30, 2021, May 31, 2021, July 31, 2021 and August 31, 2021 to October 30, 2021, (ii) obtain a limited waiver of potential defaults under the Credit Facility related to a delayed public filing of this quarterly report on Form 10-Q with respect to the fiscal quarter ended June 30, 2021 (including related financial statements) after the original deadline (and confirmation of such waiver as it pertains to the quarterly report on Form 10-Q with respect to the fiscal quarter ended March 31, 2021), and (iii) agree that until the quarterly unaudited financial statements and a revised borrowing base certificate in connection with each such quarter is delivered, the lenders will not be required to make any advances requested. We filed our consolidated unaudited financial statements as of, and for, the quarters ended March 31, 2021 and June 30, 2021 and delivered a revised borrowing base certificate within the required timeframe.

On November 15, 2021, we entered into a Second Amendment and Waiver to our Credit Agreement to (i) extend the deadline under the Credit Agreement for the delivery of our consolidated unaudited financial statements as of, and for, the quarter ended September 30, 2021 and the calendar month ending October 31, 2021 to December 10, 2021, (ii) obtain a limited waiver of potential defaults under the Credit Agreement related to a delayed public filing of the quarterly report on Form 10-Q for the quarter ended September 30, 2021 after the original deadline, and (iii) agree that until the quarterly unaudited financial statements and a revised borrowing base certificate in connection with such quarter are delivered, the lenders will not be required to make any advances requested by Borrower. We filed our consolidated unaudited financial statements as of, and for, the quarter ended September 30, 2021 and delivered a revised borrowing base certificate within the required timeframe. ~~In addition, the Credit Agreement was amended to, among other things, permit the disposition of the HB Onshore Rentals Business (as defined in the Credit Agreement).~~

On February 10, 2022, we entered into a Third Amendment to Credit Agreement to, among other things, provide us with additional flexibility around making asset sales. Specifically, the Credit Agreement was amended to refresh the amount of properties sold, transferred or otherwise disposed of pursuant to the “Substantial Portion” exception to $0 as of January 31, 2022. The “Substantial Portion” exception allows us to sell, transfer or otherwise dispose of properties so long as the aggregate value of all such properties sold, transferred or otherwise disposed of do not exceed (a) 10% of our gross book value of the assets during the four fiscal year quarter period ending with the fiscal quarter in which such determination is made, or (b) 10% of our consolidated net sales or net income during the four fiscal year quarter period ending with the fiscal quarter in which such determination is made. The Credit Agreement was also amended to add a new asset sale exception that allows us to make additional asset sales up to $25.0 million so long as (a) liquidity is greater than $100.0 million, (ii) unused availability under the Credit Agreement is greater than $25.0 million, and (iii) we receive 100% cash consideration to the extent that the property being sold is otherwise included in the calculation of the borrowing base under the Credit Agreement.

On March 8, 2022, we entered into a Fourth Amendment and Waiver to Credit Agreement to, among other things, permit us to file SES Energy Services India Pvt. Ltd, a private limited company of India and an indirect subsidiary, for bankruptcy under the Insolvency and Bankruptcy Code of India without triggering a default under the Credit Agreement.

The foregoing description of the Credit Facility, including the related amendments thereto, is a summary only and is qualified in its entirety by reference to the Credit Agreement, which is incorporated herein by reference.

On the Emergence Date, in order to implement the governance related provisions reflected in the Plan, the stockholder’s agreement, dated February 2, 2021 (the “Stockholders Agreement”), was executed, to provide for certain governance matters. Other than the obligations related to Confidential Information (as defined in the Stockholders Agreement), the rights and preferences of each stockholder under the Stockholders Agreement will terminate when such stockholder ceases to own any shares of Class A common stock.

~~The foregoing description of the Stockholders Agreement is qualified in its entirety by the full text of the document, which is incorporated herein by reference.~~

We and stockholders holding a majority of our Class A common stock entered into an amendment to the Stockholders Agreement, effective May 14, 2021, extending the deadline to provide our stockholders unaudited consolidated quarterly financial statements from 45 days after the conclusion of a quarter to 60 days after such quarter (or, if applicable, the first business day thereafter).

We and stockholders holding a majority of our Class A common stock entered into the Second Amendment to the Stockholders Agreement, effective May 31, 2021, extending the deadline to provide our stockholders the unaudited consolidated quarterly financial statements for the quarter ended March 31, 2021 to no later than July 15, 2021.

We and stockholders holding a majority of our Class A common stock entered into the Third Amendment to the Stockholders Agreement, effective as of July 14, 2021, extending the deadline to provide our stockholders the unaudited consolidated quarterly financial statements for the quarters ended March 31, 2021 and June 30, 2021 to no later than September 30, 2021 and October 31, 2021, respectively.

We and stockholders holding a majority of our Class A common stock entered the Fourth Amendment to the Stockholders Agreement, effective as of November 15, 2021, extending the deadline to provide our stockholders the unaudited consolidated quarterly financial statements for the quarters ended September 30, 2021 to no later than December 10, 2021 and making certain technical amendments to the financial statement delivery mechanics.

We and stockholders holding a majority of our Class A common stock entered into the Fifth Amendment to the Stockholders Agreement, effective as of February 9, 2022, which provides that if an officer or other authorized agent has been granted authority to approve a matter or take other action pursuant to a board-approved delegation of authority matrix, prior approval of the board will be deemed obtained without any further approval from the board.

During 2021, the significant business disruption resulting from the COVID-19 pandemic impacted customers, vendors and suppliers in all geographical areas where we operate as well as the broader economies of affected countries. However, there are signs that business activity around the world has adjusted and will continue to improve in 2022.

The recent wave of COVID-19 cases related to the Omicron variant somewhat dampened the expectations regarding economic recovery and higher demand for oil. For example, due to travel restrictions put in place as a result of Omicron, the global oil demand forecast for 2022 was originally revised down by forecasters, including the IEA and EIA, primarily to account for projected reduced jet fuel use. However, the Omicron variant appears to be less severe than prior waves of COVID-19 variants. Consequently, management believes that this surge should not halt the recovery in oil demand. With widespread vaccination campaigns, and the apparent lower rates of serious illness and hospitalization resulting from the recent wave, this wave is likely to have a lesser impact on the economy and demand for oil than previous COVID-19 variants.

Absent any further material COVID-related disruption, oil demand is expected to exceed pre-pandemic levels before the end of 2022. We also expect to accelerate work on projects that were delayed or slowed due to pandemic-related travel restrictions.

We offer a wide variety of specialized oilfield services and equipment generally categorized by their typical use during the economic life of a well. A description of the products and services offered by each of our segments is as follows:

The products and service offerings of Rentals are comprised of value-added engineering and design services, rental of premium drill strings, tubing, landing strings, completion tubulars and handling accessories, manufacturing and rental of bottom hole assemblies, and rentals of accommodation units.

The products and service offerings of Well Services are comprised of risk management, well control and training solutions, hydraulic workover and snubbing services, engineering and manufacturing of premium sand control tools, and onshore international production services. The Well Services segment also includes the operations of our offshore oil and gas property.

For information about our operating segments and financial information by operating segment and geographic area, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of this Annual Report on Form 10-K and the Notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Our customers are major and independent oil and gas companies that are active in the geographic areas in which we operate. There were no customers that exceeded 10% of our total revenues in ~~2021, 2020~~2023, 2022 or ~~2019.~~2021. A reduction in sales to any of our existing large customers could have a material adverse effect on our business and operations.

We provide products and services worldwide in highly competitive markets, with competitors comprised of both small or regionally focused companies in our Rentals segment, and large or international ~~companies.~~companies in our Well services segment. Our revenues and earnings can be affected by several factors, including but not limited to changes in competition, fluctuations in drilling and completion activity, perceptions of future prices of oil and gas, government regulation, disruptions caused by factors such as weather, pandemics, and geopolitics, and general economic conditions. We believe that the principal competitive factors are price, performance, product and service quality, safety, response time and breadth of products and services.

Our operations involve a high degree of operational risk and expose us to significant liabilities. An accident involving our services or equipment, or the failure of a product sold by us, could result in personal injury, loss of life, and damage to property, equipment or the environment. Litigation arising from a catastrophic occurrence, such as fire, explosion, well blowout or vessel loss, may result in substantial claims for damages.

We maintain a liability insurance program that covers against certain operating hazards, including product liability, property damage and personal injury claims, as well as certain limited environmental pollution claims for damage to a third party or its property arising out of contact with pollution for which we are liable, but well control costs are not covered by this program. These policies include primary and excess umbrella liability policies with limits of $200 million per occurrence, including sudden and accidental pollution incidents. All of the insurance policies we purchase contain specific terms, conditions, limitations and exclusions and are subject to either deductibles or self-insured retention amounts for which we are responsible. There can be no assurance that the nature and amount of insurance we maintain will be sufficient to fully protect us against all liabilities related to our business.

Our business is significantly affected by federal, state and local laws and other regulations. These laws and regulations relate to, among other things:

Numerous permits are required for the conduct of our business and operation of our various facilities and equipment, including our underground injection wells, trucks and other heavy equipment. These permits can be revoked, modified or renewed by issuing authorities based on factors both within and outside our control.

We cannot predict the level of enforcement of existing laws and regulations or how such laws and regulations may be interpreted by enforcement agencies or court rulings in the future. We also cannot predict whether additional laws and regulations will be adopted,

including changes in regulatory oversight, increase of federal, state or local taxes, increase of inspection costs, or the effect such changes may have on us, our businesses or our financial condition.

Our operations, and those of our customers, are subject to extensive laws, regulations and treaties relating to air and water quality, generation, storage and handling of hazardous materials, and emission and discharge of materials into the environment. We believe we are in substantial compliance with all regulations affecting our business. Historically, our expenditures in furtherance of our compliance with these laws, regulations and treaties have not been material, and we do not expect the cost of compliance to be material in the future.

Numerous federal, state and local governmental agencies, such as the U.S. Environmental Protection Agency (the “EPA”), issue laws and regulations that often require difficult and costly compliance measures that carry substantial administrative, civil and criminal penalties and may result in injunctive obligations for non-compliance. These laws and regulations may require the acquisition of a permit before commencing operations, restrict the types, quantities and concentrations of various substances that can be released into the environment in connection with our operations, limit or prohibit construction or drilling activities on certain lands lying within wilderness, wetlands, ecologically or seismically sensitive areas and other protected areas, require action to prevent or remediate pollution from current or former operations, such as plugging abandoned wells or closing pits, result in the suspension or revocation of necessary permits, licenses and authorizations, require that additional pollution controls be installed and impose substantial liabilities for pollution resulting from our operations or related to our owned or operated facilities. Liability under such laws and regulations is often strict (i.e., no showing of “fault” is required) and can be joint and several. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances, hydrocarbons or other waste products into the environment. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent and costly pollution control or waste handling, storage, transport, disposal or cleanup requirements could materially adversely affect our operations and financial position, as well as the oil and natural gas industry and infrastructure industry in general. We have not experienced any material adverse effect from compliance with these environmental requirements. This trend, however, may not continue in the future.

In recent years, federal, state and local governments have taken steps to reduce emissions of carbon dioxide, methane and other greenhouse gases, collectively referred to as greenhouse gasses (“GHGs”). For example, the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 (“IRA”) include billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration. Also, the EPA has proposed rules to reduce harmful air pollutant emissions, including GHGs, from light-, medium-, and heavy-duty vehicles beginning in model year 2027. These incentives and regulations could 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 imposes the first ever federal fee on the emission of GHGs through a methane emissions charge. Specifically, the IRA amends the Clean Air Act to impose a fee on the emission of methane that exceeds an applicable waste emissions threshold from sources required to report their GHG emissions to the EPA, including sources in the offshore and 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. On January 12, 2024, the EPA announced a proposed rule to implement the methane emissions charge. The methane emissions charge could increase the operating costs of our customers, which could, in turn, impact our business, financial condition and cash flows.

The EPA has also finalized a series of GHG monitoring, reporting and emissions control rules for the oil and natural gas industry, and ~~the U.S. Congress has, from time to time, considered adopting legislation to reduce emissions. Almost one-half~~almost half of the states have already taken measures to reduce emissions of GHGs primarily through the development of GHG emission inventories and/or regional GHG cap-and-trade programs. Also, states have imposed increasingly stringent ~~requirement~~requirements related to the venting or flaring of gas during oil and gas operations. While we are subject to certain federal GHG monitoring and reporting requirements, our operations currently are not adversely impacted by existing federal, state and local climate change initiatives.

At the international level, in December 2015, the United States participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France. The resulting Paris Agreement calls for the parties to undertake “ambitious efforts” to limit the average global temperature, and to conserve and enhance sinks and reservoirs of GHGs. The Agreement went into effect on November 4, 2016. The Paris Agreement establishes a framework for the parties to cooperate and report actions to reduce GHG emissions. Although the United States withdrew from the Paris Agreement effective November 4, 2020, President Biden issued an executive order on January 20, 2021 to rejoin the Paris Agreement, which went into effect on February 19, 2021. On April 21, 2021, the United States announced that it was setting an economy-wide target of reducing its greenhouse gas emissions by 50 to 52 percent below 2005 levels in 2030. In November 2021, in connection with the 26th Conference of the Parties in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce greenhouse gas

emission, including reducing global methane emissions by at least 30% by 2030 from 2020 levels. More than 150 countries have now signed on to ~~meet~~ this ~~objective.~~pledge. Most recently, at the 28th Conference of the Parties in the United Arab Emirates, world leaders agreed to transition away from fossil fuels in a just, orderly and equitable manner and to triple renewables and double energy efficiency globally by 2030. Furthermore, many state and local leaders have stated their intent to intensify efforts to support the international commitments.

Restrictions on emissions of methane or carbon dioxide that may be imposed could adversely affect the oil and natural gas industry by reducing demand for hydrocarbons and by making it more expensive to develop and produce hydrocarbons, either of which could have a material adverse effect on future demand for our services. At this time, it is not possible to accurately estimate how potential future laws or regulations addressing GHG emissions would impact our business.

In addition, there have also been efforts in recent years to influence the investment community and certain financial institutions, including investment advisors and certain sovereign wealth, pension and endowment funds promoting divestment of fossil fuel equities and pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel ~~reserves.~~reserves, and insurance companies to limit available coverage for entities engaged in the production or use of fossil fuels. Such environmental activism and initiatives aimed at limiting climate change and reducing air pollution could interfere with our business activities, operations and our ability to access ~~capital.~~capital and obtain third party insurance. Furthermore, claims have

been made against certain energy companies alleging that GHG emissions from oil and natural gas operations constitute a public nuisance under federal and/or state common law. As a result, private individuals or public entities may seek to enforce environmental laws and regulations against certain energy companies and could allege personal injury, property damages or other liabilities. While our business is not a party to any such litigation, we could be named in actions making similar allegations. An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

Moreover, climate change may cause more extreme weather conditions such as more intense hurricanes, thunderstorms, tornadoes and snow or ice storms, as well as rising sea levels and increased volatility in seasonal temperatures. Extreme weather conditions can interfere with our productivity and increase our costs and damage resulting from extreme weather may not be fully insured. However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations.

We purchase various raw materials and component parts in connection with delivering our products and services. These materials are generally, but not always, available from multiple sources and may be subject to price volatility. While we generally do not experience significant long-term shortages of these materials, we have from time to time experienced temporary shortages of particular raw materials. We are always seeking ways to ensure the availability of resources, as well as manage costs of raw materials.

Seasonal weather and severe weather conditions can temporarily impair our operations and reduce demand for our products and services. Examples of seasonal events that negatively affect our operations include high seas associated with cold fronts during the winter months and hurricanes during the summer months in the Gulf of Mexico, and severe cold during winter months in the U.S. land market area.

AtAs of December 31, ~~2021,~~2023, we had approximately 2,300 employees. Approximately ~~28%~~26% of our ~~employees~~total employee base are subject to union contracts ~~all of which~~and are located in ~~international locations.~~Argentina and Brazil. We believe that we have good relationships with our employees. We strive to employ a dynamic workforce to complement our core values. Our hiring policy forbids ~~the~~ discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, race or religion. We are an inclusive company with people of various backgrounds, experience, culture, styles and talents. We are committed to the health, safety and wellness of our employees, and we pride ourselves on workplace safety. We track and maintain several key safety metrics, which senior management reviews periodically and ~~are included in the determination of their compensation and~~ we evaluate management on their ability to provide safe working conditions on job sites and to create a safety culture.

We own or lease a large number of facilities in the U.S. and in various other countries throughout the world. Our international operations are primarily focused in Latin America, Asia-Pacific and the Middle East/North Africa regions. As

We have our principal executive offices at 1001 Louisiana Street, Suite 2900, Houston, Texas 77002. Our telephone number is (713) 654-2200. We also have a website at http://www.superiorenergy.com.

Copies of the annual, quarterly and current reports we file with or furnish to the SEC, and any amendments to those reports, as well as our Code of Conduct, are available on our website free of charge soon after such reports are filed with or furnished to the SEC. The information posted on our website is not incorporated into this ~~Annual Report on~~ Form 10-K. Alternatively, you may access these reports at the SEC’s website at http://www.sec.gov/.

The following information should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of this ~~Annual Report on~~ Form 10-K, the consolidated financial statements and related notes contained in Part II, Item 8 of this ~~Annual Report on~~ Form 10-K and the matters contained under the caption “Forward-Looking Statements” at the beginning of this ~~Annual Report on~~ Form 10-K.

The following discussion of “risk factors” identifies the most significant risks or uncertainties that could (i) materially and adversely affect our business, financial condition, results of operations, liquidity or prospects, as well as the market value of our securities, or (ii) cause our actual results to differ materially from our anticipated results or other expectations. These risks are not the only risks that we face. Our business operations could also be affected by additional factors that apply to all companies operating in the U.S. and globally, as well as other risks that are not presently known to us or that we currently consider to be immaterial to our operations. These risks include:

~~Despite having emerged from bankruptcy on February 2, 2021, we continue to be subject to the risks and uncertainties associated with residual Chapter 11 bankruptcy proceedings.~~

As discussed below (see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations), we emerged from bankruptcy on the Emergence Date. It is possible that having filed for bankruptcy and our recent emergence from the bankruptcy could adversely affect our business and relationships with customers, vendors, employees, service providers and suppliers. Due to uncertainties, many risks exist, including the following:

Because of the residual risks and uncertainties associated with the Chapter 11 Cases, the ultimate impact that events that occurred during, or that may occur subsequent to, these proceedings will have on our business, financial condition and results of operations cannot be accurately predicted or quantified. We cannot assure you that having been subject to bankruptcy protection will not adversely affect our operations going forward.

Our actual financial results since we emerged from bankruptcy are not comparable to the Predecessor's historical financial information as a result of the implementation of the Plan and the transactions contemplated thereby and our adoption of fresh start accounting.

In connection with the disclosure statement filed with the Bankruptcy Court, and the hearing to consider confirmation of the Plan, projected financial information through the end of 2023 was prepared to demonstrate to the Bankruptcy Court the feasibility of the Plan and our ability to continue operations upon emergence from bankruptcy. Those projections were prepared solely for the purpose of the bankruptcy proceedings and have not been, and will not be, updated on an ongoing basis and should not be relied upon by investors. At the time they were prepared, the projections reflected numerous assumptions concerning anticipated future performance with respect to prevailing and anticipated market and economic conditions that were and remain beyond our control and that may not materialize. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks and the assumptions underlying the projections and/or valuation estimates may prove to be wrong in material respects. Actual results will likely vary significantly from those contemplated by the projections. The failure of any such results, or any other developments contemplated by the Plan, to materialize, or of any such results or developments to have the anticipated effect on us and our subsidiaries or our business or operations, could materially adversely impact our business and prospects as a post-emergence company.

In addition, as a result of our emergence from bankruptcy, we adopted fresh start accounting and adjusted our assets and liabilities to fair values and our accumulated deficit was restated to zero and reflected in our financial statements for the quarter ending March 31,

2021. We became a new entity for financial reporting purposes on February 2, 2021 (the “Emergence Date”). Accordingly, our financial condition and results of operations following our emergence from bankruptcy are not comparable to the financial condition and results of operations reflected in historical financial statements.

Our business depends on conditions in the oil and gas industry, especially oil and natural gas prices and capital expenditures by oil and gas companies.

Our business depends on the level of oil and natural gas exploration, development and production activity of, and the corresponding capital spending by, oil and gas companies worldwide. The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile and difficult to predict and are likely to continue to be volatile. Oil and natural gas prices are subject to large fluctuations in response to relatively minor changes in supply and demand, economic growth trends, market uncertainty and a variety of other factors beyond our control. Price volatility continued throughout 2019 and, partially due to the emergence of the COVID-19 pandemic and failure of OPEC+ and other major producers to agree on production cuts, became more extreme in 2020 and 2021. In addition, oil prices are particularly sensitive to actual and perceived threats to global political stability, such as Russia's invasion of Ukraine, the conflict in Israel and broader geopolitical tensions in the Middle East and eastern Europe, and to changes in production from OPEC+ member states. The ongoing conflict, and the continuation of, or any increase in, the conflict between Russia and Ukraine, has led and may continue to lead to an increase in the volatility of global oil and gas prices, which could have a corresponding negative impact on the capital expenditure of oil and gas companies as a result of the higher perceived risk. In addition, the imposition of comprehensive sanctions against Russia (including in relation to the Russian energy sector) as well as the announcement of prohibitions on Russian oil and gas imports by certain members of the European Union, the United Kingdom, the United States, and certain other countries, as of March 2022, including additional countries that may enforce prohibitions of a similar nature in the future, has led to and is expected to continue to lead to an increase in the price of global oil and gas prices. Lower oil and natural gas prices generally lead to decreased spending by our customers, while higher oil and natural gas prices generally lead to increased spending up to a point. Our customers may also ~~take into account~~consider the volatility of oil and natural gas prices and other risk factors, ~~and~~which may reduce capital expenditures or require higher returns for individual projects if there is higher perceived risk. Any of these factors could significantly affect the demand for oil and natural gas, which could affect the level of capital spending by our customers and in turn could have a material effect on our business, results of operations, financial condition and cash flow.

The availability of quality drilling prospects, exploration success, relative production costs, expectations about future oil and natural gas demand and prices, the stage of reservoir development, the availability of financing, and political and regulatory environments are also expected to affect levels of exploration, development, and production activity, which would impact the demand for our services. Any prolonged reduction of oil and natural gas prices, as well as anticipated declines, could also result in lower levels of exploration, development, and production activity. In addition, the transition of the global energy sector from a primarily fossil fuel-based system to a diverse system which includes renewable energy sources could affect our customers’ levels of expenditures.

The demand for our services may be affected by numerous factors, including the following:

The oil and gas industry has historically experienced periodic downturns, which have been characterized by significantly reduced demand for oilfield services and downward pressure on the prices we charge. Sustained lower oil and natural gas prices have led to a significant decrease in spending by our customers over the past several years, which have led to significantly decreased revenues. Further decreases in oil and natural gas prices could lead to further cuts in spending and potential lower revenues for us. Moreover, weakness in the oil and gas industry may adversely impact the financial position of our customers, which in turn could cause them to fail to pay amounts owed to us in a timely manner or at all. We expect continued volatility in both crude oil and natural gas prices, ~~(including the possibilities that such prices could remain at current levels or decline further for an extended period of time),~~ as well as in the level of drilling and production related activities as a result of ~~the continuing COVID-19 pandemic,~~ decisions of OPEC+ and other oil exporting nations regarding production, and the other factors listed above. Any of these events have affected, and could further affect, the demand for oil and natural gas and has and could further have a material adverse effect on our business, results of operations, financial condition and cash flow.

Our business may also be affected by new sanctions and export controls targeting Russia and other responses to Russia’s invasion of Ukraine.

As a result of Russia’s invasion of Ukraine, ~~certain members of~~ the European Union (and certain of its member states), the United Kingdom and the United States, among others, have developed coordinated sanctions and export-control measure packages.

Based on actions taken and other public statements to date, these packages ~~may include:~~have included, for example:

As the invasion of Ukraine continues, there can be no certainty regarding whether such governments or other governments will impose additional sanctions, export-controls or other economic or military measures against Russia. ~~Although, we~~We have ~~minimal~~no operational exposure in Russia, ~~representing less than $0.2 million of our revenues for the year ended December 31, 2021,~~ and – in compliance with relevant sanctions regimes – we do not intend to commit further capital towards projects in ~~Russia, the~~Russia. The impact the invasion of Ukraine, including economic sanctions and export controls or additional war or military conflict, as well as potential responses to them by Russia, is currently unknown and they could adversely affect oil and gas companies, including many of which are our customers, as well as the global supply chain. In addition, the continuation of the invasion of Ukraine by Russia could lead to other disruptions, instability and volatility in global markets and industries, which could have a material adverse effect on our business, results of operations, financial condition and cash flow.

Our failure to comply with the FCPA and other similar laws could have a negative impact on our ongoing operations.

The FCPA and other anti-corruption laws in the countries where we operate prohibit companies and their employees, or other individuals acting on their behalf, from providing anything of value to a public official for the purposes of influencing any act or decision of these individuals to help obtain or retain business or obtain any unfair advantage. We have implemented policies and procedures designed to encourage compliance with applicable anti-corruption laws. However, our ability to comply with such laws depends on the success of our ongoing compliance programs and we cannot assure that our programs will always protect us from criminal acts committed by our employees or agents. Allegations of violations of anti-corruption laws may result in internal, independent, or government investigations. Violations of anti-corruption laws may result in severe criminal or civil sanctions, as well as legal expenses and reputational harm, and we may be subject to other liabilities, which could have a material adverse effect on our business, operations, and financial condition.

Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.

WeWhile we have a significant cash balance currently, we face uncertainty regarding the adequacy of our liquidity and capital resources over the long-term and have extremely limited, if any, access to additional financing. We cannot assure you that cash on hand, letters of credit and borrowings under the Credit Facility, and cash flow from operations will be sufficient to continue to fund our ~~operations.~~operations over the long-term.

Furthermore, turmoil in the credit and financial markets could adversely affect financial institutions, inhibit lending and limit our access to funding through borrowings under the Credit Facility or obtaining other financing in the public or private capital markets on terms we believe to be reasonable. Prevailing market conditions could be adversely affected by the ongoing disruptions in domestic or overseas sovereign or corporate debt markets, low commodity prices or other factors impacting our business, contractions or limited growth in the economy or other similar adverse economic developments in the U.S. or abroad. Instability in the global financial markets has from time to time resulted in periodic volatility in the capital markets. In addition, there has been a relatively recent increased focus of debt and equity capital providers on environmental, social and governance (“ESG”) investing, and the energy industry ~~faces~~has been generally facing growing negative sentiment in the market. This volatility, as well as this increased focus on ESG investing and ~~growing~~ negative sentiment, could limit our access to the credit markets, leading to higher borrowing costs or, in some cases, the inability to obtain financing on terms that are

acceptable to us, or at all. Any such failure to obtain additional financing could jeopardize our ability to repay, refinance or reduce our debt obligations, or to meet our other financial commitments.

Restrictive covenants in the Credit Facility could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.

The Credit Facility imposes operating and financial restrictions. Unless all loans are paid off and letters of credit outstanding are cash collateralized and the Credit Agreement terminated, these restrictions limit the ability to, among other things, subject to permitted exceptions:

The Credit Facility includes provisions that require mandatory prepayment of outstanding borrowings and/or a borrowing base redetermination when there are asset dispositions over a certain threshold, which could limit the ability to generate liquidity from asset sales. Also, the Credit Facility requires compliance with a specified financial ratio if triggered by an event of default or availability beneath specified thresholds. The ability to comply with this ratio may be affected by events beyond our control and, as a result, this ratio may not be met in circumstances when it is tested. This financial ratio restriction could limit the ability to obtain future financings, make needed capital expenditures, withstand a continued downturn in our business or a downturn in the economy in general or otherwise conduct necessary corporate activities. Declines in oil and natural gas prices could result in failure to meet one or more of the financial covenants under the Credit Facility, which could require refinancing or amendment of such obligations resulting in the payment of consent fees or higher interest rates or require a capital raise at an inopportune time or on terms not favorable.

A breach of any of these covenants or the inability to comply with the required financial ratios or financial condition tests could result in a default under the Credit Facility. A default under the Credit Facility, if not cured or waived, could result in acceleration of all indebtedness outstanding thereunder and/or a requirement to cash collateralize letters of credit issued ~~thereunder.~~
thereunder and ultimately, exercise of remedies by the lenders thereunder against the Company and the other guarantors under the Credit Facility and/or the collateral securing the Credit Facility.

~~The COVID-19 pandemic continues~~Our business may be materially and adversely impacted by U.S. and global market and economic conditions, including impacts relating to ~~adversely affect our business,~~inflation and ~~the ultimate effect on our operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.~~supply chain disruptions.

~~The COVID-19 pandemic has had,~~Our revenue is derived from the services and ~~continues~~products that we offer to ~~have, a material impact on businesses~~major, national and independent oil and natural gas exploration and production companies around the world ~~and~~for the ~~economic environments in which they operate. A number of jurisdictions in which we operate have implemented severe restrictions on the movement~~various phases of their respective ~~populations. The COVID-19 pandemic and efforts to mitigate its effect have had a substantial negative impact on~~well’s economic life cycles. Given the ~~global economy and demand for oil, which has directly affected~~concentration of our business activities in the oil and ~~progress of the Transformation Project. Although oil prices are back~~gas industry, we will be particularly exposed to pre-pandemic levels, driven by global vaccine distribution, an unfolding demand recovery, OPEC+ agreement on production volume, and a declining production base, if the demand for or price of crude oil does not further increase, our business, financial condition, results of operation and liquidity may be further materially and adversely affected. Our operations also may be further adversely affected if significant portions of our workforce continue to be unable to work effectively due to illness, quarantines, government actions or other restrictions in connection with the COVID-19 pandemic.certain economic downturns.

~~are currently experiencing~~United States and ~~may~~global market and economic conditions have been, and continue to ~~experience~~be, disrupted and volatile due to many factors, component shortages and ~~delays~~related supply chain challenges, geopolitical developments such as the conflicts in Israel (and broader geopolitical tensions in the ~~shipments of key machinery, parts~~Middle East and ~~consumables from~~eastern Europe) and between Ukraine and Russia, and inflation rates and the responses by central banking authorities to control such inflation, among others.

General business and economic conditions that could affect us and our ~~suppliers. If any~~customers include fluctuations in economic growth, debt and equity capital markets, liquidity of the ~~foregoing were~~global financial markets, the availability and cost of credit, investor and consumer confidence, and the strength of the economies in which we and our customers operate. A weak economic environment could result in significant decreases in demand for our products and services, including the delay or cancellation of current or anticipated projects. In particular, inflation rates in the United States have affected businesses across many industries, including ours, by increasing the costs of labor, equipment, parts, consumables and shipping. An inflationary environment may also cause customers to ~~continue~~defer or decrease their expenditures on the services and products that we provide. In addition, supply chain disruptions and delays, could adversely affect our ability to ~~occur, we may not be able to find alternative suppliers on commercially reasonable terms or~~provide our services and deliver our products in a timely ~~basis, if at all.~~manner, which could impair our ability to meet customer demand and result in lost sales, increased supply chain costs or damage to our reputation. Any ~~prolonged or subsequent disruptions or delays in our equipment, consumables, parts and other machinery,~~of foregoing these economic conditions could have a material adverse effect on our business, ~~results of operations,~~ financial condition, and ~~cash flow.~~

~~We believe that the well-known impacts described above and other potential impacts include, but are not limited to, the following:~~

At this time, it is not possible to quantify these risks, but the combination of these factors could have a further material impact on our financial results. The ultimate extent to which the COVID-19 pandemic adversely affects our business, financial condition, results of operation and liquidity will depend on future developments, which are highly uncertain and cannot be predicted. These future developments include, but are not limited to, vaccine availability and acceptance, the effectiveness of vaccines against different strains of COVID-19, the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the COVID-19 pandemic. Disruptions and/or uncertainties related to the COVID-19 pandemic for a sustained period of time could result in, and have resulted to date in, delays or modifications to our strategic plans and initiatives and could hinder our ability to achieve our strategic goals. The COVID-19 pandemic, and the volatile regional and global economic conditions stemming from the COVID-19 pandemic, will likely have the effect of heightening many of the other risks included in this Annual Report on Form 10-K. However, because the COVID-19 pandemic is unprecedented and continuously evolving, the other potential impacts to our risk factors are uncertain.operations.

There are operating hazards inherent in the oil and gas industry that could expose us to substantial liabilities.

Our operations are subject to hazards inherent in the oil and gas industry that may lead to property damage, personal injury, death or the discharge of hazardous materials into the environment. Many of these events are outside of our control. ~~Typically, we provide products and services at a well site where~~While our personnel ~~and equipment are located together with personnel and equipment~~has decreased significantly in recent years as a result of ~~our customer and other service providers. From~~divestitures, from time to time, personnel are injured or equipment or property is damaged or destroyed as a result of accidents, failed equipment, faulty products or services, failure of safety measures, uncontained formation pressures or other dangers inherent in oil and natural gas exploration, development and production. Any of these events can be the result of human error or purely accidental, and it may be difficult or impossible to definitively determine the ultimate cause of the event or whose personnel or equipment contributed thereto. All of these risks expose us to a wide range of significant health, safety and environmental risks and potentially substantial litigation claims for damages. With increasing frequency, our products and services are deployed in more challenging exploration, development and production locations. From time to time, customers and third parties may seek to hold us accountable for damages and costs incurred as a result of an accident, including pollution, even under circumstances where we believe we did not cause or contribute to the accident. Our insurance policies are subject to exclusions, limitations and other conditions, and may not protect us against liability for some types of events, including events involving a well blowout, or against losses from business interruption. Our insurance also may not cover losses associated with ~~pandemics such as the COVID-19 pandemic.~~pandemics. Moreover, we may not be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate or on terms that we deem commercially reasonable,

or at all. Additionally, insurance rates have in the past been subject to wide fluctuation and may be unavailable on terms that we or our customers believe are economically acceptable. Reductions in coverage, changes in the insurance markets and accidents affecting our industry may result in further increases in our cost and higher deductibles and retentions in future years and may also result in reduced activity levels in certain markets. As a result, we may not be able to continue to obtain insurance on commercially reasonable terms. Any damages or losses that are not covered by insurance, or are in excess of policy limits or subject to substantial deductibles or retentions, could adversely affect our financial condition, results of operations and cash flows.

We may not be fully indemnified against losses incurred due to catastrophic events.

As is customary in our industry, our contracts generally provide that we will indemnify and hold harmless our customers from any claims arising from personal injury or death of our employees, damage to or loss of our equipment, and pollution emanating from our equipment and services. Similarly, our customers generally agree to indemnify and hold us harmless from any claims arising from personal injury or death of their employees, damage to or loss of their equipment or property, and pollution caused from their equipment or the well reservoir (including uncontained oil flow from a reservoir). Our indemnification arrangements may not protect us in every case. For example, from time to time we may enter into contracts with less favorable indemnities or perform work without a contract that protects us. In addition, our indemnification rights may not fully protect us if we cannot prove that we are entitled to be indemnified or if the customer is bankrupt or insolvent, does not maintain adequate insurance or otherwise does not possess sufficient resources to indemnify us. In addition, our indemnification rights may be held unenforceable in some jurisdictions.

Our customers’ changing views on risk allocation could cause us to accept greater risk to win new business or could result in us losing business if we are not prepared to take such risks. To the extent that we accept such additional risk, and insure against it, our insurance premiums could rise.

Many of our customers are oil and gas companies that ~~are facing~~from time to time face liquidity constraints ~~in light of~~as the ~~current~~ commodity price ~~environment.~~environment changes. These customers impact our overall exposure to credit risk as they are also affected by prolonged changes in economic and industry conditions. If a significant number of our customers experience a prolonged business decline or disruptions, we may incur increased exposure to credit risk and bad debts.

We are subject to environmental and worker health and safety laws and regulations, which could reduce our business opportunities and revenue, and increase our costs and liabilities.

Our business is significantly affected by a wide range of environmental and worker health and safety laws and regulations in the areas in which we operate, including increasingly rigorous environmental laws and regulations governing air emissions, water discharges and waste management. Generally, these laws and regulations have become more stringent and have sought to impose greater liability on a larger number of potentially responsible parties. The Macondo well explosion in 2010 resulted in additional regulation of our offshore operations, and similar onshore or offshore accidents in the future could result in additional increases in regulation. Failure to comply with these laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, imposition of remedial requirements, permit revocations, requirements for additional pollution controls, and ~~issuance~~injunctions limiting or prohibiting some or all of ~~injunctions as to future compliance.~~our operations.

Environmental laws and regulations may provide for “strict liability” for remediation costs, damages to natural resources or threats to public health and safety as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior owners or operators or other third parties. Strict liability can render a party liable for damages without regard to negligence or fault on the part of the party. Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances. For example, our well service and fluids businesses routinely involve the handling of significant amounts of waste materials, some of which are classified as hazardous substances. We also store, transport and use radioactive and explosive materials in certain of our operations. In addition, many of our current and former facilities are, or have been, used for industrial purposes. Accordingly, we could become subject to material liabilities relating to the containment and disposal of hazardous substances, oilfield waste and other waste materials, the use of radioactive materials, the use of underground injection wells, and to claims alleging personal injury or property damage as the result of exposures to, or releases of, hazardous substances. In addition, stricter enforcement of existing laws and regulations, new domestic or foreign laws and regulations, the discovery of previously unknown contamination or the imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities that could reduce our earnings and our cash available for operations.

In addition, we and our customers may need to apply for or amend facility permits or licenses from time to time with respect to storm water or wastewater discharges, waste handling, or air emissions relating to manufacturing activities or equipment operations, which subjects us and our customers to new or revised permitting conditions that may be onerous or costly to comply with.

Climate change legislation or regulations restricting emissions of greenhouse gases or incentivizing zero-carbon energy sources could result in increased operating costs and reduced demand for the oil and natural gas our customers produce.

Increasing concerns that emissions of carbon dioxide, methane and other greenhouse gases (“GHGs”) may endanger public health and produce climate changes with significant physical effects, such as increased frequency and severity of storms, floods, droughts and other climatic events, have drawn significant attention from government agencies, environmental advocacy groups and technological initiatives aimed at reducing the use of hydrocarbons. In response, additional costly requirements and restrictions have been imposed on the oil and gas industry to regulate and reduce the emission of GHGs and transition to a global low carbon economy.

~~Specifically,~~For example, the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 (“IRA”) include billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration. Also, the EPA has ~~adopted~~proposed rules to reduce harmful air pollutant emissions, including greenhouse gases, from light-, medium-, and heavy-duty vehicles beginning in model year 2027. These incentives and regulations ~~under existing provisions~~could 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 imposes the first ever federal fee on the emission of GHGs through a methane emissions charge. Specifically, the IRA amends the Clean Air Act to impose a fee on the emission of methane that exceeds an applicable waste emissions threshold from sources required to report their GHG emissions to the EPA, including sources in the offshore and 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. On January 12, 2024, the EPA announced a proposed rule

to implement the methane emissions charge. The methane emissions charge could increase the operating costs of our customers, which ~~increase operational costs by requiring the monitoring~~could, in turn, impact our business, financial condition and ~~annual reporting~~cash flows.

The EPA has also finalized a series of GHG monitoring, reporting and emissions ~~from~~control rules for the oil and natural gas ~~production, processing, transmission~~industry, and ~~storage facilities in~~almost half of the ~~United States. Although the U.S. Congress has considered legislation~~states have already taken measures to reduce emissions of GHGs significant legislation has not yet been adopted to reduce GHG emissions at the federal level. In the absence of such federal climate legislation, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissionsprimarily through the ~~completion~~development of GHG ~~emissions~~emission inventories ~~and through cap and trade programs that typically require major sources~~and/or regional GHG cap-and-trade programs. Also, states have imposed increasingly stringent requirements related to the venting or flaring of GHG emissions to acquire and surrender emission allowances in return for emitting GHGs. Other non-U.S. governmental bodies such as the European Union have implemented similar policies aimed at reducing GHG emissions, including but not limited to carbon taxes, cap and trade programs, renewable fuel mandates, or other regulations targeting carbon intensive activities. Given the long-term trend towards increasing regulation, future federal and international GHG regulations of thegas during oil and gas ~~industry remain a possibility.~~operations. While we are subject to certain federal GHG monitoring and reporting requirements, our operations currently are not adversely impacted by existing federal, state and local climate change initiatives.

~~Climate change, environmental, social and governance, and sustainability are growing global movements. Continuing political and social attention to these issues has resulted~~At the international level, in both existing and pending international agreements and national, regional or local legislation and regulatory measures, as well as society pressure in some areas, to limit GHG emissions and has been stated in the U.S. to be a priority of the new Biden Administration, as well as other initiatives. In December 2015, the United States ~~joined the international community at~~participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, ~~France that proposed an agreement (the “Paris Agreement”) requiring member countries~~France. The resulting Paris Agreement calls for the parties to ~~review~~undertake “ambitious efforts” to limit the average global temperature, and ~~“represent a progression” in their intended nationally determined contributions, which set GHG emission reduction goals every five years beginning in 2020. This agreement was signed by~~to conserve and enhance sinks and reservoirs of GHGs. The Agreement went into effect on November 4, 2016. On April 21, 2021, the United States announced that it was setting an economy-wide target of reducing its greenhouse gas emissions by 50 to 52 percent below 2005 levels in ~~April 2016 and entered into force~~2030. In November 2021, in ~~November 2016. The United States is one~~connection with the 26th Conference of ~~over 120 nations having ratified or otherwise consented to~~ the agreement; however this agreement does not create any binding obligations for nations to limit their GHG emissions, but rather includes pledges to voluntarily limit or reduce future emissions. Although the prior administration formally withdrewParties in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce greenhouse gas emission, including reducing global methane emissions by at least 30% by 2030 from 2020 levels. More than 150 countries have now signed on to this pledge. Most recently, at the ~~Paris Agreement effective November 4, 2020,~~28th Conference of the ~~new administration issued an executive order~~Parties in the United Arab Emirates, world leaders agreed to ~~rejoin~~transition away from fossil fuels in a just, orderly and equitable manner and to triple renewables and double energy efficiency globally by 2030. Furthermore, many state and local leaders have stated their intent to intensify efforts to support the ~~Paris climate agreement on January 20, 2021, effective on February 19, 2021.~~international commitments.

