10-Q
Q3false-0000886835--12-310000886835us-gaap:NonUsMember2022-07-012022-09-300000886835spn:ManagementIncentivePlan2021Member2022-09-300000886835spn:RentalsMemberspn:UnitedStatesGulfOfMexicoMember2021-02-032021-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2022-07-012022-09-300000886835spn:RentalsMember2021-02-032021-09-300000886835spn:BuildingsImprovementsAndLeaseholdImprovementsMember2022-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2021-06-300000886835spn:WellServicesMemberus-gaap:ProductMember2021-01-012021-02-020000886835us-gaap:CorporateAndOtherMember2022-09-300000886835spn:UnitedStatesLandMember2021-02-032021-09-300000886835spn:WellServicesMemberus-gaap:ProductMember2021-07-012021-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2022-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2021-12-310000886835spn:ServicesMember2021-01-012021-02-020000886835country:US2022-01-012022-09-300000886835us-gaap:FairValueInputsLevel2Memberspn:NonQualifiedDeferredCompensationAssetsAndLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-06-300000886835us-gaap:ProductMemberspn:RentalsMember2022-01-012022-09-300000886835us-gaap:ProductMemberspn:RentalsMember2021-01-012021-02-020000886835spn:NotesReceivableSellerObligationMember2022-07-012022-09-300000886835spn:PumpcoMember2022-01-012022-09-300000886835spn:SelectCommonStockMember2022-09-300000886835spn:NotesReceivableSellerObligationMember2022-01-012022-09-300000886835spn:BuildingsImprovementsAndLeaseholdImprovementsMember2021-12-310000886835us-gaap:ConstructionInProgressMember2022-09-300000886835spn:WellServicesMemberus-gaap:ProductMember2022-07-012022-09-300000886835spn:WellServicesMemberus-gaap:ProductMember2022-01-012022-09-300000886835country:US2021-01-012021-02-020000886835spn:WellServicesMemberspn:ServicesMember2022-01-012022-09-300000886835spn:PumpcoMember2022-09-300000886835us-gaap:ConstructionInProgressMember2021-12-310000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2021-02-020000886835spn:WellServicesMemberspn:ServicesMember2022-07-012022-09-300000886835spn:RentalsMember2021-01-012021-02-020000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-12-310000886835us-gaap:RestrictedStockUnitsRSUMember2022-07-180000886835us-gaap:RestrictedStockUnitsRSUMemberspn:PredecessorsMember2021-01-012021-02-020000886835us-gaap:MachineryAndEquipmentMember2021-12-3100008868352021-06-300000886835us-gaap:NonUsMember2021-12-310000886835spn:PlatformServiceMember2022-09-300000886835spn:SelectCommonStockMember2022-01-012022-09-3000008868352022-04-012022-06-300000886835us-gaap:OilAndGasPropertiesMember2022-09-300000886835spn:RentalsMember2022-07-012022-09-300000886835us-gaap:FairValueInputsLevel1Memberspn:NonQualifiedDeferredCompensationAssetsAndLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000886835us-gaap:ProductMemberspn:RentalsMember2021-02-032021-09-300000886835us-gaap:RestrictedStockMember2022-01-012022-09-300000886835spn:WellServicesMember2022-09-300000886835us-gaap:RevolvingCreditFacilityMemberspn:JpmorganChaseBankAssetBackedSecuredRevolvingFacilityMember2022-09-300000886835spn:RentalsServicesMemberspn:WellServicesMember2021-02-032021-09-300000886835spn:WellServicesMember2021-01-012021-02-020000886835spn:WellServicesMember2021-12-310000886835spn:WellServicesMemberspn:ServicesMember2021-02-032021-09-300000886835us-gaap:RetainedEarningsMember2021-12-3100008868352021-02-032021-09-300000886835us-gaap:RetainedEarningsMember2021-02-032021-03-310000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2021-09-300000886835us-gaap:RetainedEarningsMember2021-06-300000886835spn:RevenueByTypeMember2022-01-012022-09-300000886835us-gaap:NonUsMember2022-01-012022-09-300000886835spn:WellServicesMemberspn:ServicesMember2021-01-012021-02-020000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2021-12-310000886835spn:WellServicesMemberspn:UnitedStatesGulfOfMexicoMember2021-02-032021-09-300000886835spn:WellServicesMemberspn:UnitedStatesGulfOfMexicoMember2021-07-012021-09-300000886835spn:WellServicesMemberspn:UnitedStatesLandMember2021-01-012021-02-020000886835us-gaap:RetainedEarningsMember2020-12-310000886835spn:WellServicesMember2022-07-012022-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-02-020000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-03-310000886835us-gaap:NonUsMemberspn:WellServicesMember2021-07-012021-09-300000886835us-gaap:NonUsMember2021-01-012021-02-020000886835spn:PumpcoMember2021-02-032021-09-300000886835us-gaap:RetainedEarningsMember2022-03-310000886835spn:RentalsMemberspn:UnitedStatesLandMember2021-01-012021-02-020000886835spn:RentalsMemberspn:UnitedStatesLandMember2022-01-012022-09-300000886835us-gaap:RetainedEarningsMember2022-04-012022-06-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2022-06-3000008868352022-01-012022-06-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-03-310000886835srt:MaximumMemberus-gaap:PerformanceSharesMember2022-03-282022-03-280000886835spn:ServicesMember2021-02-032021-09-300000886835spn:UnitedStatesLandMember2022-01-012022-09-300000886835spn:UnitedStatesGulfOfMexicoMember2021-07-012021-09-300000886835spn:UnitedStatesGulfOfMexicoMember2021-01-012021-02-020000886835spn:WellServicesMemberspn:UnitedStatesLandMember2022-07-012022-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2021-09-300000886835us-gaap:CommonClassAMember2022-09-300000886835spn:ServicesMember2022-07-012022-09-3000008868352021-02-020000886835country:US2022-07-012022-09-300000886835spn:UnitedStatesGulfOfMexicoMember2021-02-032021-09-300000886835us-gaap:RetainedEarningsMember2021-04-012021-06-300000886835spn:WellServicesMember2021-02-032021-09-3000008868352021-03-310000886835spn:ServicesMemberspn:RentalsMember2022-01-012022-09-300000886835us-gaap:LandMember2022-09-300000886835us-gaap:PerformanceSharesMember2022-03-282022-03-2800008868352022-03-310000886835us-gaap:RestrictedStockMember2021-02-032021-09-300000886835us-gaap:RetainedEarningsMember2022-07-012022-09-300000886835spn:NonQualifiedDeferredCompensationAssetsAndLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-09-3000008868352022-01-012022-09-300000886835spn:WellServicesMemberus-gaap:ProductMember2021-02-032021-09-300000886835us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-02-020000886835spn:RentalsMember2022-09-300000886835spn:WellServicesMemberspn:UnitedStatesGulfOfMexicoMember2022-01-012022-09-300000886835us-gaap:NonUsMemberspn:WellServicesMember2021-01-012021-02-020000886835spn:WellServicesMemberspn:UnitedStatesLandMember2021-02-032021-09-300000886835us-gaap:NonUsMember2021-07-012021-09-300000886835us-gaap:NonUsMember2021-02-032021-09-300000886835spn:UnitedStatesLandMember2022-07-012022-09-300000886835us-gaap:CorporateAndOtherMember2021-07-012021-09-300000886835us-gaap:VehiclesMember2021-12-310000886835us-gaap:NonUsMemberspn:WellServicesMember2022-07-012022-09-300000886835spn:RentalsMemberspn:UnitedStatesLandMember2021-07-012021-09-300000886835spn:RentalsMemberspn:UnitedStatesLandMember2021-02-032021-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-09-300000886835spn:RentalsMemberspn:UnitedStatesGulfOfMexicoMember2022-01-012022-09-300000886835country:US2021-12-310000886835spn:RentalsServicesMember2021-02-032021-09-300000886835us-gaap:ProductMember2021-07-012021-09-300000886835us-gaap:RetainedEarningsMember2022-01-012022-03-310000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2021-01-012021-02-020000886835spn:RentalsServicesMember2022-07-012022-09-3000008868352022-09-300000886835us-gaap:FurnitureAndFixturesMember2022-09-300000886835spn:UnitedStatesGulfOfMexicoMember2022-01-012022-09-300000886835spn:RentalsServicesMemberspn:RentalsMember2021-02-032021-09-300000886835spn:RentalsServicesMemberspn:WellServicesMember2022-07-012022-09-300000886835spn:PumpcoMember2021-12-310000886835spn:RentalsMember2021-02-032021-09-300000886835spn:PumpcoMember2021-01-012021-02-0200008868352021-01-010000886835spn:RentalsMemberspn:UnitedStatesLandMember2022-07-012022-09-300000886835us-gaap:ProductMember2022-07-012022-09-300000886835spn:WellServicesMemberspn:UnitedStatesGulfOfMexicoMember2022-07-012022-09-300000886835us-gaap:ProductMember2022-01-012022-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2021-06-300000886835us-gaap:NonUsMemberspn:RentalsMember2021-02-032021-09-300000886835us-gaap:NonUsMemberspn:RentalsMember2021-07-012021-09-300000886835spn:RevenueByGeographyMember2022-01-012022-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-06-300000886835us-gaap:ProductMember2021-02-032021-09-300000886835spn:UnitedStatesGulfOfMexicoMember2022-07-012022-09-300000886835us-gaap:VehiclesMember2022-09-300000886835country:US2021-07-012021-09-3000008868352022-01-012022-03-310000886835spn:RentalsServicesMember2022-01-012022-09-300000886835spn:NonQualifiedDeferredCompensationAssetsAndLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000886835us-gaap:RetainedEarningsMember2021-03-310000886835us-gaap:CorporateAndOtherMember2022-07-012022-09-300000886835spn:NotesReceivableSellerObligationMember2021-02-032021-09-300000886835us-gaap:RetainedEarningsMember2021-01-012021-02-020000886835us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-07-182022-07-180000886835spn:RentalsServicesMemberspn:RentalsMember2021-07-012021-09-300000886835us-gaap:NonUsMemberspn:WellServicesMember2021-02-032021-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2021-04-012021-06-300000886835us-gaap:CorporateAndOtherMember2021-12-310000886835us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-03-282022-03-280000886835us-gaap:RestrictedStockMember2022-07-012022-09-300000886835spn:UnitedStatesLandMember2021-01-012021-02-020000886835spn:ServicesMember2022-01-012022-09-300000886835spn:RentalsMemberspn:UnitedStatesGulfOfMexicoMember2021-01-012021-02-020000886835spn:WellServicesMemberspn:UnitedStatesLandMember2022-01-012022-09-300000886835spn:RentalsServicesMemberspn:WellServicesMember2021-07-012021-09-300000886835spn:WellServicesMember2022-01-012022-09-300000886835us-gaap:NonUsMemberspn:RentalsMember2021-01-012021-02-020000886835spn:WellServicesMemberspn:UnitedStatesLandMember2021-07-012021-09-300000886835spn:PumpcoMember2022-07-012022-09-300000886835us-gaap:CommonClassBMember2022-10-310000886835us-gaap:OilAndGasPropertiesMember2021-12-310000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-06-300000886835spn:RentalsMemberspn:UnitedStatesGulfOfMexicoMember2022-07-012022-09-300000886835us-gaap:FurnitureAndFixturesMember2021-12-310000886835us-gaap:CorporateAndOtherMember2021-02-032021-09-300000886835spn:RentalsServicesMemberspn:RentalsMember2021-01-012021-02-0200008868352022-08-012022-08-310000886835us-gaap:CorporateAndOtherMember2022-01-012022-09-3000008868352021-07-012021-09-300000886835spn:NotesReceivableSellerObligationMember2021-07-012021-09-300000886835us-gaap:ProductMemberspn:RentalsMember2022-07-012022-09-300000886835spn:RentalsServicesMemberspn:WellServicesMember2021-01-012021-02-020000886835spn:RentalsMember2022-07-012022-09-300000886835spn:ServicesMember2021-07-012021-09-300000886835spn:ServicesMemberspn:RentalsMember2021-01-012021-02-020000886835spn:NotesReceivableSellerObligationMember2021-01-012021-02-020000886835us-gaap:RetainedEarningsMember2021-09-3000008868352022-07-012022-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-01-012021-02-020000886835spn:PumpcoMember2021-07-012021-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-06-300000886835us-gaap:MachineryAndEquipmentMember2022-09-3000008868352020-12-310000886835us-gaap:CommonClassBMember2021-12-310000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