Smart Sand Inc

Previous wording

We are a fully integrated frac and industrial sand supply and services company. We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. We produce low-cost, high quality Northern White sand, which is a premium sand used as proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications. We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystems™ wellsite storage capabilities. In recent years, we have expanded our product line to offer Industrial Products Solutions (“IPS”) in order to diversify our customer base and markets we serve by offering sand for industrial uses. We market our products and services to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. We sell our sand through long-term contracts, short-term supply agreements or spot sales in the open market. We provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers. We believe that, among other things: (i) the size and favorable geologic characteristics of our sand reserves; (ii) the strategic location and logistical advantages of our facilities; (iii) our proprietary SmartDepot™ portable wellsite storage silos, SmartPath® transloader and SmartBelt™ conveyor;

Current wording

We are a fully integrated frac and industrial sand supply and services company. We offer complete mine to wellsite proppant supply and logistics solutions to our frac sand customers. We produce low-cost, high quality Northern White sand, which is a premium sand used as proppant to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells and for a variety of industrial applications. We also offer proppant logistics solutions to our customers through our in-basin transloading terminals and our SmartSystems™ wellsite storage capabilities. In recent years, we have expanded our product line to offer Industrial Products Solutions (“IPS”) in order to diversify our customer base and markets we serve by offering sand for industrial uses. We market our products and services to oil and natural gas exploration and production companies, oilfield service companies, and industrial manufacturers. We sell our sand through long-term contracts, short-term supply agreements or spot sales in the open market. We provide wellsite proppant storage solutions services and equipment under flexible contract terms custom tailored to meet the needs of our customers. We believe that, among other things: (i) the size and favorable geologic characteristics of our sand reserves; (ii) the strategic location and logistical advantages of our facilities; (iii) our proprietary SmartDepot™ portable wellsite storage silos, SmartPath® transloader and SmartBelt™ conveyor;

Previous wording

(iv), access to all Class I rail lines; and (v) the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services

Current wording

(iv) access to all Class I rail lines; and (v) the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services.

Previous wording

We directly control five in-basin transloading facilities and have access to third party transloading terminals in all operating basins. We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. We operate this terminal under a long-term agreement with Canadian Pacific Railway. We also serve the Appalachian Basin through three company-controlled terminals. In January 2022, we began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania, which we expanded in 2023. In December 2023 we acquired the right to operate a terminal in Minerva, Ohio and in January 2024 we acquired the rights to operate a terminal in Dennison, Ohio. We expect these two Ohio terminals to become operational in the second quarter of 2024. We also have rights to use a rail terminal located in El Reno, Oklahoma. These terminals allow us to offer more efficient and sustainable delivery options to our customers. Additionally, we have longstanding relationships with third party terminal operators that allow us access to all oil and natural gas exploration production basins of North America.

Current wording

We directly control five in-basin transloading facilities and have access to third party transloading terminals in all operating basins. We operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation in the Williston Basin. We also serve the Appalachian Basin through three company-controlled terminals. In January 2022, we began operations at a unit train capable transloading terminal in Waynesburg, Pennsylvania, which we expanded in 2023. In December 2023, we acquired the right to operate a terminal in Minerva, Ohio and in January 2024, we acquired the right to operate a terminal in Dennison, Ohio. The Minerva terminal became operational in the second quarter of 2024 and the Dennison terminal became operational in the third quarter of 2024. We also have the right to use a rail terminal located in El Reno, Oklahoma. These terminals allow us to offer more efficient and sustainable delivery options to our customers. Additionally, we have longstanding relationships with third party terminal operators that provide us with access to all oil and natural gas exploration production basins of North America.

Previous wording

We offer to our customers portable wellsite proppant storage and management solutions through our SmartSystems products and services. Our SmartSystems provide our customers with the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. This capability creates efficiencies, flexibility, enhanced safety and reliability for customers. Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL™ silo systems, SmartPath transloader SmartBelt conveyor, and our rapid deployment trailers. Our SmartDepot silos include passive and active dust suppression technology, along with the capability of a gravity-fed operation. Our self-contained SmartPath transloader is designed to work with bottom dump trailers and features a drive over conveyor, surge bin, and dust collection system. Our SmartBelt conveyor is designed to work with our SmartPath transloader to directly feed sand into the blender. Our rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, which allows for efficient removal from the wellsite during operation. We believe the system has the ability to keep up with any hydraulic fracturing operation. We have also developed a proprietary software program, the SmartSystem Tracker™, which allows our SmartSystems customers to monitor silo-specific information, including location, proppant type and proppant inventory. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them reduce their carbon footprint in their daily operations.