In addition, ~~to governmental regulations,~~ our customers are also requiring additional equipment upgrades to address the growing concerns of GHG emission and climate change which result in higher operational costs for service providers such as us. ~~Despite taking additional measures to reduce GHG emissions, there is the possibility that the demand for fossil fuels may nevertheless decrease due to such concerns.~~

~~Furthermore, there~~There have also been efforts in recent years ~~aimed at~~to influence the investment community, including investment advisors and certain sovereign wealth, pension and endowment funds ~~public pension funds, universities and other groups,~~ promoting ~~the~~ divestment of fossil fuel equities ~~as well as to pressure~~and pressuring lenders ~~and other financial services companies~~ to limit ~~or curtail activities with~~funding to companies engaged in the extraction of fossil fuel reserves. ~~If these efforts are successful,~~Such environmental activism and initiatives aimed at limiting climate change and reducing air pollution could interfere with our ~~ability~~business activities, operations and ~~the~~ ability ~~of our customers~~ to access ~~capital markets~~capital. Furthermore, claims have been made against certain energy companies alleging that GHG emissions from oil and natural gas operations constitute a public nuisance under federal and/or state common law. As a result, private individuals or public entities may seek to enforce environmental laws and regulations against certain energy companies and could allege personal injury, property damages or other liabilities. While our business is not a party to any such litigation, we could be ~~limited.~~named in actions making similar allegations. An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

At this stage, we cannot predict the impact of these or other initiatives on our or our customers’ operations, nor can we predict whether, or which of, other currently pending GHG emission proposals will be adopted, or what other actions may be taken by domestic or international regulatory bodies. The potential passage of climate change ~~regulation~~laws or regulations may curtail production and demand for fossil fuels such as oil and gas in areas of the world where our customers operate and thus adversely affect future demand for our products and services, which may in turn adversely affect future results of operations.

Continuing or worsening inflationary pressures and associated changes in monetary policy have resulted in and may result in additional increases to our operating costs, which in turn have caused and may continue to cause our capital expenditures and operating costs to rise.

Increases in the U.S. inflation rate in recent years has resulted in and may result in additional increases to our operating costs, which in turn have caused and may continue to cause our capital expenditures and operating costs to rise. Sustained levels of high inflation have likewise caused the 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.

Our operations may be materially affected by severe weather conditions in areas where we operate. Severe weather, such as hurricanes, high winds and seas, blizzards and extreme temperatures may cause evacuation of personnel, curtailment of services and suspension of

operations, inability to deliver materials to jobsites in accordance with contract schedules, loss of or damage to equipment and facilities and reduced productivity. In addition, variations from normal weather patterns can have a significant impact on demand for oil and natural gas, thereby reducing demand for our services and equipment.

Our inability to retain key employees and skilled workers could adversely affect our operations.

Our performance could be adversely affected, especially in light of our emergence from bankruptcy, if we are unable to retain certain key employees and skilled technical personnel. Our ability to continue to expand the scope of our services and products depends in part

on our ability to increase the size of our skilled labor force. The loss of the services of ~~one or more of our~~ key employees or the inability to employ or retain skilled technical personnel could adversely affect our operating results. In the past, the demand for skilled personnel has been high and the supply limited. We ~~may also face a loss of workers and labor shortages as a result of vaccine mandates or requirements and enforcement of other COVID-19 regulations in jurisdictions where we operate. We~~ have experienced increases in labor costs in recent years and may continue to do so in the future. Furthermore, these internal and external factors may also be impacted by our ~~recent~~February 2021 emergence from bankruptcy, the uncertainties currently facing us and the business environment and changes we may make to the organizational structure to adjust to changing circumstances.

If we do not successfully manage the transition associated with changes in our executive officers or directors, it could have an adverse impact on our business.

As disclosed in Item 9B “Other Information” Michael McGovern, our Executive Chair, has informed the Company of his intent to resign from his position as Executive Chair and to not stand for reelection as a member of our Board at the Company’s 2024 Annual Meeting of Stockholders (the “Meeting”). In addition, Krishna Shivram, one of our directors, also informed the Company of his decision not to stand for reelection at the Meeting. These announcements were not the result of any dispute or disagreement with the Company or our Board on any matter relating to our operations, policies or practices.

Leadership transitions can be difficult to manage. An inadequate transition of an executive officer or director may result in the loss of institutional knowledge and changes to business strategy or objectives. In addition, these changes have the potential to negatively impact our operations and relationships with employees, customers and investors due to increased or unanticipated expenses, operational inefficiencies, uncertainty regarding changes in strategy, decreased employee morale and productivity and increased turnover. In addition, if we are unable to attract and retain a qualified candidates to replace departing officers or directors in a timely manner, our ability to meet our financial and operational goals and strategic plans may be adversely impacted, as well as our financial performance. This may also make it more difficult for us to retain and hire key management and other team members.

We face significant competition in attracting and retaining talented employees. Further, managing succession for, and retention of, key executives is critical to our success, and our failure to do so could adversely affect our future performance.

Our ability to attract and retain qualified and experienced employees is essential to meet our current and future goals and objectives. There is no guarantee we will be able to attract and retain such employees or that competition among potential employers will not result in increased salaries or other benefits. If we are unable to retain existing employees or attract additional employees, we could experience a material adverse effect on our business and results of operations. We may not be able to locate or employ on acceptable terms qualified replacements for key executives if their services are no longer available. Furthermore, our business could be affected adversely if suitable replacement personnel are not recruited quickly or effectively. Our failure to adequately plan for succession of senior management and other key management roles or the failure of key employees to successfully transition into new roles could have a material adverse effect on our businesses and results of operations.

Our international operations and revenue are affected by political, economic and other uncertainties worldwide.

Our international operations are subject to varying degrees of regulation in each of the foreign jurisdictions in which we provide services. Local laws and regulations, and their interpretation and enforcement, differ significantly among those jurisdictions, and can change significantly over time. Future regulatory, judicial and legislative changes or interpretations may have a material adverse effect on our ability to deliver services within various foreign jurisdictions.

In addition to these international regulatory risks, our international operations are subject to a number of other risks inherent in any business operating in foreign countries, including, but not limited to, the following:

These and the other risks outlined above could cause us to curtail or terminate operations, result in the loss of personnel or assets, disrupt financial and commercial markets and generate greater political and economic instability in some of the geographic areas in which we operate. International areas where we operate that have significant risk include the Middle East, Indonesia, Nigeria and Angola.

We are subject to foreign currency exchange risks and limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries or to repatriate assets from some countries.

A sizable portion of our consolidated revenue and consolidated operating expenses is in foreign currencies. As a result, we are subject to significant risks, including foreign currency exchange risks resulting from changes in foreign currency exchange rates and the implementation of exchange controls; and limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries.

As an example, we conduct business in countries that have restricted or limited trading markets for their local currencies and restrict or limit cash repatriation. We may accumulate cash in those geographies, but we may be limited in our ability to convert our profits into United States dollars or to repatriate the profits from those countries. During 2023, we experienced these conditions in Argentina and though we have been able to develop processes to repatriate cash when we believe it is appropriate to do so, we have incurred losses from devaluation of the local currency and from repatriating cash. We expect restrictions on currency repatriation to continue in Argentina during 2024.

Laws, regulations or practices in foreign countries could materially restrict our operations or expose us to additional risks.

In many countries around the world where we do business, all or a significant portion of the decision making regarding procuring our services and products is controlled by state-owned oil companies. State-owned oil companies or prevailing laws may (i) require us to meet local content or hiring requirements or other local standards, (ii) restrict with whom we can contract or (iii) otherwise limit the scope of operations that we can legally or practically conduct. Our inability or failure to meet these requirements, standards or restrictions may adversely impact our operations in those countries. In addition, our ability to work with state-owned oil companies is subject to our ability to negotiate and agree upon acceptable contract terms, and to enforce those terms. In addition, many state-owned oil companies may require integrated contracts or turnkey contracts that could require us to provide services outside our core businesses. Providing services on an integrated or turnkey basis generally requires us to assume additional risks.

Moreover, in order to effectively compete in certain foreign jurisdictions, it is frequently necessary or required to establish joint ventures or strategic alliances with local contractors, partners or agents. In certain instances, these local contractors, partners or agents may have interests that are not always aligned with ours. Reliance on local contractors, partners or agents could expose us to the risk of being unable to control the scope or quality of our overseas services or products, or being held liable under the FCPA, or other anti-corruption laws for actions taken by our strategic or local contractors, partners or agents even though these contractors, partners or agents may not themselves be subject to the FCPA or other applicable anti-corruption laws. Any determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on our business, results of operations, reputation or prospects.

If we are not able to design, develop, and produce commercially competitive products and to implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures, and technology trends, our business and results of operations could be materially and adversely affected.

The market for oilfield services in which we operate is highly competitive and includes numerous small companies capable of competing effectively in our markets on a local basis, as well as several large companies that possess substantially greater financial resources than we do. Contracts are traditionally awarded on the basis of competitive bids or direct negotiations with customers.

The market for our services and products is characterized by continual technological developments to provide better and more reliable performance and services. If we are not able to design, develop, and produce commercially competitive products and to implement commercially competitive services in a timely manner in response to changes in the market, customer requirements, competitive pressures, and technology trends, our business and consolidated results of operations could be materially and adversely affected. Likewise, if our proprietary technologies, equipment, facilities, or work processes become obsolete, we may no longer be competitive, and our business and results of operations could be materially and adversely affected. In addition, we may be disadvantaged competitively and financially by a significant movement of exploration and production operations to areas of the world in which we are not currently active.

We depend on particular suppliers and are vulnerable to product shortages and price increases.

Some of the materials that we use are obtained from a limited group of suppliers. Our reliance on these suppliers involves several risks, including price increases, supply chain disruptions, inferior quality and a potential inability to obtain an adequate supply in a timely manner. We do not have long-term contracts with most of these sources, and the partial or complete loss of certain of these sources could have a negative impact on our results of operations and could damage our customer relationships. Further, a significant increase in the price of one or more of these materials could have a negative impact on our results of operations.

Estimates of our potential liabilities relating to our oil and natural gas property may be incorrect.

Actual abandonment expenses may vary substantially from those estimated by us and any significant variance in these assumptions could materially affect the estimated liability recorded in our consolidated financial statements. Therefore, the risk exists we may underestimate the cost of plugging wells and abandoning production facilities. If costs of abandonment are materially greater than our estimates, this could have an adverse effect on our financial condition, results of operations and cash flows.

Potential changes of Bureau of Ocean Energy Management security and bonding requirements for offshore platforms could impact our operating cash flows and results of operations.

Federal oil and natural gas leases contain standard terms and require compliance with detailed Bureau of Safety and Environmental Enforcement (“BSEE”) and BOEM regulations and orders issued pursuant to various federal laws, including the Outer Continental Shelf Lands Act. In 2016, BOEM undertook a review of its historical policies and procedures for determining a lessee’s ability to decommission platforms on the Outer Continental Shelf (“OCS”) and whether lessees should furnish additional ~~security, and in July~~security. Following a 2016 ~~BOEM issued a new~~ Notice to Lessees ~~requiring additional security for decommissioning activities. In January 2017,~~that was subsequently withdrawn, BOEM ~~extended the implementation timeline for properties with co-lessees by an additional six months, and in June 2017 announced that the Notice~~published a proposed rule to ~~Lessees would be stayed while BOEM continued to review its implementation issues and continued industry engagement to gather additional information on~~modify the financial assurance ~~program.~~requirements for offshore leaseholders on June 29, 2023. BOEM is also planning to update its Oil Spill Financial Responsibility regulations in 2024. If adopted, these new requirements could impact us and our customers by increasing operating costs and impacting our ability to obtain leases, thereby reducing demand for our products.

During the second half of 2016, BSEE increased its estimates of many offshore operator’s decommissioning costs, including the decommissioning costs at our sole federal offshore oil and gas property, in which our subsidiary owns a 51% non-operating interest. In October 2016, BOEM sent an initial proposal letter to the operator of the oil and gas property, proposing an increase in the supplemental bonding requirement for the property’s sole fixed platform that was eight to ten times higher than the revised supplemental bonding requirement requested for any other deep-water fixed platform in the U.S. Gulf of Mexico. Both the operator and our subsidiary submitted formal dispute notices, asserting that the estimates in the October 2016 proposal letter may be based on erroneous or arbitrary estimates of the potential decommissioning costs, and requesting in-person meetings to discuss the estimate. We asked that BSEE and BOEM reduce the estimate to an amount that more closely approximates actual decommissioning costs, consistent with estimates identified by BSEE and BOEM for similar deep-water platforms. BSEE and BOEM have not yet responded to our dispute notice.

On September 17, 2020, BOEM issued a proposed rule addressing OCS oil and gas decommissioning costs (BOEM-2018-0033). The proposed rule contains updated criteria for determining decommissioning costs. Under the proposed rule, BOEM would only require additional security when (1) a lessee or grant holder poses a substantial risk of becoming financially unable to meet its obligations; (2) there is no co-lessee, co-grant holder or predecessor that is liable for those obligations with sufficient financial capacity; and (3) the property is at or near the end of its productive life. BSEE would typically issue orders to predecessors in title in a reverse chronological order. The proposed rule would also require that a party appealing any final decommissioning decision or order provide a surety bond to ensure that funding for decommissioning is available if the order is affirmed and the liable party then defaults. Based on the proposed framework, BOEM estimates its amount of financial assurance would decrease from $3.3 billion to $3.1 billion, although BOEM expects the rule would provide greater protection as the financial assurance would be focused on the riskiest properties.

We cannot predict when these laws and regulations may be adopted or change in the ~~future, particularly as a result of the U.S. presidential administration changing in January 2021.~~future. If BOEM withdraws the ~~September~~October 2020rule proposal and proceeds to implement a rule or other regulatory action requiring additional security similar to the Notice to Lessees issued in July 2016 and we are unable to obtain the additional required bonds or post other acceptable security to secure of decommissioning obligations, BOEM may suspend or cancel operations at the oil and gas property or otherwise impose monetary penalties. Any of these actions could have a material adverse effect on our financial condition, operating cash flows and liquidity. A BSEE final rule, published

on August 23, 2023, that strengthens testing and performance requirements for blowout preventers and other well control equipment could have a similar impact.

Moreover, under existing BOEM and BSEE rules relating to assignment of offshore leases and other legal interests on the OCS, assignors of such interests may be held jointly and severally liable for decommissioning of OCS facilities existing at the time the assignment was approved by BOEM, in the event that the assignee or any subsequent assignee is unable or unwilling to conduct required decommissioning.

There may be circumstances in which the interests of our significant stockholders could conflict with the interests of our other stockholders.

On the Emergence Date, in order to implement certain transactions contemplated by the Plan, the Stockholders Agreement was executed (or deemed executed) with each stockholder pursuant to the Plan (constituting all of the stockholders on the Emergence Date) and all other stockholders from time to time, to provide for certain ~~of our~~ governance matters. ~~Two~~As of March 7, 2024, two groups of these stockholders currently hold approximately ~~50.5%~~63% of our Class A Common Stock. Furthermore, pursuant to the Stockholders Agreement, these two groups of stockholders have appointed three of our ~~six~~seven directors.

Circumstances may arise in which these groups of stockholders may have an interest in pursuing or preventing acquisitions, divestitures or other transactions, including the issuance of additional shares or debt, that, in their judgment, could enhance their investment in us, and their interests may not in all cases be aligned with our interests.

There is no public market for shares of our Class A Common Stock, and we do not expect there to be a market for shares of our Class A Common Stock.

There is no existing trading market for shares of our Class A Common Stock, and no market for our shares may develop in the future. If developed, any such market may not be sustained. In the absence of a trading market, our stockholders may be unable to liquidate an investment in our Class A Common Stock. Upon our emergence from bankruptcy, the Predecessor’s common stock was ~~canceled~~cancelled and we issued new Class A Common Stock. The Class A Common Stock is not currently traded on a national securities exchange. ~~There is no active market in the Class A Common Stock.~~ No assurance can be given that an active market will develop for our Class A Common Stock or as to the liquidity of the trading market for our Class A Common Stock. Our Class A Common Stock may be traded only infrequently, if at all, and reliable market quotations may not be available. Holders of our Class A Common Stock may experience difficulty in reselling, or an inability to sell, their shares. In addition, if an active trading market does not develop or is not maintained, significant sales of our Class A Common Stock, or the expectation of these sales, could materially and adversely affect the ~~market~~ price of our Class A Common Stock. For so long as our Class A Common Stock is not listed on a national securities exchange, our ability to access equity markets, obtain financing and provide equity incentives could be negatively impaired. Furthermore, certain transfers of our Class A Common Stock require an exemption from the registration requirements of the Securities Act and applicable state securities laws.

Provisions in the Stockholders Agreement could delay or prevent a change in control.

Certain provisions of our Stockholders Agreement may delay, discourage, prevent or render more difficult an attempt to obtain control of us, whether through a tender offer, business combination, proxy contest or otherwise. These provisions include, among other things, those that:

~~We do not intend to pay dividends on our Class A Common Stock and our~~Our ability to pay dividends on our common stock is restricted.

We ~~currently intend~~declared a special dividend of $12.45 per share on our Class A Common Stock that was paid on December 28, 2022 to ~~retain all available funds~~holders of record as of the close of business on December 16, 2022, and ~~any future earnings~~we declared a special dividend of $12.38 per share on our Class A Common Stock that will be paid on March 12, 2024 to ~~finance~~holders of record as of the close of business on February 27, 2024. Our Board of Directors continuously evaluates opportunities to pay dividends in accordance with our ~~operations.~~evolving strategic outlook. As a result, ~~we do not anticipate declaring or paying~~our decision to declare any further cash dividends on our Class A Common Stock in the foreseeable ~~future.~~future is unknown. Any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our business

prospects, results of operations, financial condition, cash requirements and availability, industry trends and other factors that our Board of Directors may deem relevant. Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness.

We do not have a class of our securities registered under Section 12 of the Exchange Act. Until we do, we will not be required to provide certain reports to our stockholders.

We do not have a class of our securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Until we do, we will not be required to provide certain reports to our stockholders. We are currently required to file periodic reports with the SEC by virtue of Section 15(d) of the Exchange Act. However, until we register a class of our securities under Section 12 of the Exchange Act, we are not subject to the SEC’s proxy rules, and large holders of our capital stock will not be subject to beneficial

ownership reporting requirements under Sections 13 or 16 of the Exchange Act and their related rules. As a result, our stockholders and potential investors may not have available to them as much or as robust information as they may have if and when we become subject to those requirements.

From time to time, we are subject to various claims, litigation and other proceedings that could ultimately be resolved against us, requiring material future cash payments or charges, which could impair our financial condition or results of operations.

The size, nature and complexity of our business make us susceptible to various claims, both in litigation and binding arbitration proceedings. We may in the future become subject to various claims, which, if not resolved within amounts we have accrued, could have a material adverse effect on our financial position, results of operations or cash flows. In addition, during periods of depressed market conditions we may be subject to an increased risk of our customers, vendors, former employees and others initiating legal proceedings against us.

Any litigation or claims, even if fully indemnified or insured, could negatively impact our reputation among our customers and the public, and make it more difficult for us to compete effectively or obtain adequate insurance in the future.

Changes in tax laws or tax rates, adverse positions taken by taxing authorities and tax audits could impact our operating results.

We are subject to ~~the jurisdiction of~~taxation in a significant number of domestic and foreign ~~taxing authorities.~~jurisdictions. Changes in tax laws or tax rates, the resolution of tax assessments or audits by various tax authorities could impact our operating results. In addition, we may periodically restructure our legal entity organization. If taxing authorities were to disagree with our tax positions in connection with any such restructurings, our effective income tax rate could be impacted. The final determination of our income tax liabilities involves the interpretation of local tax laws, tax treaties and related authorities in each taxing jurisdiction, as well as the significant use of estimates and assumptions regarding future operations and results and the timing of income and expenses. We may be audited and receive tax assessments from taxing authorities that may result in assessment of additional taxes that are ultimately resolved with the authorities or through the courts. We believe these assessments may occasionally be based on erroneous and even arbitrary interpretations of local tax law. Resolution of any tax matter involves uncertainties and there are no assurances that the outcomes will be favorable. If U.S. or other foreign tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operating may be adversely impacted.

The IRA 2022 imposes a 15% corporate alternative minimum tax (“CAMT”) on the “adjusted financial statement income” of certain large corporations (generally, corporations reporting at least $1 billion average adjusted pre-tax net income on their consolidated financial statements) as well as an excise tax of 1% on the fair market value of certain public company stock repurchases for tax years

Currently, we do not believe the CAMT, or any of the other tax provisions, will have a material impact on us for 2023, however, we will continue to monitor the future impact to us related to this new law. The U.S. Treasury Department, the Internal Revenue Service and other standard-setting bodies are expected to issue guidance on how the CAMT, stock buyback excise tax and other provisions of the IRA 2022 will be applied or otherwise administered that may differ from our interpretations.

An ownership change could limit our use of net operating losses arising prior to an ownership change.

If we were to experience an “ownership change,” as determined under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), our ability to offset taxable income arising after the ownership change with net operating losses (“NOLs”) arising prior to

the ownership change would be limited, possibly substantially. An ownership change would establish an annual limitation on the amount of our pre‑change NOLs we could utilize to offset our taxable income in any future taxable year to an amount generally equal to the value of our stock immediately prior to the ownership change multiplied by the long term tax‑exempt rate. In general, an ownership change will occur if there is a cumulative increase in our ownership of more than 50 percentage points by one or more “5% shareholders” (as defined in the Code) at any time during a rolling three‑year period.

We experienced an “ownership change” on February 2, 2021 due to the Plan that subject certain of our tax attributes, including our NOLs and other carryforwards, to an annual limitation under Section 382 of the Code. However, we do not expect the Section 382 limitation to impact our ability to use U.S. tax attributes under Section 382 relief provisions. Calculations pursuant to Section 382 of the Code can be very complicated and no assurance can be given that upon further analysis, our ability to take advantage of our NOLs may be limited to a greater extent than we currently anticipate. As of December 31, 2023, we had NOLs of $90.0 million. Future changes in our stock ownership could result in an additional ownership change.

Our ability to remediate the identified material weakness in our internal control over financial reporting.

In connection with the preparation of our consolidated financial statements as of and for the year ended December 31, 2022, we identified a material weakness in our internal control over financial reporting as we did not design and maintain effective controls to review the reasonableness of assumptions determined by, and accuracy of calculations performed by, our external tax service providers. Although this material weakness was remediated as of December 31, 2023, if we identify another material weakness that we are not able to remediate and otherwise to maintain effective internal control over financial reporting, our financial statements may be materially misstated and investors may lose confidence in the accuracy and completeness of our financial reports. Furthermore, we cannot assure you that additional material weaknesses will not be identified in the future. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our financial results depend on demand for our services and products in the U.S. and the international markets in which we operate. Declining economic conditions, negative perceptions about economic conditions, energy costs and supply chain disruptions, could result in a substantial decrease in demand for our services and products. World political events could also result in further U.S. military actions, terrorist attacks and related unrest. Military action by the U.S. or other nations could escalate and further acts of terrorism may occur in the U.S. or elsewhere. Such acts of terrorism could lead to, among other things, a loss of our investment in the country, impairment of the safety of our employees, extortion or kidnapping, and impairment of our ability to conduct our operations. Such developments have caused instability in the world’s financial and insurance markets in the past, and many experts believe that a confluence of worldwide factors could result in a prolonged period of economic uncertainty and slow growth in the future. In addition, any of these developments could lead to increased volatility in prices for oil and gas and could negatively affect the markets for our products and services. Insurance premiums could also increase and coverages may be unavailable.

Uncertain economic conditions and instability make it particularly difficult for us to forecast demand trends. The timing and extent of any changes to currently prevailing market conditions is uncertain and may affect demand for many of our services and products. Consequently, we may not be able to accurately predict future economic conditions or the effect of such conditions on demand for our services and products and our results of operations or financial condition.

Our operations may be subject to cyber-attacks that could have an adverse effect on our business operations.

Like most companies, we rely heavily on information technology networks and systems, including the Internet, to process, transmit and store electronic information, to manage or support a variety of our business operations, and to maintain various records, which may include information regarding our customers, employees or other third parties, and the integrity of these systems are essential for us to conduct our business and operations. We make significant efforts to maintain the security and integrity of these types of information and systems (and maintain contingency plans in the event of security breaches or system disruptions). However, we cannot provide assurance that our security efforts and measures will prevent security threats from materializing, unauthorized access to our systems,

loss or destruction of data, account takeovers, or other forms of cyber-attacks or similar events, whether caused by mechanical failures, human error, fraud, malice, sabotage or otherwise. We have office employees who work remotely. Remote work relies heavily on the use of remote networking and online conferencing services that enable employees to work outside of our corporate infrastructure and, in some cases, use their own personal devices, which exposes us to additional cybersecurity risks, including unauthorized access to sensitive information as a result of increased remote access and other cybersecurity related incidents. Cyber-attacks include, but are not limited to, malicious software, attempts to gain unauthorized access to data, unauthorized release of confidential or otherwise protected

information and corruption of data. It is possible that our business, financial and other systems could be compromised, which could go unnoticed for a prolonged period of time. While various procedures and controls are being utilized to mitigate exposure to such risk, there can be no assurance that the procedures and controls that we implement, or which we cause third party service providers to implement, will be sufficient to protect our systems, information or other property. Additionally, customers as well as other third parties ~~upon~~ whom we rely on face similar cybersecurity threats, which could directly or indirectly impact our business and operations. The frequency, scope and sophistication of cyber-attacks continue to grow, which increases the possibility that our security measures will be unable to prevent our systems’ improper functioning or the improper disclosure of proprietary information. Any failure of our information or communication systems, whether caused by attacks, mechanical failures, natural disasters or otherwise, could interrupt our operations, damage our reputation, or subject us to claims, any of which could materially adversely affect us.

The Audit Committee of the Board has primary responsibility for overseeing our cyber security risk management process. Our cybersecurity risk management processes are integrated within our established Enterprise Risk Management System. On a regular basis, the Audit Committee and the Board receive updates on cybersecurity matters from the Chief Information Officer ("CIO"). These updates include, but are not limited to, cybersecurity program updates, results of third-party assessments, results of tabletop 'drill' exercises, end user awareness training, and recoverability and resilience. The Audit Committee also receives quarterly reports from our internal audit department.

Our cybersecurity practices are led by the CIO, who has overall responsibility for assessing and managing cybersecurity risks, and uses a risk-based methodology to support the security, confidentiality, integrity and availability of information and IT systems. Our CIO has over 30 years of experience in IT delivery, operations, and management, as well as over 15 years’ experience leading cyber security requirements for global and publicly traded companies.

The Company regularly engages third parties to perform assessments on our cybersecurity measures, including penetration testing, vulnerability scanning and proactive threat hunting, and operating effectiveness of controls. The results of such assessments, audits, and reviews are reported to the Board, and the Company adjusts its cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits and reviews. The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers, and other external users of the Company’s systems. In addition, our internal audit department routinely performs internal audits on various aspects of cybersecurity and reports the results in its quarterly report to the Audit Committee.

The underlying controls of our cybersecurity capabilities are designed to prevent, detect, mitigate and remediate cybersecurity risks and are based on recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and the International Organizational Standardization (“ISO”) 27001 Information Security Management System Requirements.

Significant incidents are escalated and communicated by senior IT management to the CIO to determine severity, cause and remediation. We also maintain a disaster recovery plan in which critical business systems, networks and data may be successfully recreated to minimize the financial impact of a cyber incident on our business. To strengthen resiliency against malware attacks, such as ransomware, we create immutable copies of all critical system data that is isolated from the rest of the network in case data recovery is required.

Our third-party cyber partners are a key component of our cybersecurity capabilities, and we partner with leading cybersecurity companies, leveraging third party technology and expertise. Through these partnerships, we provide continuous monitoring of our global cybersecurity environment and coordinate the investigation and remediation of alerts. Additionally, annual incident response drills are in place to prepare support teams in the event of a significant incident.

We have continued to expand investments in IT security. For example we are in the process of implementing a Cyber & Data Protection Council that will use a risk-based methodology to support the security, confidentiality, integrity, and availability of our information and IT systems. The Cyber & Data Protection Council will be chaired by the CFO and members include IT, legal, and HR leadership. Significant incidents will be escalated and communicated by senior IT management to the CIO and the Cyber & Data Protection Council to determine severity, cause and remediation.

We did not experience a material cybersecurity incident in 2023, and although we are subject to ongoing and evolving cybersecurity threats, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operation or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents. See “Risk Factors – Our operations may be subject to cyber-attacks that could have an adverse effect on our business operations.”

Information on properties is contained in Part I, Item 1 of this ~~Annual Report on~~ Form 10-K.

From time to time we are involved in various legal actions incidental to our business. However, based on current circumstances, we do not believe that the ultimate resolution of these proceedings, ~~including any such proceedings described in the following two paragraphs hereof,~~ after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows. ~~See the Notes to~~For a description of our ~~consolidated financial statements included in Part II, Item 8~~material pending legal proceedings, please see Note 17 - “Contingencies”, of this ~~Annual Report on~~ Form ~~10-K for further information.~~

A subsidiary of ours is involved in legal proceedings with two former employees regarding the payment of royalties for a patentable product paid for by the subsidiary and developed while they worked for the subsidiary. On April 2, 2018, the former employees and their corporation filed a lawsuit (the “First Case”) in the Harris County District Court (the “District Court”) alleging that the royalty payments they had invoiced at 25% and for which they received payments since 2010, should have been paid at a rate of 50%. In May 2019, the jury issued a verdict in favor of the plaintiffs. On October 25, 2019, the court issued a final judgment against us, which we have fully secured with a bond. Oral arguments in front of the Court of Appeals are scheduled for April 2022. We strongly disagree with the verdict and believe the District Court committed several legal errors that should result in a reversal or remand of the case by the Court of Appeals.

A second case (the “Second Case”) was filed in District Court against the same subsidiary of ours bringing the same claims and seeking damages post judgment from the First Case until discontinuation of the sale of the product at issue by the subsidiary. In December 2020, the Court entered a final judgement for the Plaintiffs’ and the Second Case was stayed for the duration of our bankruptcy. We have filed an appeal and a Motion to Abate the Second Case pending the appeal of the First Case. The Motion to Abate the Second Case was granted on October 26, 2021 by the Court of Appeals. As of December 31, 2021, we have reserved $7.0 million for the judgements in the First Case and Second Case.

10-K. For the disclosure of environmental proceedings with a governmental entity as a party pursuant to Item 103(c)(3)(iii) of Regulation S-K, we have elected to disclose matters where we reasonably believe such proceeding would result in monetary sanctions, exclusive of interest and costs, of $1.0 million or more.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common equity consists of ~~common stock~~Class A Common Stock that is privately held and there is no established public trading market. As of ~~March 4, 2022,~~December 31, 2023, there were ~~622~~547 stockholders of ~~record for our Class A common stock and six stockholders of record for our Class B common stock.~~

~~As part of the transactions undertaken pursuant to the Plan, the record~~record. All holders of certain of the 7.125% Notes and the 7.750% Notes contributed all of their allowed claims described in the Plan in exchange for either (i) a cash payout to be entirely funded by the Equity Rights Offering, or (ii) shares of the Class A common stock.

~~By the Emergence Date, we had completed the Equity Rights Offering in accordance with the Plan, which resulted in the issuance of 735,189 shares~~ of Class A ~~common stock~~Common Stock have one vote per share in matters subject to certain Accredited Cash Opt-Out Noteholders (as defined in the Plan). The Class A common stock issued in the Equity Rights Offering was exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.a stockholder vote.

On ~~June 1, 2021,~~December 18, 2023, following the approval of our Board of Directors ~~(the “Board”~~and stockholders, each outstanding share of Class B common stock, par value $0.01 per share (“Class B Common Stock”), was reclassified into one share of Class A Common Stock. Prior to the reclassification, holders of Class B Common Stock were not entitled to vote on the election or removal of our directors.

In connection with the reclassification, on December 15, 2023, the Board and the Compensation Committee of the Board (the “Compensation Committee”) approved ~~and adopted~~an amendment to our Management Incentive Plan ~~which provides~~(“MIP”) to provide for the issuance of shares of Class A Common Stock in connection with the grant of share-based and cash-based awards ~~and, in connection therewith, the issuance from time to time of up to 1,999,869~~rather than shares of ~~our~~ Class B ~~common stock, par value $0.01 per share.~~Common Stock. Prior to the reclassification, grants under the MIP were previously in the form of shares of Class B Common Stock or awards pursuant to which shares of Class B Common Stock would be issued or were issuable.

On November 16, 2022, we announced that our Board declared a special dividend of $12.45 per share on our outstanding Class A Common Stock. Additionally, the Board determined that, in addition to ~~pay a cash~~the special dividend onto holders of our Class A Common Stock, we would make dividend equivalent payments to each holder of unvested restricted stock units. The special dividend was paid on December 28, 2022 to holders of record as of December 16, 2022.

On February 13, 2024, we announced that our Board declared a special dividend of $12.38 per share on our outstanding Class A Common Stock. Additionally, the Board determined that, in addition to the ~~future.~~ special dividend to holders of our Class A Common Stock, we would make dividend equivalent payments to each holder of unvested restricted stock units. The special dividend will be paid on March 12, 2024 to holders of record as of February 27, 2024.

Any decision to declare and pay dividends in the future will be made at the discretion of our Board ~~of Directors~~ and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, industry trends and other factors that our Board ~~of Directors~~ may deem relevant. Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements and ~~applicable~~ notes ~~to our consolidated financial statements~~thereto included in “Item 8. Financial Statements and ~~other information included elsewhere in this Annual Report on Form 10-K, including “Risk Factors” disclosed in Part I, Item 1A. The following information contains~~Supplementary Data”. Our discussion includes various forward-looking statements about our markets, the demand for our products and services and our future results, which are subject to certain risks and uncertainties. ~~Should one or more of~~For information about these risks orand uncertainties, ~~materialize, our actual results may differ from those expressed or implied by~~refer to the ~~forward-looking statements. See~~section entitled “Forward-Looking Statements” atand the ~~beginning of this Annual Report on Form 10-K.~~section entitled “Item 1A. Risk Factors”.

As used herein, “we,” “us”, “our” and similar terms refer to (i) prior to the Emergence Date (as defined below), SESI Holdings, Inc. (formerly known as Superior Energy Services, Inc.) (“Predecessor”) and its subsidiaries and (ii) after the Emergence Date, Superior Energy Services, Inc. (formerly known as Superior Newco, Inc.) and its subsidiaries (“Successor”). Additionally, as used herein, the following terms refer to our operations:

2021 was a transformative year at Superior. Following our emergence from bankruptcy, we embarked on a diligent effort to reconfigure our operations and organization to maximize shareholder value, enhance margin growth and have a more disciplined approach, both operationally and financially (the “Transformation Project”).

Historically, we provided a wide variety of services and products to many markets within the energy industry. During 2021, we realigned our core businesses to focus on products and services that we believe meet the criteria of (1) being critical to our customers’ oil and gas operations, (2) facing low or no competition from the three largest global oilfield service companies, (3) requiring deep technical expertise through the design or use of our product or service, and (4) being unlikely to become a commoditized product or service to our customers. The result of this approach is a portfolio of ~~business lines grounded in our core mission of~~premier rental and well services brands providing ~~high quality products and services while maintaining the trust and serving the needs of our~~ customers with ~~an emphasis on~~robust inventory, responsive delivery, engineered solutions, and expert consultative service — all aligned with enterprise-wide Shared Core Values for safe, sustainable operations and corporate citizenship; and committed to free cash flow generation and value creation.

We drive true value to our business units by providing enterprise-wide support, financial discipline, capital ~~efficiency for us.~~strength, and strategic focus. Our experienced, knowledgeable leadership within those businesses has excellent latitude to execute their business strategy, determine pricing, allocate inventory, and develop new products and technology. All with a focus on safety, operational excellence, competitive positioning, and financial performance that entrenches our relationships with our customers and elevates our customers’ satisfaction.

Our product offerings are weighted toward businesses critical to our customer’s oil and gas operations, require deep technical expertise, notably in premium drill pipe and bottom hole assembly rentals, and have strong cash flow generating capacity as was delivered in our 2023 results.

Our ongoing strategy of focusing operations on businesses with solid market positions along with the strength of our brands, their leaders, and teams contributed in no small part to our positive performance, margin expansion, and strong competitive position in 2023 overcoming labor market and supply chain challenges and being an early mover on effective pricing strategies to address cost inflation and margin expansion.

As we strive to be good stewards of our resources, we paid an approximately $250 million dividend and a return of capital to shareholders in December 2022, and will pay an approximate $250 million dividend to our shareholders in March 2024.

Our portfolio of companies operate in two segments, Rentals and Well Services, to provide highly specialized solutions to the upstream oil and gas industry.

~~In connection~~Our rental services include premium downhole tubulars and drill pipe, design, engineering and manufacturing of bottomhole assembly accessories, and offshore accommodation units. Collaborating closely with ~~our Transformation Project, our reportable segments were changed~~customers and strategic suppliers, we also provide engineered solutions to ~~Rentals and Well Services.~~meet their challenges.

In addition to the specific product lines mentioned above, the Company operates a basket of services globally called International Production Services (included in the Well Services Segment). This business has value accretive operations particularly in Argentina and Kuwait. International Production Services is a key part of the “Geographic Focus” portion of our ongoing transformation efforts discussed above as we look to focus on geographies that allow us to maximize return on investments.

WWC continues to develop opportunities by leveraging its global Subsea Capping response consortium WellCONTAINED. WWC also continues to pursue additional engineering capabilities and capacity and has brought its well control expertise to consult and advise on future carbon capture projects through its industry relationships with major oil companies.

~~Throughout the significant transformation initiatives, we have remained~~SCS is primarily focused on ~~sustainability through~~offshore sand control applications, including deep water Gulf of Mexico and Brazil, SCS’s multi-zone single-trip systems (MST) with zonal isolation offers flexibility in sand placement techniques. Demonstrated capabilities accommodate high pump rates and exceptional proppant volumes; the ~~lens of Safety~~system also allows for varied zone spacing and ~~Our Shared Core Values, with businesses continuing to execute our plan that puts worker safety, environmental stewardship~~enhanced reservoir production.

Design engineering and in-house manufacturing capacity compliment its focus on innovative technology, service quality ~~as top priorities.~~

~~The core values~~and delivery flexibility which enable operators to have the certainty of ~~respect without discrimination~~supply with the flexibility to manage timing of drilling and a commitment to being good citizens in communities where we live and work are part of our culture. This is most evident in how our employees show up for their colleagues in need. In 2021, the employee-led Catastrophic Relief Fund provided grants to employees who experienced property loss and damage due to the effects of winter storm Uri and Hurricane Ida. This resulted in at least 50 grants for employees totaling more than $120,000. We will continue to build on the trust and care we cultivate as part of our culture moving into the nextcompletion phases of ~~our transformation.~~

~~In response to an active dialog~~well construction, especially with customers, who are focused on ESG performance and accountability within their own supply chains, our strategic initiatives and divestitures support the goal of having a continually improving sustainability program. In 2021, the divestitures of ourlong lead-time projects in deep water ~~hauling and storage business and land service rigs greatly reduced our truck and trailer fleet, reducing our overall carbon footprint.~~development.

Substantial transformation efforts in 2021 were focused on the divestitures and liquidation of our US onshore service operations and assets, including our fluid and well service businesses to consolidators. These businesses are labor intensive and we believe would have required significant capital investment to refurbish existing units and acquire new upgraded models in order to remain competitive.International Snubbing Services (“ISS”)

~~The onshore segment of HB Rentals’ accommodations business~~Operating in two geographical markets, U.S. and ~~the Gulf of Mexico~~Australia, ISS provides hydraulic workover and snubbing services with an emphasis on well plug & abandonment applications.

With capabilities in three global regions, most notably Argentina and Kuwait, IPS provides well services such as cementing, wireline, pressure pumping, coil tubing ~~business were both divested as going concerns. We completed the liquidation of hydraulic fracturing equipment, along with the US onshore coiled tubing equipment of IPS~~ and the non-P&A wireline and slickline assets of Warrior’s Gulf of Mexico shelf operations. In total, the divestitures of non-core assets generated $98.3 million in cash and substantial go-forward G&A savings.downhole tool services.

~~With these divestitures, our employees were an important consideration; most of our employees were retained by the acquirors.~~

Further strategic realignment within the remaining business units was critical to improving our operational efficiencies and increasing our margins. We believe we are realizing significant efficiencies by consolidating businesses that operated primarily in South Louisiana. For example, our HB Rentals, ISS, Stabil Drill, and Warrior businesses were merged into one division - Rental and Specialty. These businesses continue to operate under their existing brands, but now have common leadership and consolidated support services.

These tireless and continued efforts to execute on our transformation directives position us as a streamlined and healthy business with the ability to withstand industry cycles, focused on the operational excellence our businesses are known for throughout the world.

~~As we embark on 2022 and look ahead to~~The Company’s positive performance in 2023 validates the ~~future, we believe Superior is positioned as an attractive, value-added participant~~strategy developed in ~~the oilfield service sector, demonstrating operational excellence and generating cash flow through industry cycles. The company~~emerged from bankruptcy without any debt, significant cash, and optionality to participate in accretive opportunities that may arise through further sector consolidation. In 2022, we expect capital expenditures to be invested primarily in our high-value product lines. While we have been more focused recently on organic growth and operational excellence, our significant and growing cash balance provides us2021 with ~~the opportunity to consider both complementary product lines building on our existing portfolio as well as returning capital to our shareholders in the form of dividends or stock repurchases.~~

~~Throughout the remainder of 2022 and into 2023, we will continue our~~a sequential focus on ~~executing the final phases of the transformation strategies set forth in 2021, reducing our~~product lines, geographic footprint and ~~streamlining~~support cost rationalization. Over the last three years, we have met and overcome challenges and delivered on safety, service quality and financial performance. We have consistently demonstrated discipline and stewardship as evidenced by our ~~operational support function~~return of cash to ~~align~~shareholders, with ~~the current size of our operations. Maintaining~~ an ~~opportunistic~~approximately $250 million dividend in December 2022 and disciplined approach to growth, along with consolidating and controlling costs within our portfolio of core product lines, will further our mission of providing high quality products, maintaining the trust of our customers, and creating value for our stakeholders.an additional approximately $250 million dividend expected in March 2024, all while retaining a strong capital structure.

~~Voluntary Reorganization Under Chapter 11~~In 2024, the Company will continue to explore alternatives to enhance shareholder value, including potential merger or acquisition opportunities. As part of this process, we remain in, and continue to pursue, preliminary or exploratory dialogue with various potential counterparties. In parallel, the Company will continue to seek opportunities to optimize its capital structure, including actions to facilitate additional return of capital to shareholders.

Our Board has not set a timetable or made any decisions related to further actions or potential strategic alternatives, including a future dividend, at this time. The declaration of dividends is at the discretion of the Company’s board of directors and will depend on the Company’s financial results, cash requirements, future prospects, contractual restrictions and other factors deemed relevant by the Company’s board of directors. Additionally, any potential transaction would depend upon entry into definitive agreements with a potential counterparty on terms acceptable to us. There can be no assurance that we will enter any such transaction or consummate or pursue any transaction or other strategic alternative.