-04-012021-06-300000886835us-gaap:CommonClassBMember2022-09-3000008868352021-01-012021-02-020000886835spn:RentalsMember2021-07-012021-09-300000886835us-gaap:FairValueInputsLevel1Memberspn:NonQualifiedDeferredCompensationAssetsAndLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000886835us-gaap:RetainedEarningsMember2021-07-012021-09-300000886835us-gaap:CommonClassAMember2022-10-310000886835us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100008868352021-04-012021-06-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2022-04-012022-06-300000886835spn:RentalsServicesMemberspn:RentalsMember2022-07-012022-09-300000886835spn:WellServicesMemberspn:UnitedStatesGulfOfMexicoMember2021-01-012021-02-0200008868352022-06-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2022-06-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2021-07-012021-09-300000886835us-gaap:PerformanceGuaranteeMember2022-01-012022-09-300000886835us-gaap:NonUsMemberspn:RentalsMember2022-01-012022-09-3000008868352021-09-300000886835us-gaap:RetainedEarningsMember2022-06-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-03-310000886835us-gaap:TreasuryStockMember2020-12-310000886835us-gaap:NonUsMemberspn:RentalsMember2022-07-012022-09-300000886835spn:RentalsMember2021-12-310000886835spn:WellServicesMember2021-07-012021-09-3000008868352021-12-310000886835spn:RentalsServicesMember2021-01-012021-02-020000886835spn:WellServicesMemberspn:ServicesMember2021-07-012021-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2022-03-310000886835spn:RentalsMember2021-07-012021-09-300000886835us-gaap:NonUsMember2022-09-300000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2022-01-012022-03-310000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-04-012021-06-300000886835us-gaap:NonUsMemberspn:WellServicesMember2022-01-012022-09-300000886835us-gaap:ProductMember2021-01-012021-02-020000886835us-gaap:FairValueInputsLevel2Memberspn:NonQualifiedDeferredCompensationAssetsAndLiabilitiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassBMember2022-03-310000886835spn:RentalsMemberspn:ServicesMember2021-07-012021-09-300000886835spn:RentalsMemberspn:ServicesMember2021-02-032021-09-300000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2022-09-300000886835spn:RentalsServicesMemberspn:RentalsMember2022-01-012022-09-3000008868352021-02-030000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2020-12-310000886835spn:RentalsServicesMemberspn:WellServicesMember2022-01-012022-09-300000886835country:US2022-09-300000886835spn:ServicesMemberspn:RentalsMember2022-07-012022-09-300000886835country:US2021-02-032021-09-300000886835spn:RentalsServicesMember2021-07-012021-09-3000008868352021-02-032021-03-310000886835us-gaap:RestrictedStockUnitsRSUMember2022-03-282022-03-280000886835spn:UnitedStatesLandMember2021-07-012021-09-300000886835us-gaap:RetainedEarningsMember2022-09-300000886835spn:RentalsMember2021-01-012021-02-020000886835spn:RentalsMember2022-01-012022-09-300000886835us-gaap:LandMember2021-12-310000886835spn:PlatformServiceMember2021-12-310000886835srt:MinimumMemberus-gaap:PerformanceSharesMember2022-03-282022-03-280000886835us-gaap:CommonStockMemberus-gaap:CommonClassAMember2020-12-310000886835us-gaap:CommonClassAMember2021-12-310000886835us-gaap:CommonClassBMember2022-07-182022-07-180000886835spn:RentalsMemberspn:UnitedStatesGulfOfMexicoMember2021-07-012021-09-300000886835us-gaap:RestrictedStockMember2021-01-012021-09-300000886835us-gaap:CorporateAndOtherMember2021-01-012021-02-020000886835us-gaap:AdditionalPaidInCapitalMemberus-gaap:CommonClassAMember2021-03-310000886835us-gaap:TreasuryStockMember2021-01-012021-02-020000886835spn:RentalsMember2022-01-012022-09-300000886835us-gaap:ProductMemberspn:RentalsMember2021-07-012021-09-30spn:Employeexbrli:purexbrli:sharesiso4217:USDiso4217:USDxbrli:sharesspn:Claim