Current wording

We offer to our customers portable wellsite proppant storage and management solutions through our SmartSystems products and services. Our SmartSystems provide our customers with the capability to unload, store and deliver proppant at the wellsite, as well as the ability to rapidly set up, takedown and transport the entire system. This capability creates efficiencies, flexibility, enhanced safety and reliability for customers. Through our SmartSystems wellsite proppant storage solutions, we offer the SmartDepot and SmartDepotXL™ silo systems, SmartPath transloader SmartBelt conveyor, and our rapid deployment trailers. Our SmartDepot silos include passive and active dust suppression technology, along with the capability of a gravity-fed operation. Our SmartPath transloader is designed to work with bottom dump trailers and features a drive over conveyor, surge bin, and dust collection system. Our SmartBelt conveyor is designed to work with our SmartPath transloader to directly feed sand into the blender. Our rapid deployment trailers are designed for quick setup, takedown and transportation of the entire SmartSystem, which allows for efficient removal from the wellsite during operation. We believe the system has the ability to keep up with any hydraulic fracturing operation. We have also developed a proprietary software program, the SmartSystem Tracker™, which allows our SmartSystems customers to monitor silo-specific information, including location, proppant type and proppant inventory. We believe that our SmartSystems reduce trucking and related fuel consumption for our customers, helping them reduce their carbon footprint in their daily operations.

Previous wording

We have expanded our product line to offer industrial sand through IPS. In 2023, we completed the installation of blending and cooling assets at our Utica, Illinois facility that we believe will provide new opportunities to increase our customer base in the IPS business. While sales of IPS to customers were a small portion of our overall sand sales in 2022 and 2023, we expect to continue to expand and diversify to serve the major industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more in 2024.

Current wording

We have expanded our product line to offer industrial sand through IPS. In 2023, we completed the installation of blending and cooling assets at our Utica, Illinois facility that we believe will provide new opportunities to increase our customer base in the IPS business. While sales of IPS to customers were a small portion of our overall sand sales in 2022 and 2023, going forward, we expect to continue to expand and diversify to serve the major industrial markets throughout North America, including glass, foundry, building products, filtration, geothermal, renewables, ceramics, turf & landscape, retail, recreation and more.

Previous wording

During 2023 and through the first quarter of 2024, supply and demand for Northern White Sand has been in relative balance. We saw an increase in the volume of sand sold in the first half of 2023 followed by a slowdown in activity later in the year due to customers having exhausted their budgeted spending earlier in the year. Activity has improved in the first quarter of 2024 as customers ramped up activity based on 2024 budget plans. Pricing for sand moderated in the second half of 2023 due to lower demand and has stabilized in the first quarter of 2024. High levels of inflation have led to increasing operating expenses in 2023 and the first quarter of 2024. Softening economic activities in certain countries, the continuation of the war in Ukraine, the conflict in the Middle East, along with President Biden’s pause on liquified natural gas permits could impact oil and natural gas prices and overall oil and gas activity thereby leading to substantial volatility in demand and pricing in the future. The continued volatility in oil and natural gas demand and the current availability of sufficient supply of sand has led to continued reluctance by some customers to enter into long-term contracts. As such, some customers have instead trended toward purchasing their frac sand supply in the spot market or under short term supply agreements at current market prices. We cannot predict if pricing trends for our products will continue, increase, decrease or stabilize.

Current wording

of 2023 due to stabilized supply and demand. High levels of inflation led to increasing operating expenses in 2023, which have continued at increased levels through the first half of 2024. Softening economic activities in certain countries, the continuation of the war in Ukraine, the conflict in the Middle East, along with President Biden’s pause on liquified natural gas permits could impact oil and natural gas prices and overall oil and gas activity thereby leading to substantial volatility in demand and pricing in the future. The continued volatility in oil and natural gas demand and the current availability of sufficient supply of sand has led to continued reluctance by some customers to enter into long-term contracts. As such, some customers have instead trended toward purchasing their frac sand supply in the spot market or under short term supply agreements at current market prices. We cannot predict macroeconomic events or if pricing trends for our products will continue, increase, decrease or stabilize.