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In connection with the Chapter 11 Cases, the Affiliate Debtors filed a motion for approval of a debtor-in-possession financing facility, and on December 8, 2020, the Bankruptcy Court approved such motion and entered an interim order approving the financing (the “Interim DIP Order”). In accordance with the Interim DIP Order, on December 9, 2020, we, as guarantor and SESI, as borrower, entered into a $120 million Senior Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Facility”). On January 9, 2021, the Bankruptcy Court approved the Affiliate Debtors’ entry into the DIP Credit Facility on a final basis.

~~On January 19, 2021, the Bankruptcy Court entered an order, Docket No. 289, confirming and approving the Plan.~~

~~Emergence from Voluntary Reorganization Under Chapter 11~~

~~On February 2, 2021 (the “Emergence Date”), the conditions to effectiveness of the Plan were satisfied or waived and we emerged from Chapter 11.~~

~~Bankruptcy Claims~~

~~On the Emergence Date and pursuant to the Plan:~~

•

Administrative expense claims, priority tax claims, other priority claims and other secured claims were paid or will be paid in full in the ordinary course (or receive such other treatment rendering such claims unimpaired);

•

~~General unsecured creditors for the Affiliate Debtors remained unimpaired and received payment in cash, in full, in the ordinary course;~~

•

~~General unsecured creditors for the Predecessor received their pro rata share of a cash pool in the amount of $125,000;~~

•

~~Eligible holders of the claims arising as a result of holding either the 7.125% Notes or the 7.750% Notes against the Affiliate Debtors received~~ ~~their pro rata share of:~~

•

~~A cash payment equal to 2% of the principal amount of 7.125% Notes or 7.750% Notes held by all holders who did not opt out of receiving a cash payout; or~~

•

Solely to the extent that such a holder timely and validly elected to opt out of receiving the cash payout or was otherwise deemed to have opted out of receiving the cash payout, (A) 100% of the Class A common stock issued and outstanding on the Emergence Date, subject to dilution, and (B), to the extent such holder was an “accredited investor” or “qualified institutional buyer” within the meaning of the SEC’s rules, subscription rights to participate in the Equity Rights Offering;

•

~~The Affiliate Debtors conducted the Equity Rights Offering through an offering of subscription rights for the purchase of Class A common stock on a pro rata basis;~~ ~~and,~~

•

~~Predecessor equity interests were cancelled and new Class A common stock was issued to settle claims arising as a result of holding either the 7.125% Notes or the 7.750% Notes, as noted above.~~

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Prior to the Emergence Date, the Equity Rights Offering was completed in accordance with the Plan, which resulted in the issuance of 735,189 shares of Class A Common Stock. The Class A Common Stock issued in the Equity Rights Offering was exempt from registration under the Securities Act pursuant to section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

~~The costs of our efforts to restructure our capital, prior to and during the Chapter 11 Cases, along with all other costs incurred in connection with the Chapter 11 Cases, have been material.~~

~~Credit Facility~~

The Credit Facility requires compliance with various covenants, including, but not limited to, limitations on the incurrence of indebtedness, permitted investments, liens on assets, making distributions, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. The Credit Facility also requires compliance with a fixed charge coverage ratio of 1.0 to 1.0 if (a) an event of default has occurred and is continuing or (b) availability under the Credit Facility is less than the greater of $20.0 million or 15% of the lesser of the aggregate commitments and the borrowing base.

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~~Stockholders Agreement~~

~~The foregoing description of the Stockholders Agreement is qualified in its entirety by the full text of the document, which is incorporated herein by reference.~~

~~Amendments to Stockholders Agreement~~

~~Table of Contents~~

We and stockholders holding a majority of our Class A common stock entered the Fourth Amendment to the Stockholders Agreement, effective as of November 15, 2021, extending the deadline to provide its stockholders the unaudited consolidated quarterly financial statements for the quarters ended September 30, 2021 to no later than December 10, 2021 and making certain technical amendments to the financial statement delivery mechanics.

~~COVID-19 Pandemic and Market Conditions~~

Our operations continue to be disrupted due to the circumstances surrounding the COVID-19 pandemic. The significant business disruption resulting from the COVID-19 pandemic has impacted customers, vendors and suppliers in all geographical areas where we operate. The closure of non-essential business facilities and restrictions on travel put in place by governments around the world have significantly reduced economic activity. In particular, as a result of the COVID-19 pandemic and certain related government mandated restrictions, we are currently experiencing and may continue to experience shortages and delays in the shipments of key drilling tools and certain consumables from our suppliers. See “~~Risk Factors – The COVID-19 pandemic has had and may continue to have an adverse effect on our supply chain in ways that remain unpredictable.~~”

Also, the COVID-19 pandemic has impacted and may further impact the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates, and interest rates. For example, the continued spread of COVID-19 has led to disruption and volatility in the global capital markets, which increases the cost of capital and adversely impacts access to capital. Additionally, recognized health risks associated with the COVID-19 pandemic have altered the policies of companies operating around the world, resulting in these companies instituting safety programs similar to what both domestic and international governmental agencies have implemented, including stay at home orders, social distancing mandates, and other community oriented health objectives. We are complying with all such ordinances in our operations across the globe. Management believes it has proactively addressed many of the known operational impacts of the COVID-19 pandemic to the extent possible and will strive to continue to do so, but there can be no guarantee the measures will be fully effective.

In addition, vaccine mandates may be announced in jurisdictions in which our businesses operate. Our implementation of any such requirements if and when they are deemed to be enforceable may result in attrition, including attrition of critically skilled labor, and difficulty securing future labor needs, which could have a material adverse effect on our business and financial condition, and may result in costs of compliance that are difficult to quantify at this time and may also impact our financial condition.

Commodity prices continue to be impacted by the global containment of the virus, pace of economic recovery, as well as changes to OPEC+ production levels. There is increased economic optimism as governments worldwide continue to distribute the COVID-19 vaccines. However, although vaccination campaigns are underway, several regions, including areas of the United States, have been and continue to deal with a rebound in the pandemic. There is also concern about whether vaccines will be effective against different strains of the virus that have developed and may develop in the future. West Texas Intermediate (“WTI”) oil spot prices have recovered to pre-pandemic levels. WTI oil prices and rig count averages have both increased during 2021 as compared to 2020. OPEC+ continues to meet regularly to review the state of global oil supply, demand and inventory levels. With the current shortage of other sources of energy, and the economic growth associated with what appears to be a global emergence from the pandemic, the demand for and price of oil has improved. In addition, Russia’s military incursion into Ukraine has led to, and could continue to, give a rise to regional instability and result in heightened economic sanctions by the certain members of the European Union, the United Kingdom, the United

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States, and certain other members of the international community that, in turn, could increase uncertainty with respect to global financial markets and production output from OPEC+ and other crude oil producing nations.

Industry Trends

The oil and gas industry is both cyclical and seasonal. The level of spending ~~by oil and gas companies~~in the energy industry is ~~highly~~heavily influenced by the current and expected ~~demand as well as~~ future prices of oil and natural ~~gas.~~gas, but is also impacted by ESG initiatives and ongoing supply chain shortages. Changes in spending ~~resulted~~result in an increased or decreased demand for our services and products. Rig ~~counts are~~count is an indicator of the level of spending by oil and gas companies.

Our financial performance is significantly affected by the rig count in the U.S. land and offshore market areas as well as oil and natural gas prices and worldwide rig count, which are summarized in the table below.


													For the Year Ended					For the Year Ended
					2021 to 2020					2020 to 2019			December 31,				2023 to 2022	December 31,		2022 to 2021
	2021		2020		Change			2019		Change			2023		2022		% Change		2021	% Change
Worldwide Rig Count (1)
U.S.:
Land		464		417		11	%		920		(55	)%		669		708	(5.5%)		464	52.6%
Offshore		14		16		(13	)%		23		(30	)%		19		15	26.7%		14	7.1%
Total		478		433		10	%		943		(54	)%		688		723	(4.8%)		478	51.3%
International (2)		755		825		(8	)%		1,098		(25	)%		942		851	10.7%		755	12.7%
Worldwide Total		1,233		1,258		(2	)%		2,041		(38	)%		1,630		1,574	3.6%		1,233	27.7%

Commodity Prices (average)
Crude Oil (West Texas Intermediate)	$	68.14	$	39.16		74	%	$	56.98		(31	)%	$	76.96	$	94.90	(18.9%)	$	68.14	39.3%
Natural Gas (Henry Hub)	$	3.91	$	2.03		93	%	$	2.57		(21	)%	$	2.64	$	6.42	(58.9%)	$	3.91	64.2%

(1)

Estimate of drilling activity as measured by average active drilling rigs based on Baker Hughes Co. rig count information.

(2)

Excludes Canadian rig ~~count.~~counts.

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Comparison of the Results of Operations for the Years Ended December 31, ~~2021~~2023 and ~~2020~~2022

~~The following table sets forth consolidated results of~~We reported net income from continuing operations for the periods indicated. The Successor Period and the Predecessor Period are distinct reporting periods as a result of our emergence from bankruptcy. References in these results of operations to changes in comparison to the year ended December 31, 2020 combine the Successor Period and Predecessor Period (the “Combined Year”) results for the year ended December 31, ~~2021 in order~~2023 (the “Current Year”) of $174.6 million on revenues of $919.4 million. This compares to ~~provide some comparability of such information to~~a net income from continuing operations for the year ended December 31, ~~2020. While this combined presentation is not presented according to generally accepted accounting principles~~2022 (the “Prior Year”) of $291.0 million on revenues of $884.0 million. The decrease in net income from continuing operations in the ~~United States~~Current Year is partially attributable to recognition of ~~America (“GAAP”)~~a worthless stock deduction and ~~no comparable GAAP measures are presented, management believes that providing this financial information is~~valuation allowance releases in the ~~most relevant~~Prior Year with estimated net tax benefits of $104.0 million and ~~useful method for making comparisons~~$18.5 million, respectively. An immaterial misstatement was identified and recorded in the Current Year related to the ~~year ended December 31, 2020 as reviewing the Successor Period results~~worthless stock deduction, resulting in ~~isolation would not be useful in identifying trends in or reaching conclusions regarding our overall operating performance.~~additional income tax expense of $7.6 million.

Successor

Predecessor

Non-GAAP

Predecessor

For the Period
February 3, 2021
through December 31, 2021

For the Period
January 1, 2021
through February 2, 2021

For the Combined Year ended December 31, 2021

For the Year
Ended December 31, 2020

Change

Revenues

$
648,754

$
45,928

$
694,682

$
667,249

$
27,433

Cost of revenues

422,252

29,773

452,025

408,131

43,894

Depreciation, depletion, amortization and accretion

219,859

8,358

228,217

115,771

112,446

General and administrative expenses

117,575

11,052

128,627

205,773

(77,146
)
Restructuring expenses

22,952

1,270

24,222

47,055

(22,833
)
Other expenses

16,726

-

16,726

-

16,726

Reduction in value of assets

-

-

-

23,775

(23,775
)
Loss from operations

(150,610
)

(4,525
)

(155,135
)

(133,256
)

(21,879
)

Other income (expense):

Interest income (expense), net

2,331

202

2,533

(92,426
)

94,959

Reorganization items, net

-

335,560

335,560

(19,520
)

355,080

Other expense

(7,128
)

(2,105
)

(9,233
)

(9,229
)

(4
)
Income (loss) from continuing operations before income taxes

(155,407
)

329,132

173,725

(254,431
)

428,156

Income tax (expense) benefit

33,298

(60,003
)

(26,705
)

26,888

(53,593
)
Net income (loss) from continuing operations

(122,109
)

269,129

147,020

(227,543
)

374,563

Loss from discontinued operations, net of income tax

(40,069
)

(352
)

(40,421
)

(168,687
)

128,266

Net income (loss)

$
(162,178
)

$
268,777

$
106,599

$
(396,230
)

$
502,829


	Successor
	For the Year Ended
	December 31,						Change
	2023			2022			$			%
Revenues:
Rentals	$	452,249		$	402,942		$	49,307		12.2%
Well Services		467,171			481,018			(13,847	)	(2.9%)
Total revenues		919,420			883,960			35,460
Cost of revenues:
Rentals		149,835			137,626			12,209		8.9%
Well Services		324,292			339,325			(15,033	)	(4.4%)
Total cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		474,127			476,951			(2,824	)
Depreciation, depletion, amortization and accretion		81,068			98,060			(16,992	)	(17.3%)
General and administrative expenses		125,659			128,294			(2,635	)	(2.1%)
Restructuring and transaction expenses		3,294			6,375			(3,081	)	(48.3%)
Other gains, net		(6,549	)		(29,134	)		22,585		(77.5%)
Income from operations		241,821			203,414			38,407
Other income (expense):
Interest income, net		25,761			11,713			14,048		119.9%
Loss on Blue Chip Swap securities		(19,856	)		-			(19,856	)	100.0%
Other expense, net		(13,391	)		(1,804	)		(11,587	)	**
Income from continuing operations before income taxes		234,335			213,323			21,012
Income tax benefit (expense)		(59,741	)		77,719			(137,460	)	(176.9%)
Net income from continuing operations		174,594			291,042			(116,448	)
Income (loss) from discontinued operations, net of income tax		426			(4,577	)		5,003		(109.3%)
Net income	$	175,020		$	286,465		$	(111,445	)

** Not a meaningful percentage

Net income for the Combined Year was $106.6 million, which compares to a net loss for the prior year of $396.2 million. The Combined Year net income was driven primarily by recognition of a $335.6 million gain in Reorganization items, net primarily due to debt forgiveness as part of our emergence from bankruptcy. Also included in the results for the Combined Year was a pre-tax charge of $24.2 million related to restructuring activities and other expense of $16.7 million, which primarily relate to charges associated with asset disposals.

Revenues and Cost of Revenues

~~Revenue for the Combined Year was $694.7 million, an increase of $27.4~~Revenues from our Rentals segment increased $49.3 million, or ~~4.1%~~12.2%, ~~from~~in the ~~prior year.~~Current Year as compared to the Prior Year. Cost of revenues also increased $12.2 million, or 8.9%, as compared to the Prior Year. These increases are primarily attributable to increased revenue across all rental product service lines, which include our premium drill pipe, accommodations and bottom hole assemblies. Additionally, higher offshore and international rig counts provided for greater utilization of these rentals, which contributed to an increase in gross margin of 66.9% for the ~~Combined~~Current Year ~~was $452.0~~as compared to 65.8% for the Prior Year.

Revenues from our Well Services segment decreased $13.8 million ~~an increase~~and cost of ~~$43.9~~revenues decreased $15.0 million ~~or 10.8%, from~~in the ~~prior year. Both revenues~~Current Year as compared to the Prior Year. Revenues and cost of revenues in the ~~prior year~~Current Year were ~~severely~~negatively impacted by $36.0 million and $24.0 million, respectively, from the ~~effects~~disposition of ~~COVID-19, and the increase in our results~~certain non-core businesses in the ~~Combined~~second half of 2022 and 2023. Excluding the impact of these dispositions, revenues in the Current Year ~~were driven by~~increased $22.2 million and cost of revenues increased $9.0 million from improvements in our ~~Well Services business related~~completion services and well control service lines. Excluding the impact of dispositions, gross margin for the Current Year increased to ~~operations~~31.5% as compared to 29.9% for the Prior Year due to continued increases in ~~Latin America~~service revenues with higher margins, such as our U.S. offshore and ~~improvements~~international completion services and international well control services. Additionally, increased offshore and international rig counts allowed for higher activity in our well control services, partially offset by declines in well completion services. Additionally, during the Combined Year, we incurred shut down costs of $8.7 million at certain locations primarily in our Well Services segment which include costs associated with the severance of personnelU.S. offshore and ~~write-down of inventory at these locations.~~international operations.

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Depreciation, Depletion, Amortization and Accretion

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Depreciation, depletion, amortization and accretion ~~was $228.2~~expense for December 31, 2023 decreased $17.0 million, ~~during the Combined Year~~or 17.3%, as compared to ~~$115.8 million during~~ the prior year. The increase is related to both an increase in the carrying value of our assets and lower average remaining useful lives as a result of fair value adjustments recorded as a part of fresh start accounting.Prior Year. Depreciation expense infor the ~~Combined~~Prior Year was impacted by the valuation process under fresh start ~~accounting. Certain~~accounting, where certain fully depreciated assets were assigned ana new estimated fair value ~~of approximately $197.5 million~~ and a new remaining useful life of less than 36 months which significantly increased the amount of depreciation expense recorded in the Combined Year. Depreciation expense for these previously fully depreciated assets was $167.5 million for the Combined Year. Depreciation expense for the year ending December 31, 2022 is expected to decline significantly from the Combined Year.months.

~~General and Administrative Expenses~~

General and administrative expense was $128.6 million during the Combined Year compared to $205.8 million during the prior year. The decrease is the result of our continued focus on limiting spending and reducing our cost structure.

Restructuring ~~Expenses~~

~~Restructuring expenses during the Combined Year were $24.2 million~~ and primarily relate to severance expenses and costs related to executive officers that resigned during the period as well as professional fees associated with our previously discussed Transformation Project.

Restructuring expenses for the year ended December 31, 2020 were $47.1 million, and include $31.5 million of advisory and professional fees relating to the Chapter 11 Cases and $15.6 million related to the RSA premium paid to certain Consenting Noteholders pursuant to the RSA (the “RSA Premium”).Transaction Expenses

~~Other Expenses~~

~~Other~~Restructuring and transaction expenses during the Combined Year were $16.7 million. Other expenses comprised $13.1 million related to our Wells Services segment, which includes approximately $11.7 million from exit activities related to SES Energy Services India Pvt. Ltd, and $3.6 million related to our Rentals segment. Other expenses primarily relate to charges recorded as part of our strategic ~~disposal of low margin assets in line with~~efforts to reconfigure our ~~Transformation Project strategy~~organization both operationally and ~~includes gains/losses on asset sales,~~financially. Current Year restructuring and transaction expense decreased $3.1 million or 48.3%, as ~~well as impairments primarily related~~compared to ~~long-lived assets.~~

~~Reduction in Value of Assets~~

~~The reduction in value of assets recorded in 2020 was $23.8 million and was related to impairment of our long-lived assets, primarily in our Well Services segment.~~the Prior Year.

~~Reorganization items,~~Other gains, net

~~Reorganization items,~~Other gains in the Current Year declined by $22.6 million primarily due to inclusion of a $17.4 million gain from revisions in estimates related to our decommissioning liability in the Prior Year.

Loss on Blue Chip Swap Securities

During the Current Year, we utilized an indirect foreign mechanism known as a Blue Chip Swap (“BCS”) to remit a total of $13.9 million U.S. dollars from Argentina through the purchase and sale of BCS securities. These transactions resulted in a net ~~were $335.6~~loss of $19.9 million during the ~~Combined~~Current Year. See “Note ~~3 –~~ ~~Fresh Start Accounting~~ ~~to our consolidated financial statements for additional information.~~16 - Blue Chip Swap Securities”.

Interest Income, ~~(Expense),~~ net

Interest income, net for Current Year was ~~$2.5~~$25.8 million compared to $11.7 million for the ~~Combined~~Prior Year. The increase in interest income was driven by interest derived on overnight money market accounts primarily in the United States and Argentina.

Other Expense, net

Losses on foreign currencies during the Current Year as~~compared~~and Prior Year were $12.8 million and $12.6 million, respectively. Losses on foreign currency primarily relate to ~~interest~~our operations in Argentina which devalued its peso by more than 50% during the Current Year. Losses on foreign currencies related to our operations in Argentina totaled $14.8 million and $7.5 million in the Current Year and Prior Year, respectively.

Losses on foreign currencies during the Prior Year also include an expense of ~~$92.4~~$2.7 million ~~for the~~which represents a correction of an immaterial error relating to a period prior year. Interest expense for the prior year was a result of outstanding debt which was subsequently eliminated as a liability subject to compromise and settled in accordance with the Plan. See Note 3 – ~~Fresh Start Accounting~~ to our ~~consolidated financial statements for additional information.~~emergence from bankruptcy.

During the Prior Year, we disposed of 4.1 million shares of Select Energy Services, Inc. (“Select”) for $34.7 million, and we recognized gains totaling $8.9 million in connection with these transactions. As of December 31, 2022, we had disposed of all shares of Select.

Income Taxes

The effective tax rate in the Current Year was an expense of 25.5%. The effective tax rate for the Current Year is different from the U.S. federal statutory rate of 21.0% due to foreign income taxable in the U.S., a non-recurring non-deductible loss, and foreign tax rates that differ from the U.S. federal statutory rate. The effective tax rate in the Current Year was also impacted by $9.9 million in income tax benefits from reversals of uncertain tax positions in foreign jurisdictions. Finally, the effective tax rate in the Current Year was impacted by adjustments to valuation allowances in the U.S. and foreign jurisdictions. We evaluate deferred tax assets, including tax credits and net operating losses, on a routine basis and this may result in the release of all or a portion of currently recorded valuation allowance when there is sufficient positive evidence.

Additionally, we identified an error in the tax provision for the year ended December 31, 2022 pertaining to certain net operating loss carryforwards that should have been eliminated as part of a worthless stock deduction taken in the fourth quarter of 2022. As such, we recognized an additional income tax expense of $7.6 million during the three months ended March 31, 2023, with a corresponding decrease to deferred tax assets, to correct this immaterial misstatement.

The effective tax rate for the ~~Successor Period and the Predecessor Period~~Prior Year was ~~21.4%, and 18.2%, respectively.~~

a benefit of 36.4%. The effective tax rate infor the ~~Successor Period~~Prior Year is different from the ~~blended~~U.S. federal ~~and state~~ statutory rate of ~~22.5%~~21.0% primarily from ~~non-deductible items~~the recognition of a worthless stock deduction for U.S. income tax purposes with an estimated net tax benefit of $104.0 million. In addition, there were valuation allowance releases primarily for foreign deferred tax

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assets and a portion of U.S. foreign tax credits offset by foreign losses for which no tax benefit was ~~recorded.~~

~~Table of Contents~~

~~The tax rate~~recorded resulting in the Predecessor Period is different from the blended federal and state statutory rate of 22.5% primarily from the adoption of fresh start accounting during the period. The cancellation of indebtedness income resulting from the restructuring has significantly reduced our US tax attributes, including but not limited to net operating loss carryforwards. We experienced an ownership change under Sec. 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which is anticipated to limit certain remaining tax attributes.

~~The effective tax rate for the prior year was 10.6%. The tax rate is different from the blended federal and state statutory rate of 22.5% primarily from foreign losses for which no~~ tax benefit ~~was recorded.~~of $18.5 million.

Discontinued Operations

~~Loss~~Income from discontinued operations, net of tax, was ~~$40.4~~$0.4 million for the ~~Combined~~Current Year as compared to ~~$168.7~~a loss from discontinued operations of $4.6 million for the ~~prior year.~~Prior Year. See “Note 1418 - Discontinued ~~Operations~~Operations” ~~to our consolidated financial statements for further discussion.~~

~~Comparison of the Results of Operations for the Years Ended December 31, 2020 and 2019~~

For 2020, our revenue was $667.2 million, a decrease of $304.8 million or 31%, as compared to 2019. Net loss from continuing operations was $227.5 million, and net loss was $396.2 million. Included in the results for 2020 were pre-tax charges of $47.1 million related to restructuring expenses, $23.8 million related to a reduction in value of assets, and $19.5 million related to reorganization items. For 2019, our revenue was $972.1 million, resulting in a loss from continuing operations of $90.3 million, and a net loss of $255.7 million. Included in the results for 2019 was a pre-tax charge of $9.3 million related to a reduction in value of assets.

~~The following table compares our operating results for 2020 and 2019 (in thousands). Cost of revenues excludes depreciation, depletion, amortization and accretion for each of our business segments.~~

Year ended December 31,

2020

2019

Change

Revenues

$
667,249

$
972,052

$
(304,803
)

Cost of revenues

408,131

558,265

(150,134
)
Depreciation, depletion, amortization and accretion

115,771

146,791

(31,020
)
General and administrative expenses

205,773

244,403

(38,630
)
Restructuring expenses

47,055

-

47,055

Other expenses

-

-

-

Reduction in value of assets

23,775

9,293

14,482

Loss from operations

(133,256
)

13,300

(146,556
)

Other income (expense):

Interest income (expense), net

(92,426
)

(98,339
)

5,913

Reorganization items, net

(19,520
)

-

(19,520
)
Other expense

(9,229
)

(2,484
)

(6,745
)
Income (loss) from continuing operations before income taxes

(254,431
)

(87,523
)

(166,908
)
Income tax (expense) benefit

26,888

(2,733
)

29,621

Net income (loss) from continuing operations

(227,543
)

(90,256
)

(137,287
)
Loss from discontinued operations, net of income tax

(168,687
)

(165,465
)

(3,222
)
Net income (loss)

$
(396,230
)

$
(255,721
)

$
(140,509
)

~~Revenues and Cost of Revenues~~

Revenue for 2020 was $667.2 million, a decrease of $304.8 million, or 31.4%, from the prior year. Cost of revenues for 2020 was $408.1 million, a decrease of $150.1 million, or 26.9%, from the prior year. Both revenues and cost of revenues in 2020 were severely impacted by the effects of COVID-19, as we experienced declines in each geographic market in which we operated, from declines in demand and rig counts.

~~Table of Contents~~

~~Depreciation, Depletion, Amortization and Accretion~~

Depreciation, depletion, amortization and accretion decreased to $115.8 million during 2020 from $146.8 million in 2019. The decrease in depreciation, depletion, amortization and accretion was primarily due to impairments of long-lived assets during 2020 and 2019 in addition to assets becoming fully depreciated.

~~General and Administrative Expenses~~

General and administrative expenses decreased to $205.8 million during 2020 from $244.4 million in 2019. Total general and administrative expenses decreased primarily due to our continued focus on limiting spending and reducing our cost structure.

~~Restructuring Expenses~~

Restructuring expenses were $47.1 million for the year ended December 31, 2020. These prepetition restructuring expenses include $31.5 million of advisory and professional fees relating to the Chapter 11 Cases and $15.6 million related to the RSA Premium. There were no prepetition charges during 2019.

~~Reduction in Value of Assets~~

The reduction in value of assets recorded in 2020 was $23.8 million as compared to $9.3 million in 2019. The reduction in value of assets during both 2020 and 2019 was related to impairment of our long-lived assets, primarily in our Well Services segment. See the Notes to our consolidated financial statements for further discussion.

~~Reorganization Expenses~~

Reorganization expenses were $19.5 million for the year ended December 31, 2020. These post-petition reorganization expenses are comprised primarily of unamortized debt issuance costs, expenses related to rejected leases, and post-petition professional fees related to the Chapter 11 Cases. There were no reorganization expenses during 2019.

~~Income Taxes~~

~~Our effective tax rate for 2020 was 10.6% compared to a negative 3.1% for 2019.~~

~~Discontinued Operations~~

~~Loss from discontinued operations, net of tax, was $168.7 million for 2020 as compared to $165.5 million for 2019. See the Notes~~ to our consolidated financial statements for further discussion.

Liquidity and Capital Resources

Cash flows depend, to a large degree, on the level of spending by oil and gas companies for exploration, development and production activities. Certain sources and uses of cash, such as our level of discretionary capital expenditures and divestitures of non-core assets, are within our control and are adjusted as necessary based on market conditions.

Also impacting liquidity is the state of the global economy, which impacts oil and natural gas consumption. Our operations continue to be disrupted due to the circumstances surrounding the COVID-19 pandemic. The significant business disruption resulting from the COVID-19 pandemic has impacted customers, vendors and suppliers in all geographical areas where we operate. The closure of non-essential business facilities and restrictions on travel put in place by governments around the world have significantly reduced economic activity. Also, the COVID-19 pandemic has impacted and may further impact the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates. There is increased economic optimism in 2022 as governments worldwide continue to distribute the COVID-19 vaccines and supplemental vaccine boosters. However, although vaccination campaigns are underway, several regions, including areas of the United States, have been and continue to deal with a rebound in the pandemic. There is also concern about whether vaccines will be effective against different strains of the virus that have developed and may develop in the future. Even though signs of economic recovery centered on COVID-19 mitigation, global vaccine distribution, and re-opening efforts make demand for oil and gas difficult to project, we believe demand is recovering and prices will be positively impacted.

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~~Debt Instruments~~

Availability under the Credit Facility at any time is equal to the lesser of (i) the aggregate commitments under the Credit Facility and (ii) the borrowing base at such time. Subject to certain conditions, upon request and with the consent of the participating lenders, the total commitments under the Credit Facility may be increased to $170.0 million. SESI’s obligations under the Credit Facility are guaranteed by us and all of SESI’s material domestic subsidiaries and secured by substantially all of the personal property of ours, SESI and SESI’s material domestic subsidiaries, in each case, subject to certain customary exceptions.

On the Emergence Date, the Credit Facility replaced the DIP Credit Facility, and the undrawn letters of credit outstanding under the DIP Credit Facility were deemed outstanding under the Credit Facility.

~~Financial Condition and Sources of Liquidity~~

Our primary sources of liquidity have been cash and cash equivalents, cash generated from operations and from asset sales, and availability under our Credit Facility. As of December 31, ~~2021,~~2023, we had cash, cash equivalents and restricted cash of ~~$394.5~~$477.1 million. During the ~~Successor Period and the Predecessor Period~~Current Year, net cash provided by operating activities was ~~$58.9~~$202.4 million. We received $31.1 million ~~and $5.4 million, respectively. During the Successor Period and the Predecessor Period, $97.5 million and $0.8 million were received~~ in cash proceeds from the sale of assets ~~respectively.~~and $13.9 million in proceeds from the sale of BCS securities. The primary uses of liquidity are to provide support for operating activities, restructuring activities and capital expenditures. We spent $74.5 million of cash on capital expenditures and $33.8 million on the purchases of BCS securities during the Current Year. Additionally, during the Current Year, we paid $27.1 million to the Washington State Department of Revenue related to a use tax assessment from several years ago that we have appealed and is currently under review.

As of December 31, 2021, the borrowing base under the Credit Facility was approximately $114.9 million and we had $37.1 million of letters of credit outstanding that reduced the borrowing availability under the revolving credit facility.

The energy industry faces growing negative sentiment in the market which may affect our ability to access capital on terms favorable to us. While we have confidence in the level of support from our lenders, this negative sentiment in the energy industry has not only impacted our customers in North America, but also ~~affects~~affected the availability and pricing for most credit lines extended to participants in the energy industry. From time to time, we may enter into transactions to dispose of businesses or capital assets that no longer fit our long-term strategy.

~~Uses~~Distributions to Shareholders

On November 16, 2022, we announced that our Board declared a special dividend of ~~Liquidity~~$12.45 per share on our outstanding Class A Common Stock. Additionally, the Board determined that, in addition to the special dividend to holders of our Class A Common Stock, we would make dividend equivalent payments to each holder of unvested restricted stock units. The special dividend was paid on December 28, 2022 to holders of record as of December 16, 2022.

On February 13, 2024, we announced that our Board declared a special dividend of $12.38 per share on our outstanding Class A Common Stock. Additionally, the Board determined that, in addition to the special dividend to holders of our Class A Common Stock, we would make dividend equivalent payments to each holder of unvested restricted stock units. The special dividend will be paid on March 12, 2024 to holders of record as of February 27, 2024.

Equity Reclassification

On December 18, 2023, following the approval of our Board and stockholders each share of Class B Common Stock was automatically reclassified into one share of Class A Common Stock.

Debt Instruments

During the Current Year, we entered into a new Credit Agreement providing for a $140.0 million asset-based secured revolving Credit Facility, all of which is available for the issuance of letters of credit (the “Credit Facility”). The ~~primary uses~~Credit Facility matures on December 6, 2028, subject to certain conditions set forth in the Credit Agreement. The issuance of ~~liquidity are to provide support for operating activities, restructuring activities~~letters of credit reduces availability under the Credit Facility on a dollar-for-dollar basis.

For additional information, please see Part II, Item 8, “Financial Statements and ~~capital expenditures. We spent $34.2~~Supplementary Data – Note 9 - “Debt”.

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As of December 31, 2023, the borrowing base under the Credit Facility was approximately $140.0 million and we had $31.5 million of ~~cash on capital expenditures during~~letters of credit outstanding that reduced the ~~Successor Period and $3.0 million of cash on capital expenditures during~~borrowing availability under the Predecessor Period. We incurred significant costs associated with the Chapter 11 Cases, including fees for legal, financial and restructuring advisors to us, and certain of our creditors. During the Predecessor Period, we incurred $18.3 million of advisory and professional fees relating to the Chapter 11 Cases and $12.0 million of fees paid in consideration for the commitment by the Backstop Commitment Parties to provide the Delayed-Draw Term Loan Facility upon the emergence from bankruptcy (which we did not ultimately utilize).Credit Facility.

Critical Accounting Policies and Estimates

The accounting policies described below are considered critical in obtaining an understanding of our consolidated financial statements because their application requires significant estimates and judgments by management in preparing our consolidated financial statements. Management’s estimates and judgments are inherently uncertain and may differ significantly from actual results achieved. Management considers an accounting estimate to be critical if the following conditions apply:

•

the estimate requires significant assumptions; and

~~Table of Contents~~

•

changes in estimate could have or, a material effect on our consolidated results of operations or financial condition; or

•

if different estimates that could have been selected had been used, there could be a material effect on our consolidated results of operations or financial condition.

It is management’s view that the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate. However, actual results can differ significantly from those estimates under different assumptions and conditions. The sections below contain information about our most critical accounting estimates.

~~Bankruptcy~~ We applied Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 852 – Reorganizations (“ASC 852”) in preparing the consolidated financial statements. ASC 852 requires distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business. Accordingly, pre-petition liabilities that could have been impacted by the Chapter 11 Cases were classified as liabilities subject to compromise in our consolidated balance sheet as of December 31, 2020. These liabilities were reported at the amounts we anticipated would be allowed by the Bankruptcy Court. Additionally, certain expenses, realized gains and losses and provisions for losses that were realized or incurred during and directly related to the Chapter 11 Cases, including fresh start valuation adjustments and gains on liabilities subject to compromise were recorded as reorganization items, net in the consolidated statements of operations. See Note 2 – ~~Emergence from Voluntary Reorganization under Chapter 11~~ ~~for more information on the events of the Chapter 11 Cases as well as the accounting and reporting impacts of the reorganization during the Predecessor Period.~~

Long-Lived Assets Valuation We review long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. We record impairment losses on long-lived assets to be held and used in operations when the fair value of those assets is less than their respective carrying amount. Impairment losses are recorded in the amount by which the carrying amount of such assets exceeds the fair value. Fair value is measured, in part, by the estimated cash flows to be generated by those assets. Our cash flow estimates are based upon, among other things, historical results adjusted to reflect our best estimate of future market rates, utilization levels and operating performance. Our estimates of cash flows may differ from actual cash flows due to, among other things, changes in economic conditions or changes in an asset’s operating performance. Assets are generally grouped by subsidiary or division for the impairment testing, which represent the lowest level of identifiable cash flows. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell. Our estimate of fair value represents our best estimate based on industry trends and reference to market transactions and is subject to variability. The oil and gas industry is cyclical and our estimates of the period over which future cash flows will be generated, as well as the predictability of these cash flows, can have a significant impact on the carrying value of these assets and, in periods of prolonged down cycles, may result in impairment charges.

Decommissioning ~~liabilities~~liability Our decommissioning ~~liabilities are~~liability is associated with our oil and gas property and include ~~liabilities~~costs related to the plugging of wells, removal of the related platform and equipment and site restoration. We review the adequacy of our decommissioning ~~liabilities~~liability whenever indicators suggest that the estimated cash flows and/or relating timing needed to satisfy the liability have changed materially. Estimates of our decommissioning ~~liabilities~~liability are calculated using the income approach. Estimates of future retirement costs are adjusted for an estimated inflation rate over the expected time period prior to retirement and future cash outflows are discounted by a credit adjusted risk-free rate.

Income Taxes We use the asset and liability method of accounting for income taxes. This method ~~takes into account~~considers the differences between financial statement treatment and tax treatment of certain transactions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Our deferred tax calculation requires us to make certain estimates about our future operations. Changes in state, federal and foreign tax laws, as well as changes in our financial condition or the carrying value of existing assets and liabilities, could affect these estimates. The effect of a change in tax rates is recognized as income or expense in the period that the rate is enacted.

~~Fair Value Measurements~~Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in determining fair value are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. We historically utilized unadjusted quoted prices in the market for measuring the fair value of debt. We utilize unadjusted quoted prices for similar assets and liabilities in active markets for measuring the fair value of non-qualified deferred compensation plan assets and liabilities. We utilize unadjusted quoted prices which are readily determinable for measuring the fair value of our investment in equity securities. We use both cost and market estimates when calculating fair value for long-lived assets for impairment.

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Recently Adopted and Issued Accounting Guidance

See Part II, Item 8, “Financial Statements and Supplementary Data – Note 120 – ~~Summary of Significant Accounting Policies~~ – New Accounting ~~Pronouncements.”~~Pronouncements”.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks associated with foreign currency fluctuations and changes in interest rates. A discussion of our market risk exposure in financial instruments follows.

Foreign Currency Exchange Rate Risk

Prior to the Emergence Date, the functional currency of the majority of our international subsidiaries was US dollars and the functional currency for certain of our international subsidiaries was the local currency.

Commencing on the Emergence Date, as part of adopting a new accounting policy at fresh start accounting, the functional currency of certain international subsidiaries changed from the local currency to US dollars. This change brings alignment so that our functional currency is US dollars. Management considered the economic factors outlined in FASB ASC Topic No. 830 - Foreign Currency Matters in the determination of the functional currency. Management concluded that the predominance of factors support the use of the US Dollar as the functional currency which resulted in a change in functional currency to US dollars for all international subsidiaries.

~~The change in functional currency is applied on a prospective basis beginning on the Emergence Date and translation adjustments will~~While we continue to ~~remain as a component of prior periods accumulated other comprehensive loss.~~

Webe exposed to foreign currency exchange rates, we do not hold derivatives for trading purposes or use derivatives with complex features. When we believe it is prudent, we may enter into forward foreign exchange contracts to hedge the impact of foreign currency fluctuations. ~~We do not enter into forward foreign exchange contracts for trading purposes. At~~As of December 31, ~~2021 and 2020,~~2023, we ~~had no~~did not have any outstanding foreign currency forward contracts.

For additional information, please see Part II, Item 8, “Financial Statements and Supplementary Data – Note 16 - ‘Blue Chip Swap Securities’”.

Interest Rate Risk

At December 31, ~~2021~~2023 and ~~2020,~~2022, we had no variable rate debt outstanding.

Commodity Price Risk

Our revenues, profitability and future rate of growth significantly depend upon the market prices of oil and natural gas. Lower prices may also reduce the amount of oil and gas that can economically be produced.

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Item 8. Financial Statements and Supplementary Data


Consolidated Financial Statements and Notes	Page

Reports of Independent Registered Public Accounting Firm (PCAOB ID 238)	43
~~Report of Independent Registered Public Accounting Firm (PCAOB ID 185)~~	4535
Consolidated Balance Sheets	4838
Consolidated Statements of Operations	4939
Consolidated Statements of Comprehensive Income (Loss)	5040
Consolidated Statements of Changes in ~~Stockholders'~~Stockholders’ Equity (Deficit)	5141
Consolidated Statements of Cash Flows	5242
Notes to Consolidated Financial Statements	5343

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Superior Energy Services, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of Superior Energy Services, Inc. and its subsidiaries (Successor) (the “Company”) as of December 31, ~~2021,~~2023 and 2022, and the related consolidated statements of operations, of comprehensive income (loss), of changes in ~~stockholders’~~stockholders' equity (deficit) and of cash flows for the years ended December 31, 2023 and 2022, and for the period from February 3, 2021 through December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2021,~~2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, and for the period from February 3, 2021 through December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

Basis of Accounting

As discussed in Note 1 to the consolidated financial statements, Superior Energy Services, Inc. and certain of its direct and indirect wholly-owned domestic subsidiaries (collectively the “Affiliate Debtors”) filed petitions on December 7, 2020 with the United States Bankruptcy Court for the Southern District of Texas (Bankruptcy Court) for reorganization under the provisions of Chapter 11 of the Bankruptcy Code. The Bankruptcy Court confirmed the Affiliate ~~Debtor’s~~Debtors’ Joint Prepackaged Plan of Reorganization on January 19, 2021 and the Affiliate ~~Debtor’s~~Debtors emerged from bankruptcy on February 2, 2021. In connection with its emergence from bankruptcy, the Company adopted fresh start accounting as of February 2, 2021.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

Table of Contents

As described in Notes 1 and 3 to the consolidated financial statements, the Company recognized total revenues of $919,420 thousand for the year ended December 31, 2023. Revenues are recognized when performance obligations are satisfied in accordance with contractual terms, in an amount that reflects the consideration management expects to be entitled to in exchange for services rendered, rentals provided or products sold. Services revenue primarily represents amounts charged to customers for the completion of services rendered, including labor, products and supplies necessary to perform the service. Rentals revenue is primarily priced on a per day, per man hour or similar basis and consists of fees charged to customers for use of rental equipment over the term of the rental period, which is generally less than twelve months. Products are generally sold based upon purchase orders or contracts with customers that include fixed or determinable prices but do not include right of return provisions or other significant post-delivery obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. A contract’s standalone selling prices are determined based on the prices charged for services rendered, rentals provided or products sold.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing the revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as contracts, purchase orders, invoices, proof of delivery or of services performed, and where applicable, subsequent cash receipts and (ii) testing a sample of outstanding accounts receivable balances as of December 31, 2023 by obtaining and inspecting source documents, such as invoices, proof of delivery or of services performed, and where applicable, subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

March 7, 2024

We have served as the Company’s auditor since 2021.

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Superior Energy Services, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations, of comprehensive income (loss), of changes in stockholders' equity (deficit) and of cash flows of Superior Energy Services, Inc. and its subsidiaries (Predecessor) (the “Company”) for the period from January 1, 2021 through February 2, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the period from January 1, 2021 through February 2, 2021 in conformity with accounting principles generally accepted in the United States of America.