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period from to

 

Commission File No. 001-34037

Commission Company Name: SUPERIOR ENERGY SERVICES, INC

 

 

 

 

 

 

 

SUPERIOR ENERGY SERVICES, INC.

 

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

 

 

 

 

Delaware

 

87-4613576

 

 

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

 

 

 

 

1001 Louisiana Street, Suite 2900

Houston, TX

(Address of principal executive offices)

 

77002

(Zip Code)

 

 

Registrant’s telephone number, including area code: (713) 654-2200

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol

Name of each exchange on which registered

 None

N/A

None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes. ☒ No 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated filer ☐

 

Accelerated filer ☐

Non-accelerated filer      ☒

 

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

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

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 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 No 

 

The number of shares of the registrant’s Class A common stock outstanding on October 31, 2022 was 19,998,695.

The number of shares of the registrant’s Class B common stock outstanding on October 31, 2022 was 76,269.

1

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

Information Regarding Forward-Looking Statements

3

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

Unaudited Condensed Consolidated Balance Sheets

4

 

Unaudited Condensed Consolidated Statements of Operations

5

 

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

7

 

Unaudited Consolidated Statements of Changes in Stockholders' Equity (Deficit)

8

 

Unaudited Condensed Consolidated Statements of Cash Flows

9

 

Notes to Unaudited Condensed Consolidated Financial Statements

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

33

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

34

Item 1A.

Risk Factors

34

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

34

Item 3.

Defaults Upon Senior Securities

34

Item 4.

Mine Safety Disclosures

34

Item 5.

Other Information

34

Item 6.

Exhibits

35

 

 

 

SIGNATURES

 

36

 

 

 

2

 


 

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 (the “Form 10-Q”) 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” and “estimates,” variations of such words and similar expressions identify forward-looking statements. All statements, other than statements of historical fact, included in this Form 10-Q 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:

 

risks and uncertainties regarding the continuing effects of residual bankruptcy proceedings on us and our various constituents; attendant risks associated with restrictions on our ability to pursue our business strategies;
the difficulty to predict our long-term liquidity requirements and the adequacy of our capital resources;
restrictive covenants in the Credit Facility (as defined below) 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 conditions in the oil and gas industry;
U.S. and global market and economic conditions, including impacts relating to inflation and supply chain disruptions;
the effects of public health threats, pandemics and epidemics, and the adverse impact thereof on our growth, operating costs, supply chain, labor availability, logistical capabilities, customer demand and industry demand generally, margins, utilization, cash position, taxes, the price of our securities, and our ability to access capital markets, including the macroeconomic effects from the continuing COVID-19 pandemic;
the ability of the members of Organization of Petroleum Exporting Countries (“OPEC+”) to agree on and to maintain crude oil price and production controls;
operating hazards, including the significant possibility of accidents resulting in personal injury or death, or property damage for which we may have limited or no insurance coverage or indemnification rights;
the possibility of not being fully indemnified against losses incurred due to catastrophic events;
claims, litigation or other proceedings that require cash payments or could impair financial condition;
credit risk associated with our customer base;
the effect of regulatory programs and environmental matters on our operations or prospects;
the impact that unfavorable or unusual weather conditions could have on our operations;
the potential inability to retain key employees and skilled workers;
political, legal, economic and other uncertainties associated with our international operations could materially restrict our operations or expose us to additional risks;
potential changes in tax laws, adverse positions taken by tax authorities or tax audits impacting our operating results;
changes in competitive and technological factors affecting our operations;
risks associated with the uncertainty of macroeconomic and business conditions worldwide;
risks to our operations from potential cyber-attacks;
counterparty risks associated with reliance on key suppliers;
challenges with estimating our potential liabilities related to our oil and natural gas property;
risks associated with potential changes of Bureau of Ocean Energy Management (“BOEM”) security and bonding requirements for offshore platforms;
the likelihood that the interests of our significant stockholders may conflict with the interests of our other stockholders;
the risks associated with owning our Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), for which there is no public market; and
the likelihood that our stockholders agreement may prevent certain transactions that could otherwise be beneficial to our stockholders.