Previous wording

Revenues were $83.1 million and tons sold were approximately 1,336,000 for the three months ended March 31, 2024. Revenues for the three months ended March 31, 2023 were $82.4 million, during which time we sold approximately 1,195,000 tons of sand. The key factors contributing to the increase in revenues for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 were as follows:

Current wording

Revenues were $73.8 million and tons sold were approximately 1,274,000 for the three months ended June 30, 2024. Revenues for the three months ended June 30, 2023 were $74.8 million, during which time we sold approximately 1,084,000 tons of sand. The key factors contributing to the revenues for the three months ended June 30, 2024 being relatively flat, as compared to the three months ended June 30, 2023 were as follows:

Previous wording

•Smart Systems revenue, was approximately $3.3 million for the three months ended March 31, 2024 compared to $2.3 million for the three months ended March 31, 2023. The increase in SmartSystems revenue was due to higher utilization of our SmartSystems fleet and expanded use of our SmartBelt technology.

Current wording

•SmartSystems revenue was approximately $2.8 million for the three months ended June 30, 2024 compared to $2.3 million for the three months ended June 30, 2023. The increase in SmartSystems revenue was due to higher utilization of our SmartSystems fleet and expanded use of our SmartBelt technology.

Previous wording

We incurred $0.5 million and $0.4 million of net interest expense for the three months ended March 31, 2024 and March 31, 2023, respectively.

Current wording

We incurred $0.4 million and $0.2 million of net interest expense for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

For the three months ended March 31, 2024 and March 31, 2023, our effective tax rate was approximately 155.2% and (79.9)%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, carrybacks, and state apportionment changes, among other items.

Current wording

For the three months ended June 30, 2024 and 2023, our effective tax rate was approximately 122.6% and (108.9)%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The computation of the effective tax rate includes modifications from the statutory rate such as income tax credits, tax depletion deduction, carrybacks, and state apportionment changes, among other items.

Previous wording

•Sand revenue was relatively constant at $79.7 million for the three months ended March 31, 2024 versus $80.0 million for the three months ended March 31, 2023. Total volumes increased by approximately 12%, however, average sand prices were lower in the first quarter of 2024 as supply and demand shifts have become more in balance compared to the same period in 2023. We also recognized higher contractual shortfall revenue in the prior year.

Current wording

•Sand revenue was relatively constant at $150.7 million for the six months ended June 30, 2024 versus $152.5 million for the six months ended June 30, 2023. Total volumes increased by approximately 15%, however, average sand prices were lower in the first half of 2024 as supply and demand shifts have become more in balance compared to the same period in 2023. We also recognized higher contractual shortfall revenue in the prior year.

Previous wording

Gross profit was $11.8 million and $11.6 million for the three months ended March 31, 2024 and March 31, 2023, respectively. The increase in the gross profit for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher sales volumes partially offset by lower average sales prices of our sand relative to the cost to produce and deliver products to our customers. Smart Systems contributed more to gross profit as a result of higher utilization.

Current wording

Gross profit was $24.9 million and $24.3 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The gross profit for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was relatively consistent with higher sales volumes partially offset by lower average sales prices of our sand relative to the cost to produce and deliver products to our customers. SmartSystems contributed more to gross profit as a result of higher utilization.

Previous wording

Selling, general and administrative expenses decreased to $10.4 million for the three months ended March 31, 2024 compared to $10.8 million for the three months ended March 31, 2023, due to cost reduction measures put in place by management, which were partially offset by additional costs incurred related to financing activities. Additionally, in the first quarter of 2023, we recorded a $1.9 million net loss on disposal of fixed assets as we reconfigured one of our wet plants to increase the efficiency of its operations and upgraded some of our mining equipment.

Current wording

Selling, general and administrative expenses decreased to $19.2 million for the six months ended June 30, 2024 compared to $19.7 million for the six months ended June 30, 2023, due to cost reduction measures put in place by management, which were partially offset by additional costs incurred related to financing activities. Additionally, in the first half of 2023, we recorded a $1.9 million net loss on disposal of fixed assets as we reconfigured one of our wet plants to increase the efficiency of its operations and upgraded some of our mining equipment.

Previous wording

EBITDA and net cash provided by operating activities is the GAAP measure most directly comparable to free cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures. You should not consider contribution margin, EBITDA, Adjusted EBITDA or free cash flow in isolation or as substitutes for an analysis of our results as reported under GAAP. Because contribution margin, EBITDA, Adjusted EBITDA and free cash flow may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Current wording

Contribution margin, EBITDA, adjusted EBITDA and free cash flow are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial condition and results of operations. Gross profit is the GAAP measure most directly comparable to contribution margin, net income is the GAAP measure most directly comparable to EBITDA and adjusted EBITDA and net cash provided by operating activities is the GAAP measure most directly comparable to free cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures. You should not consider contribution margin, EBITDA, adjusted EBITDA or free cash flow in isolation or as substitutes for an analysis of our results as reported under GAAP. Because contribution margin, EBITDA, adjusted EBITDA and free cash flow may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Previous wording