Basis of Accounting

As discussed in Note 1 to the consolidated financial statements, Superior Energy Services, Inc. and certain of its direct and indirect wholly-owned domestic subsidiaries (collectively the “Affiliate Debtors”) filed petitions on December 7, 2020 with the United States Bankruptcy Court for the Southern District of Texas (Bankruptcy Court) for reorganization under the provisions of Chapter 11 of the Bankruptcy Code. The Bankruptcy Court confirmed the Affiliate Debtors’ Joint Prepackaged Plan of Reorganization on January 19, 2021 and the Affiliate Debtors emerged from bankruptcy on February 2, 2021. In connection with its emergence from bankruptcy, the Company adopted fresh start accounting as of February 2, 2021.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

~~Critical Audit Matters~~

~~Decommissioning Liabilities Assessment~~

As described in Notes 1 and 3 to the consolidated financial statements, the Company has decommissioning liabilities associated with oil and gas property related to the plugging of wells, removal of the related platform and equipment, and site restoration. Management reviews the adequacy of the decommissioning liabilities whenever indicators suggest that the estimated cash flows and/or related timing

~~Table of Contents~~

needed to satisfy the liability have changed materially. The decommissioning liabilities are valued using the income approach. As disclosed by management, estimates of future retirement costs are adjusted for an estimated inflation rate over the expected time period prior to retirement and future cash outflows are discounted by a credit adjusted risk-free rate. As of December 31, 2021, the decommissioning liabilities were approximately $190 million.

The principal considerations for our determination that performing procedures relating to the decommissioning liabilities assessment is a critical audit matter are the significant judgment by management when estimating its decommissioning liabilities, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to future retirement costs. In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, testing management’s process for estimating the decommissioning liabilities by evaluating the appropriateness of the cash flow model, testing the completeness and accuracy of data used by management, and evaluating the reasonableness of management’s significant assumption related to future retirement costs. Professionals with specialized skill and knowledge were used to assist in evaluating the assumption related to future retirement costs.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

March 21, 2022

We have served as the Company’s auditor since 2021.

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Table of Contents

~~Report of Independent Registered Public Accounting Firm~~

~~To the Board of Directors and Stockholders of Superior Energy Services, Inc.~~

~~Opinion on the Financial Statements~~

We have audited the accompanying consolidated statements of operations, of comprehensive income (loss), of changes in stockholders' equity (deficit) and of cash flows of Superior Energy Services, Inc. and its subsidiaries (Predecessor) (the “Company”) for the period from January 1, 2021 through February 2, 2021,including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the period from January 1, 2021 through February 2, 2021 in conformity with accounting principles generally accepted in the United States of America.

~~Basis of Accounting~~

As discussed in Note 1 to the consolidated financial statements, Superior Energy Services, Inc. and certain of its direct and indirect wholly-owned domestic subsidiaries (collectively the “Affiliate Debtors”) filed petitions on December 7, 2020 with the United States Bankruptcy Court for the Southern District of Texas (Bankruptcy Court) for reorganization under the provisions of Chapter 11 of the Bankruptcy Code. The Bankruptcy Court confirmed the Affiliate Debtor’s Joint Prepackaged Plan of Reorganization on January 19, 2021 and the Affiliate Debtors emerged from bankruptcy on February 2, 2021. In connection with its emergence from bankruptcy, the Company adopted fresh start accounting as of February 2, 2021. This matter is also described in the “Critical Audit Matters” section of our report.

~~Basis for Opinion~~

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~Critical Audit Matters~~

~~Liabilities Subject to Compromise~~

As described above and in Notes 1, 2 and 3 to the consolidated financial statements, the Affiliate Debtors filed petitions for reorganization under the provisions of Chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) on December 7, 2020. As disclosed by management, pre-petition liabilities that could have been impacted by the Chapter 11 Cases were classified as liabilities

~~Table of Contents~~

subject to compromise. During the Chapter 11 Cases, the Affiliate Debtors filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Affiliate Debtors, subject to the assumptions filed in connection therewith. The Affiliate Debtors received proofs of claim, primarily representing general unsecured claims. Differences in amounts recorded and claims filed by creditors are investigated and resolved, including through filing objections with the Bankruptcy Court, where appropriate. The Company may ask the Bankruptcy Court to disallow claims that it believes are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In light of the substantial number of claims filed, the claims resolution process took considerable time to complete and continued even after the Affiliate Debtors emerged from bankruptcy. Prior to emergence from bankruptcy, liabilities are measured at their allowed claim amount. Liabilities subject to compromise as of February 2, 2021 was $1.6 billion prior to applying the effects of fresh start accounting. Reorganization items, net of $336 million recorded in the period ended February 2, 2021 included the gain on settlement of liabilities subject to compromise of $667 million, in addition to certain expenses, realized gains and losses, and provisions for losses that were realized or incurred during and directly related to the Chapter 11 Cases, including fresh start valuation adjustments.

The principal considerations for our determination that performing procedures relating to liabilities subject to compromise is a critical audit matter are the significant complexity in management’s claims resolution process to determine liabilities subject to compromise were complete and measured at the allowed claim amount, which in turn led to a high degree of auditor effort in performing procedures and evaluating audit evidence related to the completeness of the bankruptcy claims and measurement of the liabilities subject to compromise. In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, testing the completeness and measurement of the liabilities subject to compromise, and the involvement of professionals with specialized skill and knowledge to assist in (i) identifying the source claims from publicly available information, (ii) assessing completeness of management’s listing of claims by comparing the claims independently identified to management’s listing, and (iii) evaluating management’s claims resolution process to determine liabilities subject to compromise were complete and measured at the allowed claim amount.

~~/s/~~ ~~PricewaterhouseCoopers LLP~~

~~Houston, Texas~~

~~March 21, 2022~~

~~We have served as the Company’s auditor since 2021.~~

~~Table of Contents~~

~~Report of Independent Registered Public Accounting Firm~~

~~To the Stockholders and Board of Directors~~

~~Superior Energy Services, Inc.:~~

~~Opinion on the Consolidated Financial Statements~~

We have audited the accompanying consolidated balance sheet of Superior Energy Services, Inc. and subsidiaries (the Company) as of December 31, 2020 (Predecessor), the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two year period ended December 31, 2020 (Predecessor), and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 (Predecessor), and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2020 (Predecessor), in conformity with U.S. generally accepted accounting principles.

~~Basis for Opinion~~

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~/s/ KPMG LLP~~

~~We served as the Company’s auditor from 1996 to 2021.~~

~~Houston, TX~~

~~March 26, 2021, except as to Note 14, as to which the date is March 21, 2022~~

~~Table of Contents~~

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except per share data)

Successor

Predecessor

December 31, 2021

December 31, 2020

ASSETS

Current assets:

Cash and cash equivalents

$
314,974

$
188,006

Accounts receivable, net

182,432

158,516

Income taxes receivable

5,099

8,891

Prepaid expenses

15,861

31,793

Inventory

60,603

77,027

Other current assets

6,701

9,171

Investment in equity securities

25,735

-

Assets held for sale

37,528

242,104

Total current assets

648,933

715,508

Property, plant and equipment, net

356,274

408,107

Operating lease right-of-use assets

25,154

33,317

Goodwill

-

138,677

Notes receivable

60,588

72,129

Restricted cash

79,561

80,178

Intangible and other long-term assets, net

28,998

53,163

Total assets

$
1,199,508

$
1,501,079

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$
43,080

$
50,330

Accrued expenses

116,882

114,777

Liabilities held for sale

5,607

46,376

Total current liabilities

165,569

211,483

Decommissioning liabilities

190,380

134,436

Operating lease liabilities

19,193

29,464

Deferred income taxes

12,441

5,288

Other long-term liabilities

70,192

123,261

Total non-current liabilities

292,206

292,449

Liabilities Subject to Compromise

-

1,335,794

Total liabilities

457,775

1,839,726

Stockholders’ equity (deficit):

Predecessor common stock $0.001 par value; 25,000,000 shares authorized;
   15,799,318 shares issued and 14,826,906 shares outstanding at December 31, 2020

-

16

Successor Class A common stock $0.01 par value; 50,000,000 shares authorized;
   19,998,695 shares issued and outstanding at December 31, 2021

200

-

Successor Class B common stock $0.01 par value; 2,000,000 shares authorized;
   113,840 shares issued and 76,269 shares outstanding at December 31, 2021

1

-

Class A Additional paid-in capital

902,486

2,756,889

Class B Additional paid-in capital

1,224

0

Predecessor Treasury stock, at cost, 972,412 shares at December 31, 2020

-

(4,290
)
Accumulated other comprehensive loss, net

-

(67,947
)
Accumulated deficit

(162,178
)

(3,023,315
)
Total stockholders’ equity (deficit)

741,733

(338,647
)
Total liabilities and stockholders’ equity (deficit)

$
1,199,508

$
1,501,079


	December 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	391,684	$	258,999
Accounts receivable, net		276,868		249,808
Income taxes receivable		10,542		6,665
Prepaid expenses		18,614		17,299
Inventory		74,995		65,587
Other current assets		7,922		6,276
Assets held for sale		-		11,978
Total current assets		780,625		616,612
Property, plant and equipment, net		294,960		282,376
Note receivable		69,005		69,679
Restricted cash		85,444		80,108
Operating lease right-of-use assets		15,972		18,797
Deferred tax assets		67,241		97,492
Other assets, net		27,746		25,948
Total assets	$	1,340,993	$	1,191,012

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		38,214	$	31,570
Accrued expenses		103,782		116,575
Income taxes payable		20,220		11,682
Decommissioning liability		21,631		9,770
Liabilities held for sale		-		3,349
Total current liabilities		183,847		172,946
Decommissioning liability		148,652		150,901
Operating lease liability		11,338		14,634
Other liabilities		36,245		69,647
Total liabilities		380,082		408,128

Stockholders’ equity:
Class A Common Stock $0.01 par value; 52,000 shares authorized; 20,151 shares issued and outstanding at December 31, 2023 and 19,999 shares issued and outstanding at December 31, 2022		202		200
Class B Common Stock $0.01 par value; 84 shares issued and 80 shares outstanding at December 31, 2022		-		1
Class A Additional paid-in capital		911,388		902,486
Class B Additional paid-in capital		-		5,896
Accumulated deficit		49,321		(125,699	)
Total stockholders’ equity		960,911		782,884
Total liabilities and stockholders’ equity	$	1,340,993	$	1,191,012

See accompanying notes to consolidated financial statements.

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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except share data)


	Successor			Predecessor
							Year ended December 31,						Successor									Predecessor
	For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021			2020			2019			For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021
Revenues:
Services	$	305,699		$	19,234		$	299,383		$	482,347		$	357,936		$	386,775		$	305,699		$	19,234
Rentals		208,951			14,434			225,363			326,126			346,728			309,314			208,951			14,434
Product sales		134,104			12,260			142,503			163,579			214,756			187,871			134,104			12,260
Total revenues		648,754			45,928			667,249			972,052			919,420			883,960			648,754			45,928
Cost of revenues:
Services		236,784			15,080			230,341			345,653			238,543			268,078			236,784			15,080
Rentals		86,354			5,876			88,535			114,552			120,738			102,975			86,354			5,876
Product sales		99,114			8,817			89,255			98,060			114,846			105,898			99,114			8,817
Total cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		422,252			29,773			408,131			558,265			474,127			476,951			422,252			29,773
Depreciation, depletion, amortization and accretion:
Services		105,426			3,500			51,754			77,237			26,878			37,168			105,426			3,500
Rentals		69,443			2,627			38,561			54,089			26,036			29,724			69,443			2,627
Product sales		44,990			2,231			25,456			15,465			28,154			31,168			44,990			2,231
Total depreciation, depletion, amortization and accretion		219,859			8,358			115,771			146,791			81,068			98,060			219,859			8,358
General and administrative expenses		117,575			11,052			205,773			244,403			125,659			128,294			117,575			11,052
Restructuring expenses		22,952			1,270			47,055			-
Other expenses		16,726			0			0			0
Reduction in value of assets		0			0			23,775			9,293
(Loss) income from operations		(150,610	)		(4,525	)		(133,256	)		13,300
Restructuring and transaction expenses														3,294			6,375			22,952			1,270
Other (gains) and losses, net														(6,549	)		(29,134	)		16,726			-
Net income (loss) from operations														241,821			203,414			(150,610	)		(4,525	)
Other income (expense):
Interest income (expense), net		2,331			202			(92,426	)		(98,339	)
Interest income, net														25,761			11,713			2,331			202
Reorganization items, net		0			335,560			(19,520	)		0			-			-			-			335,560
Other expense		(7,128	)		(2,105	)		(9,229	)		(2,484	)
Loss on Blue Chip Swap securities														(19,856	)		-			-			-
Other expense, net														(13,391	)		(1,804	)		(7,128	)		(2,105	)
Income (loss) from continuing operations before income taxes		(155,407	)		329,132			(254,431	)		(87,523	)		234,335			213,323			(155,407	)		329,132
Income tax (expense) benefit		33,298			(60,003	)		26,888			(2,733	)
Income tax benefit (expense)														(59,741	)		77,719			33,298			(60,003	)
Net income (loss) from continuing operations		(122,109	)		269,129			(227,543	)		(90,256	)		174,594			291,042			(122,109	)		269,129
Loss from discontinued operations, net of income tax		(40,069	)		(352	)		(168,687	)		(165,465	)
Income (loss) from discontinued operations, net of income tax														426			(4,577	)		(40,069	)		(352	)
Net income (loss)	$	(162,178	)	$	268,777		$	(396,230	)	$	(255,721	)	$	175,020		$	286,465		$	(162,178	)	$	268,777

Income (loss) per share -basic
Income (loss) per share - basic:
Net income (loss) from continuing operations	$	(6.11	)	$	18.13		$	(15.35	)	$	(5.86	)	$	8.68		$	14.53		$	(6.11	)	$	18.13
Loss from discontinued operations, net of income tax		(2.00	)		(0.02	)		(11.38	)		(10.75	)
Income (loss) from discontinued operations, net of income tax														0.02			(0.22	)		(2.00	)		(0.02	)
Net income (loss)	$	(8.11	)	$	18.11		$	(26.73	)	$	(16.61	)	$	8.70		$	14.31		$	(8.11	)	$	18.11

Income (loss) per share - diluted:
Net income (loss) from continuing operations	$	(6.11	)	$	18.06		$	(15.35	)	$	(5.86	)	$	8.66		$	14.49		$	(6.11	)	$	18.06
Loss from discontinued operations, net of income tax		(2.00	)		(0.03	)		(11.38	)		(10.75	)
Income (loss) from discontinued operations, net of income tax														0.02			(0.23	)		(2.00	)		(0.03	)
Net income (loss)	$	(8.11	)	$	18.03		$	(26.73	)	$	(16.61	)	$	8.68		$	14.26		$	(8.11	)	$	18.03

Weighted-average shares outstanding - basic		19,998			14,845			14,822			15,393
Weighted-average shares outstanding - diluted		19,998			14,905			14,822			15,393
Weighted-average shares outstanding
Basic														20,126			20,024			19,998			14,845
Diluted														20,152			20,087			19,998			14,905

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

Successor

Predecessor

Year ended December 31,

For the Period
February 3, 2021
through
December 31, 2021

For the Period
January 1, 2021
through
February 2, 2021

2020

2019

Net income (loss)

$
(162,178
)

$
268,777

$
(396,230
)

$
(255,721
)
Change in cumulative translation adjustment, net of tax

0

67,947

3,980

1,250

Comprehensive income (loss)

$
(162,178
)

$
336,724

$
(392,250
)

$
(254,471
)


	Successor							Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021
Net income (loss)	$	175,020	$	286,465	$	(162,178	)	$	268,777
Change in cumulative translation adjustment, net of tax		-		-		-			67,947
Comprehensive income (loss)	$	175,020	$	286,465	$	(162,178	)	$	336,724

See accompanying notes to consolidated financial statements.

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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three Years Ended December 31, ~~2021~~2023

(in thousands, except per share data)

Accumulated

Common Stock

Additional

other

Class A

Class B

paid-in capital

Treasury

comprehensive

Accumulated

Shares

Amount

Shares

Amount

Class A

Class B

stock

loss, net

deficit

Total

Balances, December 31, 2018 (Predecessor)

154,885,418

$
155

$
-

$
-

$
2,735,125

$
-

$
-

$
(73,177
)

$
(2,371,364
)

$
290,739

Net loss

-

-

-

-

-

-

-

-

(255,721
)

(255,721
)
Foreign currency translation adjustment

-

-

-

-

-

-

-

1,250

-

1,250

Purchases of treasury stock

-

-

-

-

-

-

(4,290
)

-

-

(4,290
)
Stock-based compensation expense, net of forfeitures

-

-

-

-

18,459

-

-

-

-

18,459

Transactions under stock plans

1,187,961

2

-

-

(1,677
)

-

-

-

-

(1,675
)
Shares issued under Employee Stock Purchase Plan

532,292

-

-

-

811

-

-

-

-

811

1-for-10 Reverse Stock Split

(140,916,208
)

(141
)

-

-

141

-

-

-

-

-

Balances, December 31, 2019 (Predecessor)

15,689,463

16

-

-

2,752,859

-

(4,290
)

(71,927
)

(2,627,085
)

49,573

Net loss

-

-

-

-

-

-

-

-

(396,230
)

(396,230
)
Foreign currency translation adjustment

-

-

-

-

-

-

-

3,980

-

3,980

Stock-based compensation expense, net of forfeitures

-

-

-

-

4,238

-

-

-

-

4,238

Transactions under stock plans

109,855

-

-

(208
)

-

-

-

-

(208
)
Balances, December 31, 2020 (Predecessor)

15,799,318

16

-

-

2,756,889

-

(4,290
)

(67,947
)

(3,023,315
)

(338,647
)
Net income

-

-

-

-

-

-

-

-

268,777

268,777

Foreign currency translation adjustment

-

-

-

-

-

-

-

67,947

-

67,947

Extinguishment of unrecognized compensation expense

-

-

-

-

988

-

-

-

-

988

Stock-based compensation expense, net of forfeitures

-

-

-

935

-

935

Restricted stock units vested

48,903

-

-

-

-

-

-

-

-

-

Shares withheld and retired

(14,701
)

-

-

-

-

-

-

Cancellation of Predecessor equity

(15,833,520
)

(16
)

-

-

(2,758,812
)

-

4,290

-

2,754,538

-

Issuance of Successor Class A common stock

19,995,581

200

-

-

902,486

-

-

-

-

902,686

Balances, February 2, 2021 (Predecessor)

19,995,581

$
200

-

$
-

$
902,486

$
-

$
-

$
-

$
-

$
902,686

Balances, February 3, 2021 (Successor)

19,995,581

$
200

$
-

$
-

$
902,486

$
-

$
-

$
-

$
-

$
902,686

Net loss

-

-

-

-

-

-

-

-

(162,178
)

(162,178
)
Stock-based compensation expense, net of forfeitures

-

-

-

-

-

2,710

-

-

-

2,710

Common stock issued

3,114

-

113,840

1

-

(1
)

-

-

-

-

Shares withheld and retired

-

-

(37,571
)

-

-

(1,485
)

-

-

-

(1,485
)
Balances, December 31, 2021 (Successor)

19,998,695

$
200

76,269

$
1

$
902,486

$
1,224

$
-

$
-

$
(162,178
)

$
741,733


													Additional									Accumulated
	Common Stock												paid-in									other
	Class A						Class B						capital						Treasury			comprehensive			Accumulated
	Shares			Amount			Shares			Amount			Class A			Class B			stock			loss, net			deficit			Total
Balances, December 31, 2020 (Predecessor)		15,799			16			-			-			2,756,889			-			(4,290	)		(67,947	)		(3,023,315	)	$	(338,647	)
Net income		-			-			-			-			-			-			-			-			268,777			268,777
Foreign currency translation adjustment		-			-			-			-			-			-			-			67,947			-			67,947
Extinguishment of unrecognized compensation expense		-			-			-			-			988			-			-			-			-			988
Stock-based compensation expense, net		-			-			-			-			935			-						-						935
Restricted stock units vested		49			-			-			-			-			-			-			-			-			-
Shares withheld and retired		(15	)		-			-			-			-			-			-			-			-			-
Cancellation of Predecessor equity		(15,833	)		(16	)		-			-			(2,758,812	)		-			4,290			-			2,754,538			-
Issuance of Class A Common Stock		19,996			200			-			-			902,486			-			-			-			-			902,686
Balances, February 2, 2021 (Predecessor)		19,996		$	200			-		$	-		$	902,486		$	-		$	-		$	-		$	-		$	902,686


Balances, February 3, 2021 (Successor)		19,996		$	200			-		$	-		$	902,486		$	-		$	-		$	-		$	-		$	902,686
Net income		-			-			-			-			-			-			-			-			(162,178	)		(162,178	)
Stock-based compensation expense, net		-						-			-			-			2,710			-			-			-			2,710
Common stock issued		3			-			114			1			-			(1	)		-			-			-			-
Share withheld and retired		-			-			(38	)		-			-			(1,485	)		-			-			-			(1,485	)
Balances, December 31, 2021 (Successor)		19,999			200			76			1			902,486			1,224			-			-			(162,178	)		741,733
Net income		-			-			-			-			-			-			-			-			286,465			286,465
Cash dividends ($12.45 per share)		-			-			-			-			-			-			-			-			(249,986	)		(249,986	)
Stock-based compensation expense, net		-			-			-			-			-			4,807			-			-			-			4,807
Restricted stock units vested		-			-			10			-			-			-			-			-			-			-
Share withheld and retired		-			-			(2	)		-			-			(135	)		-			-			-			(135	)
Shares placed in treasury		-			-			(4	)		-			-			-			-			-			-			-
Balances, December 31, 2022 (Successor)		19,999		$	200			80		$	1		$	902,486		$	5,896		$	-		$	-		$	(125,699	)	$	782,884
Net income		-			-			-			-			-			-			-			-			175,020			175,020
Stock-based compensation expense, net		-			-			-			-			-			4,123			-			-			-			4,123
Restricted stock units vested		-			-			91			1			-			(1	)		-			-			-			-
Shares withheld and retired		-			-			(19	)		-			-			(1,116	)		-			-			-			(1,116	)
Reclassification of stock		152			2			(152	)		(2	)		8,902			(8,902	)		-			-			-			-
Balances, December 31, 2023 (Successor)		20,151		$	202			-		$	-		$	911,388		$	-		$	-		$	-		$	49,321		$	960,911

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows

(in thousands)

Successor

Predecessor

Year ended December 31,

For the Period
February 3, 2021
through
December 31, 2021

For the Period
January 1, 2021
through
February 2, 2021

2020

2019

Cash flows from operating activities:

Net income (loss)

$
(162,178
)

$
268,777

$
(396,230
)

$
(255,721
)
Adjustments to reconcile net loss to net cash from operating activities:

Depreciation, depletion, amortization and accretion

251,361

10,499

146,793

271,410

Deferred income taxes

(48,975
)

54,322

2,041

3,247

Reduction in value of assets

0

0

141,110

93,763

Right-of-use assets amortization

8,380

1,372

20,224

20,613

Amortization of credit facility costs

452

0

0

0

Stock based compensation expense

2,710

935

2,628

19,814

Reorganization items, net

0

(354,279
)

18,087

0

Bad debt

(4,908
)

(210
)

12,473

76

Gain on sale of assets and businesses

0

58

0

0

Gain on sale of equity securities

(383
)

0

0

0

Unrealized gain on investment in equity securities

(2,147
)

0

-

0

Other expenses

30,707

0

0

0

Other reconciling items, net

6,687

(355
)

(8,309
)

(16,023
)
Changes in operating assets and liabilities:

Accounts receivable

(28,676
)

3,602

111,948

104,462

Prepaid expenses

4,854

(340
)

0

0

Inventory and other current assets

22,866

(221
)

27,933

(6,137
)
Accounts payable

735

(2,365
)

(35,170
)

(12,278
)
Accrued expenses

(21,770
)

23,489

(18,154
)

(37,482
)
Income taxes

11,535

340

0

0

Operating lease liabilities and other, net

(12,366
)

(241
)

(23,157
)

(39,316
)
Net cash from operating activities

58,884

5,383

2,217

146,428

Cash flows from investing activities:

Payments for capital expenditures

(34,152
)

(3,035
)

(47,653
)

(140,465
)
Proceeds from sales of assets

97,505

775

50,039

110,008

Proceeds from sales of equity securities

4,099

0

0

0

Net cash from investing activities

67,452

(2,260
)

2,386

(30,457
)
Cash flows from financing activities:

Credit facility costs

(14
)

(1,920
)

(1,554
)

0

Tax withholdings for vested restricted stock units

(1,485
)

0

(208
)

(1,677
)
Purchases of treasury stock

0

0

0

(4,290
)
Delayed draw term loan commitment fee

0

0

(12,000
)

0

Other

0

0

(432
)

675

Net cash from financing activities

(1,499
)

(1,920
)

(14,194
)

(5,292
)
Effect of exchange rate changes on cash

0

311

2,387

961

Net change in cash, cash equivalents, and restricted cash

124,837

1,514

(7,204
)

111,640

Cash, cash equivalents, and restricted cash at beginning of period

269,698

268,184

275,388

163,748

Cash, cash equivalents, and restricted cash at end of period

$
394,535

$
269,698

$
268,184

$
275,388


	Successor									Predecessor
	For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021
Cash flows from operating activities:
Net income	$	175,020		$	286,465		$	(162,178	)	$	268,777
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion, amortization and accretion		81,068			98,060			251,361			10,499
Right-of-use assets amortization		2,825			6,357			8,380			1,372
Deferred income taxes		33,000			(104,587	)		(48,975	)		54,322
Stock based compensation expense		4,123			4,807			2,710			935
Reorganization items, net		-			-			-			(354,279	)
Bad debt		873			2,248			(4,908	)		(210	)
Gain on sale of assets and businesses		-			-			-			58
Gain on sale of equity securities		-			(8,950	)		(383	)		-
Unrealized gain on investment in equity securities		-			-			(2,147	)		-
Other (gains) and losses, net		(13,520	)		(32,872	)		30,707			-
Loss on Blue Chip Swap securities		19,856			-			-			-
Washington State Tax Settlement		(27,068	)		-			-			-
Decommissioning costs		(10,776	)		-			-			-
Other reconciling items, net		(3,427	)		(3,822	)		6,687			(355	)
Changes in operating assets and liabilities:
Accounts receivable		(30,168	)		(65,669	)		(28,676	)		3,602
Prepaid expenses		(1,958	)		(1,096	)		4,854			(340	)
Inventory and other current assets		(28,153	)		(4,568	)		22,866			(221	)
Accounts payable		2,015			(10,149	)		735			(2,365	)
Accrued expenses		(18,449	)		8,503			(21,770	)		23,489
Income taxes		5,318			771			11,535			340
Other, net		11,811			(82	)		(11,914	)		(241	)
Net cash from operating activities		202,390			175,416			58,884			5,383
Cash flows from investing activities:
Payments for capital expenditures		(74,496	)		(65,784	)		(34,152	)		(3,035	)
Proceeds from sales of assets		31,099			50,376			97,505			775
Proceeds from sales of equity securities		-			34,685			4,099			-
Proceeds from sales of Blue Chip Swap securities		13,912			-			-			-
Purchases of Blue Chip Swap securities		(33,768	)		-			-			-
Net cash from investing activities		(63,253	)		19,277			67,452			(2,260	)
Cash flows from financing activities:
Credit facility costs		-			-			(14	)		(1,920	)
Tax withholdings for vested restricted stock units		(1,116	)		(135	)		(1,485	)		-
Distributions to stockholders		-			(249,986	)		-			-
Net cash from financing activities		(1,116	)		(250,121	)		(1,499	)		(1,920	)
Effect of exchange rate changes on cash		-			-			-			311
Net change in cash, cash equivalents, and restricted cash		138,021			(55,428	)		124,837			1,514
Cash, cash equivalents, and restricted cash at beginning of period		339,107			394,535			269,698			268,184
Cash, cash equivalents, and restricted cash at end of period	$	477,128		$	339,107		$	394,535		$	269,698

See accompanying notes to consolidated financial statements.

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Notes to Consolidated Financial Statements

As of and For the Years Ended December 31, ~~2021,~~2023, 2022 and 2020 ~~and 2019~~

(1) Summary of Significant Accounting Policies

Basis of Presentation

As used herein, “we,” ~~“us”,~~“us,” “our” and similar terms refer to (i) prior to February 2, 2021 (the “Emergence Date”), SESI Holdings, Inc. ~~(formerly known as Superior Energy Services, Inc.)~~ and its subsidiaries (“Predecessor”) and (ii) after the Emergence Date, Superior Energy Services, Inc. ~~(formerly known as Superior Newco, Inc.)~~ and its subsidiaries (“Successor”).

As used herein, the following terms refer to our operations:


"“Predecessor ~~Period"~~	Period”	January 1, 2021 through February 2, 2021
"“Successor ~~Period"~~	Period”	February 3, 2021 through December 31, 2021

Our consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. Certain previously reported amounts, specifically related to assets held for sale and discontinued operations, have been reclassified to conform to current year presentation.

“Prior Year”

January 1, 2022 through December 31, 2022

“Current Year”

January 1, 2023 through December 31, 2023

Due to the lack of comparability with historical financials, our consolidated financial statements and related footnotes are presented with a “black line” division to emphasize the lack of comparability between amounts presented as of, and after, ~~February 2, 2021~~the Emergence Date.

Our consolidated financial statements include our accounts and ~~amounts presented for all prior periods. Our~~those of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial ~~results for future periods following the application of fresh start accounting will be different from historical trends and the differences may be material.~~statements.

Business

We serve major, national and independent oil and natural gas exploration and production companies around the world and offer products and services with respect to the various phases of a well’s economic life cycle.

~~The Transformation Project has been focused around three sequential phases:~~

•

Business Unit Review – analyzing strategic changes and executing various non-core asset divestitures, which emphasized product optimization and margin enhancement to maximize the cash flow profile of our business units and focus on our core competencies (collectively, the “Business Unit Review”);

•

~~Geographic Focus – reviewing our footprint and improving capital efficiency by focusing on low-risk, high reward geographies to maximize returns; and~~

•

Right Size Support – streamlining support to match optimized business units that represent our core portfolio and consolidating our operational footprint to align the size of our operations with current demand to provide a superior value proposition and exhibit capital discipline.

Historically, we provided a wide variety of services and products to many markets within the energy industry. ~~During 2021, we realigned our~~Our core businesses to focus on products and services that we believe meet the criteria ~~of (1)~~ of:

•

being critical to our customers’ oil and gas ~~operations, (2) facing low or no~~operations;

•

limiting competition from the three largest global oilfield service ~~companies, (3)~~ companies;

•

requiring deep technical expertise through the design or use of our ~~product~~products or ~~service,~~services, such as premium drill pipe and ~~(4) being~~ drilling bottom hole assembly accessory rentals;

•

unlikely to become a commoditized product or service to our ~~customers.~~ customers; and

•

providing strong cash flow generation capacity and opportunities.

The result of this approach is a portfolio of business lines grounded in our core mission of providing high quality products and services while maintaining the trust and serving the needs of our customers, with an emphasis on free cash flow generation and capital ~~efficiency for us.~~efficiency.

Emergence from Voluntary Reorganization under Chapter 11

~~In connection with our Transformation Project, our reportable segments were changed to Rentals and Well Services.~~

~~Table of Contents~~

~~Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code~~

On December 4,7, 2020, ~~we and~~ certain of our direct and indirect wholly-owned domestic subsidiaries ~~(the "Affiliate Debtors") entered into an Amended and Restated Restructuring Support Agreement (the “Amended RSA”) that amended and restated in its entirety~~filed petitions for reorganization under the ~~Restructuring Support Agreement (the “RSA”), dated September 29, 2020, with certain holders~~provisions of ~~SESI, L.L.C.’s (“SESI”) outstanding (i)~~ ~~7.125% senior unsecured notes due 2021 (the “7.125% Notes”) and (ii)~~ ~~7.750% senior unsecured notes due 2024 (the “7.750% Notes”). The parties to the Amended RSA agreed to the principal terms of a proposed financial restructuring of the Affiliate Debtors, which was implemented through the Plan (as defined below).~~

~~On December 7, 2020, the Affiliate Debtors filed the Chapter 11 Cases under~~ Chapter 11 of the Bankruptcy Code ~~in the Bankruptcy Court,~~ and, in connection therewith, ~~the Affiliate Debtors~~ filed ~~with the Bankruptcy Court~~ the proposed Joint Prepackaged Plan of Reorganization ~~under the Bankruptcy Code~~ (as amended, modified or supplemented from time to time, the “Plan”). After commencement of the Chapter 11 Cases, the Affiliate Debtors continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In connection with the Chapter 11 Cases, the Affiliate Debtors filed a motion for approval of a debtor-in-possession financing facility, and on December 8, 2020, the Bankruptcy Court approved such motion and entered an interim order approving the financing (the “Interim DIP Order”). In accordance with the Interim DIP Order, on December 9, 2020, we, as guarantor and SESI, as borrower, entered into a $~~120~~ million Senior Secured Debtor-in-Possession Credit Agreement (the “DIP Credit Facility”). On January 9, 2021, the Bankruptcy Court approved the Affiliate Debtors’ entry into the DIP Credit Facility on a final basis.

~~On January 19, 2021, the Bankruptcy Court entered an order, Docket No. 289, confirming and approving the Plan.~~

On the Emergence Date, we qualified for and adopted fresh start accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 852 – Reorganizations (ASC 852), which specifies the accounting and financial reporting requirements for entities reorganizing through Chapter 11 bankruptcy proceedings. The application of fresh start accounting resulted in a new basis of accounting and we became a new entity for financial reporting purposes. As a result ofconditions to the ~~implementation~~effectiveness of the Plan were satisfied and the application of fresh start accounting, our historical financial statements on or before the Emergence Date are not a reliable indicator of our financial condition and results of operations for any period after our adoption of fresh start accounting.

~~We applied ASC 852 in preparing the consolidated financial statements, which requires distinguishing transactions associated with the reorganization separate~~we emerged from ~~activities related to the ongoing operations of the business. Accordingly, pre-petition liabilities that could have been impacted by the~~ Chapter 11 Cases were classified as liabilities subject to compromise in our consolidated balance sheet as of December 31, 2020. These liabilities were reported at the amounts we anticipated would be allowed by the Bankruptcy Court. Additionally, certain expenses, realized gains and losses and provisions for losses that were realized or incurred during and directly related to the Chapter 11 Cases, including fresh start valuation adjustments and gains on liabilities subject to compromise were recorded as reorganization items, net in the consolidated statements of operations. See Note 2 – ~~Emergence from Voluntary Reorganization under Chapter 11~~ ~~for more information on the events of the Chapter 11 Cases as well as the accounting and reporting impacts of the reorganization during the Predecessor Period.~~11.

Use of Estimates

In preparing the accompanying financial statements, we make various estimates and assumptions that affect the reported amounts of assets and liabilities, ~~and disclosure of~~including contingent ~~assets and~~ liabilities ~~reported~~ as of the dates of the balance sheets and the amounts of revenues and expenses reported for the periods shown in the income statements and statements of cash flows. All estimates, assumptions, valuations and financial projections related to fresh start accounting, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. See Note 3 – statements. Actual results could differ from those estimates.~~Fresh Start Accounting~~ ~~for information about the use of estimates relating to fresh start accounting, .~~

~~Changes in Accounting Policies~~43

As part of the adoption of fresh start accounting and effective upon emergence from bankruptcy, we have adopted new presentations for certain items within our consolidated balance sheets and statement of operations. The presentation changes related to foreign currencies, bad debt expense, gains/losses on sales of assets and reduction in value of assets are further described within their relevant discussion below.

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Major Customers and Concentration of Credit Risk

The majority of our business is conducted with major and independent oil and gas companies. We evaluate the financial strength of our customers and provide allowances for probable credit losses when deemed necessary.

The market for our services and products is the oil and gas industry in the U.S. land and Gulf of Mexico areas and select international market areas. Oil and gas companies make capital expenditures on exploration, development and production operations. The level of these expenditures historically has been characterized by significant volatility.

We derive a large amount of revenue from a small number of major and independent oil and gas companies. There were 0no customers that exceeded ~~10%~~10% of our total revenues in ~~2021, 2020 or 2019.~~any of the last three years.

Our assets that are potentially exposed to concentrations of credit risk consist primarily of cash, cash equivalents, and trade receivables. The financial institutions with which we transact business are large, investment grade financial institutions which are “well capitalized” under applicable regulatory capital adequacy guidelines, thereby minimizing our exposure to credit risks for deposits in excess of federally insured amounts.

Cash Equivalents

We consider all short-term investments with a maturity of 90 days or less when purchased to be cash equivalents.

Restricted Cash

Restricted cash totaled $85.4 million as of December 31, 2023. This primarily includes approximately $32.3 million for the payment and performance of secured obligations including the reimbursement of letters of credit and approximately $51.6 million in escrow to secure the future decommissioning obligations related to our oil and gas property.

Accounts Receivable and ~~Allowances~~

Allowance for Credit Losses

Trade accounts receivable are recorded at the invoiced amount or the earned ~~amount~~ but not yet invoiced amount and do not bear interest. We maintain ~~our~~an allowance for ~~doubtful accounts at net realizable value. The allowance for doubtful accounts is~~credit losses based on our best estimate of probable uncollectible amounts in existing accounts receivable. We assess individual customers and overall receivables balances to identify amounts that are believed to be uncertain of collection. The aging of the receivable balance as well as economic factors concerning the customer factor into the judgment and estimation of allowances, which often involve significant dollar amounts. Adjustments to the allowance for credit losses in future periods may be made based on changing customer conditions. Our allowance for ~~doubtful accounts~~credit losses as of December 31, ~~2021~~2023 and ~~2020~~2022 was $~~2.2~~6.3 million and $~~23.0~~6.1 million, respectively.

As part of the adoption of fresh start accounting and effective upon emergence from bankruptcy, we have adopted new presentations for certain items within our consolidated balance sheets and statement of operations. Prior to emergence from bankruptcy, we recognized badBad debt ~~expense within general and administrative expenses. These~~ expenses or recoveries are ~~now~~ recognized within cost of revenues. ~~During the Successor Period and Predecessor Period, we recognized $4.9~~ ~~million, $0.2~~ ~~million, respectively in~~The following table presents bad debt ~~recoveries. During~~expense or recoveries for the ~~years ended December 31, 2020 and 2019, we recognized $~~periods shown (in millions):~~11.9~~

~~million and $2.3~~ ~~million, respectively, in bad debt expense.~~


	Successor							Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021
Bad debt expense (recoveries)	$	0.9	$	2.2	$	(4.9	)	$	(0.2	)

Revenue Recognition

Revenues are recognized when performance obligations are satisfied in accordance with contractual terms, in an amount that reflects the consideration we expect to be entitled to in exchange for services rendered, rentals provided or products sold. Taxes collected from customers and remitted to governmental authorities and revenues are reported on a net basis.

A performance obligation arises under contracts with customers and is the unit of account under Topic 606. We account for services rendered and rentals provided separately if they are distinct and the service or rental is separately identifiable from other items provided to a customer and if a customer can benefit from the services rendered or rentals provided on their own or with other resources that are readily available to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. A contract’s standalone selling prices are determined based on the prices charged for services rendered, rentals provided or products sold. Our payment terms vary by the type of products or services offered. The term between invoicing and when the payment is due is typically 30 days.

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Services revenue: primarily represents amounts charged to customers for the completion of services rendered, including labor, products and supplies necessary to perform the service. Rates for these services vary depending on the type of services provided and are primarily based on a per hour or per day basis.

Rentals revenue: primarily priced on a per day, per man hour or similar basis and consists of fees charged to customers for use of rental equipment over the term of the rental period, which is generally less than twelve months.

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Product sales: products are generally sold based upon purchase orders or contracts with our customers that include fixed or determinable prices but do not include right of return provisions or other significant post-delivery obligations. We recognize revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured and delivery occurs as directed by the customer.

We expense sales commissions when incurred as the amortization period would ~~have been~~typically be one year or less.

Inventory

Inventories are stated at the lower of cost or net realizable value. We apply net realizable value and obsolescence to the gross value of inventory. ~~Cost is determined using~~Work-in-progress and finished goods are primarily recorded utilizing the standard cost method. Supplies and consumables are recorded at either the first-in first-out or ~~weighted-average~~weighted average cost ~~methods for finished goods and work-in-process.~~method. Supplies and consumables consist principally of products used in the services provided to our customers. ~~The components of inventory balances are as follows (in thousands):~~

Decommissioning Liabilities

December 31, 2021

December 31, 2020

Finished goods

$
26,187

$
35,074

Raw materials

9,753

5,139

Work-in-process

4,253

2,994

Supplies and consumables

20,410

33,820

Total

$
60,603

$
77,027

We account for our decommissioning liability under ASC 410 – Asset Retirement Obligations. Our decommissioning liability is associated with our oil and gas property and includes costs related to the plugging of wells, decommissioning of the related platform and equipment and site restoration. We review the adequacy of our decommissioning liability whenever indicators suggest that the estimated cash flows and/or relating timing needed to satisfy the liability have changed materially.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, except for assets for which ~~reduction in value is~~impairments have been recorded ~~during the period~~ and assets acquired using purchase accounting, which are recorded at fair value as of the date of acquisition. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets as follows:


Machinery and equipment		3-12 years
Buildings, improvements and leasehold improvements		10-30 years
Automobiles, trucks, tractors and trailers		4-7 years
Furniture and fixtures		3-10 years

~~As part of the adoption of fresh start accounting and effective upon emergence from bankruptcy, certain fully depreciated assets were assigned a new remaining useful life of less than~~ 36 months. Prior to emergence from bankruptcy, we recognized gains/losses on sales of assets within general and administrative expenses. Gains/losses on sales of assets are now recognized within other expenses as a component of operating income.

In connection with changes in estimates of our decommissioning liability for our oil and gas property and related notes receivable as of December 31, 2021, we established an asset retirement cost (“ARC”) of $~~24.2~~ ~~million which will be depreciated over the estimated life of the oil and gas reserves. See further discussion of our decommissioning liability and notes receivable below.~~

~~Reduction in Value~~Impairment of ~~Long-Lived Assets~~long-lived assets

We review long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The carrying amount of an asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. We record impairment losses on long-lived assets to be held and used ~~in operations~~ when the fair value of those assets is less than their respective carrying amount. Impairment losses are recorded in the amount by which the carrying amount of such assets exceeds the fair value. Fair value is measured, in part, by the estimated cash flows to be generated by those assets. Our cash flow estimates are based upon, among other things, historical results adjusted to reflect our best estimate of future market rates, utilization levels and operating performance. Our estimates of cash flows may differ from actual cash flows due to, among other things, changes in economic conditions or changes in an asset’s operating performance. Assets are generally grouped by subsidiary or division for the impairment testing, which represent the lowest level of identifiable cash flows. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs to sell. Our estimate of fair value represents our best estimate based on industry trends and reference to market transactions and is subject to variability. The oil and gas industry is cyclical and our estimates of the period over which future cash flows will be generated, as well as the predictability of these cash flows, can have a significant impact on the carrying value of these assets and, in periods of prolonged down cycles, may result in impairment charges.