 

These risks and other uncertainties related to our business are described in detail in our Annual Report on Form 10-K for the year ended December 31, 2021 (the "Form 10-K") and this Form 10-Q Part II, Item 1A, "Risk Factors". We undertake no obligation to update any of our forward-looking statements in this discussion. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

 

3

 


 

PART I. FINANCIAL INFORMATION

 

Item 1. Unaudited Condensed Consolidated Financial Statements and Notes

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 ASSETS

 

 

 

 

 

 

 Current assets:

 

 

 

 

 

 

 Cash and cash equivalents

 

$

453,682

 

 

$

314,974

 

 Accounts receivable, net

 

 

222,646

 

 

 

182,432

 

 Income taxes receivable

 

 

5,527

 

 

 

5,099

 

 Prepaid expenses

 

 

16,029

 

 

 

15,861

 

 Inventory

 

 

69,962

 

 

 

60,603

 

 Investment in equity securities

 

 

16,888

 

 

 

25,735

 

 Other current assets

 

 

5,790

 

 

 

6,701

 

 Assets held for sale

 

 

18,314

 

 

 

37,528

 

 Total current assets

 

 

808,838

 

 

 

648,933

 

 Property, plant and equipment, net

 

 

283,906

 

 

 

356,274

 

 Note receivable

 

 

66,078

 

 

 

60,588

 

 Restricted cash

 

 

79,757

 

 

 

79,561

 

 Other long-term assets, net

 

 

48,636

 

 

 

54,152

 

 Total assets

 

$

1,287,215

 

 

$

1,199,508

 

 

 

 

 

 

 

 

 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 Current liabilities:

 

 

 

 

 

 

 Accounts payable

 

$

51,398

 

 

$

43,080

 

 Accrued expenses

 

 

107,972

 

 

 

108,610

 

 Income taxes payable

 

 

15,900

 

 

 

8,272

 

 Liabilities held for sale

 

 

3,666

 

 

 

5,607

 

 Total current liabilities

 

 

178,936

 

 

 

165,569

 

 Decommissioning liability

 

 

144,781

 

 

 

190,380

 

 Deferred income taxes

 

 

21,761

 

 

 

12,441

 

 Other long-term liabilities

 

 

80,616

 

 

 

89,385

 

 Total liabilities

 

 

426,094

 

 

 

457,775

 

 

 

 

 

 

 

 

 Stockholders’ equity (deficit):

 

 

 

 

 

 

 Class A common stock $0.01 par value; 50,000 shares authorized;
    
19,999 shares issued and outstanding at September 30, 2022 and
    December 31, 2021

 

 

200

 

 

 

200

 

 Class B common stock $0.01 par value; 2,000 shares authorized;
    
114 shares issued and 76 shares outstanding at September 30, 2022 and
    December 31, 2021

 

 

1

 

 

 

1

 

 Class A Additional paid-in capital

 

 

902,486

 

 

 

902,486

 

 Class B Additional paid-in capital

 

 

4,743

 

 

 

1,224

 

 Accumulated deficit

 

 

(46,309

)

 

 

(162,178

)

 Total stockholders’ equity

 

 

861,121

 

 

 

741,733

 

 Total liabilities and stockholders’ equity

 

$

1,287,215

 

 

$

1,199,508

 

 

See accompanying notes to unaudited condensed consolidated financial statements

 

 

 

 

 

 

4

 


 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

(unaudited)

 

 

 

 

For the Three Months Ended

 

 

 

September 30, 2022

 

 

 

2022

 

 

2021

 

 Revenues:

 

 

 

 

 

 

 Services

 

$

99,763

 

 

$

85,667

 

 Rentals

 

 

80,173

 

 

 

59,420

 

 Product sales

 

