Liberty Energy (LBRT) risk factors, FY2025 10-K

Risks Related to the Oil and Natural Gas Industry

1. 01Federal, state, local and other applicable legislative and regulatory initiatives relating to hydraulic fracturing may serve to limit future oil and natural gas E&P activities and could have a material adverse effect on our results of operations and business
2. 02further regulate, restrict or prohibit hydraulic fracturing. Such actions could result in a decline in the completion of new oil and gas wells, which could negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the demand for our services
3. 03Federal legislation and regulatory initiatives relating to drilling on federal lands could harm our business and negatively impact the oil and natural gas industry66% rewritten
4. 04Our business depends on domestic capital spending by the oil and natural gas industry, and reductions in capital spending could have a material adverse effect on our liquidity, results of operations and financial condition
5. 05The volatility of oil and natural gas prices may adversely affect the demand for our completions services and negatively impact our results of operations31% rewritten
6. 06Delays or restrictions in obtaining permits by us for our operations or by our customers for their operations could impair our business
7. 07Our operations are subject to risks associated with climate change and potential regulatory programs meant to address climate change; these programs may impact or limit our business plans, result in significant expenditures or reduce demand for our services and reduce our revenues
8. 08An increased societal and governmental focus on ESG and climate change issues may adversely impact our business, impact our access to investors and financing, and decrease demand for our services
9. 09Our operations are subject to significant risks, some of which are beyond our control. These risks may be self-insured, or may not be fully covered under our insurance policies
10. 10In addition, our operations are subject to, and exposed to, employee/employer liabilities and risks such as wrongful termination, discrimination, labor organizing, retaliation claims and general human resource related matters
11. 11We could experience continued or increased severity of trucking related issues or trucking accidents, which could materially affect our results of operations
12. 12We may be subject to claims for personal injury and property damage, which could materially adversely affect our financial condition, prospects and results of operations
13. 13We are subject to environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities
14. 14Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us
15. 15Technology advancements in well service technologies, including those involving completions services, could have a material adverse effect on our business, financial condition and results of operations
16. 16The ability or willingness of OPEC+ and other oil exporting nations to set and maintain production levels may have a significant impact on oil and natural gas commodity prices74% rewritten
17. 17Geopolitical conditions, including political turmoil and volatility, regional conflicts, sanctions, terrorism and war could result in market instability, which could adversely affect our business, financial condition and results of operations56% rewritten

Risks Related to the TRAs

1. 18The Company is required to make payments under the TRAs for certain tax benefits that it may claim, and the amounts of such payments could be significant
2. 19We may be adversely affected by uncertainty in the global financial markets and the deterioration of the financial condition of our customers
3. 20Our business, financial condition and results of operations may be adversely impacted by the effects of inflation
4. 21Reliance upon a few large customers may adversely affect our revenue and operating results22% rewritten
5. 22We are subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss
6. 23Our assets require significant amounts of capital for maintenance, upgrades and refurbishment and may require significant capital expenditures for new equipment
7. 24We rely on certain third parties for materials, and delays in deliveries of such materials, increases in the cost of such materials or our contractual obligations to pay for materials that we ultimately do not require could harm our business, results of operations and financial condition
8. 25We currently utilize a limited number of assemblers and suppliers for major equipment to both build new fleets and upgrade any fleets we acquire to our preferred specifications, and our reliance on these vendors exposes us to risks including price and timing of delivery
9. 26Changes in transportation regulations may increase our costs and negatively impact our results of operations
10. 27We face a variety of risks related to our diversification and entry into new lines of business in distributed power generation29% rewritten
11. 28As we continue our diversification into a new line of business, the market price for our common stock will become subject to factors different from those that have historically and currently impacted our common stock
12. 29Power generating operations performance involves significant risks and hazards and may be below expected levels of output or efficiencyNew
13. 30A distributed power business is dependent on our relationships with key suppliers to obtain equipment requiring significant capital commitments and may be on terms and conditions that limit our ability to adjust to changing market conditionsNew
14. 31We may be unable to adapt our distributed power technologies to meet increasing customer needs and power loads, which could result in increased downtime of our power generation offering and disruptions to the power supply to our customersNew
15. 32Distributed power solutions in some applications could be affected by availability of the electrical gridNew
16. 33The power industry is highly competitive and rapidly evolvingNew
17. 34Distributed power systems involve long and uncertain sales cycles, and we may not be successful in converting our sales prospects into revenue generating contractsNew
18. 35Our current and future indebtedness could adversely affect our financial condition36% rewritten
19. 36Unsatisfactory safety performance may negatively affect our customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenues
20. 37If we are unable to fully protect our intellectual property rights, we may suffer a loss in our competitive advantage or market share
21. 38We may be adversely affected by disputes regarding intellectual property rights of third parties62% rewritten
22. 39Seasonal weather conditions, natural disasters, public health crises, and other catastrophic events outside of our control could severely disrupt normal operations and harm our business
23. 40The sand mining operations are subject to a number of risks relating to the proppant industry
24. 41Silica-related legislation, health issues and litigation could have a material adverse effect on our business, reputation or results of operations
25. 42We are subject to the Federal Mine Safety and Health Act of 1977, which imposes stringent health and safety standards on certain aspects of our operations
26. 43The occurrence of explosive incidents could disrupt our operations and could adversely affect our business, financial condition and results of operations
27. 44The choice of forum provisions in our charter and bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us
28. 45There can be no assurance we will repurchase shares of our Class A Common Stock in any particular amounts