Other (gains) and losses, net

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~~During 2020~~Other (gains) and ~~2019, we recorded~~losses, net includes gains and losses on the disposal of assets, as well as impairments related to long-lived assets.

Other gains, net for the Current Year were $~~23.8~~6.5 million, and are primarily comprised of net gains of $~~9.3~~5.0 million ~~respectively, in connection with the reduction in value of our long-lived assets. The reduction in value of assets was~~ related to ~~long-lived assets primarily in~~ our Well Services ~~segment.~~segment from the sale of non-core assets.

Prior to emergence from bankruptcy, we recognized the reduction in value assets separately on the consolidated statement of operations. Reduction in value of assets are now recognized within other expenses as a component of operating income. The bankruptcy filings required an assessment whether the carrying amounts of our long-lived assets would be recoverable. Management’s evaluation at the Emergence Date indicated that no additional impairment was necessary as a direct result of the bankruptcy filings.

~~Other Expenses~~

Other ~~expenses during~~gains, net for the Prior Year were $29.1 million and are primarily comprised of gains of $23.6 million related to our Well Services segment, including a gain of $17.4 million from revisions in estimates related to our decommissioning liability, and $5.2 million related to net gains on the disposal of non-core assets within our Rentals segment.

Other losses, net in the Successor Period were $16.7 ~~million. Other expenses~~million, and are comprised of $13.1 million related to our ~~Wells~~Well Services segment, ~~which includes~~including approximately $11.7 million from exit activities related to SES Energy Services India Pvt. Ltd, and $3.6 million related to our Rentals segment. Other expenses primarily relate to charges recorded as part of our strategic disposal of low margin assets in line with our Transformation Project strategy and includes gains/losses on asset sales, as well as impairments primarily related to long-lived assets.

~~Goodwill~~

As part of our emergence from the Chapter 11 Cases, we adopted fresh start accounting and began reporting as a new accounting entity as of the Emergence Date. Due to the fair value measurement of our assets and liabilities as required by ASC 852, we determined that we retained no goodwill balance based on the assignment of reorganization value to our identifiable assets and liabilities. As noted in Note 3 – ~~Fresh Start Accounting,~~ ~~our goodwill balance of $138.9~~ million was eliminated as of the Emergence Date. During the Predecessor Period and the years ended December 31, 2020 and 2019, we did not recognize any reduction in value of goodwill. Fluctuations in the carrying amount of goodwill from period to period were from the impacts of foreign currency and were not material for any period.

~~Notes Receivable~~

We have decommissioning liabilities related to the acquisition of a single oil and gas property. Our notes receivable consist of a commitment from the seller of the oil and gas property for costs associated with the abandonment of the property. Pursuant to an agreement with the seller, we invoice the seller an agreed upon amount at the completion of certain decommissioning activities. The gross amount of the seller’s obligation to us totals $~~115.0~~ ~~million and is recorded at its present value.~~

In December 2021, it was determined that the interest rate applied to calculate the fair value of our notes receivable was not revised to reflect the appropriate credit adjusted risk-free rate at the time of our emergence from bankruptcy, and in December 2021, we recorded an increase in the carrying value of our notes receivable of approximately $~~4.8~~ ~~million to correct this immaterial misstatement.~~

Additionally, in December 2021, we revised our estimates relating to the timing of decommissioning work on our oil and gas property, resulting in a three year extension of the expected completion of the platform decommissioning to an estimated date of 2031. This change in estimate resulted in a $~~20.6~~ ~~million reduction of the carrying value of the note receivable, which totaled $60.6~~ ~~million as of December 31, 2021.~~

~~The discount on the notes receivable, which is currently based on an effective interest rate of~~ ~~6.6~~%, is amortized to interest income over the expected timing of the completion of the decommissioning activities. Interest receivable is considered paid in kind and is compounded into the carrying amount of the note.

~~During the Successor Period, the Predecessor Period and the years ended December 31, 2020 and 2019, we recorded non-cash interest income of $3.9~~ ~~million, $0.4~~ ~~million, $4.5~~ ~~million and $4.2~~ ~~million related to our notes receivable, which is included in other reconciling items, net in the Consolidated Statements of Cash Flows.~~

~~Restricted Cash~~

~~Restricted cash as of December 31, 2021 includes approximately $76.9~~ ~~million held in a collateral account for the payment and performance of secured obligations including the reimbursement of letters of credit. Additionally, we hold approximately $2.7~~ ~~million in escrow to secure the future decommissioning obligations related to the oil and gas property.~~

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~~Decommissioning Liabilities~~

We account for decommissioning liabilities under ASC 410 – Asset Retirement Obligations. Our decommissioning liabilities are associated with our oil and gas property and include liabilities related to the plugging of wells, removal of the related platform and equipment and site restoration. We review the adequacy of our decommissioning liabilities whenever indicators suggest that the estimated cash flows and/or relating timing needed to satisfy the liability have changed materially.

In December 2021, we revised our estimates relating to the timing and the cost of decommissioning work on our oil and gas property, which included a three year extension of the completion of the platform decommissioning to an estimated date of 2031. This change in estimate resulted in an increase in the present value of decommissioning liabilities of $~~3.6~~ million as of December 31, 2021. Additionally, during the revision of the decommissioning estimates as of December 31, 2021, it was determined that certain wells, primarily conductor and methanol wells, were historically excluded from the estimate of the decommissioning liability, including as part of our fresh start accounting. We also identified an error in the accretion calculation for the successor period. At December 31, 2021, we recognized a combined $~~11.0~~ ~~million increase in the decommissioning liability and recorded incremental accretion of $3.1~~ million to correct these immaterial misstatements. In applying ASC 852, the additional decommissioning liability as of fresh start led to an increase to intangible assets, specifically trademarks of $3.1 million after considering the effects of the notes receivable adjustment, that was also recognized at December 31, 2021.

~~We had decommissioning liabilities of $190.4~~ ~~million as of December 31, 2021. We had decommissioning liabilities of $142.7~~ million as of December 31, 2020, including decommissioning liabilities included within liabilities held for sale. In connection with fresh start accounting, we now present all decommissioning liabilities separately on the balance sheet. Previously, certain decommissioning liabilities were included as a component of other long-term liabilities.

~~During the Successor Period, the Predecessor Period and the years ended December 31, 2020 and 2019, we recognized $9.3~~ ~~million, $0.5~~ ~~million, $6.5~~ ~~million and $6.1~~ ~~million of accretion expense associated with our decommissioning liabilities.~~

Income Taxes

We use the asset and liability method of accounting for income taxes. This method ~~takes into account~~considers the differences between financial statement treatment and tax treatment of certain transactions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Our deferred tax calculation requires us to make certain estimates about our future operations. Changes in state, federal and foreign tax laws, as well as changes in our financial condition or the carrying value of existing assets and liabilities, could affect these estimates. The effect of a change in tax rates is recognized as income or expense in the period that the rate is enacted.

We recognize ~~DTAs~~deferred tax assets (“DTAs”) to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If we determine that we would be able to realize our DTAs in the future in excess of their net recorded amount, we would make an adjustment to the DTA valuation allowance, which would reduce the provision for income taxes.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

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~~Earnings per Share~~

~~Our common equity consists of Class A Common Stock, par value $0.01~~ ~~per share (the “Class A Common Stock”) and Class B common stock, par value $0.01~~ ~~per share (“Class B Common Stock”). See Note 2 -~~ ~~Emergence from Voluntary Reorganization under Chapter 11~~ ~~and Note 9 -~~ ~~Stock-Based Compensation Plans~~ ~~for further discussion of our Class A and Class B Common Stock.~~

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional shares of common stock that could have been outstanding assuming the exercise of stock options and conversion of restricted stock units.

~~During the Successor Period and the years ended December 31, 2020 and 2019, we incurred losses from continuing operations; as such, the impact of any incremental shares would be anti-dilutive.~~ ~~Diluted earnings per share for the Predecessor Period includes the impact of approximately~~ ~~0.1~~ ~~million dilutive securities. At December 31, 2021, we have~~ ~~0.1~~ ~~million shares of unvested restricted stock and $1.4~~ ~~million in unvested restricted stock units outstanding which will be converted into Class B common shares upon vesting.~~

Foreign Currency

~~As part of the adoption of fresh start accounting and effective upon emergence from bankruptcy, we have adopted new presentations for certain items.~~ The functional currency of ~~certain~~our international subsidiaries ~~changed from~~is the ~~local currency to~~ U.S. dollars. Management considered the economic factors outlined in FASB ASC Topic No. 830 - Foreign Currency Matters in the determination of the functional currency. Management concluded that the predominance of factors support the use of the Successor's parent currency as the functional currency which resulted in a change in functional currency to U.S. dollars for all international subsidiaries.

dollar. Financial statements of our international subsidiaries are remeasured into U.S. dollars using the historical exchange rate for affected the long-term assets and liabilities and the balance sheet date exchange rate for affected current assets and liabilities. An average exchange rate is used for each period for revenues and expenses. These transaction gains and losses, as well as any other transactions in a currency other than the functional currency, are included in other income (expense) in the consolidated statements of operations in the period in which the currency exchange rates ~~change. During the Successor Period, the Predecessor Period and the years ended December 31, 2020 and 2019, we recorded foreign~~change

Foreign currency losses ~~of $~~are as follows (in millions):~~8.8~~

~~million, $2.1~~ ~~million, $8.9~~ ~~million and $0.8~~ ~~million, respectively.~~


	Successor						Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021		For the Period January 1, 2021 through February 2, 2021
Loss on foreign currency	$	12.8	$	12.6	$	8.8	$	2.1

Stock-Based Compensation

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We record compensation costs relating to share-based payment transactions and include such costs in general and administrative expenses in the consolidated statements of operations. The cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award).

Self-Insurance Reserves

We are self-insured, through deductibles and retentions, up to certain levels for losses under our insurance programs. We accrue for these liabilities based on estimates of the ultimate cost of claims incurred as of the balance sheet date. We regularly review the estimates of asserted and unasserted claims and provide for losses through reserves. We obtain actuarial reviews to evaluate the reasonableness of internal estimates for losses related to workers’ compensation, auto liability and group medical on an annual basis.

~~Recently Issued Accounting Standards~~Restructuring and Transaction Expenses

Restructuring and transaction expenses in our consolidated statement of operations are as follows (in millions):


	Successor						Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021		For the Period January 1, 2021 through February 2, 2021
Restructuring and transaction expenses	$	3.3	$	6.4	$	23.0	$	1.3

~~In June 2016,~~

Expenses in the ~~FASB issued ASU 2016-13 - Measurement~~Current Year represent charges recorded as part of ~~Credit Losses on Financial Instruments (“ASU 2016-13”)~~. ~~This update improves financial reporting by requiring earlier recognition of credit losses on financing receivables~~our strategic efforts to reconfigure our organization both operationally and financially. Expenses in the Prior Year represent costs associated with these strategic efforts, as well as legal and other ~~financial assets~~professional expenses primarily related to certain tax and stockholder distribution matters. Expenses in ~~scope by using~~ the ~~Current Expected Credit Losses (the “CECL”) model. The CECL model utilizes a lifetime expected credit loss measurement objective for~~Successor Period and Predecessor Period primarily relate to professional fees and separation costs related to former executives and personnel. During the ~~recognition~~Successor Period, we incurred shut down costs of ~~credit losses on financial instruments~~$8.9 million at certain locations in our Well Services segment. These shut down costs include the ~~time~~write-down of inventory of $6.5 million which is reflected in cost of sales and the ~~asset~~severance of personnel and other shut down costs of $2.4 million which is ~~originated or acquired. This update will apply to receivables arising from revenue transactions. The new standard is effective for us beginning on January 1, 2023. We have concluded that the adoption~~primarily reflected in cost of ~~ASU 2016-13 will not have a material impact on our consolidated financial statements.~~services.

~~(3)~~ Fresh Start Accounting

In connection with the emergence from bankruptcy and in accordance with ASC 852, we qualified for and adopted fresh start accounting on the Emergence Date because (1) the holders of our then existing common shares received less than 50 percent of our new common shares outstanding upon emergence and (2) the reorganization value of our assets immediately prior to confirmation of the Plan of $1,456.8 million was less than the total of all post-petition liabilities and allowed claims of $2,076.1 million.

Reorganization Value

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In accordance with ASC 852, upon adoption of fresh start accounting, the reorganization value derived from the enterprise value as disclosed in the Plan was allocated to our assets and liabilities based on their fair values (except for deferred income taxes) in accordance with FASB ASC Topic No. 805 - Business Combinations (ASC 805) and FASB ASC Topic No. 820 - Fair Value Measurements (ASC 820). The amount of deferred income taxes recorded due to the fair value adjustments to assets and liabilities was determined in accordance with FASB ASC Topic No. 740 - Income Taxes.

The reorganization value represents the fair value of our total assets before considering certain liabilities and is intended to approximate the amount a willing buyer would pay for our assets immediately after restructuring. The Plan confirmed by the Bankruptcy Court estimated a range of enterprise values between $710.0 million and $880.0 million.

The following table reconciles the enterprise value to the reorganization value of our assets that has been allocated to our individual assets as of the Emergence Date (in thousands):


	Emergence Date
Selected Enterprise Value within Bankruptcy Court Range	$	729,918
Plus: Cash and cash equivalents		172,768
Plus: Liabilities excluding the decommissioning liabilities		380,496
Plus: Decommissioning liabilities, including decommissioning liabilities classified as held for sale		173,622
Reorganization Value	$	1,456,804

Management determined the enterprise and corresponding equity value using various valuation methods, including (i) discounted cash flow analysis (“DCF”), (ii) comparable company analysis and (iii) precedent transaction analysis. The use of each approach provides corroboration for the other approaches.

In order to estimate the enterprise value using the DCF analysis approach, management’s estimated future cash flow projections, plus a terminal value which was calculated by applying a multiple based on our internal rate of return (“IRR”) of 17.6% and a perpetuity growth rate of 3.0% to the terminal year’s projected earnings before interest, tax, depreciation and amortization (“EBITDA”). These estimated future cash flows were then discounted to an assumed present value using our estimated weighted-average cost of capital, which is represented by our IRR.

The comparable company analysis provides an estimate of our value relative to other publicly traded companies with similar operating and financial characteristics, by which a range of EBITDA multiples of the comparable companies was then applied to management’s projected EBITDA to derive an estimated enterprise value.

Precedent transaction analysis provides an estimate of enterprise value based on recent sale transactions of similar companies, by deriving the implied EBITDA multiple of those transactions, based on sales prices, which was then applied to management’s projected EBITDA.

The enterprise value and corresponding equity value are dependent upon achieving the future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, we cannot assure you that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially.

Valuation Process

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The reorganization value was allocated to the Successor’s reporting segments using the discounted cash flow approach. The reorganization value was then allocated to the Successor’s identifiable assets and liabilities using the fair value principle as contemplated in ASC 820. The specific approach, or approaches, used to allocate reorganization value by asset class are noted below.

Inventory

The fair value of the inventory was determined by using both a cost approach and income approach. Inventory was segregated into raw materials, spare parts, work in process (“WIP”), and finished goods. Fair value of raw materials and spare parts inventory were determined using the cost approach. Fair value of finished goods and WIP inventory were determined by using the net realizable value approach. The fair value of finished goods was measured using an estimate of the costs to sell or dispose of the inventory plus a reasonable profit allowance on those efforts adjusted for holding costs. The fair value of WIP was measured using an estimate of the costs to complete and sell or consume the inventory plus a reasonable profit allowance on those efforts adjusted for holding costs.

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Property, Plant and Equipment

Real Property

The fair values of real property locations were estimated using the sales comparison (market) approach and cost approach. As part of the valuation process, information was obtained on the Successor’s current usage, building type, year built, and cost history for all properties valued. In determining the fair value and remaining useful life for real property assets, functional and economic obsolescence was considered and taken as an adjustment at the asset level.

Tangible Assets Excluding Real Property and Oil and Gas Assets

The fair values of our tangible assets were calculated using either the cost or market approach. For most tangible asset categories, a cost approach was utilized relying on purchase year, historic costs, and industry/equipment based trend factors to determine replacement cost new of the assets. Readily available market transaction data was used and adjusted for current market conditions for asset categories with active secondary markets such as heavy trucks and computer equipment. In both approaches, consideration was made for the effects of physical deterioration as well as functional and economic obsolescence in determining both estimates of fair value and the remaining useful lives of the assets.

Oil and Gas Assets

The oil and gas assets were valued using estimates of the reserve volumes and associated income data based on escalated price and cost parameters.

Internally-Developed Software

Internally-developed software was valued using the cost approach in which a replacement cost was estimated based on the software developer time, materials, and other supporting services required to replicate the software.

Decommissioning Liabilities

In accordance with FASB ASC Topic No. 410 – Asset Retirement and Environmental Obligations (“ASC 410”), the decommissioning liabilities associated with our oil and gas assets were valued using the income approach. Estimates of future retirement costs were adjusted for an estimated inflation rate over the expected time period prior to retirement and future cash outflows were discounted by a credit adjusted risk-free rate. We changed our presentation to consolidate the decommissioning liabilities previously recorded to other long-term liabilities into decommissioning liabilities.

Intangible Assets

Intangible assets were identified apart from goodwill using the guidance provided in ASC 805. Intangible assets that were identified as either separable or arose from contract or other legal rights were valued using either the cost or income approaches. The principal intangible assets identified were trademarks and patents. Trademarks and patents were valued using the relief from royalty method in which the subject intangible asset is valued by reference to the amount of royalty income it could generate if it was licensed in an arm’s length transaction to a third party.

Lease Liabilities and Right of Use Assets

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The fair value of lease liabilities was measured as the present value of the remaining lease payments, as if the lease were a new lease as of the Emergence Date. The Successor used its incremental borrowing rate of 5.3% commensurate with the Successor's capital structure as the discount rate in determining the present value of the remaining lease payments.

Consolidated Balance Sheet

The adjustments included in the following fresh start consolidated balance sheet as of February 2, 2021 reflect the effects of the transactions contemplated by the Plan and executed by the Successor on the Emergence Date (reflected in the column Reorganization Adjustments), and fair value and other required accounting adjustments resulting from the adoption of fresh start accounting (reflected in the column Fresh Start Adjustments). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine the fair values and significant assumptions.

The consolidated balance sheet as of the Emergence Date was as follows (in thousands):


	As of February 2, 2021
				Reorganization				Fresh Start
	Predecessor			Adjustments				Adjustments				Successor
ASSETS
Current assets:
Cash and cash equivalents	$	194,671		$	(21,903	)	(1)	$	-			$	172,768
Restricted cash - current		-			16,751		(2)		-				16,751
Accounts receivable, net		153,518			11		(3)		-				153,529
Income taxes receivable		9,146			-				(170	)	(16)		8,976
Prepaid expenses		31,630			-				-				31,630
Inventory and other current assets		90,073			-				11,067		(17)		101,140
Assets held for sale		240,761			-				(20,402	)	(18)		220,359
Total current assets		719,799			(5,141	)			(9,505	)			705,153

Property, plant and equipment, net		401,263			-				139,587		(19)		540,850
Operating lease right-of-use assets		32,488			-				1,430		(20)		33,918
Goodwill		138,934			-				(138,934	)	(21)		-
Notes receivable		72,484			-				-				72,484
Restricted cash - non-current		80,179			-				-				80,179
Intangible and other long-term assets, net		52,264			(10,080	)	(4)		(17,964	)	(22)		24,220
Total assets	$	1,497,411		$	(15,221	)		$	(25,386	)		$	1,456,804

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	51,816		$	(700	)	(5)	$	-			$	51,116
Accrued expenses		126,768			9,042		(6)		1,406		(23)		137,216
Liabilities held for sale		39,642			1,614		(7)		(3,992	)	(24)		37,264
Total current liabilities		218,226			9,956				(2,586	)			225,596

Decommissioning liabilities		134,934			-				34,581		(25)		169,515
Operating lease liabilities		23,584			-				(29	)	(26)		23,555
Deferred income taxes		4,853			3,100		(8)		51,569		(27)		59,522
Other long-term liabilities		121,756			-				(45,826	)	(28)		75,930
Total non-current liabilities		285,127			3,100				40,295				328,522
Liabilities subject to compromise		1,572,772			(1,572,772	)	(9)		-				-
Total liabilities		2,076,125			(1,559,716	)			37,709				554,118

Stockholders’ equity (deficit):
Predecessor common stock $0.001 par value		16			(16	)	(10)		-				-
Predecessor Additional paid-in capital		2,757,824			(2,757,824	)	(11)		-				-
Predecessor Treasury stock at cost		(4,290	)		4,290		(12)		-				-
Successor Class A common stock $0.001 par value		-			200		(13)		-				200
Successor Additional paid-in capital		-			902,486		(14)		-				902,486
Accumulated other comprehensive loss, net		(67,532	)		-				67,532		(29)		-
Accumulated deficit		(3,264,732	)		3,395,359		(15)		(130,627	)	(30)		-
Total stockholders’ equity (deficit)		(578,714	)		1,544,495				(63,095	)			902,686
Total liabilities and stockholders’ equity (deficit)	$	1,497,411		$	(15,221	)		$	(25,386	)		$	1,456,804

~~As of February 2, 2021~~

~~Reorganization~~

~~Fresh Start~~

Table of Contents

Predecessor

Adjustments

Adjustments

Successor

ASSETS

Current assets:

Cash and cash equivalents

$
194,671

$
(21,903
)

  (1)

$
-

$
172,768

Restricted cash - current

-

16,751

  (2)

-

16,751

Accounts receivable, net

153,518

11

  (3)

-

153,529

Income taxes receivable

9,146

-

(170
)

  (16)

8,976

Prepaid expenses

31,630

-

-

31,630

Inventory and other current assets

90,073

-

11,067

  (17)

101,140

Assets held for sale

240,761

-

(20,402
)

  (18)

220,359

Total current assets

719,799

(5,141
)

(9,505
)

705,153

Property, plant and equipment, net

401,263

-

139,587

  (19)

540,850

Operating lease right-of-use assets

32,488

-

1,430

  (20)

33,918

Goodwill

138,934

-

(138,934
)

  (21)

-

Notes receivable

72,484

-

-

72,484

Restricted cash - non-current

80,179

-

-

80,179

Intangible and other long-term assets, net

52,264

(10,080
)

  (4)

(17,964
)

  (22)

24,220

Total assets

$
1,497,411

$
(15,221
)

$
(25,386
)

$
1,456,804

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$
51,816

$
(700
)

  (5)

$
-

$
51,116

Accrued expenses

126,768

9,042

  (6)

1,406

  (23)

137,216

Liabilities held for sale

39,642

1,614

  (7)

(3,992
)

  (24)

37,264

Total current liabilities

218,226

9,956

(2,586
)

225,596

Decommissioning liabilities

134,934

-

34,581

  (25)

169,515

Operating lease liabilities

23,584

-

(29
)

  (26)

23,555

Deferred income taxes

4,853

3,100

  (8)

51,569

  (27)

59,522

Other long-term liabilities

121,756

-

(45,826
)

  (28)

75,930

Total non-current liabilities

285,127

3,100

40,295

328,522

Liabilities subject to compromise

1,572,772

(1,572,772
)

  (9)

-

-

Total liabilities

2,076,125

(1,559,716
)

37,709

554,118

Stockholders’ equity (deficit):

Predecessor common stock $0.001 par value

16

(16
)

  (10)

-

-

Predecessor Additional paid-in capital

2,757,824

(2,757,824
)

  (11)

-

-

Predecessor Treasury stock at cost

(4,290
)

4,290

  (12)

-

-

Successor Class A common stock $0.001 par value

-

200

  (13)

-

200

Successor Additional paid-in capital

-

902,486

  (14)

-

902,486

Accumulated other comprehensive loss, net

(67,532
)

-

67,532

  (29)

-

Accumulated deficit

(3,264,732
)

3,395,359

  (15)

(130,627
)

  (30)

-

Total stockholders’ equity (deficit)

(578,714
)

1,544,495

(63,095
)

902,686

Total liabilities and stockholders’ equity (deficit)

$
1,497,411

$
(15,221
)

$
(25,386
)

$
1,456,804

Reorganization Adjustments (in thousands)

(1)

Changes in cash and cash equivalents included the following:


~~Payment of debtor in possession financing fees~~	$	(~~183~~	)
~~Payment of professional fees at the Emergence Date~~		(~~2,649~~	)
~~Payment of lease rejection damages classified as liabilities subject to compromise~~		(~~400~~	)
Transfers from cash to restricted cash for Professional Fees Escrow and General Unsecured Creditors Escrow		(~~16,751~~	)
~~Payment of debt issuance costs for the Credit Facility~~		(~~1,920~~	)
~~Net change in cash and cash equivalents~~	$	(~~21,903~~	)


Payment of debtor in possession financing fees	$	(183	)
Payment of professional fees at the Emergence Date		(2,649	)
Payment of lease rejection damages classified as liabilities subject to compromise		(400	)
Transfers from cash to restricted cash for Professional Fees Escrow and General Unsecured Creditors Escrow		(16,751	)
Payment of debt issuance costs for the Credit Facility		(1,920	)
Net change in cash and cash equivalents	$	(21,903	)

(2)

Changes to restricted cash - current included the following:

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Transfer from cash for Professional Fee Escrow	$	16,626
Transfer from cash for General Unsecured Creditors Escrow		125
Net change in restricted cash - current	$	16,751

(3)

Changes of $11 to accounts receivable reflect a receivable from the solicitor from the Chapter 11 Cases for excess proceeds received during the Rights Offering.

(4)

Changes to intangibles and other long-term assets included the following:


~~Write-off of deferred financing costs related to the Delayed-Draw Term Loan~~	$	(~~12,000~~	)
~~Capitalization of debt issuance costs associated with the Credit Facility~~		~~1,920~~
~~Net change in intangibles and other long-term assets~~	$	(~~10,080~~	)


Write-off of deferred financing costs related to the Delayed-Draw Term Loan	$	(12,000	)
Capitalization of debt issuance costs associated with the Credit Facility		1,920
Net change in intangibles and other long-term assets	$	(10,080	)

(5)

Changes to accounts payable included the following:


~~Payment of professional fees at the Emergence Date~~	$	(~~2,649~~	)
~~Professional fees recognized and payable at the Emergence Date~~		~~1,949~~
~~Net change in accounts payable~~	$	(~~700~~	)


Payment of professional fees at the Emergence Date	$	(2,649	)
Professional fees recognized and payable at the Emergence Date		1,949
Net change in accounts payable	$	(700	)

(6)

Changes in accrued liabilities include the following:


Payment of debtor in possession financing fees	$	(183	)
Accrual of professional fees		6,500
Accrual for transfer taxes		1,900
Reinstatement of lease rejection liabilities to be settled post-emergence		700
Accrual of general unsecured claims against parent		125
Net change in accrued liabilities	$	9,042

(7)

Changes in liabilities held for sale reflect the fair value reinstatement of rejected lease claims.

(8)

Changes in deferred income taxes are due to reorganization adjustments.

(9)

The resulting gain on liabilities subject to compromise was determined as follows:

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Prepetition 7.125% and 7.750% notes including accrued interest and unpaid interest	$	1,335,794
Rejected lease liability claims		4,956
Allowed Class 6 General Unsecured Claims against Parent		232,022
Liabilities subject to compromise settled in accordance with the Plan		1,572,772
Reinstatement of accrued liabilities for lease rejection claims		(700	)
Reinstatement of liabilities held for sale for lease rejection claims		(1,614	)
Payment to settle lease rejection claims		(400	)
Cash proceeds from rights offering		963
Cash payout provided to cash opt-in noteholders		(952	)
Cash Pool to settle GUCs against Parent		(125	)
Issuance of common stock to prepetition noteholders, incremental to rights offering (par value)		(193	)
Additional paid-in capital attributable to successor common stock issuance		(869,311	)
Successor common stock issued to cash opt-out noteholders in the rights offering (par value)		(7	)
Additional paid-in capital attributable to rights offering shares		(33,175	)
Gain on settlement of liabilities subject to compromise	$	667,258

The Equity Rights Offering generated $963 ~~million~~thousand in proceeds used to settle $952 ~~million~~thousand in Cash Opt-in Noteholder claims. The Equity Rights Offering shares were offered at a price of $1.31/share to Cash Opt-out Noteholders. As such, the Equity Rights Offering shares generated the $963 ~~million~~thousand in cash proceeds from the share issuance as well as an implied discount to the Cash Opt-in claimants of $32.2 million, recorded as a loss on share issuance in reorganization items, net. The loss on the Equity Rights Offering share issuance

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is offset by the gain on share issuance of $32.2 million implied by the issuance of shares to settle Cash Opt-out Noteholder claims at a value of $~~46.82~~/$46.82/share compared to the reorganization value implied share price of $45.14/share.

(10)

Changes of $16 in Predecessor common stock reflect the cancellation of the Predecessor’s common stock.

(11)

Changes in Predecessor additional paid-in capital (APIC) include the following:


~~Extinguishment of APIC related to Predecessor's outstanding equity interests~~	$	(~~2,758,812~~	)
~~Extinguishment of RSUs for the Predecessor's incentive plan~~		~~988~~
~~Net change in Predecessor's additional paid-in capital~~	$	(~~2,757,824~~	)


Extinguishment of APIC related to Predecessor's outstanding equity interests	$	(2,758,812	)
Extinguishment of RSUs for the Predecessor's incentive plan		988
Net change in Predecessor's additional paid-in capital	$	(2,757,824	)

(12)

Reflects ~~$4.3~~$4.3 million cancellation of Predecessor treasury stock held at cost.

(13)

Changes in the Successor’s Class A common stock include the following:


Issuance of successor Class A common stock to prepetition noteholders, incremental to rights offering (par value)	$	193
Successor Class A common stock issued to cash opt-out noteholders in the rights offering (par value)		7
Net change in Successor Class A common stock	$	200

(14)

Changes in Successor additional paid-in capital include the following:


Additional paid-in capital (Successor Class A common stock)	$	869,311
Additional paid-in capital (rights offering shares)		33,175
Net change in Successor additional paid-in capital	$	902,486

(15)

Changes to retained earnings (deficit) include the following:

Gain on settlement of liabilities subject to compromise

$
667,258

Accrual for transfer tax

(1,900
)
Extinguishment of RSUs for Predecessor incentive plan

(988
)
Adjustment to net deferred tax liability taken to tax expense

(3,100
)
Professional fees earned and payable as a result of consummation of the Plan of Reorganization

(8,449
)
Write-off of deferred financing costs related to the Delayed-Draw Term Loan

(12,000
)
Extinguishment of Predecessor equity (par value, APIC, and treasury stock)

2,754,538

Net change in retained earnings (deficit)

$
3,395,359

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Gain on settlement of liabilities subject to compromise	$	667,258
Accrual for transfer tax		(1,900	)
Extinguishment of RSUs for Predecessor incentive plan		(988	)
Adjustment to net deferred tax liability taken to tax expense		(3,100	)
Professional fees earned and payable as a result of consummation of the Plan of Reorganization		(8,449	)
Write-off of deferred financing costs related to the Delayed-Draw Term Loan		(12,000	)
Extinguishment of Predecessor equity (par value, APIC, and treasury stock)		2,754,538
Net change in retained earnings (deficit)	$	3,395,359

Fresh Start Adjustments (in thousands)

(16)

Changes of $170 in income tax receivable reflects the decrease to current deferred tax assets due to the adoption of fresh start accounting.

(17)

Changes in inventory and other current assets included the following:


Fair value adjustment to inventory - Global Segment	$	12,137
Fair value adjustment to other current assets		(1,070	)
Net change in inventory and other current assets due to the adoption of fresh start accounting	$	11,067

(18)

Changes of $20.4 million in assets held for sale primarily reflect a fair value adjustment of $16.5 million which decreased the value of real property and a $3.5 million decrease to Predecessor decommissioning balances due to the adoption of fresh start accounting.

(19)

Changes of $139.6 million to property, plant and equipment reflect the fair value adjustment.

~~Table of Contents~~


	Successor Fair Value		Predecessor Book Value
Land, Buildings, and Associated Improvements	$	117,341	$	205,237
Machinery and Equipment		290,593		1,103,501
Rental Services Equipment		92,861		617,762
Other Depreciable or Depletable Assets		35,143		46,403
Construction in Progress		4,912		4,912
		540,850		1,977,815
Less: Accumulated Depreciation and Depletion		-		(1,576,552	)
Property, Plant and Equipment, net	$	540,850	$	401,263

(20)

Reflects $1.4 million due to the fair value adjustment increasing operating lease right-of-use assets.

(21)

Changes of $138.9 million to goodwill reflect the derecognition of the Predecessor’s goodwill due to the adoption of fresh start accounting.

(22)

Reduction of other long-term assets was due to the adoption of fresh start accounting and include $17.1 million in decommissioning liabilities related to Predecessor long-term assets fair valued and presented in the Successor’s property, plant, and equipment.

The fair value changes of $1.4 million to intangibles assets are reflected in the table below:


	Successor Fair Value		Predecessor Net Book Value
Customer Relationships	$	-	$	4,901
Trademarks		4,166		11
Patents		2,120		-
Intangible Assets, Net	$	6,286	$	4,912

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(23)

Changes of $1.4 million to accrued expenses reflect the fair value adjustment increasing the current portion of operating lease liabilities.

(24)

Reflects the $4.0 million fair value adjustment decreasing decommissioning liabilities and operating lease liabilities related to assets held for sale.

(25)

Reflects the $34.6 million fair value adjustment increasing the non-current portion of decommissioning liabilities.

(26)

Reflects the fair value adjustment decreasing the non-current portion of operating lease liabilities.

(27)

Reflects the $70.4 million increase of deferred tax liabilities netted against an $18.8 million increase in realizable deferred tax assets due to the adoption of fresh start accounting.

(28)

Changes of $45.8 million in other long-term liabilities reflects the reclassification of amounts associated with the Predecessor’s decommissioning liability balances that were fair valued and presented in the Successor’s decommissioning liabilities, as well as an increase in FIN48 liabilities of $1.5 million.

(29)

Changes to accumulated other comprehensive loss reflect the elimination of Predecessor currency translation adjustment balances due to the adoption of fresh start accounting on Predecessor currency translation adjustment balances.

(30)

Changes reflect the cumulative impact of fresh start accounting adjustments discussed above and the elimination of the Predecessor’s accumulated other comprehensive loss and the Predecessor’s accumulated deficit.


~~Fresh start valuation adjustments~~	$	(~~77,376~~	)
~~Adjustment to net deferred tax liability taken to tax expense~~		(~~53,251~~	)
~~Net impact to accumulated other comprehensive loss and accumulated deficit~~	$	(~~130,627~~	)

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Fresh start valuation adjustments	$	(77,376	)
Adjustment to net deferred tax liability taken to tax expense		(53,251	)
Net impact to accumulated other comprehensive loss and accumulated deficit	$	(130,627	)

Reorganization Items, net

~~The~~In the Predecessor Period, we incurred costs associated with the reorganization, primarily unamortized debt issuance costs, expenses related to rejected leases and post-petition professional fees. In accordance with applicable guidance, costs associated with the Chapter 11 Cases have been recorded as reorganization items, net within the accompanying consolidated statement of operations for the Predecessor Period. Reorganization items, net was zero for the Successor Period, with $13.7 million used in operating activities during the Successor Period. Reorganization items, net was $335.6 million for the Predecessor Period, with $3.1 million representing cash used in operating activities during the Predecessor Period, $2.7 million and $0.4 million paid for professional fees and to settle lease rejection damages, respectively.


	Predecessor
	For the Period January 1, 2021 through February 2, 2021
Gain on settlement of liabilities subject to compromise	$	667,258
Allowed claim adjustment for Class 6 claims		(232,022	)
Fresh Start valuation adjustments (1)		(77,376	)
Professional fees		(16,005	)
Predecessor lease liabilities rejected per the Plan		13,347
Write off of deferred financing costs related to the Delayed-Draw Term Loan		(12,000	)
Lease rejection damages		(4,956	)
Extinguishment of RSU's for the Predecessor's incentive plan		(988	)
Other items		(1,698	)
Total reorganization items, net	$	335,560

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(1) Includes approximately $16.4 million in adjustments to assets and liabilities classified as held for sale. See Note 1418 - Discontinued Operations.

~~In connection with the Transformation Project, during the Successor Period and Predecessor Period, we incurred costs of $23.0~~ ~~million and $1.3~~ million, respectively, which primarily relate to professional fees and separation costs related to former executives and personnel. These costs are included in Restructuring expenses in the consolidated statements of operations. Additionally, during the Successor Period, we have incurred shut down costs of $~~8.9~~ ~~million at certain locations in our Well Services segment. These shut down costs include the write-down of inventory of $6.5~~ ~~million which is reflected in cost of sales and the severance of personnel and other shut down costs of $2.4~~ ~~million which is primarily reflected in cost of services.~~

~~Amortization expense for the Successor Period, the Predecessor Period and the years ended December 31, 2020 and 2019 was $0.9 million, $0.1~~ ~~million, $1.3~~ ~~million and $1.3~~ ~~million, respectively. Based on the carrying values of intangible assets of December 31, 2021, amortization expense for the next five years (2022 through 2026) is estimated to be $0.9 million.~~

Prior to the commencement of the Chapter 11 Cases, we had an asset-based revolving credit facility (the “Prepetition Credit Facility”) which was scheduled to mature in October 2022. Upon commencement of the Chapter 11 Cases, all amounts outstanding under the Prepetition Credit Facility became outstanding under the DIP Credit Facility.

The borrowing base under the Prepetition Credit Facility was calculated based on a formula referencing the borrower’s and the subsidiary guarantors’ eligible accounts receivable, eligible inventory and eligible premium rental drill pipe less reserves. Availability under the Prepetition Credit Facility was the lesser of (i) the commitments, (ii) the borrowing base and (iii) the highest principal amount permitted to be secured under the indenture governing the ~~7.125% Notes.~~

~~We had outstanding $800.0~~ ~~million of~~ ~~7.125% senior unsecured notes due December 2021. The indenture governing the~~ ~~7.125% senior unsecured notes due 2021 required semi-annual interest payments on June 15 and December 15of each year through the maturity date of December 15, 2021. Additionally, we had outstanding $500.0~~ ~~million of~~ ~~7.750% senior unsecured notes due September 2024. The indenture governing the~~ ~~7.750% senior unsecured notes due 2024 required semi-annual interest payments on March 15 and September 15 of each year through the maturity date of September 15, 2024.~~

~~We, along with certain of our direct and indirect~~ ~~100% owned domestic subsidiaries, entered into guarantees of the outstanding~~ ~~7.750~~% Notes. All guarantees were full and unconditional, joint and several, except that the guarantee of any subsidiary guarantor could be released under certain customary circumstances, including, but not limited to, upon legal defeasance or satisfaction and discharge of the indenture that governed the ~~7.750% Notes. We were to be released from our guarantee only in connection with any legal defeasance or~~

~~satisfaction and discharge of the indenture. At the Emergence Date, all obligations under the 7.750% Notes were cancelled and the applicable agreements governing such obligations were terminated.~~

~~The balances outstanding under the~~ ~~7.125% Notes and~~ ~~7.750% Notes were classified as liabilities subject to compromise in the accompanying consolidated balance sheet at December 31, 2020. On the Emergence Date, obligations under the~~ ~~7.125% Notes and~~ ~~7.750% Notes, including principal and accrued interest of $35.8~~ ~~million, were fully extinguished in exchange for equity.~~

~~(9)~~(11) Stock-Based Compensation Plans

~~As noted in Note 2 –~~ ~~Emergence from Voluntary Reorganization under Chapter 11, our outstanding equity interests were cancelled as of the Emergence Date and new Class A common stock was issued to settle claims arising as a result of holding either the~~ ~~7.125% Notes or the~~ ~~7.750~~% Notes. As a result of the consummation of the Plan, restricted stock units issued prior to the fresh start accounting date under our stock incentive plans were cancelled for zero consideration. The balance sheet effect of the cancellation is noted in Note 3 – ~~Fresh Start Accounting~~.

2021 Management Incentive Plan

On ~~June 1, 2021, our~~December 15, 2023, the Board ~~of Directors (the “Board”)~~ and the Compensation Committee ofapproved an amendment to the ~~Board (the “Compensation Committee”) approved and adopted our~~ Management Incentive Plan (“MIP”), ~~which provides~~to provide for the grant of share-based and cash-based awards and ~~in connection therewith,~~to provide for the issuance from time to time of up to 1,999,869 shares of our Class ~~B common stock, par value $0.01~~ ~~per share.~~

~~Restricted Stock Grants~~

~~Total stock-based compensation expense and~~A Common Stock. Outstanding grants under the ~~associated tax benefits during~~MIP are in the ~~Successor Period are as follows (in thousands):~~

Successor

For the Period
February 3, 2021
through
December 31, 2021

Restricted stock awards

$
2,071

Restricted stock units

639

Cash-based PSUs (1)

(1,268
)
Total compensation expense

1,442

Related income taxes

(335
)
Total compensation expense, net of income taxes

$
1,107

~~(1)~~

~~The PSU's related to the performance period ended December 31, 2021 were canceled due to not achieving the required performance.~~

~~On June1, 2021, the Board and the Compensation Committee approved the forms~~form of restricted stock ~~award agreements for (i) employee participants (the “Employee Restricted Stock Award Agreement”~~awards (“RSAs”) and ~~(ii) non-employee directors (the “Director Restricted~~time-based vesting restricted stock units (“RSUs”). The RSUs will be settled in Class A Common Stock ~~Award Agreement”~~upon the satisfaction of time-based vesting conditions. In December 2023, we cancelled all outstanding performance-based vesting restricted stock units (“PSUs”). in exchange for a cash retention bonus, payable in four equal semi-annual installments beginning on March 15, 2024, subject generally to the executive’s continued employment on each payment date.

~~On June 2, 2021, the Board and the Compensation Committee approved the issuance of~~ ~~113,840~~ ~~shares of restricted stock (76,269~~ shares of restricted stock after giving effect to tax withholding) of Class B common stock under the MIP to certain of our non-employee directors and officers (the “Restricted Stock Awards”). Upon issuance of the Restricted Stock Awards, we immediately vested and retired ~~35,571~~ ~~shares which were withheld for taxes.~~ The ~~Restricted Stock Awards will~~RSAs vest over a period of three years, subject to earlier vesting and forfeiture on terms and conditions set forth in the applicable award agreement. ~~The fair value of~~RSUs granted in 2022 generally vest in three equal annual installments over the ~~Restricted Stock Awards was estimated~~three-year period, subject generally to ~~be $39.53~~ ~~per share as of the date of grant. The unamortized estimated grant date fair value as of December 31, 2021 was approximately $2.4~~ ~~million.~~

~~During the third quarter of 2021, the Board~~continued employment and the ~~Compensation Committee approved the issuance of $2.0~~ million in restricted stock units which will be convertible into Class B common stock upon vesting (the “Restricted Stock Units”). These Restricted Stock Units will vest over a period of 18 months, subject to earlier vesting and forfeiture onother terms and conditions set forth in the ~~applicable award agreement. The fair value~~forms of the ~~Restricted Stock Units was estimated~~RSU award agreements. RSUs granted in 2021 vested in full in the first quarter of 2023, subject generally to ~~be $39.53 per share as~~continued employment and the other terms and conditions set forth in the forms of the ~~date~~RSU award agreements. Prior to cancellation, holders of ~~grant.~~ PSUs were eligible to earn between 25% and 100% of the target award based on achievement of share price goals set forth in the forms of the PSU award agreements.