 

42,351

 

 

 

33,496

 

 Total revenues

 

 

222,287

 

 

 

178,583

 

 Cost of revenues:

 

 

 

 

 

 

 Services

 

 

66,205

 

 

 

71,688

 

 Rentals

 

 

25,816

 

 

 

26,011

 

 Product sales

 

 

24,060

 

 

 

28,371

 

 Total cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

 

 

116,081

 

 

 

126,070

 

 Depreciation, depletion, amortization and accretion:

 

 

 

 

 

 

 Services

 

 

8,266

 

 

 

28,426

 

 Rentals

 

 

6,749

 

 

 

19,717

 

 Product sales

 

 

5,493

 

 

 

11,065

 

 Total depreciation, depletion, amortization and accretion

 

 

20,508

 

 

 

59,208

 

 General and administrative expenses

 

 

31,841

 

 

 

33,671

 

 Restructuring expenses

 

 

1,223

 

 

 

4,712

 

 Other (gains) and losses, net

 

 

(13,397

)

 

 

(1,097

)

 Income (loss) from operations

 

 

66,031

 

 

 

(43,981

)

 Other income (expense):

 

 

 

 

 

 

 Interest income, net

 

 

3,373

 

 

 

647

 

 Other income (expense)

 

 

(6,838

)

 

 

(6,224

)

 Income (loss) from continuing operations before income taxes

 

 

62,566

 

 

 

(49,558

)

 Income tax (expense) benefit

 

 

(14,058

)

 

 

9,518

 

 Net income (loss) from continuing operations

 

 

48,508

 

 

 

(40,040

)

 Income (loss) from discontinued operations, net of income tax

 

 

17

 

 

 

(5,161

)

 Net income (loss)

 

$

48,525

 

 

$

(45,201

)

 

 

 

 

 

 

 

 Income (loss) per share - basic:

 

 

 

 

 

 

 Net income (loss) from continuing operations

 

$

2.42

 

 

$

(2.00

)

 Income (loss) from discontinued operations, net of income tax

 

 

-

 

 

 

(0.26

)

 Net income (loss)

 

$

2.42

 

 

$

(2.26

)

 

 

 

 

 

 

 

 Income (loss) per share - diluted:

 

 

 

 

 

 

 Net income (loss) from continuing operations

 

$

2.41

 

 

$

(2.00

)

 Income (loss) from discontinued operations, net of income tax

 

 

0.01

 

 

 

(0.26

)

 Net income (loss)

 

$

2.42

 

 

$

(2.26

)

 

 

 

 

 

 

 

 Weighted-average shares outstanding - basic

 

 

20,024

 

 

 

19,999

 

 Weighted-average shares outstanding - diluted

 

 

20,090

 

 

 

19,999

 

See accompanying notes to unaudited condensed consolidated financial statements

 

5

 


 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

(unaudited)

 

 

Successor

 

 

 

Predecessor

 

 

 

For the Nine Months Ended September 30, 2022

 

 

For the Period
February 3, 2021
through
September 30, 2021

 

 

 

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

 

 Revenues:

 

 

 

 

 

 

 

 

 

 

 Services

 

$

291,268

 

 

$

209,133

 

 

 

$

19,234

 

 Rentals

 

 

224,328

 

 

 

143,972

 

 

 

 

14,434

 

 Product sales

 

 

129,261

 

 

 

97,213

 

 

 

 

12,260

 

 Total revenues

 

 

644,857

 

 

 

450,318

 

 

 

 

45,928

 

 Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 Services

 

 

199,903

 

 

 

166,801

 

 

 

 

15,080

 

 Rentals

 

 

74,664

 

 

 

60,960

 

 

 

 

5,876

 

 Product sales

 

 

74,862

 

 

 

69,391

 

 

 

 

8,817

 

 Total cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

 

 

349,429

 

 

 

297,152

 

 

 

 

29,773

 

 Depreciation, depletion, amortization and accretion:

 

 

 

 

 

 

 

 

 

 

 Services

 

 

30,224

 

 

 

73,174

 

 

 

 

3,500

 

 Rentals

 

 

23,278

 

 

 

