Ranger Energy Services(US:RNGR)2024-03-05 22:31Operations and Services - The company operates in multiple active oil and natural gas basins in the U.S., including the Permian Basin and Bakken Shale, providing services through three reportable segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services[20][24]. - The fleet consists of 402 high specification well service rigs, which are among the newest in the industry, with higher operating horsepower (450 HP or greater) and taller mast heights (102 feet or higher) than traditional rigs[28][29]. - The wireline services segment includes workovers, well maintenance, and production services, which are critical for sustaining oil and natural gas production[31][32]. - Hydraulic fracturing services are essential for the production of oil and natural gas, stimulating production from dense subsurface rock formations[66]. Customer Base and Revenue - In 2023, two customers accounted for approximately 10% each of the consolidated revenue, while the top five revenue-generating customers represented about 43% of the total revenue[42]. - The company has a diverse customer base, serving approximately 190 distinct customers in 2023, indicating a broad market reach[42]. - The top three trade net receivable balances represented 14%, 13%, and 7% of consolidated accounts receivable as of December 31, 2023[272]. - In the High Specification Rig segment, the top three net trade receivable balances represented 20%, 20%, and 12% of total net accounts receivable[272]. Regulatory Environment - The company operates under stringent environmental regulations, which may impose substantial liabilities for pollution resulting from operations[46]. - Increased compliance costs due to environmental regulations may not be passed on to customers, potentially affecting the company's financial condition[47]. - The company is subject to the federal Occupational Safety and Health Act (OSHA) and comparable state statutes, ensuring worker health and safety[48]. - The company may incur significant costs or liabilities associated with naturally occurring radioactive materials (NORM) in its operations[49]. - The company generates industrial wastes regulated as hazardous materials, which could lead to increased management and disposal costs if reclassified[52]. - The Clean Water Act imposes strict controls on pollutant discharges, with potential civil and criminal penalties for noncompliance[54]. - The Oil Pollution Act of 1990 holds responsible parties liable for oil cleanup costs and damages resulting from spills[55]. - The company’s operations are subject to increasing regulatory scrutiny regarding greenhouse gas emissions, which could adversely affect demand for its services[61]. - The company operates under various state and local environmental review and permitting requirements, which may be more stringent than federal laws[71]. - The company is subject to regulatory oversight by the DOT and various state agencies, which may affect operational costs[73]. - Any regulations that restrict hydraulic fracturing could adversely impact demand for the company's products and services[68]. - The company cannot predict the final scope of regulations that may apply to oil and gas operations on federal lands, which could affect business operations[69]. Financial Position - The company has no outstanding debt under the Wells Fargo Revolving Credit Facility as of December 31, 2023, with a weighted average interest rate of 7.0%[271]. - The market for the company's services is indirectly exposed to fluctuations in oil and natural gas prices, which could affect demand for services[273]. - The company does not currently hedge its indirect exposure to commodity price risk[273]. - Environmental compliance costs have historically not had a material adverse effect on the company's business, but future costs could be substantial[70]. Workforce - As of December 31, 2023, the company employed approximately 2,000 full-time and part-time employees, with additional independent contractors hired as needed[44]. Market Dynamics - The industry is highly cyclical, with demand for services driven by the level of drilling activity and influenced by global oil and natural gas prices[39]. - Seasonal weather conditions can adversely affect operations, particularly in regions like the Denver-Julesburg Basin and Bakken Shale, leading to potential revenue reductions[40]. - The company differentiates itself through technical expertise, equipment capacity, and a strong safety record, aiming to deliver high-quality services and operational efficiency[38].