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The ~~unamortized estimated grant date fair value as of~~following sets forth activity related to issuances under the MIP for the year ended December 31, ~~2021 was approximately $~~2023 and 2022~~1.4~~:

~~million.~~


	Grants of Share-Based Awards
				July/
	June			August			March			July
	2021			2021			2022			2022			Total
Unvested awards outstanding, December 31, 2022		29,976			37,947			72,050			88,215			228,188
Vested		(14,988	)		(37,947	)		(24,017	)		(29,405	)		(106,357	)
Unvested awards outstanding, December 31, 2023		14,988			-			48,033			58,810			121,831

Estimated grant date fair value	$	39.53		$	39.53		$	58.80		$	58.80

Unamortized grant date fair value, December 31, 2022 (in millions)	$	0.8		$	-		$	3.1		$	4.2		$	8.1
Unamortized grant date fair value, December 31, 2023 (in millions)	$	0.2		$	-		$	1.6		$	2.2		$	4.0


	Grants of Share-Based Awards
				July/
	June			August			March		July
	2021			2021			2022		2022		Total
Unvested awards outstanding, December 31, 2021		76,269			50,596			-		-		126,865
Granted					-			72,050		88,215		160,265
Vested		(46,293	)		(12,649	)		-		-		(58,942	)
Unvested awards outstanding, December 31, 2022		29,976			37,947			72,050		88,215		228,188

Estimated grant date fair value	$	39.53		$	39.53		$	58.80	$	58.80

Unamortized grant date fair value, December 31, 2021 (in millions)	$	2.4		$	1.4		$	-	$	-	$	3.8
Unamortized grant date fair value, December 31, 2022 (in millions)	$	0.8		$	-		$	3.1	$	4.2	$	8.1

Compensation expense associated with RSA and RSU grants are as follows:


	For the Year Ended
	December 31,
	2023		2022
Compensation Expense	$	4,123	$	4,807

Liability-Classified Compensation

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401(k)

We maintain a defined contribution profit sharing plan for employees who have satisfied minimum service requirements. Employees may contribute up to 75% of their eligible earnings to the plan subject to the contribution limitations imposed by the Internal Revenue Service. We provide a nondiscretionary match of 100% of an employee’s contributions to the plan, up to 4% of the employee’s salary.

We made contributions ~~of $~~to the plan as follows (in millions):~~2.6~~

~~million, $0.4~~ ~~million, $6.2~~ ~~million and $10.5~~ ~~million during the Successor Period, Predecessor Period and in 2020 and 2019, respectively.~~


	Successor						Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021		For the Period January 1, 2021 through February 2, 2021
401K	$	3.2	$	3.1	$	2.6	$	0.4

Supplemental Executive Retirement Plan

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We have a supplemental executive retirement plan (“SERP”). The SERP provides retirement benefits to our executive officers and certain other designated key employees. The SERP is an unfunded, non-qualified defined contribution retirement plan, and all contributions under the plan are unfunded credits to a notional account maintained for each participant. ~~Prior~~We suspended all contributions to the plan effective January 1, ~~2020, under the SERP, we made annual contributions to a retirement account based on age and years of service. The participants in the plan received contributions ranging from~~ 2020.5~~% to~~ 35~~% of salary and annual cash bonus, which totaled $~~0

~~million, $~~

~~1.1~~ ~~million and $1.2~~ ~~million during 2020, 2019 and 2018, respectively.~~ We made payments to eligible participants in the SERP ~~of $3.4~~ ~~million during the Successor Period, and made payments to eligible participants of $2.3~~ ~~million in 2019.~~ ~~NaN~~ ~~payments were made during the Predecessor Period or during 2020.~~as follows (in millions):

~~Predecessor Stock-Based and Long-Term Incentive Compensation~~

On September 28, 2020, the Board of Directors of the Predecessor approved the implementation of a Key Employee Retention Program (“KERP”), which was designed to retain key employees in their current roles over the near term while providing them with financial stability. KERP payments were in lieu of any outstanding unvested awards under our long-term equity-based incentive plans (other than any cash-based performance units (which we refer to as PSUs) any annual bonuses that would otherwise be payable to the KERP participants. The KERP provided for one-time retention payments equal to approximately $~~7.3~~ ~~million in the aggregate to our~~ 6 ~~executive officers, including our named executive officers. The KERP further provided for approximately $2.4~~ ~~million of retention payments to other non-executive employees.~~

We were authorized to grant restricted stock units, stock options, performance share units and other cash and stock awards as part of its Long-Term Incentive Program (LTIP). Total stock-based compensation expense is reflected in general and administrative expenses in the consolidated statements of operations. ~~Total stock-based compensation expense and the associated tax benefits are as follows (in thousands):~~

Predecessor

Year ended December 31,

For the Period
January 1, 2021
through
February 2, 2021

2020

2019

Stock options

$
0

$
94

$
2,743

Restricted stock units

1,170

4,144

15,716

Cash restricted stock units

0

(56
)

298

Cash-based PSUs

78

(1,554
)

935

Total compensation expense

1,248

2,628

19,692

Related income taxes

(60
)

(610
)

(4,569
)
Total compensation expense, net of income taxes

$
1,188

$
2,018

$
15,123


	Successor						Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021		For the Period January 1, 2021 through February 2, 2021
SERP	$	0.2	$	1.7	$	3.4	$	-

~~Stock Options~~

~~Stock option grants generally vested in equal installments over~~ ~~three years~~ ~~and expired in~~ ~~ten years~~ from the grant date. Non-vested stock options were generally forfeited upon termination of employment. Compensation expense for stock option grants was recognized based on the fair value at the date of grant using the Black-Scholes-Merton option pricing model. Historical data, among other factors, was used to estimate the expected volatility and the expected life of the stock options. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the stock option. The dividend yield was based on our historical and projected dividend payouts.

~~We did~~ 0~~t grant any stock options during the Predecessor Period or the year ended December 31, 2020. The weighted average fair values of stock options granted in 2019 was $24.60~~ ~~and was based on a risk free interest rate of~~ ~~2.57%, an expected life of~~ 6 ~~years and~~

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~~an expected volatility of~~ ~~56.62%. As of December 31, 2020,~~ ~~468,247~~ ~~stock options were outstanding and exercisable at a weighted average option price of $156.97. As discussed above, all stock options were canceled for no consideration at the Emergence Date.~~

~~Restricted Stock Units~~

~~RSUs granted as part of the LTIP generally vested in equal annual installments over~~ ~~three years. At December 31, 2020,~~ ~~134,236~~ ~~non-vested RSUs were outstanding at a weighted average grant date fair value of $80.27. During the Predecessor Period,~~ ~~48,903~~ ~~RSU's vested, and we recognized approximately $1.0~~ ~~million in Reorganization items, net associated with the remaining RSUs, which were either forfeited or canceled for no consideration at the Emergence Date.~~

~~Performance Share Units~~

~~As part of our LTIP, PSUs were issued providing for a~~ ~~three year~~ ~~performance period. At December 31, 2020, there were~~ ~~210,398~~ ~~PSUs outstanding (96,522~~ ~~and~~ ~~113,876~~ related to performance periods ending December 31, 2020 and 2021, respectively). The 2020 PSU grants (related to performance periods ending December 31, 2022) were surrendered as a condition to participation in the KERP. During the Successor Period, payments of approximately $~~4.0~~ million were made related to the performance period ended December 31, 2020 and the PSU's related to the performance period ended December 31, 2021 were canceled due to not achieving the required performance.

Non-Qualified Deferred Compensation Plan

The Nonqualified Deferred Compensation Plan (“NQDC Plan”) provides an income deferral opportunity for executive officers and certain senior managers who qualified for participation. Participants in the NQDC Plan could make an advance election each year to defer portions of their base salary, bonus and other compensation. Payments made to participants are based on their enrollment elections and plan balances. No deferrals were elected for ~~2021.~~2023. We have not had enrollment periods for the NQDC since 2019.

~~Employee Stock Purchase Plan~~Retention Bonus Agreements

~~Our Employee Stock Purchase Plan (“ESPP”) terminated in accordance with its terms in 2019. Prior~~On December 15, 2023, the Board and the Compensation Committee of the Board approved retention bonus agreements for executives pursuant to ~~termination,~~which each is eligible ~~employees were allowed~~ to ~~purchase shares of common stock at~~earn a ~~discount during~~ ~~six month~~ ~~offering periods~~cash retention bonus beginning on ~~January 1st~~March 15, 2024, subject to continued employment on each payment date. As a condition to execution of the retention bonus, all rights and ~~July 1st of each year~~obligations under the existing PSU agreements were forfeited and ~~ending on June 30 and December 31 of each year, respectively. During 2019,~~ ~~532,292~~ ~~shares~~PSUs were ~~issued in connection with the ESPP. Cash received from participants totaled $0.7~~ ~~million and we recognized compensation expense of $0.1~~ ~~million.~~cancelled.

~~(10)~~(12) Income Taxes

The income tax provision is as follows:


	Successor			Predecessor									Successor									Predecessor
In thousands:	Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021			For the Year Ended December 31, 2020			For the Year Ended December 31, 2019			For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021
Current income tax expense/(benefit)
Federal	$	(1,106	)	$	0		$	(36,506	)	$	0		$	205		$	(50	)	$	(1,106	)	$	-
State		(307	)		0			635			546			576			945			(307	)		-
Foreign		6,220			3,314			8,497			(3,359	)		36,111			23,738			6,220			3,314
Total current income tax expense/(benefit)		4,807			3,314			(27,374	)		(2,813	)		36,892			24,633			4,807			3,314

Deferred income tax expense/(benefit)
Federal		(42,904	)		55,015			4,593			10,175			44,712			(83,420	)		(42,904	)		55,015
State		2,633			(182	)		(638	)		1,623			(886	)		165			2,633			(182	)
Foreign		2,166			1,856			(3,469	)		(6,252	)		(20,977	)		(19,097	)		2,166			1,856
Total deferred income tax expense/(benefit)		(38,105	)		56,689			486			5,546			22,849			(102,352	)		(38,105	)		56,689
Total income tax expense/(benefit)	$	(33,298	)	$	60,003		$	(26,888	)	$	2,733		$	59,741		$	(77,719	)	$	(33,298	)	$	60,003

~~On March 27, 2020,~~Federal current and deferred tax primarily reflect use of NOL carryforwards. Foreign current tax is commensurate with prior year’s based on profitable operations in jurisdictions with limited annual or little NOL carryforwards and deferred benefit related to the ~~President signed~~release of valuation allowances on deferred tax assets in jurisdictions where there was positive evidence.

The Organization for Economic Co-operation and Development (“OECD”) reached agreement on Pillar Two Model Rules (“Pillar Two”) to implement a minimum 15% tax rate on certain multinational companies. Many countries are in the ~~Coronavirus Aid, Relief,~~process of proposing and ~~Economic Security Act (the CARES Act), a~~enacting tax ~~relief and spending package intended~~laws to ~~provide economic stimulus~~implement the Pillar Two framework. We continue to ~~address~~evaluate the impact of ~~the COVID-19 pandemic. The CARES Act allows corporations with net operating losses generated in 2018, 2019~~these proposals and 2020 to elect to carryback those losses for a period of five years and relaxes the limitation for business interest deductions for 2019 and 2020. Under the provisions of the CARES Act, we received a refundlegislative changes

7662

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~~of $30.5~~ ~~million in July 2020 related~~as new guidance emerges. Due to the ~~carryback of~~uncertainty regarding the ~~2018 net operating loss~~timing and ~~received a refund of $8.2~~ ~~million~~manner in ~~February 2021 related to~~which the ~~carryback of~~separate jurisdictions in which we operate may adopt the ~~2019 net operating loss.~~Pillar Two rules, its impact is not currently estimable.

Effective in tax year 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174. The legislation did not have a material impact in our business, operating results, and financial condition.

A reconciliation of the U.S. statutory federal tax rate to the consolidated effective tax rate is as follows:


	Successor			Predecessor									Successor									Predecessor
In thousands:	Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021			For the Year Ended December 31, 2020			For the Year Ended December 31, 2019
Continuing Operations (in thousands):													For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021
Computed expected tax expense/(benefit)	$	(32,635	)	$	69,125		$	(53,431	)	$	(18,380	)	$	49,211		$	44,798		$	(32,635	)	$	69,125
State and foreign income taxes		(17,893	)		6,217			5,026			(7,444	)		17,249			(350	)		(17,893	)		6,217
Foreign Tax Credit														(15,022	)		(5,161	)		-			-
Valuation allowance		0			(46,208	)		19,024			24,638			(4,580	)		(13,140	)		-			(46,208	)
Release of unrecognized tax benefits														(9,897	)		-			-			-
Non-recurring non-deductible														3,498			-			-			-
Foreign income inclusion in US														10,270			-			-			-
Gain on Settlement of Liabilities Subject to Compromise		0			(89,905	)		0			0			-			-			-			(89,905	)
Reduction in Deferred Tax Assets		19,154			87,316			0			(233	)		-			-			19,154			87,316
Fresh Start Adjustments		0			29,099			0			0			-			-			-			29,099
Worthless stock deduction														6,781			(103,992	)		-			-
Other		(1,924	)		4,359			2,493			4,152			2,231			126			(1,924	)		4,359
Total income tax expense/(benefit)	$	(33,298	)	$	60,003		$	(26,888	)	$	2,733		$	59,741		$	(77,719	)	$	(33,298	)	$	60,003

The effective tax rate in the Current Year is different from the U.S. federal statutory rate of 21.0% due to foreign income taxable in the U.S., a non-recurring non-deductible loss, and foreign tax rates that differ from the U.S. federal statutory rate. The effective tax rate in the Current Year was also impacted by the benefit of FTC generated in and carried over from 2023, and $9.9 million in income tax benefits from reversals of uncertain tax positions in foreign jurisdictions. Finally, the effective tax rate in the Current Year was impacted by adjustments to valuation allowances in the U.S. and foreign jurisdictions. We evaluate deferred tax assets, including tax credits and net operating losses, on a routine basis and this may result in the release of all or a portion of currently recorded valuation allowance when there is sufficient positive evidence.

The effective tax rate for the Prior Year is different from the U.S. federal statutory rate of 21.0% primarily from a worthless stock deduction. Other impacts to the rate included non-deductible items, foreign tax rates that differ from the U.S. federal statutory rate, valuation allowance adjustments based on current period income in certain jurisdictions and foreign losses for which no tax benefit was being recorded.

For the year ended December 31, 2021, we evaluated the tax impact resulting from our emergence from Chapter 11 Bankruptcy on February 2, 2021 and the Plan. As part of the debt restructuring, a substantial portion of our pre-petition debt was extinguished. ~~Absent an exception, a taxpayer recognizes~~We recognized cancellation of indebtedness income (“CODI”) upon discharge of ~~its~~our outstanding ~~indebtedness for an amount of consideration that is less than its adjusted issue price. A taxpayer in~~indebtedness. Due to bankruptcy, ~~may exclude~~ CODI was excluded from taxable income ~~but must first reduce its~~provided tax attributes were reduced by the amount of CODI realized. ~~When the debt was extinguished, we~~We realized CODI for U.S. federal income tax purposes of approximately $~~428~~433.0 ~~million. The CODI exclusion resulted~~million resulting in a partial elimination of our federal net operating loss carryforwards, as well as a partial reduction in tax basis in ~~assets, primarily property, plant and equipment.~~assets. The CODI also eliminated $19.2 million of state NOL deferred tax asset which resulted in a corresponding reduction in the state valuation allowance.

Section 382 of the Internal Revenue Code of 1986 provides an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. We experienced an ownership change on February 2, 2021, as defined in Section 382, due to the Plan. The limitation under Section 382 is based on the value of the corporation as of the Emergence Date. WeCurrently, we do not expect the Section 382 limitation to impact our ability to use U.S. NOLs and FTC carryover tax attributes ~~other than foreign tax credits.~~under Section 382 relief provisions.

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Significant components of our deferred tax assets and liabilities are as follows:


	Successor			Predecessor
In thousands:	December 31, 2021			December 31, 2020			December 31, 2023			December 31, 2022
Deferred tax assets:
Allowance for doubtful accounts	$	1,046		$	1,713		$	1,159		$	1,374
Operating loss and tax credit carryforwards		84,684			150,426
U.S. operating loss and tax credit carryforwards								163,823			157,395
Compensation and employee benefits		8,832			27,625			6,843			7,376
Decommissioning liabilities		39,328			30,960			38,989			39,328
Goodwill and other intangible assets								63			369
Operating leases		197			2,792			147			126
Foreign deferred tax assets								45,003			38,780
Other assets		30,749			34,578			9,779			13,565
Total gross deferred tax assets		164,836			248,094			265,806			258,313
Less: Valuation allowance		(90,781	)		(139,106	)		(132,031	)		(80,280	)
Total deferred tax assets		74,055			108,988		$	133,775		$	178,033

Deferred tax liabilities:
Property, plant and equipment		64,721			69,510		$	53,613		$	64,571
Notes receivable		17,812			12,977			17,659			17,812
Goodwill and other intangible assets		(772	)		23,920
Other liabilities		1,287			7,869
Other Liability								1,399			1,546
Total deferred tax liabilities		83,048			114,276		$	72,671		$	83,929
Net deferred tax liabilities	$	8,993		$	5,288

Net deferred tax assets (liabilities)							$	61,104		$	94,104

The Balance Sheet classification is based on a jurisdictional grouping:
Deferred tax assets								67,241			97,492
Less: Deferred tax liabilities (included in Other liabilities)								(6,137	)		(3,388	)
Total deferred tax assets and liabilities							$	61,104		$	94,104

Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements. The measurement of deferred tax assets and liabilities is based on enacted tax laws and rates currently in effect in each of the jurisdictions in which we have operations. In recording deferred income tax assets, we consider whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income of the appropriate character during the periods in which those deferred income tax assets would be deductible. We consider all available positive and negative evidence, including scheduled reversal of deferred income tax liabilities, projected future taxable income,

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tax-planning strategies, and results of recent operations for this determination. ~~Due to the history~~

The ultimate realization of losses in recent years, we are not relying on any projected future taxable income for this analysis. We are in a net deferred tax liability position as of December 31, 2021 in the U.S., and the reversal of the deferred tax liability is expected to offset the reversal of U.S. deferred tax assets in the future periods. Thus, management believes that it is more likely than not that U.S. federal deferred tax assets, with the exception of certain credits, will be realized. Management determined that sufficient positive evidence does not exist to realize deferred tax assets for ~~certain~~the U.S. ~~federal credits, certain~~FTC carryovers is dependent on the generation of future taxable income of the appropriate character during the FTC carryforward period. During 2022, we determined there was enough positive evidence to realize a portion of the tax benefit related to FTC carryforwards. This is due to a pattern of sustained profitability in the U.S. ~~state tax attributes,~~since we emerged from bankruptcy and ~~for~~capacity of relief under Section 382. At December 31, 2023, we had a FTC carryforward of $77.6 million with expiration dates from 2024 to 2033. There is a partial valuation allowance of $50 million against the FTC carryforward at year end 2023 which will more-likely-than-not expire before being utilized. We will continue to evaluate the realizability of FTCs in future years.

The amount of our net deferred tax assets considered realizable could be adjusted if projections of future taxable income are reduced or objective negative evidence in the ~~majority~~form of a three-year cumulative loss is present or both. Should we no longer have a level of sustained profitability, excluding non-recurring charges, we will have to rely more on our future projections of taxable income to determine if we have an adequate source of taxable income for the realization of our ~~foreign operations.~~deferred tax assets, namely NOL, interest limitation, and tax credit carryforwards. This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets.

The amount of U.S. consolidated net operating losses available as of December 31, ~~2021, after attribute reduction,~~2023 is ~~estimated to be approximately~~ $~~43.3~~90.0 million,which ~~are available to reduce future taxable income. These losses~~ have an indefinite carryforward but are limited to offsetting 80% of taxable income each year. At December 31, ~~2021,~~2023, we also had ~~various~~ state net operating ~~loss carryforwards with expiration dates starting in 2022. A~~losses net deferred tax asset of $~~18.8~~16.9 million ~~reflects the expected future tax benefit for the state loss carryforwards. At December 31, 2021, we also had~~offset by a ~~U.S. foreign tax credit carryforward of $55.9~~ ~~million with expiration dates from 2025 to 2027.~~full valuation allowance.

We have not provided additional US income tax expense on foreign earnings of ~~our~~foreign affiliates. We are repatriating from foreign subsidiaries ~~since we have reinvested or expect to reinvest undistributed earnings outside~~and the ~~U.S. indefinitely. At December 31, 2021, our foreign subsidiaries had an overall accumulated deficit in earnings. We do~~distributions are not ~~intend to repatriate the earnings of our profitable foreign subsidiaries. We have not provided U.S. income taxes for such earnings. These earnings could become~~ subject to ~~U.S. income tax, state and foreign taxes if repatriated. It~~ incremental US taxation because they represent either 1) return of basis where there

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is not ~~practicable to estimate the amount of taxes that might be payable on such undistributed earnings.~~current or accumulated earnings and profits, 2) previously taxed earnings and profits or 3) foreign earnings exempt from incremental US tax.

We file income tax ~~return~~returns in the U.S., including federal and various state filings, and certain foreign jurisdictions. The number of years that are open under the statute of limitations and subject to audit varies depending on the tax jurisdiction. We remain subject to U.S. federal tax examinations for years after ~~2017.~~2019.

The activity in unrecognized tax benefits is as follows:


	Successor			Predecessor								Successor									Predecessor
In thousands:	Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021		For the Year Ended December 31, 2020			For the Year Ended December 31, 2019			For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021
Unrecognized tax benefits at beginning of period	$	14,706		$	13,206	$	13,206		$	30,558		$	14,009		$	14,973		$	14,706		$	13,206
Additions based on tax positions related to prior years		2,848			1,500		1,757			2,500			55			569			2,848			1,500
Reductions based on tax positions related to prior years		(552	)		0		0			0			(75	)		(334	)		(552	)		-
Additions based on tax positions related to current year		0			0		0			0			-			78			-			-
Reductions as a result of a lapse of the applicable statute of limitations		0			0		(757	)		0			(9,765	)		-			-			-
Reductions relating to settlements with taxing authorities		(2,029	)		0		(1,000	)		(19,852	)		(112	)		(1,277	)		(2,029	)		-
Unrecognized tax benefits at end of period	$	14,973		$	14,706	$	13,206		$	13,206		$	4,112		$	14,009		$	14,973		$	14,706

We had unrecognized tax benefits of $~~15.0~~4.1 million as of December 31, 2023, $~~13.2~~14.0 million as of December 31, 2022, and $~~13.2~~15.0 million as of December 31, 2021, ~~2020 and 2019, respectively,~~ all of which would impact our effective tax rate if recognized. It is reasonably possible that $~~2.9~~0.9 million of unrecognized tax benefits could be settled in the next twelve-month period due to the conclusion of tax audits or due to the expiration of statute of limitations.

It is our policy to recognize interest and applicable penalties, if any, related to uncertain tax positions in income tax expense. The amounts in the tabular reconciliation above include accrued interest and penalties of $~~6.9~~1.9 million, $~~5.8~~7.2 million and $~~5.0~~6.9 million for ~~the years~~periods ended December 31, 2023, 2022 and 2021, ~~2020 and 2019,~~ respectively. ~~During the year ended December 31, 2019, we recorded a reduction in unrecognized tax benefits of $19.9~~ million relating to settlements of income tax audits in foreign countries. Interest and penalties associated with the unrecognized tax benefits are classified as a component of income tax expense in the consolidated statements of operations.

~~(11)~~(13) Segment Information

~~In connection with our Transformation Project, our~~Our reportable segments ~~were changed to~~are Rentals and Well Services. ~~We have recast historical amounts below and in Note 4 -~~ ~~Revenue~~ ~~in connection with this change.~~

Business Segments

~~Table of Contents~~

We evaluate the performance of our reportable segments based on income or loss from operations. The segment measure is calculated as segment revenues less segment operating expenses, including general and administrative expenses, depreciation, depletion, amortization and accretion expense and ~~reduction in value of assets.~~other (gains) and losses, net. We use this segment measure to evaluate our reportable segments as it is the measure that is most consistent with how we organize and manage our business operations. Corporate and other costs primarily include expenses related to support functions, including salaries and benefits for corporate employees.

Summarized financial information for our segments is as follows (in thousands):

For the Period February 3, 2021 through December 31, 2021 (Successor)

Well

Corporate and

Consolidated

Rentals

Services

Other

Total

Revenues

$
268,695

$
380,059

$
-

$
648,754

Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

105,373

316,879

-

422,252

Depreciation, depletion, amortization and accretion

152,250

61,074

6,535

219,859

General and administrative expenses

24,812

46,780

45,983

117,575

Restructuring expenses

0

0

22,952

22,952

Other expenses

3,609

13,117

0

16,726

Income (loss) from operations

(17,349
)

(57,791
)

(75,470
)

(150,610
)
Interest income (expense), net

(7
)

3,930

(1,592
)

2,331

Other income (expense)

1,280

(14,407
)

5,999

(7,128
)
Income (loss) from continuing operations before income taxes

$
(16,076
)

$
(68,268
)

$
(71,063
)

$
(155,407
)

For the Period January 1, 2021 through February 2, 2021 (Predecessor)

Well

Corporate and

Consolidated

Rentals

Services

Other

Total

Revenues

$
18,339

$
27,589

$
-

$
45,928

Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

7,839

21,934

-

29,773

Depreciation, depletion, amortization and accretion

4,271

3,666

421

8,358

General and administrative expenses

2,027

4,111

4,914

11,052

Restructuring expenses

-

-

1,270

1,270

Income (loss) from operations

4,202

(2,122
)

(6,605
)

(4,525
)
Interest income (expense), net

10

356

(164
)

202

Reorganization items, net

(2,037
)

31,816

305,781

335,560

Other income (expense)

(399
)

(165
)

(1,541
)

(2,105
)
Income (loss) from continuing operations before income taxes

$
1,776

$
29,885

$
297,471

$
329,132

For the year ended December 31, 2020 (Predecessor)

Well

Corporate and

Consolidated

Rentals

Services

Other

Total

Revenues

$
297,835

$
369,414

$
0

$
667,249

Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

109,902

298,229

0

408,131

Depreciation, depletion, amortization and accretion

63,072

48,929

3,770

115,771

General and administrative expenses

52,718

73,200

79,855

205,773

Restructuring expenses

-

-

47,055

47,055

Reduction in value of assets

754

21,038

1,983

23,775

Income (loss) from operations

71,389

(71,982
)

(132,663
)

(133,256
)
Interest income (expense), net

-

4,539

(96,965
)

(92,426
)
Reorganization expenses

0

0

(19,520
)

(19,520
)
Other income

-

-

(9,229
)

(9,229
)
Income (loss) from continuing operations before income taxes

$
71,389

$
(67,443
)

$
(258,377
)

$
(254,431
)

Table of Contents

For the year ended December 31, 2019 (Predecessor)

Well

Corporate and

Consolidated

Rentals

Services

Other

Total

Revenues

$
430,442

$
541,610

$
0

$
972,052

Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

168,608

389,657

0

558,265

Depreciation, depletion, amortization and accretion

86,395

55,670

4,726

146,791

General and administrative expenses

61,829

89,272

93,302

244,403

Reduction in value of assets

0

9,293

0

9,293

Income (loss) from operations

113,610

(2,282
)

(98,028
)

13,300

Interest income (expense), net

0

4,172

(102,511
)

(98,339
)
Reorganization expenses

0

0

0

0

Other income

0

0

(2,484
)

(2,484
)
Income (loss) from continuing operations before income taxes

$
113,610

$
1,890

$
(203,023
)

$
(87,523
)


For the year ended December 31, 2023 (Successor)				Well			Corporate and			Consolidated
	Rentals			Services			Other			Total
Revenues	$	452,249		$	467,171		$	-		$	919,420
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		149,835			324,292			-			474,127
Depreciation, depletion, amortization and accretion		49,414			28,796			2,858			81,068
General and administrative expenses		28,475			44,267			52,917			125,659
Restructuring expenses		-			-			3,294			3,294
Other gains, net		(495	)		(5,000	)		(1,054	)		(6,549	)
Income (loss) from operations	$	225,020		$	74,816		$	(58,015	)	$	241,821

For the year ended December 31, 2022 (Successor)				Well			Corporate and			Consolidated
	Rentals			Services			Other			Total
Revenues	$	402,942		$	481,018		$	-		$	883,960
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		137,626			339,325			-			476,951
Depreciation, depletion, amortization and accretion		58,731			34,841			4,488			98,060
General and administrative expenses		28,139			45,898			54,257			128,294
Restructuring expenses		-			-			6,375			6,375
Other gains, net		(5,190	)		(23,575	)		(369	)		(29,134	)
Income (loss) from operations	$	183,636		$	84,529		$	(64,751	)	$	203,414

For the Period February 3, 2021 through December 31, 2021 (Successor)				Well			Corporate and			Consolidated
	Rentals			Services			Other			Total
Revenues	$	268,695		$	380,059		$	-		$	648,754
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		105,373			316,879			-			422,252
Depreciation, depletion, amortization and accretion		152,250			61,074			6,535			219,859
General and administrative expenses		24,812			46,780			45,983			117,575
Restructuring expenses		-			-			22,952			22,952
Other losses, net		3,609			13,117			-			16,726
Loss from operations	$	(17,349	)	$	(57,791	)	$	(75,470	)	$	(150,610	)

For the Period January 1, 2021 through February 2, 2021 (Predecessor)				Well			Corporate and			Consolidated
	Rentals			Services			Other			Total
Revenues	$	18,339		$	27,589		$	-		$	45,928
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		7,839			21,934			-			29,773
Depreciation, depletion, amortization and accretion		4,271			3,666			421			8,358
General and administrative expenses		2,027			4,111			4,914			11,052
Restructuring expenses		-			-			1,270			1,270
Income (loss) from operations	$	4,202		$	(2,122	)	$	(6,605	)	$	(4,525	)

Identifiable Assets

Well

Corporate

Consolidated

Rentals

Services

and Other

Total

December 31, 2021 (Successor)

$
365,358

$
715,738

$
118,412

$
1,199,508

December 31, 2020 (Predecessor)

572,776

554,178

374,125

1,501,079


			Well		Corporate		Consolidated
	Rentals		Services		and Other		Total
December 31, 2023	$	553,706	$	597,438	$	189,849	$	1,340,993
December 31, 2022		432,437		533,327		225,248		1,191,012

The Corporate and Other segment as of December 31, 2023 and 2022 includes $67.2 million and $97.5 million of non-current deferred tax assets, respectfully. At December 31, ~~2021 and 2020,~~2022, the Corporate and Other segment included $~~37.5~~ ~~million and $242.1~~12.0 million of identifiable assets relating to assets held for sale. ~~For further discussion see Note 14 -~~ We had no assets held for sale as of December 31, 2023.~~Discontinued Operations~~.

Capital Expenditures

The following represents capital expenditures for the periods presented:


			Well		Corporate		Consolidated
	Rentals		Services		and Other		Total
December 31, 2023	$	58,962	$	12,103	$	3,431	$	74,496
December 31, 2022		54,126		10,729		929		65,784
For the period from February 3, 2021 through December 31, 2021 (Successor)		27,335		6,817		-		34,152
For the period from January 1, 2021 through February 2, 2021 (Predecessor)		2,429		606		-		3,035

Well

Corporate

Consolidated

Rentals

Services

and Other

Total

For the period from February 3, 2021 through December 31, 2021 (Successor)

$
27,335

$
6,817

$
-

$
34,152

For the period from January 1, 2021 through February 2, 2021 (Predecessor)

2,429

606

-

3,035

December 31, 2020 (Predecessor)

24,053

19,609

3,991

47,653

December 31, 2019 (Predecessor)

63,252

28,386

12,084

103,722

Table of Contents

Geographic Information

We operate in the U.S. and in various other countries throughout the world. Our international operations are primarily focused in Latin America, Asia-Pacific and the Middle East ~~and North Africa~~ regions. We attribute revenue to various countries based on the location where services are performed or the destination of the drilling products or equipment sold or rented. See “Note 3 - Revenues” for a detail of our domestic and international revenues. Long-lived assets consist primarily of property, plant and equipment and are attributed to various countries based on the physical location of the asset at the end of a ~~period.~~period.

~~Revenues~~

Successor

Predecessor

Year ended December 31,

For the Period
February 3, 2021
through
December 31, 2021

For the Period
January 1, 2021
through
February 2, 2021

2020

2019

United States

$
304,623

$
23,863

$
339,041

$
585,553

Other countries

344,131

22,065

328,208

386,499

Total

$
648,754

$
45,928

$
667,249

$
972,052

Long-Lived Assets


	Successor		Predecessor
	December 31, 2021		December 31, 2020		December 31, 2023		December 31, 2022
United States	$	231,388	$	253,114	$	232,629	$	212,534
Other countries		124,886		154,993
International						62,331		69,842
Total	$	356,274	$	408,107	$	294,960	$	282,376

~~Table of Contents~~

~~(12)~~(14) Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in determining fair value are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. The three input levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities;

Level 2: Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets or model-derived valuations or other inputs that can be corroborated by observable market data; and

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The following tables provide a summary of the financial assets and liabilities measured at fair value on a recurring basis (in thousands):

Successor Fair Value at

December 31, 2021

Level 1

Level 2

Level 3

Total

Non-qualified deferred compensation assets and liabilities

Intangible and other long-term assets, net

$
0

$
15,896

$
-

$
15,896

Accounts payable

-

2,250

-

2,250

Other long-term liabilities

-

19,218

-

19,218

Investment in equity securities

$
25,735

$
-

$
-

$
25,735

Predecessor Fair Value at

December 31, 2020

Level 1

Level 2

Level 3

Total

Non-qualified deferred compensation assets and liabilities

Intangible and other long-term assets, net

$
-

$
15,013

$
-

$
15,013

Accounts payable

-

2,869

-

2,869

Other long-term liabilities

-

20,697

-

20,697

Total debt

$
409,050

$
-

$
-

$
409,050


	December 31, 2023		December 31, 2022
Non-qualified deferred compensation assets and liabilities
Other assets, net	$	17,079	$	16,299
Accrued expenses		1,797		1,831
Other liabilities		15,589		15,855

Our non-qualified deferred compensation plans allow officers, certain highly compensated employees and non-employee directors to defer receipt of a portion of their compensation and contribute such amounts to one or more hypothetical investment funds. These investments are reported at fair value based on unadjusted quoted prices in active markets for identifiable assets and observable inputs for similar assets and liabilities, which represent a Level 2 in the fair value hierarchy depending on the type of investment. Commencement of the Chapter 11 Cases automatically stayed payments under the non-qualified deferred compensation plans. As a result of the consummation of the Plan, restricted stock units issued prior to the Fresh Start Accounting Date under our stock incentive plans were cancelled for hierarchy.0 ~~consideration.~~

~~Investment in equity securities relates to our ownership in~~ ~~4.1~~ million shares of common stock of Select Energy Services, Inc. This investment is reported at fair value based on unadjusted quoted prices which are readily determinable, which represents a Level 1 in the fair value hierarchy. During the Successor Period, we recognized an unrealized gain on equity securities of $~~2.1~~ ~~million, which is included in other expense in our consolidated statement of operations. See Note 14 -~~ ~~Discontinued Operations~~ ~~for further discussion.~~

The carrying amount of cash equivalents, accounts receivable, accounts payable and accrued expenses, as reflected in the consolidated balance sheets, approximates fair value due to the short maturities. ~~We historically utilized unadjusted quoted prices in the market for measuring the fair value of debt.~~

81(15) Other Income (Expense)

Other income (expense) primarily relates to re-measurement gains and losses associated with our foreign currencies and gains on our investment in common stock of Select Energy Services, Inc. (“Select”).

Foreign currency losses are as follows (in millions):


	Successor						Predecessor
	For the Year Ended December 31, 2023		For the Year Ended December 31, 2022		For the Period February 3, 2021 through December 31, 2021		For the Period January 1, 2021 through February 2, 2021
Loss on foreign currency	$	12.8	$	12.6	$	8.8	$	2.1

Table of Contents

Losses on foreign currencies during the Prior Year include an expense of $2.7 million which represents a correction of an immaterial error relating to a period prior to our emergence from bankruptcy. Gains and losses on foreign currencies are primarily related to our operations in Brazil and Argentina.

During the Prior Year, we disposed of 4.1 million shares of Select for $34.7 million, and we recognized gains totaling $8.9 million in connection with these transactions. During the Successor Period, we disposed of 0.7 million shares of Select for $4.1 million, and we recognized gains totaling $0.4 million. As of December 31, 2022, all shares of Select have been disposed.

~~(13)~~(16) Blue Chip Swap Securities

The functional currency for our Argentine operations is the U.S. dollar and we use Argentina’s official exchange rate to remeasure our Argentine peso-denominated net monetary assets into U.S. dollars at each balance sheet date. The Central Bank of Argentina has maintained certain currency controls that limited our ability to access U.S. dollars in Argentina and to remit cash from our Argentine operations.

During the third quarter of 2023, we utilized an indirect foreign exchange mechanism known as a Blue Chip Swap (“BCS”) to remit $9.7 million U.S. dollars from Argentina through the purchase and sale of BCS securities. These transactions were completed at exchange rates that represented a premium of approximately 123%.

Additionally, during the fourth quarter of 2023, we performed a BCS to remit approximately $4.3 million U.S. dollars from Argentina through the purchase and sale of BCS securities. The transactions were completed at exchange rates that represented a premium of approximately 184%.

These BCS transactions resulted in a net loss of $19.9 million during the Current Year.

We continue to use the official exchange rate for remeasurement of our Argentine peso-denominated net monetary assets under U.S. GAAP as the BCS rate does not meet the criteria for remeasurement under U.S. GAAP.