Contribution margin was $18.5 million and $17.8 million, or $13.85 and $14.89 per ton sold, for the three months ended March 31, 2024 and 2023, respectively. The increase in overall contribution margin for the three months ended March 31, 2024, when compared to the same period in 2023, was primarily due to higher tons sold and the increased utilization of our SmartSystems fleet. The decrease in contribution margin per ton sold was primarily due to lower average sand sales prices for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Current wording

Contribution margin was $19.8 million and $19.0 million, or $15.53 and $17.57 per ton sold, for the three months ended June 30, 2024 and 2023, respectively. Contribution margin was $38.3 million and $36.8 million, or $14.67 and $16.17 per ton sold, for the six months ended June 30, 2024 and 2023, respectively. The increase in overall contribution margin for both the three and six month periods ended June 30, 2024, when compared to the same periods in 2023, was primarily due to higher tons sold and the increased utilization of our SmartSystems fleet, as well as our focus on cost reduction measures throughout the Company.

Previous wording

Adjusted EBITDA was $9.3 million for the three months ended March 31, 2024 compared to $8.3 million for the three months ended March 31, 2023. The increase in Adjusted EBITDA for the three months ended March 31, 2024, compared to the same period in 2023, was primarily due to higher sales volumes, increased IPS sales and higher utilization of our SmartSystems fleet.

Current wording

Adjusted EBITDA was $11.9 million for the three months ended June 30, 2024 compared to $11.3 million for the three months ended June 30, 2023. Adjusted EBITDA was $21.2 million for the six months ended June 30, 2024 compared to $19.4 million for the six months ended June 30, 2023. The increase in adjusted EBITDA for the six months ended June 30, 2024, compared to the same period in 2023, was primarily due to higher sales volumes and higher utilization of our SmartSystems fleet.

Previous wording

Net cash provided by operating activities is the GAAP measure most directly comparable to free cash flows. Free cash flows should not be considered an alternative to net cash provided by operating activities presented in accordance with GAAP. Because free cash flows may be defined differently by other companies in our industry, our definition of free cash flows may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of net cash provided by (used in) operating activities to free cash flows.

Current wording

Net cash provided by operating activities is the GAAP measure most directly comparable to free cash flows. Free cash flows should not be considered an alternative to net cash provided by operating activities presented in accordance with GAAP. Because free cash flows may be defined differently by other companies in our industry, our definition of free cash flows may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. The following table presents a reconciliation of net cash provided by operating activities to free cash flows.

Previous wording

Our primary sources of liquidity are cash flow generated from operations and availability under our ABL Credit Facility and other equipment financing sources. As of March 31, 2024, cash on hand was $4.6 million and we had $6.0 million in undrawn availability on our ABL Credit Facility. We are in the process of refinancing this facility.

Current wording

Our primary sources of liquidity are cash flow generated from operations and availability under our ABL Credit Facility and other equipment financing sources. As of June 30, 2024, cash on hand was $6.3 million and we had $18.0 million in undrawn availability on our ABL Credit Facility. We are in the process of refinancing this facility.

Previous wording

We expect full year 2024 capital expenditures to be between $15.0 million and $20.0 million. Our expected capital expenditures for 2024 are primarily for process improvement and efficiency projects at our mine sites, upgrading mining equipment and the build out of our new Ohio terminals. We expect to fund these capital expenditures with cash from operations, equipment financing options available to us or borrowings under the ABL Credit Facility.

Current wording

We expect full year 2024 capital expenditures to be between $10.0 million and $13.0 million. Our expected capital expenditures for 2024 are primarily for process improvement and efficiency projects at our mine sites, upgrading mining equipment and the build out of our new Ohio terminals. We expect to fund these capital expenditures with cash from operations, equipment financing options available to us or borrowings under the ABL Credit Facility.

Previous wording

Our debt facilities include the Oakdale Equipment Financing, various notes payable and our ABL Credit Facility. Our Oakdale Equipment Financing is secured by substantially all of the assets at our Oakdale facility. The outstanding balance under the Oakdale Equipment Financing as of March 31, 2024 was $6.9 million. Minimum cash payments on this facility for the remainder of 2024 are anticipated to be $5.7 million. Our various notes payable are primarily secured by heavy equipment purchases as well as some of our manufactured SmartSystems. Total debt under these notes payable as of March 31, 2024 was $3.0 million. Minimum cash payments on these notes payable for the remainder of 2024 are anticipated to be $0.9 million. There was $14.0 million outstanding on our ABL Credit Facility as of March 31, 2024, which matures December 13, 2024. We are in the process of refinancing this facility.