50,558

 

 

 

 

2,627

 

 Product sales

 

 

24,437

 

 

 

34,524

 

 

 

 

2,231

 

 Total depreciation, depletion, amortization and accretion

 

 

77,939

 

 

 

158,256

 

 

 

 

8,358

 

 General and administrative expenses

 

 

94,090

 

 

 

84,417

 

 

 

 

11,052

 

 Restructuring expenses

 

 

4,441

 

 

 

20,533

 

 

 

 

1,270

 

 Other (gains) and losses, net

 

 

(30,263

)

 

 

(732

)

 

 

 

-

 

 Income (loss) from operations

 

 

149,221

 

 

 

(109,308

)

 

 

 

(4,525

)

 Other income (expense):

 

 

 

 

 

 

 

 

 

 

 Interest income, net

 

 

6,011

 

 

 

1,394

 

 

 

 

202

 

 Reorganization items, net

 

 

-

 

 

 

-

 

 

 

 

335,560

 

 Other income (expense)

 

 

(6,362

)

 

 

(6,499

)

 

 

 

(2,105

)

 Income (loss) from continuing operations before income taxes

 

 

148,870

 

 

 

(114,413

)

 

 

 

329,132

 

 Income tax (expense) benefit

 

 

(32,813

)

 

 

15,550

 

 

 

 

(60,003

)

 Net income (loss) from continuing operations

 

 

116,057

 

 

 

(98,863

)

 

 

 

269,129

 

 Income (loss) from discontinued operations, net of income tax

 

 

(188

)

 

 

(33,967

)

 

 

 

(352

)

 Net income (loss)

 

$

115,869

 

 

$

(132,830

)

 

 

$

268,777

 

 

 

 

 

 

 

 

 

 

 

 

 Income (loss) per share - basic:

 

 

 

 

 

 

 

 

 

 

 Net income (loss) from continuing operations

 

$

5.80

 

 

$

(4.94

)

 

 

$

18.13

 

 Income (loss) from discontinued operations, net of income tax

 

 

(0.01

)

 

 

(1.70

)

 

 

 

(0.02

)

 Net income (loss)

 

$

5.79

 

 

$

(6.64

)

 

 

$

18.11

 

 

 

 

 

 

 

 

 

 

 

 

 Income (loss) per share - diluted:

 

 

 

 

 

 

 

 

 

 

 Net income (loss) from continuing operations

 

$

5.78

 

 

$

(4.94

)

 

 

$

18.06

 

 Income (loss) from discontinued operations, net of income tax

 

 

(0.01

)

 

 

(1.70

)

 

 

 

(0.03

)

 Net income (loss)

 

$

5.77

 

 

$

(6.64

)

 

 

$

18.03

 

 

 

 

 

 

 

 

 

 

 

 

 Weighted-average shares outstanding - basic

 

 

20,016

 

 

 

19,997

 

 

 

 

14,845

 

 Weighted-average shares outstanding - diluted

 

 

20,074

 

 

 

19,997

 

 

 

 

14,905

 

See accompanying notes to unaudited condensed consolidated financial statements

 

6

 


 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

 

 

 

For the Three Months Ended

 

 

 

September 30, 2022

 

 

 

2022

 

 

2021

 

 Net income (loss)

 

$

48,525

 

 

$

(45,201

)

 Change in cumulative translation adjustment, net of tax

 

 

-

 

 

 

-

 

 Comprehensive income (loss)

 

$

48,525

 

 

$

(45,201

)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

For the Nine Months Ended September 30, 2022

 

 

For the Period
February 3, 2021
through
September 30, 2021

 

 

 

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

 

 Net income (loss)

 

$

115,869

 

 

$

(132,830

)

 

 

$

268,777

 

 Change in cumulative translation adjustment, net of tax

 

 

-

 

 

 

-

 

 

 

 

67,947

 

 Comprehensive income (loss)

 

$

115,869

 

 

$

(132,830

)

 

 

$

336,724

 

 

See accompanying notes to unaudited condensed consolidated financial statements

 

 

7

 


 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Common Stock

 

 

paid-in

 

 

 

 

 

other

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

capital