ProPetro Holding (PUMP) risk factors, FY2024 10-K

Other

1. 01Risks Inherent in Our Business and Industry
2. 02The cyclical nature of the oil and natural gas industry may cause our operating results to fluctuate
3. 03The majority of our operations are located in the Permian Basin, making us vulnerable to risks associated with operating in one major geographic area
4. 04The IRA 2022 could accelerate the transition to a low carbon economy and could impose new costs on our customers’ operations
5. 05Our business may be adversely affected by a deterioration in general economic conditions or a weakening of the broader energy industry
6. 06New technology may cause us to become less competitive
7. 07Our operations require substantial capital and we may be unable to obtain needed capital or financing on satisfactory terms, or at all, which could limit our ability to grow
8. 08Concerns over general economic, business or industry conditions may have a material adverse effect on our results of operations, liquidity and financial condition
9. 09Our indebtedness and liquidity needs could restrict our operations and adversely affect our financial condition
10. 10Restrictions in our ABL Credit Facility and any future financing agreements may limit our ability to finance future operations or capital needs or capitalize on potential acquisitions and other business opportunities
11. 11We may record losses or impairment charges related to goodwill and long-lived assets including intangible assets
12. 12Our operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which we may not be adequately insured and which could cause us to lose customers and substantial revenue
13. 13A terrorist attack, armed conflict or political or civil unrest could harm our business
14. 14We may be subject to claims for personal injury and property damage, which could materially adversely affect our financial condition and results of operations
15. 15We are subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss
16. 16We may grow through acquisitions and/or internal expansions, and our failure to properly plan and manage such growth may adversely affect our performance
17. 17We may be adversely affected by the effects of inflation

Risks Related to Customers, Suppliers and Competition

1. 18Reliance upon a few large customers may adversely affect our revenue and operating results
2. 19We face significant competition that may cause us to lose market share, and competition in our industry has intensified as a result of customer consolidation and industry downturns
3. 20We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our business, results of operations and financial condition
4. 21Our business depends upon the ability to obtain specialized equipment, parts and key raw materials, including sand and chemicals, from third‑party suppliers, and we may be vulnerable to delayed deliveries and future price increases
5. 22We may be required to pay fees to certain of our Sand Suppliers based on minimum volumes under long-term contracts regardless of actual volumes received
6. 23Disruption of our supply chain could adversely impact our ability to provide our services

Risks Related to Employees

1. 24We rely on a few key employees whose absence or loss could adversely affect our business
2. 25If we are unable to employ a sufficient number of skilled and qualified workers, our capacity and profitability could be diminished and our growth potential could be impaired

Risks Related to Regulatory Matters

1. 26We are subject to environmental laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows
2. 27Our and our customers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide
3. 28Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays
4. 29Increasing trucking regulations may increase our costs and negatively impact our results of operations
5. 30Increased attention to ESG matters, conservation measures, commercial development and technological advances could reduce demand for oil and natural gas and our services
6. 31Certain of our completion services, particularly our hydraulic fracturing services, are substantially dependent on the availability of water. Restrictions on our or our customers’ ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows

Risks Related to our Tax Matters

1. 32Our ability to use our NOLs may be limited
2. 33Changes to applicable tax laws and regulations or exposure to additional tax liabilities could adversely affect our operating results and cash flows
3. 34We are subject to certain requirements of Section 404. If we or our auditors identify and report material weaknesses in internal control over financial reporting, our investors may lose confidence in our reported information and our stock price may be negatively affected
4. 35Certain provisions of our certificate of incorporation, and bylaws, as well as Delaware law, may discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock
5. 36Our business could be negatively affected as a result of the actions of activist shareholders
6. 37The market price of our common stock is subject to volatility
7. 38There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock
8. 39There can be no assurance that we will purchase all the shares authorized under our share repurchase program or that such program will enhance the long-term value of our share price