Current wording

Our debt facilities include the VFI Equipment Financing, various notes payable and our ABL Credit Facility. Our VFI Equipment Financing is secured by the majority of the Company’s SmartSystems equipment. The outstanding balance under the VFI Equipment Financing as of June 30, 2024 was $9.1 million. Minimum cash payments on this facility for the remainder of 2024 are anticipated to be $1.5 million. Our various notes payable are primarily secured by heavy equipment. Total debt under these notes payable as of June 30, 2024 was $3.1 million. Minimum cash payments on these notes payable for the remainder of 2024 are anticipated to be $0.4 million. There was $2.0 million outstanding on our ABL Credit Facility as of June 30, 2024, which matures December 13, 2024. We are in the process of refinancing this facility.

Previous wording

We use leases primarily to procure certain office space, railcars and heavy equipment as part of our operations. The majority of our lease payments are fixed and determinable. Our operating lease liabilities as of March 31, 2024 were $21.6 million. Minimum cash payments on operating leases for the remainder of 2024 are anticipated to be $8.3 million.

Current wording

We use leases primarily to procure certain office space, railcars and heavy equipment as part of our operations. The majority of our lease payments are fixed and determinable. Our operating lease liabilities as of June 30, 2024 were $25.7 million. Minimum cash payments on operating leases for the remainder of 2024 are anticipated to be $6.4 million.

Previous wording

We had outstanding performance bonds of $19.7 million at March 31, 2024.

Current wording

We had outstanding performance bonds of $19.7 million as of June 30, 2024.

Previous wording

As of March 31, 2024, we had contractual obligations for the ABL Credit Facility, Oakdale Equipment Financing, notes payable, operating and finance leases, delivery of sand, royalties and similar minimum payments for the rights to mine land, capital expenditures, asset retirement obligations, and other commitments to municipalities for maintenance.

Current wording

As of June 30, 2024, we had contractual obligations for the ABL Credit Facility, VFI Equipment Financing, notes payable, operating and finance leases, delivery of sand, royalties and similar minimum payments for the rights to mine land, capital expenditures, asset retirement obligations, and other commitments to municipalities for maintenance.

Previous wording

Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, same of our excavation and our wet sand processing activities have historically been limited during winter months. As a consequence, we typically have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we have overproduced sand to meet demand in the winter months. These higher cash operating costs are capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall cost of production in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. We have indoor wet processing facilities at two of our plant locations, which allow us to produce wet sand inventory year-round to support a portion of our dry sand processing capacity, which may reduce certain of the effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods.

Current wording

Our business is affected to some extent by seasonal fluctuations in weather that impact the production levels for a portion of our wet sand processing capacity. While our dry plants are able to process finished product volumes evenly throughout the year, some of our excavation and our wet sand processing activities have historically been limited during winter months. As a consequence, we typically have experienced lower cash operating costs in the first and fourth quarter of each calendar year, and higher cash operating costs in the second and third quarter of each calendar year when we have overproduced sand to meet demand in the winter months. These higher cash operating costs are capitalized into inventory and expensed when these tons are sold, which can lead to us having higher overall cost of production in the first and fourth quarters of each calendar year as we expense inventory costs that were previously capitalized. We have indoor wet processing facilities at two of our plant locations, which allow us to produce wet sand inventory year-round to support a portion of our dry sand processing capacity, which may reduce some of the effects of this seasonality. We may also sell frac sand for use in oil and natural gas producing basins where severe weather conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods.

Previous wording

For the three months ended March 31, 2024, revenue from Equitable Gas Corporation, Halliburton Energy Services and Encino Energy accounted for 37.4%, 11.4% and 11.2% respectively, of total revenue. For the three months ended March 31, 2023, EQT Production Corporation, Encino Energy, and Liberty Oilfield Services accounted for 32.5%, 13.3%, and 10.8%, respectively, of total revenue.

Current wording

For the six months ended June 30, 2024, revenue from Equitable Gas Corporation and Encino Energy accounted for 32.7% and 12.2%, respectively, of total revenue. For the six months ended June 30, 2023, EQT Production Corporation, Liberty Oilfield Services, and Enerplus Resources Corporation accounted for 30.6%, 10.2% and 8.7%, respectively, of total revenue.

Previous wording

There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, 2024.

Current wording

There have been no material changes in our critical accounting policies and procedures during the six months ended June 30, 2024.