(17) Contingencies

Due to the nature of our business, we are involved, from time to time, in various routine litigation or subject to disputes or claims or actions, including those commercial in nature, regarding our business activities in the ordinary course of business. Legal costs related to these matters are expensed as incurred. Management is of the opinion that none of the claims and actions will have a material adverse impact on our financial position, results of operations or cash flows. ~~Commencement of the Chapter 11 Cases automatically stayed certain proceedings and actions, these cases have continued after the Emergence Date.~~

~~A subsidiary of ours is~~

We are currently involved in legal proceedings with 2 ~~former employees regarding~~ the ~~payment~~Washington State Department of ~~royalties for~~Revenue in relation to a ~~patentable product paid for by the subsidiary and developed while they worked for the subsidiary. On~~dispute arising in April ~~2, 2018, the former employees and their corporation filed~~2019 pertaining to a ~~lawsuit (the “First Case”) in the Harris County District Court (the “District Court”) alleging that the royalty payments they had invoiced at~~ 25~~% and for which they received payments since 2010, should have been paid at~~use tax assessment from 2016 as a ~~rate of~~ 50~~%. In May 2019, the jury issued a verdict in favor~~result of the ~~plaintiffs. On October 25, 2019, the court issued~~construction of a final judgment against us, which we have fully secured with a bond. Oral arguments in front of the Court of Appeals are scheduled for April 2022. We strongly disagree with the verdict and believe the District Court committed several legal errors that should result in a reversal or remand of the casevessel by ~~the Court of Appeals.~~

A second case (the “Second Case”) was filed in District Court against the same subsidiary of ours bringing the same claims and seeking damages post judgment from the First Case until discontinuation of the sale of the product at issue by the subsidiary. In December 2020, the Court entered a final judgement for the Plaintiffs’ and the Second Case was stayed for the durationone of our ~~bankruptcy. We have filed an~~subsidiaries. The matter was appealed to the Washington State Board of Tax Appeals, which affirmed the assessment on May 22, 2023. In order to appeal ~~and a Motion~~the assessment to ~~Abate~~Whatcom County Superior Court, we paid the ~~Second Case pending the appeal of the First Case. The Motion to Abate the Second Case was granted on October 26, 2021 by the Court of Appeals. As of December 31, 2021, we have reserved~~full $~~7.0~~27.1 million ~~for the judgements in the First Case and Second Case.~~

~~Our Indian subsidiary, SES Energy Services India Pvt. Ltd, entered into a contract with an Indian oil and gas company~~assessment on May 31, 2023. On June 20, 2023, we appealed this decision to provide an off shore vessel for well stimulation. A dispute arose over the performability of the terms of the contract. The contract was terminated by the customer. The maximum liability under the contractWhatcom County Superior Court where it is ~~capped at approximately $~~currently pending review.~~7.3~~ ~~million, of which approximately $3.5~~ ~~million has been claimed via revocation of performance bank guarantees.~~

~~(14)~~(18) Discontinued Operations

In December 2019, Pumpco Energy Services, Inc (“Pumpco”) completed its hydraulic fracturing field operations and made the determination to discontinue, wind down and exit its hydraulic fracturing operations. We have, and will continue, to sell Pumpco’s fixed assets over time. During the Successor Period, we have recognized gains of approximately $~~10.5~~ ~~million related to the sales of these assets.~~68

During the third quarter of 2021, we sold all of the issued and outstanding equity of Complete Energy Services, Inc. (“Complete”) to Select Energy Services, Inc. (“Select”), which also included SPN Well Services, Inc.’s (“SPW”) flowback and well testing businesses, including the associated assets, liabilities and working capital, pursuant to a Securities Purchase and Sale Agreement (the “Purchase Agreement”) with SES Holdings, LLC, Select and Complete. Pursuant to the Purchase Agreement, Select acquired ~~100% of the equity interests of Complete, for a purchase price of approximately $14.0~~ ~~million in cash and the issuance of~~ ~~3.6~~ ~~million shares of Class A common stock, $0.01~~ par value, of Select, subject to customary post-closing adjustments. The Purchase Agreement contains customary representations, warranties and covenants. In connection with this disposition, during the Successor Period, we recognized a reduction in value of assets related to Complete of approximately $~~12.4~~ ~~million.~~

~~During the third quarter of 2021, we entered into an agreement with an unrelated third party to sell tranches of coil tubing assets held by SPW for $14.0~~ ~~million. As of December 31, 2021, we have completed sales totaling $11.4~~ ~~million under this contract. The gain/loss on these assets sales was not material.~~

~~In November 2021, we completed an agreement with an unrelated third party to sell the remaining assets of SPW for $8.5~~ ~~million. In connection with the sale of the remaining assets of SPW, we recognized a reduction in value of assets totaling $14.5~~ ~~million during the third quarter of 2021.~~

~~The disposal of Complete and SPW is aligned with our overall strategic objective to divest assets and service lines that do not compete for investment in the current market environment.~~

Table of Contents

The following table summarizes the components of loss from discontinued operations, net of tax (in thousands):


	Successor			Predecessor									Successor									Predecessor
							Year ended December 31,						For the Year Ended December 31,						For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021
	For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021			2020			2019			2023			2022
Revenues	$	90,682		$	10,719		$	184,580		$	734,768		$	-		$	-		$	90,682		$	10,719
Cost of services		85,191			10,398			180,408			639,065			-			-			85,191			10,398
Depreciation, depletion, amortization and accretion		31,502			2,141			31,022			124,746			-			-			31,502			2,141
General and administrative expenses		8,847			1,119			22,035			50,953			590			8,043			8,847			1,119
Other expenses		15,807			0			0			0
Reduction in value of assets		0			0			117,335			84,470
Other (gains) and losses, net														(1,129	)		(2,249	)		15,807			-
Loss from operations		(50,665	)		(2,939	)		(166,220	)		(164,466	)		539			(5,794	)		(50,665	)		(2,939	)
Other income (expense)		188			2,485			(2,069	)		27			-			-			188			2,485
Loss from discontinued operations before tax		(50,477	)		(454	)		(168,289	)		(164,439	)
Income (loss) from discontinued operations before tax														539			(5,794	)		(50,477	)		(454	)
Income tax benefit (expense)		10,408			102			(398	)		(1,026	)		(113	)		1,217			10,408			102
Loss from discontinued operations, net of income tax	$	(40,069	)	$	(352	)	$	(168,687	)	$	(165,465	)
Income (loss) from discontinued operations, net of income tax													$	426		$	(4,577	)	$	(40,069	)	$	(352	)

The following summarizes the assets and liabilities related to ~~the business reported as~~our discontinued operations (in thousands):

Successor

Predecessor

December 31, 2021

December 31, 2020

Current assets:

Accounts receivable, net

$
7,469

$
25,448

Prepaid expenses

26

4,881

Other current assets

447

12,076

Total current assets

7,942

42,405

Property, plant and equipment, net

29,328

179,380

Operating lease ROU assets

127

16,958

Other assets

131

3,361

Total assets held for sale

$
37,528

$
242,104

Liabilities:

Accounts payable

$
652

$
2,830

Accrued expenses

4,268

11,153

Operating lease liabilities

72

21,987

Decommissioning liabilities

0

8,311

Other liabilities

615

2,095

Total liabilities

$
5,607

$
46,376


	For the Year Ended December 31,
	2023		2022
Assets:
Accounts receivable, net	$	-	$	350
Property, plant and equipment, net		-		11,468
Other assets, net		-		160
Total assets held for sale	$	-	$	11,978

Liabilities:
Accounts payable	$	-	$	86
Accrued expenses		-		3,192
Other liabilities		-		71
Total liabilities held for sale	$	-	$	3,349

Significant operating non-cash items and cash flows from investing activities for our discontinued operations were as follows (in thousands):

~~Table of Contents~~

Successor

Predecessor

Year ended December 31,

For the Period
February 3, 2021
through
December 31, 2021

For the Period
January 1, 2021
through
February 2, 2021

2020

2019

Cash flows from discontinued operating activities:

Reduction in value of assets

$
0

$
0

$
117,335

$
84,470

(Gain)/loss on sale of assets

0

(43
)

286

12,727

Other expenses

15,807

0

0

0

Depreciation, depletion, amortization and accretion

31,502

2,141

31,022

124,746

Cash flows from discontinued investing activities:

Proceeds from sales of assets

88,332

486

22,224

23,140


	For the Year Ended December 31,
	2023			2022
Cash flows from discontinued operating activities:
Other gains, net	$	(1,129	)	$	(2,249	)
Cash flows from discontinued investing activities:
Proceeds from sales of assets	$	13,020		$	20,110

~~Additionally, we have recast certain historical amounts in our consolidated balance sheet, statements of operations and in the following notes to these financial statements: Note 1 -~~ ~~Summary of Significant Account Policies, Note 3 -~~ ~~Fresh Start Accounting, Note 5 -~~ ~~Leases, Note 6 -~~ ~~Intangibles, Note 7 -~~ ~~Property, Plant and Equipment, Net, Note 10 -~~ ~~Income Taxes~~ ~~and Note 11 -~~ ~~Segment Information~~ ~~as it pertains to these discontinued operations.~~

~~(15)~~(19) Supplemental Cash Flow Information

The table below is a reconciliation of cash, cash equivalents and restricted cash for the beginning and the end of the period for all periods presented:

Successor

Predecessor

Year ended December 31,

For the Period
February 3, 2021
through
December 31, 2021

For the Period
January 1, 2021
through
February 2, 2021

2020

2019

Cash, cash equivalents, and restricted cash, beginning of period

Cash and cash equivalents

$
172,768

$
188,006

$
272,624

$
158,050

Restricted cash-current

16,751

-

-

-

Restricted cash-non-current

80,179

80,178

2,764

5,698

Cash, cash equivalents, and restricted cash, beginning of period

$
269,698

$
268,184

$
275,388

$
163,748

Cash, cash equivalents, and restricted cash, end of period

Cash and cash equivalents

$
314,974

$
172,768

$
188,006

$
272,624

Restricted cash-current

-

16,751

-

-

Restricted cash-non-current

79,561

80,179

80,178

2,764

Cash, cash equivalents, and restricted cash, end of period

$
394,535

$
269,698

$
268,184

$
275,388

~~Non-cash investing activities during the Successor Period include the acquisition of investments in equity securities of $27.3~~ ~~million in connection with asset disposals.~~

Table of Contents


	Successor						Predecessor
	For the Year Ended December 31,				For the Period February 3, 2021 through December 31, 2021		For the Period January 1, 2021 through February 2, 2021
	2023		2022
Cash and cash equivalents	$	258,999	$	314,974	$	172,768	$	188,006
Restricted cash-current		-		-		16,751		-
Restricted cash-non-current		80,108		79,561		80,179		80,178
Cash, cash equivalents, and restricted cash, beginning of period	$	339,107	$	394,535	$	269,698	$	268,184

Cash and cash equivalents	$	391,684	$	258,999	$	314,974	$	172,768
Restricted cash-current		-		-		-		16,751
Restricted cash-non-current		85,444		80,108		79,561		80,179
Cash, cash equivalents, and restricted cash, end of period	$	477,128	$	339,107	$	394,535	$	269,698

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, ~~(as amended)~~as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. In addition, the disclosure controls and procedures provide reasonable assurance that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. An evaluation was carried out, under the supervision and with the participation of our management, including our CEO and CFO, regarding the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures as of December 31, ~~2021~~2023 were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. See disclosure of a material weakness below under “Remediation of Previously Reported Material Weakness.”

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, and for performing an assessment of the effectiveness of our internal control over financial reporting as of December 31, ~~2021.~~2023. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our CEO and CFO, performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, ~~2021~~2023 based upon criteria in Internal Control – Integrated Framework ~~(2013)~~(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management determined that as of December 31, ~~2021,~~2023, our internal control over financial reporting was effective based on those criteria.

As of December 31, ~~2020,~~2022, management determined that we did not ~~effectively operate control activities~~design and maintain effective controls to ~~appropriately consider all potential~~review the reasonableness of assumptions determined by, and accuracy of calculations performed by, our external tax service providers and was deemed a material weakness. This material weakness resulted in an adjustment to deferred tax benefit and income tax ~~alternatives relating to uncertain tax positions. The resulting material weakness determined~~benefit that ~~while we performed a timely~~was recorded in the consolidated financial statements as of and ~~accurate analysis over~~for the income tax consequences of our uncertain tax positions, specifically the bankruptcy filing amendment, we did not contemporaneously document a summary of all the potential uncertain tax positions related to the transaction, and did not evidence this analysis to support the accounting treatment for each potential uncertain tax position.year ended December 31, 2022.

ToIn order to address the material weakness described above, management implemented a remediation plan that included implementing enhancements to ~~address~~our controls around reviewing the ~~control deficiency that led to this material weakness, including reinforcing the controls for identifying and reviewing potential uncertain tax positions,~~reasonableness of assumptions determined by, and the ~~formalization~~accuracy of ~~additional supporting documentation for existing uncertain~~calculations performed by, our external tax positions. Additionally, management reinforced the controls to evaluate, resolve, and document the related conclusions and accounting treatment for uncertain tax positions. This included enhancing documentation of regularly held meetings between tax management and key stakeholders to discuss ongoing business activities and triggering events, as well as to determine any associated tax implications.service providers. The remediation plan was implemented during ~~2021,~~2023, and management determined that the controls have been satisfactorily implemented and have operated effectively for a sufficient period of time. Therefore, management concluded the previously reported material weakness is remediated as of December 31, ~~2021.~~2023.

There ~~has~~have been no ~~change~~changes in our internal control over financial reporting during the ~~three months~~fourth quarter ended December 31, ~~2021,~~2023 that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

~~None~~On March 4, 2024, Michael Y. McGovern and on March 5, 2024, Krishna Shivram, each informed the Board of their intentions to not stand for re-election at the Company’s 2024 Annual Meeting of Stockholders (the “Meeting”), which is currently expected to be held in May 2024, and to step down from the Board following the conclusion of their current term which ends effective as of the Meeting date. Each of Mr. McGovern and Mr. Shivram have also announced their intention to step down as a member of the Board’s Audit Committee and Compensation Committee and, in the case of Mr. Shivram, Chairman of the Board’s Audit Committee. Mr. McGovern, in addition to his intention not to stand for re-election as a director and to resign as director effective as of immediately prior to the Meeting, informed the Board of his intent to resign from his position as Executive Chairman, effective as of the later of (i) the Meeting date and (ii) if applicable, the expiration of the 90-day notice period required under his Executive Chairman Agreement, dated July 18, 2022 but effective as of July 1, 2022, with the Company (the “Executive Chairman Agreement”). The Company has approved the acceleration of Mr. McGovern’s effective date of termination in his capacity as Executive Chairman to the Meeting date if it occurs before the expiration of the 90-day notice period referred to above, in accordance with the terms of the Executive Chairman Agreement, to coincide with the conclusion of his term as a director. Following Mr. McGovern’s departure from the Board, the Company expects that the Board would appoint Mr. Brian K. Moore, Chief Executive Officer, as Chairman of the Board, effective as of such time.

In connection with the foregoing, the Company anticipates that the Board would reduce the size of the Board from seven to six directors, effective immediately prior to the Meeting and concurrent with Mr. McGovern’s resignation, subject to entering into an amendment to the Stockholders Agreement, dated as of February 2, 2021, between the Company and its stockholders party thereto (the “Stockholders Agreement”) to permit the number of directors to be fixed at between six and seven, in anticipation of nominating six individuals for election to serve on the Board at the Meeting.

Pursuant to the Plan, as of the Emergence Date, the following directors ceased to serve on our Board of Directors: Terence E. Hall, Peter D. Kinnear, Janiece M. Longoria, Michael M. McShane, James M. Funk and W. Matt Ralls.

~~Pursuant to the Plan and the~~ Stockholders Agreement (defined below), our current Board ~~of Directors~~ consists of the following seven members:

As disclosed in Item 9B “Other Information” Mr. McGovern has informed the Company of his intent to resign from his position as Executive Chair and to not stand for reelection as a member of our Board at the Meeting. In addition, Mr. Shivram also informed the Company of his decision not to stand for reelection at the Meeting. These announcements were not the result of any dispute or disagreement with the Company or our Board on any matter relating to our operations, policies or practices.

We currently have an Audit Committee and a Compensation Committee. All directors serve on each committee. The Board believes under NYSE listing standards (which we are not currently subject to), ~~we believe~~ that all of the directors, except for Mr. Moore and Mr. McGovern, may be independent directors, provided that Mr. Citarrella, Mr. Flores and Mr. ~~Flores~~Foster may not be independent for Audit Committee purposes. The Board ~~expects all of its directors would~~considers Ms. Robertson and Mr. Shivram to be ~~considered~~ Audit Committee financial experts.

Joseph Citarrella, ~~35,~~37, is currently a Managing Principal for Monarch Alternative Capital LP (“Monarch”), a private investment firm. From 2008 to 2012,Mr. Citarrella was an Associate at Goldman Sachs in the Global Investment Research equity group covering the integrated oil, exploration and production, and refining sectors. From 2017 to 2018, Mr. Citarrella served as nonexecutive Chairman of the Board of Vanguard Natural Resources, Inc., a Houston based independent oil and gas company. From 2018 to 2019, Mr. Citarrella served as an independent director for Resolute Energy. Mr.

Citarrella is a designated director of Monarch. Mr. ~~Citarella~~Citarrella is a valuable member of our ~~board of directors~~Board because of his extensive experience in the oil and gas industry.

Daniel E. Flores, ~~51,~~53, is currently a Partner at GoldenTree Asset Management LP (“GoldenTree”), an employee-owned global asset management firm. Mr. Flores served as Senior Vice President of Avenue Capital Group from 2008 to 2013. Previously, Mr. Flores worked in the Restructuring and Finance Group at Lehman Brothers and as an analyst at Merrill Lynch. Mr. Flores is a designated director of GoldenTree. Mr. Flores is a valuable member of our ~~board of directors~~Board because of his extensive experience in the financial industry.

Michael Y. McGovern, ~~70,~~72, is currently our Executive Chairman. Mr. McGovern also serves as a director of Cactus, Inc. and previously served as a director of Nuverra Environmental Services and ION Geophysical Corporation.Mr. McGovern has more than 40 years of experience in the energy industry having served as a director and an executive at multiple public and private companies. Mr. McGovern is a valuable member of our ~~board of directors~~Board because of his extensive experience in the oil and gas industry.

Julie J. Robertson, ~~66,~~68, served as the Executive ~~Chairwoman~~Chair of Noble Corporation and previously served as ~~Chairwoman~~Chair of the Board, President and Chief Executive Officer from January 2018 until her retirement in May 2020. From 2001 to 2018, Ms. Robertson served in various other management roles for Noble Corporation and its subsidiaries. Ms. Robertson served continuously as Corporate

Secretary of Noble Corporation from 1993 until assuming the ~~Chairwoman’s~~Chair’s role in 2018 and served as ~~Chairwoman~~Chair at the time of the filing by Noble Corporation and certain other debtors of voluntary petitions for reorganization pursuant to chapter 11 of the United States Code on July 31, 2020. Ms. Robertson resigned as ~~Chairwoman~~Chair of Noble Corporation in 2021. Ms. Robertson is also ~~Chairman~~Chair of the Board and the Joint Nomination and Remuneration Committee of Seadrill Limited, a director of EOG Resources, Inc. and a trustee of Spindletop Charities, Inc. In 2020, Ms. Robertson was elected the first female Chair of the International Association of Drilling Contractors. Ms. Robertson serves as the ~~Chairman~~Chair of our Compensation Committee. Ms. Robertson is a ~~designated director of GoldenTree. Ms. Robertson is a~~ valuable member of our ~~board of directors~~Board because of her extensive experience in the oil and gas industry.

Krishna Shivram, ~~59,~~61, has over 31 years of experience spread across financial and management positions in the oil and gas industry in the United States, Middle East, Europe and India. Mr. Shivram serves as a director of Allison Transmission Holdings Inc. and Ranger Energy Services Inc. He is also Managing Partner of Veritec Ventures LLC, a venture capital firm focused on making energy transition and climate tech investments. Mr. Shivram served as Chief Executive Officer of Sentinel Energy Services Inc.~~, where he was Chief Executive Officer~~ from 2017 to 2020. Prior to that, Mr. Shivram served as a director of Gulfmark Offshore from 2017 to 2018 and held executive positions, including CFO and interim CEO at Weatherford International Plc and VP Treasurer at Schlumberger Limited. ~~Mr. Shivram is also a director at Ranger Energy Services, Inc.~~ Mr. Shivram serves as the Chairman of our Audit Committee.

Ian S. Foster, 39, is currently a Partner at GoldenTree, an employee-owned global asset management firm. Mr. ~~Shivram~~Foster worked in the Goldman Sachs Investment Banking Division from 2007 to 2021, most recently as a Managing Director, Head of Industrials M&A and served as a member of the firmwide M&A fairness committee. Mr. Foster is a designated director of GoldenTree. Mr. Foster is a valuable member of our ~~board of directors because of his extensive financial experience.~~

~~Timothy J. Winfrey~~, 61, is currently a Senior Advisor to LeBaronBrown Industries LLC, an investment organization designed to support the long-term growth of industry-leading operating businesses. Mr. Winfrey served as Vice President - Energy Systems and Controls of Roper Technologies Inc. from 2002 to 2015. From 2001 to 2002, Mr. Winfrey served as President of Ingersoll-Rand Company's Commercial and Retail Air Solutions business, prior to which he was Vice President and general manager of Ingersoll-Rand's Reciprocating Compressor division. Prior to that, Mr. Winfrey held various corporate development and general management positions with Owens Corning, Eaton Corporation and British Petroleum Company Plc. Mr. Winfrey is a valuable member of our board of directorsBoard because of his extensive experience ~~as a senior executive~~ in the ~~industrial engineering~~financial industry.

Brian K. Moore, ~~65,~~67, is currently our President and Chief Executive Officer and a member of the Board ~~of Directors~~ since January 2022. Mr. Moore has previously served as our Executive Vice President of Corporate Services from April 2016 to January 2022, and as our Senior Executive Vice President of North America Services from February 2012 to March 2016. Prior to that, Mr. Moore held executive positions at Complete Production Services and Integrated Production Services. Mr. Moore is a valuable member of our ~~board of directors~~Board because of his extensive experience as a senior executive in the oil field service industry.

~~As discussed above, on the Emergence Date, in order to implement certain transactions contemplated by the Plan, the Company~~We entered into the Stockholders Agreement to provide for certain governance matters. Other than obligations related to Confidential Information (as defined in the Stockholders Agreement), the rights and preferences of each stockholder under the Stockholders Agreement will terminate when such stockholder ceases to own shares of the Class A Common ~~Stock and Class B Common~~ Stock. While the initial Board ~~of Directors~~ designees post-emergence were appointed by GoldenTree, Monarch, and the ad hoc noteholders, going forward, pursuant to the Stockholders Agreement, the Board ~~of Directors~~currently consists of seven directors, of whom:

Furthermore, the Board ~~of Directors~~ is given special governance rights in the Stockholders Agreement, including approval rights over certain corporate and other transactions, such as (i) any merger, consolidation, reorganization (including conversion) or any other business combination, (ii) certain acquisitions or dispositions of assets or liabilities, (iii) incurrence of indebtedness (subject to certain monetary thresholds), and (iv) issuances of equity, subject to the limitations therein, among other actions.

The Stockholders Agreement also provides the stockholders certain preemptive rights, drag-along rights, tag-along rights, and registration rights, subject, in each case, to the terms and conditions identified in the Stockholders Agreement.

Set forth below is certain information regarding our current executive officers, including all offices and positions held by each in the past five years.

There are no family relationships among any of our current directors or executive officers.

Our Shared Core Values at Work (Code of Conduct) applies to all of our directors, officers and employees. This Code of Conduct is publicly available on the Corporate Governance page in the About Us section of our website at http://www.superiorenergy.com. Any waivers granted to directors or executive officers and any material amendment to our Code of Conduct will be posted promptly on our website and/or disclosed in a current report on Form 8-K. We will provide to any person without charge, upon request, a copy of such code of ethics. The request may be made via mail to: Superior Energy Services, Inc., 1001 Louisiana Street, Suite 2900, Houston, Texas 77002.

The Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy and practices applicable to named executive officers’ compensation for ~~2021.~~2023. For ~~2021,~~2023, our named executive officers (“NEOs”) were:

Effective as of March 16, 2021, David Dunlap, our President and CEO and a member of the Board, and Westervelt Ballard, our Executive Vice President, Chief Financial Officer and Treasurer, each resigned from all positions held with us. Mr. McGovern was named as Executive Chairman as of March 16, 2021 and served in the position of Interim CEO for the remainder of 2021. Mr. Spexarth assumed the position of Interim Chief Financial Officer from March 16, 2021 to August 2021 and has assumed the role Executive Vice President and Chief Financial Officer since August 2021.

On January 20, 2022, Brian K. Moore, our Executive Vice President, was appointed President and Chief Executive Officer and a member of the Board in accordance with the Stockholders’ Agreement. As a result of Mr. Moore’s appointment, Mr. McGovern, our Executive Chairman of the Board, no longer performs the functions of our principal executive officer but remains with us as executive chairman of the Board. Mr. Moore was not one of our NEOs for 2021.

The Compensation Committee of the Board (the “Compensation Committee”) is responsible for designing, implementing and administering our executive compensation program. The primary objective of that program is to attract and retain key personnel.

Our Compensation Committee is guided by several key principles to leverage the Company’s ability to motivate key talent. Our Compensation Committee believes compensation should:

The ~~Executive Chairman, who also served as interim~~ CEO ~~during 2021,~~ developed recommendations for compensation practices in ~~2021~~2023 that were subject to ~~joint~~ Compensation Committee ~~and Board~~ approval. The CEO’s recommendations are based on his evaluations of the performance of the executives and are based on several factors, including individual performance, business results, and general market information. The Compensation Committee on its own reviews the performance and compensation of the CEO and approves his level of compensation.

In ~~2021,~~2023, compensation practices were aligned with ~~our post-emergence company~~the Company to address a number of realities, including:

The Compensation Committee regularly reviews and considers the effectiveness of the Company’s existing compensation programs and modifies such programs or develops new programs to better effectuate the Compensation Committee’s compensation objectives. In addition, the Compensation Committee annually evaluates with its independent compensation consultant whether the program is balanced and appropriate in terms of base pay and incentives, both short-term and long-term.

In ~~2021,~~2023, the Compensation Committee engaged Lyons, Benenson & Company Inc. (“LB&Co”) as its independent executive compensation ~~consultant.~~consultant, as it did in 2022. LB&Co is a leading independent compensation consulting firm that advises and counsels boards of directors and their compensation and governance committees on matters related to executive compensation, board compensation and corporate governance. They work collaboratively with directors and top management to develop compensation solutions that are supportive of each client's goals, objectives and long-term plans.

LB&Co advises the Compensation Committee on executive compensation matters and assists in developing and implementing our executive compensation program. LB&Co also informs the Compensation Committee on current trends to ensure the Compensation Committee is aware of evolving market conditions.

Brian K. Moore, who served as a member of the Compensation Committee in ~~2021~~2023 was an officer ~~or employee~~ of ~~ours,~~the Company and is currently the CEO, and Michael Y. McGovern, who served as a member of our Compensation Committee in ~~2021 served as interim Chief~~2023 is currently the Company’s Executive ~~Officer for part of 2021.~~
Chairman.

None of our executive officers serves or served during the last completed fiscal year as a director or member of the compensation committee of another organization one of whose executive officers serves or served at the same time as a member of either the Board or the Compensation Committee.

In ~~September 2021,~~2023, LB&Co was directed to compile an analysis of compensation for our key executives. Included in this analysis was a review of our “Peer Group”. In establishing the Peer Group, the Compensation Committee sought to include companies in similar industries, with applicable revenue scope, similar business characteristics and adequate executive compensation disclosures. For 2023, the Peer Group was unchanged from 2022 and made up of the following companies for comparison:

As part of a multi-faceted review process, competitive data was drawn from both the Peer Group and publicly available survey data in order to analyze where the Company’s compensation stands relative to the market in terms of base salary, short-term and long-term incentive targets and the resulting total estimated direct compensation (“TEDC”). Relative to the peer group analyses by position, all of Superior’s executives’ TEDC register at or below the median for the Peer Group and generally within the range of competitive practice. Target pay may vary from the median based on the executive’s industry experience, company experience and performance in his or her role, internal pay equity among our executives and other factors the Compensation Committee considers relevant, for example, the lack

of liquidity in the Company’s common stock. Overall, the Compensation Committee believes the compensation program of the Company’s executives to be competitive.

Officers and directors of the Company are encouraged to make a substantial investment in Company stock to further align the interests of officers, directors and stockholders. Accordingly, in December 2023 our Board established minimum stock ownership guidelines for officers and directors in the following amounts:

Each officer and director is expected to attain his or her ownership target within five years of appointment to such position. The Compensation Committee may, in its discretion, extend the period of time for attainment of such ownership levels in appropriate circumstances up to seven years. New hires or directors or executives newly appointed into a role subject to these guidelines would revert to the five year timeline. In December 2023 our Board extended such period to seven years for our current executive officers and directors.

The value of a share shall be measured as the greater of the then current market price or, if applicable, the closing price of a share of the Company’s common stock on the acquisition date.

For purposes of these guidelines, an officer’s or director’s stock ownership includes stock owned directly by the officer or director, restricted stock, stock deferred under any deferral plan and stock held in trust for the officer or director and his or her immediate family.

During 2023, the Company continued to evolve the executive compensation program in response to changing market conditions. The equity awards and employment agreements granted and entered into in 2022 identified the future executive leadership, including the CEO, CFO and business unit leaders, of the Company and were intended to provide stability for the organization and retain key executives to support the positioning of the Company for success. The employment agreements were not amended in 2023 and remain in effect, but, as further discussed below, the Company modified its approach to executive compensation in 2023 to better achieve the Company’s stability and success.

As discussed above in Part II, on December 18, 2023, the Company filed the Restated Certificate and the Class B Common Stock of the Company was reclassified as Class A Common Stock of the Company. The Reclassification helps strengthen the relationship between shareholder return and executive compensation by creating a single class of common stock. On December 15, 2023, in connection with, and in order to incorporate the changes related to, the Reclassification, the Board and the Compensation Committee amended the Company’s 2021 Management Incentive Plan to define the term “Common Stock” to mean the Class A Common Stock (and any stock or other securities into which such common stock may be converted or into which they may be exchanged).

In addition, on December 15, 2023, the Board and the Compensation Committee approved retention bonus agreements (the “Retention Bonus Agreements”) for each of Messrs. Moore, Spexarth, Delahoussaye and Ellis and Ms. Toups (each, an “Executive”) pursuant to which each Executive is eligible to earn a cash retention bonus (each, a “Retention Bonus” and collectively, the “Retention Bonuses”) in the amounts set forth in the table below, payable in four equal semi-annual installments beginning on March 15, 2024, subject generally to the Executive’s continued employment on each payment date.

Pursuant to the Retention Bonus Agreement, as a condition to the grant of the Retention Bonus, each Executive agreed to forfeit all performance stock units (“PSUs”) granted pursuant to an award agreement effective as of March 28, 2022 in the case of Messrs. Moore, Spexarth and Delahoussaye and Ms. Toups, and effective as of July 18, 2022 in the case of Mr. Ellis (each, a “PSU Award Agreement”). Upon execution of the Retention Bonus Agreement, all rights and obligations under the PSU Award Agreement were forfeited and

terminated and the PSUs granted thereunder were cancelled and are of no further force or effect. The PSUs were subject to termination and forfeiture for no consideration in the event no strategic transaction occurred prior to March 23, 2025. The cancellation, along with the Retention Bonuses, ensure motivation and retention as the Company embarks on its longer-term strategy given that the Company has not yet executed a strategic transaction of the type contemplated by the PSU Award Agreements. Under the Retention Bonus Agreements, payments are structured as four equal installments in March and September of 2024 and 2025 thus extending the duration of retention incentives further into 2025.

As discussed in last year’s CD&A, the equity-based compensation awards granted to our NEOs in 2022 were intended to cover a three year period in lieu of customary annual awards. This intent continues to apply even after the Company adjusted its approach to executive compensation by cancelling the PSUs granted in 2022 and awarding the Retention Bonuses. Accordingly, no equity or equity-based compensation awards were granted to our NEOs in 2023.

The three main components of the executive compensation program for ~~the portion of 2021 after the Emergence Date~~2023 were base salary, annual incentive plan (“AIP”) awards, ~~long-term incentive awards under~~and the ~~Management Incentive Plan (as defined below) and compensation bonus awards. For the portion of 2021 prior to the Emergence Date, the main component of executive compensation consisted of base salary.~~Retention Bonuses.

The primary role of the base salary element of the executive compensation program during ~~2021~~2023 was to compensate executives for the experience, accomplishments, education, personal qualities and other qualifications that were key for their specific ~~role.~~roles as well as their level of responsibility. The Compensation Committee monitors and adjusts salaries for our NEOs over time as necessary to remain competitive with the base salaries of executive officers of members of our Peer Group in order to retain and to continue to develop key talent. For additional salary information, see the ~~2021 summary compensation~~2023 Summary Compensation Table below.

Messrs. Delahoussaye and Ellis and Ms. Toups each received base salary increases in February 2023 to remain consistent with market trends. The table ~~below.~~below summarizes each NEO’s base salary for 2022 and 2023:

In connection with naming Mr. McGovern as our Executive Chairman on April 23, 2021, the Board approved total cash compensation payable to Mr. McGovern in an annual amount of $1,500,000, equivalent to a $750,000 base salary and a deemed achievement of bonus at target of 100% of base salary, to be paid on a monthly basis during the period Mr. McGovern performed the functions of principal executive officer, retroactive to March 16, 2021, the effective date that he was deemed to have begun performing such functions. Any annual cash retainer Mr. McGovern would receive for serving as a director was suspended for the period spent as principal executive officer.

In July 2021, certain salary adjustments were made to base salaries. Ms. Toups received an increase from $286,200 to $350,000 in conjunction with her significantly increased responsibilities as President of the newly consolidated Rental & Specialty group comprised of three separate business units. The increase also considered the 10% salary reduction taken in April 2020. Mr. Edwards received an increase from $262,000 to $300,000 in conjunction with his significantly increased responsibilities as General Counsel and Corporate Secretary and also considered the 10% salary reduction taken in April 2020.

Mr. Delahoussaye received a salary increase from $270,000 to $285,000 as a market adjustment in July 2021. In August 2021, Mr. Delahoussaye received a salary increase from $270,000 to $325,000 in connection with his promotion to Vice President of Workstrings International and business unit organizational changes and took into consideration his 15% salary reduction in April 2020. Mr. Delahoussaye received a salary increase from $325,000 to $375,000 when named as the President of Workstrings International in September 2021.

In connection with being named Executive Vice President, Chief Financial Officer and Treasurer, effective August 19, 2021, Mr. Spexarth's annual cash base salary was increased from $278,500 to $425,000 in consideration of market analysis and the 15% salary reduction in April 2020.

The purpose of the AIP is to focus management’s attention on key financial metrics that drive our performance and to reward executives for achievement of annual ~~financial~~ objectives. Furthermore, the AIP is part of a comprehensive compensation program that aligns pay to performance by making a substantial portion of total executive compensation variable, or “at-risk.” The target AIP opportunity for each NEO is 75% of base salary, with the exception of Mr. Moore, for which it is 105%, Mr. Spexarth, for which it is 80%, and Mr. McGovern, who does not participate in the AIP.

Although the Compensation Committee sets annual incentive target levels that result in target-level payouts when performance objectives are met (subject to the target annual incentive award opportunity provided for in Messrs. Moore’s and Spexarth’s employment agreements), our program ~~provides executives with~~may pay out below or above target, contingent upon the ~~opportunity~~Company’s performance relative to ~~earn higher payments depending~~the Compensation Committee and Board approved goals, which are set annually based on our operating plan.

At the ~~extent to which these~~beginning of each year, our Compensation Committee is responsible for reviewing and recommending for approval by our Board quantifiable corporate performance objectives ~~are achieved or exceeded if~~and the relative weighting of those metrics. At the end of each year, the Compensation Committee reviews the Company’s performance results against these objectives. Payments in respect of the 2023 AIP awards were approved by the ~~Board.~~Compensation Committee in March 2024 based upon EBITDA-based metrics set at the beginning of 2023.

Under the AIP, our NEOs (other than Mr. McGovern) are eligible to earn a payout based on a target percentage of their base salary. Given the activity in the oil and gas industry, the Compensation Committee also established what it believed was an appropriate EBITDA target of ~~$95.8~~301.0 million for

~~2021~~ 2023 given the evolving market landscape. This ~~challenging~~ performance goal was designed to help achieve a balance between stockholder returns and executive ~~compensation.~~compensation and tie a significant portion of compensation directly to our operating and

100% of the total payout of the AIP is based on the achievement of the foregoing EBITDA target. The 2021 overall incentive payout is 35% of each NEO’s target award opportunity based on this factor. For 2021, the maximum payout to each NEO under the AIP was capped at 50% of the typical target payout. Under the AIP, the CEO is granted discretion to propose adjustments to targets or propose adjustments to results for exceptional items during the program subject to Compensation Committee approval.

~~As noted previously, the Compensation Committee determined to use EBITDA as the primary~~ financial ~~metric for the AIP.~~performance. As a financial metric, EBITDA is closely linked to cash flow and encourages management to focus on improving efficiency from existing operations.

For 2023, 100% of the total payout of the AIP was based on the achievement of the EBITDA target, and each eligible NEO’s payout levels are summarized below. The financial metric provides for threshold, target, overachievement and maximum payout levels, expressed as a percentage of salary based upon the achievement of ~~70%, 100% and 130% of~~ the EBITDA target.

~~The possible total award payout levels for 2021, stated as a percentage of the named executive officer’s base salary, are set forth in the table below.~~

~~On June 1, 2021,~~Based on the ~~Board and~~Company’s EBITDA results for 2023, all NEOs (with the ~~Compensation Committee approved and adopted our Management Incentive Plan (“MIP”). The purpose~~exception of Mr. McGovern, who does not participate in the ~~MIP is to provide~~AIP) received a means through which we and our affiliates may attract and retain key personnel and to provide a means whereby directors, officers and employees (and prospective directors, officers and employees) can acquire and maintain an equity interest in us, or be paid incentive compensation, which may (but need not) be measured by reference to the value of a share of common stock, thereby strengthening their commitment to the welfare of us and our affiliates and aligning their interests with those of our stockholders.

~~Pursuant to the MIP, the Compensation Committee may grant awards with respect to up to 1,999,869 shares of our Class B common stock.~~

~~On June 2, 2021, the Board and the Compensation Committee approved the grant of restricted stock awards~~bonus under the ~~MIP~~AIP in 2024 in an amount equal to ~~certain~~a figure between the applicable target and over achievement percentage of ~~our non-employee directors and officers, including Messrs. McGovern, Spexarth and Edwards.~~base salary.

One-third of the shares underlying each restricted stock award will vest on each of April 1, 2022 and the second and third anniversaries of the grant date, subject to earlier vesting and forfeiture on terms and conditions set forth in the applicable award agreement.

On November 23, 2021, the Board and Compensation Committee approved the grant of restricted stock unit (“RSU”) awards under the MIP to Messrs. Spexarth, Edwards, and Delahoussaye and Ms. Toups. Each of Mr. Spexarth’s, Mr. Edwards’ and Ms. Toups’s RSU awards will become 100% vested on January 7, 2023 and Mr. Delahoussaye’s RSU award will become 100% vested on February 19, 2023, in each case subject to earlier vesting and forfeiture on terms and conditions set forth in the applicable award agreement.

~~The number of restricted stock awards and RSUs granted to each of our NEOs in 2021 is set forth in the table below:~~

~~The following table shows the 2021 MIP award value of the 2021 MIP grants. The amounts below reflect the 2021 MIP grant values used at the time to determine award amounts.~~

In addition to base salary and AIP and MIP awards described above, on April 1, 2021, the Board authorized and awarded a compensation bonus award to Mr. Spexarth in the amount of $125,000, which was paid on August 15, 2021. The compensation bonus award was made in connection with naming Mr. Spexarth as our Interim Chief Financial Officer in order to compensate Mr. Spexarth for his increased responsibilities. Mr. Spexarth did not receive an increase in base salary in connection with his appointment as Interim Chief Financial Officer.

The following table summarizes the compensation awarded to, earned by, or paid to each NEO for the years ended December 31, ~~2021, 2020~~2023, 2022 and 2019. All of the stock and option awards reflected in the table for fiscal years 2019 and 2020 were surrendered in connection with participation in the Key Employee Retention Program (the “KERP”), which was implemented in connection with the bankruptcy and paid to the named executive officers in 2020 in the amounts reflected in the KERP column.2021.

The following table presents additional information regarding ~~the AIP, RSU and restricted stock~~non-equity incentive plan awards granted to NEOs under the 2023 AIP during the year ended December 31, ~~2021.~~2023.

Relocation compensation for Mr. Delahoussaye resulted from his move from Houston, Texas to Broussard, Louisiana, upon assuming the role of president of Workstrings International. Other compensation for Mr. Dunlap and Mr. Ballard was paid upon execution of a waiver and release of claims against the Company. Severance included benefits continuation for two years, including ArmadaCare Supplemental Executive Medical coverage. ArmadaCare was terminated for all executives effective December 31, 2021.no further force or effect.

~~The restricted stock awards vest equally on~~On March 28, 2022, the Board and the Compensation Committee approved employment agreements for each of ~~April 1,~~Messrs. Moore, Spexarth, Delahoussaye and Ms. Toups, which superseded and replaced their existing employment agreements with the Company, except for Mr. Delahoussaye who was not a party to an employment agreement with the Company, and in Mr. Moore’s case also superseded his binding term sheet with the Company disclosed in the Company’s Current Report on Form 8-K filed on January 24, 2022. Mr. Moore’s employment agreement provides for an annual base salary of $750,000 and a target annual incentive award opportunity of 100% of his annual base salary. Mr. Spexarth’s employment agreement provides for an annual base salary of $425,000 and a target annual incentive award opportunity of 70% of his annual base salary. Messrs. Delahoussaye’s and Ellis’ and Ms. Toups’ employment agreements provide for an annual base salary no lower than his or her current annual base salary as of the effective date of

the applicable employment agreement. Please refer to the CD&A for information on the NEOs annual base salaries for 2023. On July 18, 2022, the Board and the ~~second and third anniversaries~~compensation committee approved an executive chairman agreement for Michael Y. McGovern, the Company’s Executive Chairman (the “Executive Chairman Agreement”), which provides for an annual base salary of $750,000, with an initial one-year term that automatically extends for an additional one-year term on the first anniversary of the ~~grant~~effective date of ~~June 2, 2021,~~the Executive Chairman Agreement unless either party gives 60 days’ prior written notice of non-renewal before expiration of the then-current term. Mr. McGovern’s annual base salary is subject to ~~earlier vesting and forfeiture on terms and conditions set forth in~~adjustment (upward or downward) if Mr. McGovern’s duties or commitments change during the ~~applicable award agreement. The RSUs vest 18 months from~~term of the ~~date of grant, July 7, 2021 (August 19, 2021 for Mr. Delahoussaye), subject to earlier vesting and forfeiture on terms and conditions set forth in the applicable award agreement.~~Executive Chairman Agreement.

Each NEO’s base salary and annual bonus for 2023, as a percentage of total compensation varied, depending on the position. For Mr. McGovern, salary and annual bonus represented approximately 98.2% of total compensation. For Mr. Moore, salary and annual bonus represented approximately 98.7% of total compensation. For Mr. Spexarth, salary and annual bonus represented approximately 97.3% of total compensation. For Mr. Delahoussaye, salary and annual bonus represented approximately 98.0% of total compensation. For Mr. Ellis, salary and annual bonus represented approximately 88.4% of total compensation. For Ms. Toups, salary and annual bonus represented approximately 96.9% of total compensation.

The following table sets forth the outstanding equity awards held by our NEOs as of December 31, ~~2021.~~2023.

The following table presents information regarding the vesting of restricted stock awards and RSUs held by our NEOs during 2023.

None of the NEOs participated in any defined benefit pension plans in ~~2021.~~2023.

With regard to the NQDC Plan, participant accounts are treated as if invested in one or more investment vehicles selected by the participant. The annual rate of return for these funds for fiscal year 2023 was as follows:

The Supplemental Executive Retirement Plan (SERP) provided retirement benefits to executive officers and certain other designated key employees. The SERP is an unfunded, non-qualified defined contribution retirement plan and all contributions under the SERP are in the form of credits to a notional account maintained for each participant.

The Nonqualified Deferred Compensation Plan (NQDC Plan) provides an income deferral opportunity for executive officers and certain senior managers who qualify for participation.

With regard to the NQDC Plan, participant contributions are treated as if invested in one or more investment vehicles selected by the participant. The annual rate of return for these funds for fiscal year 2021 was as follows:

Because our NEOs became NEOs at different times and under different circumstances, the compensation and benefits awarded to our individual NEOs in the event of termination or a change ofin control varies. Below is a description of the employment agreements ~~change in control severance plan~~ and other arrangements in place with each of our NEOs.

~~Waiver and Release~~Employment Agreements ~~of Messrs. Dunlap and Ballard.~~ ~~In connection with their resignations,~~. Mr. ~~Dunlap~~Moore’s and Mr. ~~Ballard~~Spexarth’s employment agreements each ~~entered into a waiver and release in favor~~have an initial three-year term that automatically extends for an additional one-year term unless either party gives 60 days’ prior written notice of non-renewal before expiration of the ~~Company. In exchange~~then-current term. Mr. Delahoussaye’s and Ms. Toups’ employment agreements each have an initial two-year term that automatically extends for ~~executing their release,~~an additional one-year term unless either party gives 60 days’ prior written notice of non-renewal before expiration of the then-current term.

Mr. Ellis’ employment agreement has an initial two-year term that automatically extends for an additional one-year term unless either party gives 60 days’ prior written notice of non-renewal before expiration of the then-current term.

Executive Chairman Agreement for Mr. McGovern. The Executive Chairman Agreement has an initial one-year term with an automatic extension for an additional one-year term on the first anniversary of the effective date and each subsequent anniversary thereafter, unless either the Company or Mr. McGovern gives 60 days’ prior written notice of non-renewal before the next anniversary of the effective date.

The termination and change in control payments and benefits provided for in the employment agreements and Executive Chairman Agreement for our NEOs are described below.

~~Termination without Cause or for Good Reason in Connection with a Change of Control~~

Termination without Cause or for Good Reason in Connection with a Change in Control

The payments and benefits described above are subject to the NEO’s timely execution of a release of claims in favor of us. Each employment agreement includes an indefinite confidentiality and protection of information covenant and a mutual one-year non-disparagement covenant. Upon termination of employment by us for cause or resignation without good reason, ~~Mr. Spexarth and Ms. Toups~~each NEO will ~~each~~ be bound by a non-competition and non-solicitation covenant for one year after the date of their ~~termination, and Mr. Edwards will be bound by a non-competition and non-solicitation covenant for 9 months after the date of his~~ termination.

~~Mr. Spexarth is the only NEO who participates in our Change of Control Severance Plan.~~

As of December 31, 2021, he was eligible to receive certain cash severance payments upon a termination of employment without cause or for good reason that occurs within 6 months before or 24 months after a change of control. The potential severance payments due under the plan are determined as of the date of the change of control, based on a “sharing pool” that is calculated as a percentage of the transaction value (with the sharing pool increasing or decreasing as the transaction value increases or decreases, respectively). We do not provide excise tax gross-ups under our severance plan.

Subsequent to December 31, 2021, all Change of Control Severance Plan participants, including Mr. Spexarth, consented to the Compensation Committee’s termination of the Severance Plan in accordance with Section 7.2 of the Severance Plan and waived their right to receive the severance payments and benefits thereunder.

~~Calculation of change of control severance benefits.~~ The severance benefit under the Change of Control Severance Plan is equal to each participant’s portion of the total cash available in the sharing pool. Each participant’s severance benefit will be determined based on the date of the change of control. The plan is designed to ensure that each participant receives the same percentage of the total net after-tax benefit that would be received by all participants under the plan as the participant’s percentage interest, and the total net after-tax benefit received by all participants is maximized.

~~Determination of sharing pool.~~ The total severance benefits payable under the plan may not exceed the “sharing pool.” The sharing pool is determined based on the transaction value, as defined in the plan, at the time of the change of control as follows:

With respect to the restricted stock award granted to Mr. Spexarth in 2021, upon the termination of ~~an NEO’s~~his employment ~~without cause~~ by the Company ~~by the NEO for “good reason”~~without “cause” (as defined in the ~~NEO's applicable~~MIP), by Mr. Spexarth for “good reason” (defined in the MIP to have the same meaning as his employment ~~agreement, if any)~~agreement) or due to Mr. Spexarth’s “disability” (as defined in the ~~NEO’s disability, the NEO~~MIP), Mr. Spexarth will vest in a pro rata portion of ~~the NEO’s~~his unvested restricted ~~stock and RSU awards.~~stock. Such pro rata portion will be determined by dividing the number of days that elapsed ~~since~~from the ~~award~~vesting date immediately preceding Mr. Spexarth’s termination date (or, if none, the grant ~~date~~date) through the ~~NEO’s~~ termination date by ~~the number of days from the grant date through the original vesting date.~~365. In addition, ~~an NEO’s~~Mr. Spexarth’s outstanding 2021 restricted stock ~~and RSU awards~~award will become 100% vested upon his ~~or her~~ death or the occurrence of a “change in control” (as defined in the MIP) (subject to his continued employment immediately prior to such change in control).

The RSUs granted to Messrs. Moore, Spexarth, Delahoussaye, Ellis and Ms. Toups do not provide for any accelerated vesting in the event of a termination of the NEO’s employment. With respect to the RSUs granted to Mr. McGovern, in the event that Mr. McGovern’s employment is terminated by the Company without “cause” (excluding due to death or disability (as defined in the Executive Chairman Agreement)) or by Mr. McGovern for “good reason” (as defined in the Executive Chairman Agreement), subject to Mr. McGovern’s timely execution of a release of claims in favor of the Company and continued compliance with his restrictive covenants, the tranche of RSUs scheduled to vest on the next scheduled vesting date following the date of termination (i.e., one third (1/3rd)) will vest. In addition, Mr. McGovern’s RSU award will become 100% vested upon the occurrence of a change in control, ~~provided~~subject to Mr. McGovern’s continued employment as of the ~~NEO is employed by us at~~date of such change in control. The RSU awards granted to the ~~time.~~NEOs (other than Mr. McGovern) do not automatically vest upon a change in control.

The Retention Bonus Agreements provide that if a “change in control” (as defined in the MIP) occurs prior to September 15, 2025 or if the NEO’s employment is terminated by the Company without “cause” as defined in the MIP prior to September 15, 2025, then any unpaid portion of the Retention Bonus will accelerate and be payable to the NEO, less applicable tax withholding, on the consummation of such change in control or on the date of termination, as applicable, subject to, in the event of a change in control, the NEO’s continued employment through and including the consummation of such change in control

We do not provide excise tax gross ups under any employment agreement or equity award ~~or the Change of Control Severance Plan~~ discussed above. Each of the employment agreements discussed above, ~~and~~as well as the ~~Change of Control Severance Plan~~Executive Chairman Agreement, provides for a “best net” approach in the event that severance and other payments and benefits result in “excess parachute payments” under Internal Revenue Code Section 280G. Under a “best net” approach, the NEO’s payments and benefits will be reduced to avoid triggering excise tax if the reduction would result in a greater after-tax amount for the NEO compared to the amount he or she would receive net of the excise tax if no reduction were made.

Except as otherwise noted, the following table quantifies the potential payments to our NEOs under their employment arrangements and equity awards ~~our Change of Control Severance Plan~~ discussed above and the SERP and the NQDC Plan, as described above, for various scenarios involving a change ofin control or termination of employment of each of our NEOs in such position at the end of the year, assuming a December 31, ~~2021~~2023 termination date and where applicable, using the estimated fair market ~~values~~value as of December 31, ~~2021~~2023 of ~~$39.53~~$65.52 per share of our ~~Class A common stock and $39.53 per share of our Class B~~ common stock. Excluded are benefits provided to all employees, such as accrued vacation and benefits provided by third parties under our life and other insurance policies. Also excluded are benefits our NEOs would receive upon termination of employment under our 401(k) plan.

Table of Contents

Name

Termination without Cause

Resignation for Good Reason

Termination without Cause / for Good Reason in Connection with a Change of
Control

Change of Control Alone

Voluntary Termination

Death

Disability

Current NEOs

Michael Y. McGovern

Restricted Stock Acceleration

$
-

$
-

$
927,492

$
927,492

$
-

$
-

$
-

RSU Acceleration

-

-

-

-

-

-

-

Total

$
-

$
-

$
927,492

$
927,492

$
-

$
-

$
-

James W. Spexarth

Severance Pay

$
1,147,500

n/a

$
5,973,000

n/a

n/a

n/a

n/a

Prorated Bonus (at target)

148,750

n/a

148,750

n/a

n/a

n/a

n/a

SERP

86,154

86,154

86,154

n/a

86,154

86,154

86,154

NQDC Plan

471,639

471,639

471,639

n/a

471,639

471,639

471,639

Restricted Stock Acceleration

72,298

n/a

309,994

309,994

n/a

309,994

72,298

RSU Acceleration

161,207

n/a

500,015

500,015

n/a

500,015

161,207

COBRA Payments

36,359

n/a

36,359

n/a

n/a

n/a

n/a

Outplacement

n/a

n/a

10,000

n/a

n/a

n/a

n/a

Total

$
2,123,907

$
557,793

$
7,535,911

$
810,009

$
557,793

$
1,367,802

$
791,298

Blaine D. Edwards

Severance Pay

$
303,750

n/a

$
607,500

n/a

n/a

n/a

n/a

Prorated Bonus (at target)

105,000

n/a

105,000

n/a

n/a

n/a

n/a

NQDC Plan

60,028

60,028

60,028

n/a

60,028

60,028

60,028

Restricted Stock Acceleration

72,298

n/a

309,994

309,994

n/a

309,994

72,298

RSU Acceleration

161,207

n/a

500,015

500,015

n/a

500,015

161,207

COBRA Payments

11,731

n/a

23,462

n/a

n/a

n/a

n/a

Total

$
714,014

$
60,028

$
1,605,999

$
810,009

$
60,028

$
870,037

$
293,533

Michael J. Delahoussaye

Severance Pay (1)

93,750

n/a

93,750

-

-

-

Restricted Stock Acceleration

RSU Acceleration

124,078

n/a

500,015

500,015

n/a

500,015

124,078

Total

$
217,828

$
-

$
593,765

$
500,015

$
-

$
500,015

$
124,078

Deidre D. Toups

Severance Pay

$
472,500

n/a

$
945,000

n/a

n/a

n/a

n/a

Prorated Bonus (at target)

122,500

n/a

122,500

n/a

n/a

n/a

n/a

SERP

370,354

370,354

370,354

n/a

370,354

370,354

370,354

NQDC Plan

1,458,469

1,458,469

1,458,469

n/a

1,458,469

1,458,469

1,458,469

Restricted Stock Acceleration

RSU Acceleration

161,207

n/a

500,015

500,015

n/a

500,015

161,207

COBRA Payments

18,180

n/a

36,359

n/a

n/a

n/a

n/a

Total

$
2,603,210

$
1,828,823

$
3,432,697

$
500,015

$
1,828,823

$
2,328,838

$
1,990,030

Separated NEOs

David D. Dunlap

Severance Pay

$
3,655,010

SERP

1,543,233

NQDC Plan

660,193

COBRA Payments

44,065

Total

$
-

$
-

$
-

$
-

$
5,902,501

$
-

$
-

Westervelt T. Ballard, Jr.

Severance Pay

$
1,716,660

SERP

324,572

COBRA Payments

44,065

Total

$
-

$
-

$
-

$
-

$
2,085,297

$
-

$
-

~~(1)~~

~~Severance for Mr. Delahoussaye is not pursuant to an employment agreement.~~


Name	Termination without Cause		Resignation for Good Reason		Termination without Cause / for Good Reason in Connection with a Change of Control (1)		Change of Control Alone		Voluntary Termination		Death		Disability
Michael Y. McGovern
Severance Pay	$	408,904	$	408,904	$	-	$	-	$	-	$	-	$	-
RSU Acceleration		1,733,528		1,733,528		1,733,528		3,467,100		-		-		-
COBRA Payments		-		-		-		-		-		-		-
Total	$	2,142,432	$	2,142,432	$	1,733,528	$	3,467,100	$	-	$	-	$	-
Brian K. Moore
Severance Pay	$	3,075,000	$	3,075,000	$	3,075,000	$	-	$	-	$	-	$	-
Prorated Bonus (at target)		787,500		787,500		787,500		-		-		-		-
SERP		1,425,992		1,425,992		1,425,992		-		1,425,992		1,425,992		1,425,992
Retention Bonus Acceleration		6,750,000		-		6,750,000		6,750,000		-		-		-
COBRA Payments		32,380		32,380		32,380		-		-		-		-
Total	$	12,070,871	$	5,320,871	$	12,070,871	$	6,750,000	$	1,425,992	$	1,425,992	$	1,425,992
James W. Spexarth
Severance Pay	$	1,530,000	$	1,530,000	$	1,530,000	$	-	$	-	$	-	$	-
Prorated Bonus (at target)		340,000		340,000		340,000		-		-		-		-
SERP		93,453		93,453		93,453		-		93,453		93,453		93,453
NQDC Plan		531,090		531,090		531,090		-		531,090		531,090		531,090
Restricted Stock Acceleration		160,454		160,454		160,454		276,254		-		276,254		160,454
Retention Bonus Acceleration		1,544,963		-		1,544,963		1,544,963		-		-		-
COBRA Payments		49,519		49,519		49,519		-		-		-		-
Total	$	4,249,478	$	2,704,516	$	4,249,478	$	1,821,217	$	624,543	$	900,797	$	784,997
Michael J. Delahoussaye
Severance Pay	$	682,500	$	-	$	1,365,000	$	-	$	-	$	-	$	-
Prorated Bonus (at target)		292,500		-		292,500		-		-		-		-
Retention Bonus Acceleration		1,312,500		-		1,312,500		1,312,500		-		-		-
COBRA Payments		24,948		-		49,896		49,896		-		-		-
Total	$	2,312,448	$	-	$	3,019,896	$	1,362,396	$	-	$	-	$	-
Bryan M. Ellis
Severance Pay	$	580,000	$	-	$	1,190,000	$	-	$	-	$	-	$	-
Prorated Bonus (at target)		255,000		-		255,000		-		-		-		-
Retention Bonus Acceleration		1,326,000		-		1,326,000		1,326,000		-		-		-
COBRA Payments		24,948		-		37,358		37,358		-		-		-
Total	$	2,185,948	$	-	$	2,808,358	$	1,363,358	$	-	$	-	$	-
Deidre D. Toups
Severance Pay	$	638,750	$	-	$	1,225,000	$	-	$	-	$	-	$	-
Prorated Bonus (at target)		273,750		-		273,750		-		-		-		-
SERP		401,731		401,731		401,731		-		401,731		401,731		401,731
NQDC Plan		1,452,174		1,452,174		1,452,174		-		1,452,174		1,452,174		1,452,174
Retention Bonus Acceleration		1,200,000		-		1,200,000		1,200,000		-		-		-
COBRA Payments		24,948		-		37,358		37,358		-		-		-
Total	$	3,991,353	$	1,853,905	$	4,590,013	$	1,237,358	$	1,853,905	$	1,853,905	$	1,853,905

CEO Pay Ratio

The table below sets forth comparative information regarding (A) the ~~2021~~2023 annual total compensation of Mr. ~~McGovern, our Executive Chairman, who filled the position of interim Chief Executive Officer during 2021 beginning on March 16, 2021,~~Moore and (B) the ~~2021~~2023 annual total compensation of ~~our~~the median ~~employee, and (C) the ratio of our former CEO’s 2021 annual total compensation compared to the 2021 annual total compensation of our median~~ employee.

CEO Pay Ratio

CEO 2021 Annual Total Compensation (A)

$
2,528,910

Median Employee 2021 Annual Total Compensation (B)

48,569

Pay Ratio

52:1

~~Table of Contents~~


CEO Pay Ratio
CEO 2023 Annual Total Compensation	$	1,841,324
Median Employee 2023 Annual Total Compensation		76,027

Developments during ~~2021~~2023 required a review of the analysis to determine the median employee for comparison to determine the CEO pay ratio. The methodology used in identifying the ~~2021~~2023 median employee was substantially similar to prior period reviews. ~~However,~~As we did for ~~2021,~~2022, for 2023, no international employees were excluded under the 5% de minimis exception. We consistently applied the compensation measure of total taxable compensation which included base salary, overtime, bonuses paid in ~~2021,~~2023, long-term incentives granted in ~~2021~~2023 and all other types of taxable compensation. In the analysis, all part-time and full-time U.S. and non-U.S. employees who were employed by us as of December 31, ~~2021~~2023 were included.

Table of Contents

Approximately ~~2,300~~2,292 part-time and full-time U.S. and non-U.S. employees (other than Mr. ~~McGovern)~~Moore), who were employed as of December 31, ~~2021,~~2023, were included. December 31, ~~2021~~2023 was selected as the date to identify our median compensated employee. Given that we have global operations and employees located in many locations, pay and reporting systems and pay practices vary depending on the region. As a result, assumptions, adjustments and estimates were consistently applied to identify the annual total taxable compensation of the median compensated employee. International compensation was converted to USD for comparison purposes using conversion rates as of December 31, ~~2021.~~2023. Based on the methodology described above, the median employee is an hourly operations employee ~~(shop foreman)~~ who has worked for us for ~~four years.~~approximately a year and a half.

In ~~2021,~~2023, the median ~~compensated~~ employee earned an annual total compensation of ~~$48,569.~~$76,027. The ~~2021~~2023 annual total ~~annual~~ compensation for Mr. ~~McGovern (our Executive Chairman, who~~Moore was ~~acting as interim CEO as of the median employee identification date)~~$1,841,324. This amount equals Mr. Moore’s total compensation as reported in the Summary Compensation ~~Table was $2,528,910.~~Table. As a result, the pay ratio between our ~~interim~~ CEO’s annual total ~~annual~~ compensation and the median ~~compensated~~ employee’s annual total ~~annual~~ compensation was ~~52:~~25:1 in ~~2021.~~2023.

~~2021~~2023 Director Compensation

In ~~2021, prior to the Emergence Date,~~2023, the non-management directors received:

•

a retainer of ~~$43,750;~~$75,000;

•

an additional fee of ~~$5,000~~$20,000 for the chair of the Audit Committee;

•

an additional fee of ~~$3.750 for~~$15,000 or the chair of the Compensation Committee;

•

~~an additional fee of $2,500 for the chair of the Corporate Governance Committee;~~

•

~~an additional fee of $6,250 for the lead director; and~~

•

~~an additional fee of $31,250 for the non-executive chairman of the Board.~~

~~In 2021, subsequent to the Emergence Date, our non-management directors received:~~

•

~~an annual retainer of $75,000;~~

•

~~an additional annual fee of $20,000 for the chair of the Audit Committee; and~~

•

~~an additional annual fee of $15,000 for the chair of the Compensation Committee.~~

In addition, on June 2, 2021, the Board and the Compensation Committee approved the issuance of restricted stock awards to our directors, including 33,519 shares of restricted stock to our executive chairman of the Board, whose award is shown in the Summary Compensation table and Grants of Plan-Based Awards table above because of his position as one of our NEOs for 2021.

The table below summarizes the compensation for the year ended ~~2021~~2023 for non-management directors (regardless of when earned). All non-management directors were reimbursed for reasonable expenses incurred in attending Board and Board committee meetings.


Name	Fees Earned or Paid in Cash		Stock Awards		All Other Compensation		Total
Joseph Citarrella (1)	$	75,000	$	-	$	-	$	75,000
Daniel E. Flores (2)		75,000		-		-		75,000
Julie J. Robertson		90,000		-		-		90,000
Krishna Shivram		95,000		-		-		95,000
Timothy J. Winfrey (3)		75,000		-		-		75,000

Name

Fees Earned or
Paid in Cash

Stock
Awards (1)

All Other
Compensation (2)

Total

Joseph Citarrella (3)

$
67,962

$
-

$
-

$
67,962

Daniel E. Flores (4)

67,962

-

-

67,962

James M. Funk (5)

50,000

-

40,330

90,330

Terence E. Hall (5)

75,000

-

13,518

88,518

Peter D. Kinnear (5)

43,750

-

10,613

54,363

Janiece M. Longoria (5)

46,250

-

-

46,250

Michael M. McShane (5)

48,750

-

9,557

58,307

W. Matt Ralls (5)

47,500

-

12,011

59,511

Julie J. Robertson (4)

81,555

725,020

-

806,575

Krishna Shivram

86,086

725,020

-

811,106

Timothy J. Winfrey

67,962

725,020

-

792,982

~~100~~

~~Table of Contents~~

(1)

The aggregate grant date fair value of the restricted stock awards was calculated in accordance with FASB ASC Topic 718 and estimated to be $39.53 per share as of the grant date, June 2, 2021. The restricted stock awards vest on each of April 1, 2022 and the second and third anniversaries of the grant date, subject to earlier vesting and forfeiture on terms and conditions set forth in the applicable award agreement.

~~(2)~~

~~The amounts reported in the above All Other Compensation column represent Directors NQDC Plan lump-sum payments.~~

~~(3)~~

Compensation paid to Monarch Alternative Capital LP, and not to named director ~~individually~~individually.

~~(4)~~(2)

Compensation paid to GoldenTree Asset Management LP, and nonot to named director ~~individually~~individually.

~~(5)~~(3)

~~Pursuant~~Mr. Winfrey resigned from the Board effective January 26, 2024.

Director cash compensation is paid quarterly. There were no additional equity awards to directors in 2023 given the multi-year vesting schedule of the 2021 grants which were intended to compensate the directors for a three year period of service. On January 26, 2024, the Board and the Compensation Committee of the Board approved accelerated vesting with respect to 4,891 and 3,790 outstanding restricted shares of the Company’s Class A common stock granted pursuant to restricted stock awards under the Company’s 2021 Management Incentive Plan to Mr. Winfrey and Ms. Robertson, respectively, that would otherwise vest on June 2, 2024. On March 6, 2024, the Board and the Compensation Committee of the Board approved accelerated vesting with respect to 3,693 outstanding restricted shares of the Company’s Class A common stock granted pursuant to restricted stock awards under the Company’s 2021 Management Incentive Plan to Mr. Shivram that would otherwise vest on June 2, 2024. In addition, on February 15, 2024 we purchased 14,763 vested shares of our Class A common stock for $65.52 per share from Mr. Winfrey following his resignation from the Board in January 2024. Director compensation is structured to attract and retain experienced and qualified directors. The compensation reflects the time commitment of the role as well as the qualifications of the directors. At the end of 2023, the aggregate number of restricted stock awards for each non-management director and the full grant date fair value of such equity award granted to each director computed in accordance with ASC 718 is as follows:


Name	Number of Unvested Restricted Stock Awards Outstanding as of December 31, 2023		Fair Value as of December 31, 2023
Julie J. Robertson		3,790	$	248,343
Timothy J. Winfrey		4,891		320,458
Krishna Shivram		3,693		241,944

Directors and Officers (“D&O”) insurance insures our individual directors and officers against certain losses that they are legally required to bear as a result of their actions while performing duties on our behalf. Our D&O insurance policy does not break out the premium for directors versus officers and, therefore, a dollar amount cannot be assigned to the ~~Plan, as~~coverage provided for individual directors.

Table of ~~the Effective Date, named director ceased to serve on the Board.~~

Contents

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Shares were issued under our MIP, discussed above. The Compensation Committee designates participants in the plan, determines the types of cash and share based awards authorized by the plan to be issued to participants, and determines the terms of the individual forms of awards granted under the MIP, among other things. Pursuant to the MIP, the Compensation Committee is authorized to grant awards with respect to an aggregate of 1,999,869 shares of Class BA Common Stock.

The following table shows the number of shares of our Class A Common Stock beneficially owned by holders as of March ~~4, 2022~~7, 2024 known by us to beneficially own more than 5% of the outstanding shares of our common stock as well as our directors and executive officers.

The information in the table is based on information provided to us by the entities listed below as well as our transfer agent. ~~These stockholders acquired their shares of Class A Common Stock in connection with our emergence from bankruptcy discussed elsewhere in this Annual Report on Form 10-K.~~

We believe, based on information supplied by the stockholders, that except as may otherwise be indicated in the footnotes to the table below, the stockholders have sole voting and dispositive power with respect to the shares of Class A Common Stock reported as beneficially owned by them.

Upon our emergence from Chapter 11 bankruptcy, all existing equity was cancelled and we issued the ~~Class A Common Stock. As a result, our directors and executive officers are not currently beneficial owners of any shares of our outstanding~~ Class A Common Stock. The address of directors and officers is in care of Superior Energy Services, Inc., 1001 Louisiana Street, Suite 2900, Houston, Texas 77002.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Our practice has been that any transaction which would require disclosure under Item 404(a) of Regulation S-K of the rules and regulations of the SEC, with respect to a director or executive officer, must be reviewed and approved by the Audit Committee.

On the Emergence Date, in order to implement the governance related provisions reflected in the Plan, we entered into a Stockholders Agreement to provide for certain governance matters, which is further discussed in Item 10 in this Annual Report on Form 10-K.

On February 15, 2024 we purchased 14,763 shares of our Class A Common Stock for $65.52 per share from Timothy J. Winfrey, a former director that resigned from the Board in January 2024. Because the purchase was from a former director, Audit Committee approval was not required by our practice described above; however, the purchase was unanimously approved by our directors.

The following table presents fees for professional audit services rendered by our Independent Registered Public Accounting Firm for the audits of our annual financial statements for ~~2021, 2020~~the years ended December 31, 2023, 2022 and ~~2019,~~2021, and fees billed for other services rendered. Our Independent Registered Public Accounting Firm for the ~~financial statements ended December 31, 2021 was PricewaterhouseCoopers LLP (“PWC”) and for the~~ years ended December 31, ~~2020~~2023 and ~~2019~~2022 and 2021 was KPMG LLP (“KPMG”). During the year ended December 31, 2021, KPMG provided audit services relates to the years ended December 31, 2020 and 2019 due to the recasting of our prior period financial statements for the presentation of assets held for sale and discontinued operations.PricewaterhouseCoopers LLP.

The following documents have been included in Part II, Item 8 of this Annual Report on Form 10-K:

All other schedules have been omitted because they are inapplicable or not required or the information is included elsewhere in the consolidated financial statements or notes thereto.

Pursuant to the requirements of Section 13 or 15(d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



Delaware		~~75-2379388~~87-4613576
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1001 Louisiana Street, Suite 2900
Houston, TX		77002
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading symbol	Name of each exchange on which registered
None	N/A	None



Large accelerated filer ¨		Accelerated Filer ¨
Non-accelerated filer x		Smaller reporting company ¨
		Emerging growth company ¨



			Page
PART I

	Item 1	Business	5
	Item 1A	Risk Factors	1310
	Item 1B	Unresolved Staff Comments	22
	Item 1C	Cybersecurity	2522
	Item 2	Properties	2523
	Item 3	Legal Proceedings	2523
	Item 4	Mine Safety Disclosures	2523

PART II

	Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	26
	~~Item 6~~	~~Selected Financial Data~~	2624
	Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2725
	Item 7A	Quantitative and Qualitative Disclosures about Market Risk	4133
	Item 8	Financial Statements and Supplementary Data	4234
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8571
	Item 9A	Controls and Procedures	8571
	Item 9B	Other Information	8672
	Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	72

PART III

	Item 10	Directors, Executive Officers and Corporate Governance	8672
	Item 11	Executive Compensation	8874
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~101~~87
	Item 13	Certain Relationships and Related Transactions, and Director Independence	~~102~~88
	Item 14	Principal Accounting Fees and Services	~~102~~88

PART IV

	Item 15	Exhibits, Financial Statement Schedules	~~104~~89


~~"Predecessor Period"~~		~~January 1, 2021 through February 2, 2021~~
~~"Successor Period"~~		~~February 3, 2021 through December 31, 2021~~



	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the fiscal year ended December 31, ~~2021~~2023



o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the Transition Period from ________ to _______


	Successor			Predecessor			Non-GAAP			Predecessor
	For the Period February 3, 2021 through December 31, 2021			For the Period January 1, 2021 through February 2, 2021			For the Combined Year ended December 31, 2021			For the Year Ended December 31, 2020			Change

Revenues	$	648,754		$	45,928		$	694,682		$	667,249		$	27,433

Cost of revenues		422,252			29,773			452,025			408,131			43,894
Depreciation, depletion, amortization and accretion		219,859			8,358			228,217			115,771			112,446
General and administrative expenses		117,575			11,052			128,627			205,773			(77,146	)
Restructuring expenses		22,952			1,270			24,222			47,055			(22,833	)
Other expenses		16,726			-			16,726			-			16,726
Reduction in value of assets		-			-			-			23,775			(23,775	)
Loss from operations		(150,610	)		(4,525	)		(155,135	)		(133,256	)		(21,879	)

Other income (expense):
Interest income (expense), net		2,331			202			2,533			(92,426	)		94,959
Reorganization items, net		-			335,560			335,560			(19,520	)		355,080
Other expense		(7,128	)		(2,105	)		(9,233	)		(9,229	)		(4	)
Income (loss) from continuing operations before income taxes		(155,407	)		329,132			173,725			(254,431	)		428,156
Income tax (expense) benefit		33,298			(60,003	)		(26,705	)		26,888			(53,593	)
Net income (loss) from continuing operations		(122,109	)		269,129			147,020			(227,543	)		374,563
Loss from discontinued operations, net of income tax		(40,069	)		(352	)		(40,421	)		(168,687	)		128,266
Net income (loss)	$	(162,178	)	$	268,777		$	106,599		$	(396,230	)	$	502,829


	December 31, 2021		December 31, 2020
Finished goods	$	26,187	$	35,074
Raw materials		9,753		5,139
Work-in-process		4,253		2,994
Supplies and consumables		20,410		33,820
Total	$	60,603	$	77,027


	December 31, 2023			December 31, 2022
Wells	$	96,603		$	96,171
Platform		73,680			64,500
Total decommissioning liability		170,283			160,671
Note receivable		(69,005	)		(69,679	)
Total decommissioning liability, net of note receivable	$	101,278		$	90,992


2022	$	8,002
2023		5,735
2024		3,611		$	6,998
2025		2,905			5,242
2026		1,854			2,467
2027					997
2028					832
Thereafter		16,628			14,909
Total lease payments		38,735			31,445
Less imputed interest		(13,892	)
Less: imputed interest					(15,671	)
Total	$	24,843		$	15,774


	Successor
	For the Period February 3, 2021 through December 31, 2021
Restricted stock awards	$	2,071
Restricted stock units		639
Cash-based PSUs (1)		(1,268	)
Total compensation expense		1,442
Related income taxes		(335	)
Total compensation expense, net of income taxes	$	1,107


	Successor Fair Value at
	December 31, 2021
	Level 1		Level 2		Level 3		Total
Non-qualified deferred compensation assets and liabilities
Intangible and other long-term assets, net	$	0	$	15,896	$	-	$	15,896
Accounts payable		-		2,250		-		2,250
Other long-term liabilities		-		19,218		-		19,218

Investment in equity securities	$	25,735	$	-	$	-	$	25,735

	Predecessor Fair Value at
	December 31, 2020
	Level 1		Level 2		Level 3		Total
Non-qualified deferred compensation assets and liabilities
Intangible and other long-term assets, net	$	-	$	15,013	$	-	$	15,013
Accounts payable		-		2,869		-		2,869
Other long-term liabilities		-		20,697		-		20,697

Total debt	$	409,050	$	-	$	-	$	409,050


Name	Age	Offices Held and Term of Office
Michael Y. McGovern (1)	7072	Executive Chairman of the Board ~~of Directors~~ since March 2021
Brian K. Moore	6567	President and Chief Executive Officer since January 2022, Executive Vice President of Corporate Services from April 2016 to January 2022, Senior Executive Vice President of North America Services from February 2012 to March 2016
James W. Spexarth	5456	Executive Vice President and Chief Financial Officer since August 2021, Interim Chief Financial Officer from March 2021 to August 2021, Chief Accounting Officer since March 2018, Vice President and Corporate Controller from August 2013 to February 2018


Name		Offices Held
~~Current NEOs~~
Michael Y. McGovern		Executive Chairman ~~Interim~~
Brian K. Moore		President, Chief Executive Officer ~~for 2021~~
James W. Spexarth		Executive Vice President, Chief Financial Officer and Treasurer
~~Blaine D. Edwards (1)~~		~~Executive Vice President, General Counsel and Secretary~~
Michael J. Delahoussaye		President, Workstrings International
Bryan M. Ellis		President, Wild Well Control, International Snubbing Services, and International Production Services
Deidre D. Toups		President, ~~Specialized Rental~~Stabil Drill, Superior Completion Services, and ~~Services Division~~
~~Separated NEOs~~
~~David D. Dunlap~~		~~Former President and Chief Executive Officer~~
~~Westervelt T. Ballard, Jr.~~		~~Former Executive Vice President, Chief Financial Officer and Treasurer~~HB Rentals


Chief Executive Officer		Common stock equivalent to 5 times base salary
Other Executives		Common stock equivalent to 3 times base salary
Independent Non-Employee Directors		Common stock equivalent to 5 times the annual cash retainer


Executive	Retention Bonus
Brian K. Moore	$	6,750,000.00
James W. Spexarth		1,544,962.50
Michael J. Delahoussaye		1,312,500.00
Bryan M. Ellis		1,326,000.00
Deidre Toups		1,200,000.00


Name	2022 Base Salary		2023 Base Salary
Mr. McGovern	$	750,000	$	750,000
Mr. Moore		750,000		750,000
Mr. Spexarth		425,000		425,000
Mr. Delahoussaye		375,000		390,000
Mr. Ellis		325,000		340,000
Ms. Toups		350,000		365,000


NEO	Threshold	Target	Maximum
Current NEOs
Mr. McGovern	0%	0%	0%
Mr. Spexarth	17.5%	35%	70%
Mr. Edwards	17.5%	35%	70%
Mr. Delahoussaye	17.5%	35%	70%
Ms. Toups	17.5%	35%	70%
Separated NEOs
Mr. Dunlap	0%	0%	0%
Mr. Ballard	0%	0%	0%


NEO	Threshold	Target	Over Achievement	Maximum
Mr. Moore	52.5%	105.0%	157.5%	210.0%
Mr. Spexarth	40.0%	80.0%	120.0%	160.0%
Mr. Delahoussaye	37.5%	75.0%	112.5%	150.0%
Mr. Ellis	37.5%	75.0%	112.5%	150.0%
Ms. Toups	37.5%	75.0%	112.5%	150.0%


NEO	RSU		Restricted Stock
Current NEOs
Mr. McGovern		-		33,519
Mr. Spexarth		12,649		12,649
Mr. Edwards		12,649		12,649
Mr. Delahoussaye		12,649		-
Ms. Toups		12,649		-
Separated NEOs
Mr. Dunlap		-		-
Mr. Ballard		-		-


NEO	Total Value of 2021 MIP Awards
Current NEOs
Mr. McGovern	$	1,325,006
Mr. Spexarth		1,000,030
Mr. Edwards		1,000,030
Mr. Delahoussaye		500,015
Ms. Toups		500,015
Separated NEOs
Mr. Dunlap		-
Mr. Ballard		-


Name and Principal Position	Year	Salary ($)(1)		Bonus ($)(2)		Stock Awards ($)(3)		Option Awards(4)		KERP(5)		Non-Equity Incentive Plan Compensation ($)(6)		All Other Compensation ($)(7)		Total ($)
Current NEOs
Michael Y. McGovern	2021	$	1,203,904	$	-	$	1,325,006	$	-	$	-	$	-	$	-	$	2,528,910
Interim Chief Executive Officer,	2020		-		-		-		-		-		-		-		-
Executive Chairman	2019		-		-		-		-		-		-		-		-
James W. Spexarth	2021		327,495		125,000		1,000,030		-		-		297,500		38,526		1,788,551
Executive Vice President,	2020		293,580		-		-		-		614,250		151,200		38,320		1,097,350
Chief Financial Officer and Treasurer	2019		327,600		-		214,250		122,828				292,053		78,280		1,035,011
Blaine D. Edwards	2021		270,570		-		1,000,030		-		-		105,000		10,938		1,386,538
Executive Vice President,	2020		-		-		-		-		-		-		-		-
General Counsel and Secretary	2019		-		-		-		-		-		-		-		-
Michael J. Delahoussaye	2021		301,077		-		500,015		-		-		262,500		77,892		1,141,484
President,	2020		-		-		-		-		-		-		-		-
Workstrings International	2019		-		-		-		-		-		-		-		-
Deidre D. Toups	2021		315,646		-		500,015		-		-		245,000		30,781		1,091,442
President,	2020		-		-		-		-		-		-		-		-
Specialized Rental and Services Division	2019		-		-		-		-		-		-		-		-
Separated NEOs
David D. Dunlap (8)	2021		174,250		-		-		-		-		-		3,682,793		3,857,043
Former President and	2020		725,769		-		-		-		3,187,500		816,000		46,470		4,775,739
Chief Executive Officer	2019		850,000		-		1,111,800		637,484		-		2,204,756		226,460		5,030,500
Westervelt T. Ballard, Jr. (8)	2021		101,699		-		-		-		-		-		1,739,457		1,841,156
Former Executive Vice President,	2020		423,118		-		-		-		1,069,200		253,440		38,070		1,783,828
Chief Financial Officer and Treasurer	2019		475,200		-		372,911		213,823		-		646,525		97,322		1,805,781


Name	401(k) Contributions		Life Insurance Premiums		ArmadaCare		Automobile and Commuting		Relocation		Severance		Total
Current NEOs
Mr. McGovern	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Mr. Spexarth		11,600		1,138		16,188		9,600		-		-		38,526
Mr. Edwards		9,900		1,038		-		-		-		-		10,938
Mr. Delahoussaye (9)		11,600		1,112		-		7,872		57,308		-		77,892
Ms. Toups		11,600		1,181		-		18,000		-		-		30,781
Separated NEOs
Mr. Dunlap		7,142		320		16,029		4,292		-		3,655,010		3,682,793
Mr. Ballard		4,159		320		16,029		2,289		-		1,716,660		1,739,457


			Estimated Future Payouts Under Non-Equity Incentive Plan Awards

Name	Grant Date(1)		Threshold ($)		Target ($)		Maximum ($)		Stock Awards: Number of Shares of Stock or Units (#)		Grant Date Fair Value of Awards
Current NEOs
Michael Y. McGovern	06/02/2021			-		-		-		33,519	$	1,325,006
James W. Spexarth	06/02/2021			-		-		-		12,649		500,015
James W. Spexarth	07/07/2021			-		-		-		12,649		500,015
Blaine D. Edwards	06/02/2021			-		-		-		12,649		500,015
Blaine D. Edwards	07/07/2021			-		-		-		12,649		500,015
Michael J. Delahoussaye	08/19/2021			-		-		-		12,649		500,015
Deidre D. Toups	07/07/2021			-		-		-		12,649		500,015
Separated NEOs
David D. Dunlap		-		-		-		-		-		-
Westervelt T. Ballard, Jr.		-		-		-		-		-		-


		Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Name	Grant Type	Threshold ($)		Target ($)		Over Achievement ($)		Maximum ($)
Michael Y. McGovern
Brian K. Moore	AIP		393,750		787,500		1,181,250		1,575,000
James W. Spexarth	AIP		170,000		340,000		510,000		680,000
Michael J. Delahoussaye	AIP		146,250		292,500		438,750		585,000
Bryan M. Ellis	AIP		127,500		255,000		382,500		510,000
Deidre D. Toups	AIP		136,875		273,750		410,625		547,500


	Option Awards								Stock Awards
	Number of Securities Underlying Unexercised Options (#)												Equity Incentive Plan Awards
Name	Exercisable		Unexercisable		Option Exercise Price		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (1)		Market Value of Shares or Units of Stock That Have Not Vested		Number of Unearned Shares, Units or Other Rights That Have Not Vested		Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Current NEOs
Michael Y. McGovern (2)		-		-	$	-		-		23,463	$	927,492		-	$	-
James W. Spexarth (2)		-		-		-		-		7,842		309,994		-		-
James W. Spexarth (3)		-		-		-		-		12,649		500,015		-		-
Blaine D. Edwards (2)		-		-		-		-		7,842		309,994		-		-
Blaine D. Edwards (3)		-		-		-		-		12,649		500,015		-		-
Michael J. Delahoussaye (3)		-		-		-		-		12,649		500,015		-		-
Deidre D. Toups (3)		-		-		-		-		12,649		500,015		-		-
Separated NEOs
David D. Dunlap		-		-		-		-		-		-		-		-
Westervelt T. Ballard, Jr.		-		-		-		-		-		-		-		-


		Stock Awards

Name	Grant Date	Number of Shares or Units of Stock That Have Not Vested			Market Value of Shares or Units of Stock That Have Not Vested (1) ($)

Michael Y. McGovern	7/18/2022		52,917	(2)		3,467,122
Brian K. Moore	3/28/2022		30,000	(2)		1,965,600
James W. Spexarth	6/1/2021		2,614	(3)		171,269
	3/28/2022		6,867	(2)		449,926
Michael J. Delahoussaye	3/28/2022		5,833	(2)		382,178
Bryan M. Ellis	7/18/2022		5,893	(2)		386,109
Deidre D. Toups	3/28/2022		5,333	(2)		349,418


	Stock Awards
Name	Number of Shares Acquired On Vesting (#)		Value Realized on Vesting ($) (1)
Michael Y. McGovern		26,458		1,487,469
Brian K. Moore		15,000		843,300
James W. Spexarth		18,696		1,051,089
Michael J. Delahoussaye		15,566		875,121
Bryan M. Ellis		2,947		165,680
Deidre D. Toups		15,316		861,066


Name	Aggregate Earnings in 2023		Aggregate Withdrawals/ Distributions		Aggregate Balance at 12/31/23
Brian K. Moore
SERP (1)		56,973		-		1,425,992
James W. Spexarth
NQDC Plan		39,664		-		531,090
SERP (1)		3,734		-		93,453
Deidre D. Toups
NQDC Plan		175,057		-		1,452,174
SERP (1)		16,050		-		401,731


Fund	One Year Total Return
Nationwide VIT Money Market V		4.80	%
JPMorgan IT Core Bond 1		5.91	%
Vanguard VIF Total Bond Mkt Idx		5.58	%
Franklin Templeton VIP Global Bond 1		3.19	%
MFS VIT Value Svc		7.63	%
Fidelity VIP Index 500 Initial		26.19	%
American Funds IS Growth 2		38.48	%
JPMorgan IT Mid Cap Value 1		10.91	%
Vanguard VIF Mid Cap Index		15.83	%
Janus Henderson VIT Enterprise Svc		17.78	%
DFA VA U.S. Targeted Value		20.03	%
DWS Small Cap Index VIP A		16.76	%
Vanguard VIF Small Co Gr		19.65	%
Nationwide VIT International Index I		17.58	%
Invesco VI EQV International Equity I		18.15	%
MFS VIT II International Intrinsic Value Svc		17.37	%
Vanguard VIF Real Estate Index		11.70	%


Name	Aggregate Earnings in 2021		Aggregate Withdrawals/ Distributions			Aggregate Balance at 12/31/21
Current NEOs
Michael Y. McGovern		-		-			-
James W. Spexarth
NQDC Plan		4,411		-			471,639
SERP (1)		4,747		-			86,154
Blaine D. Edwards
NQDC Plan		2,416		-			60,028
Deidre D. Toups
NQDC Plan		240,654		-			1,458,469
SERP (1)		20,408		-			370,354
Separated NEOs
David D. Dunlap
NQDC Plan		101,083		(660,193	)		-
SERP (1)		63,933		(1,543,233	)		-
Westervelt T. Ballard, Jr.
SERP (1)		13,446		(324,572	)		-


~~Fund~~	One Year Total Return
~~Nationwide VIT Money Market V~~		~~0.00~~	%
~~JPMorgan IT Core Bond 1~~		~~(1.35~~	)%
~~Vanguard VIF Total Bond Mkt Idx~~		~~(1.72~~	)%
~~Franklin Templeton VIP Global Bond 1~~		~~(4.62~~	)%
~~MFS VIT Value Svc~~		~~25.16~~	%
~~Fidelity VIP Index 500 Initial~~		~~28.58~~	%
~~American Funds IS Growth 2~~		~~21.99~~	%
~~JPMorgan IT Mid Cap Value 1~~		~~29.88~~	%
~~Vanguard VIF Mid Cap Index~~		~~24.36~~	%
~~Janus Henderson VIT Enterprise Svc~~		~~16.54~~	%
~~DFA VA U.S. Targeted Value~~		~~39.68~~	%
~~DWS Small Cap Index VIP A~~		~~14.50~~	%
~~Vanguard VIF Small Co Gr~~		~~14.22~~	%
~~Nationwide VIT International Index I~~		~~10.84~~	%
~~Invesco VIF International Growth I~~		~~5.89~~	%
~~MFS VIT II International Intrinsic Value Svc~~		~~10.28~~	%
~~Vanguard VIF Real Estate Index~~		~~40.21~~	%


Transaction Value (in Billions)		Sharing Pool (3 Executives)		Sharing Pool as a Percentage of Transaction Value (Approximate)
$	1.0	$	12,400,000	1.24%


CEO Pay Ratio
CEO 2021 Annual Total Compensation (A)	$	2,528,910
Median Employee 2021 Annual Total Compensation (B)		48,569
Pay Ratio	52:1