Ranger Energy Services, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 — Organization and Business Operations

Business

Ranger Energy Services, Inc. (“Ranger, Inc.,” “Ranger,” “we,” “us,” “our” or the “Company”) is a provider of onshore high specification well service rigs, wireline services, and additional processing solutions and ancillary services in the United States (“U.S.”). The Company provides an extensive range of well site services to leading U.S. E&P companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.

Our service offerings consist of well completion support, workover, well maintenance, wireline, and other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted inthree reportable segments, as follows:

•High Specification Rigs. Provides high specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

•Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our completion, production, and pump down service lines.

•Processing Solutions and Ancillary Services. Provides complementary services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services primarily include equipment rentals, plug and abandonment, logistics, coil tubing, and processing solutions.

The Company’s operations take place in most of the active oil and natural gas basins in the U.S., including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend, Anadarko Basin, and Canadian and Kingfisher Counties plays.

Organization

Ranger, Inc. was incorporated as a Delaware corporation in February 2017. In conjunction with the initial public offering of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), which closed on August 16, 2017 (the “Offering”), and the corporate reorganization Ranger Inc. underwent in connection with the Offering, Ranger Inc. became a holding company, and its sole material assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”). Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”) and Torrent Energy Services, LLC (“Torrent Services”), and the other subsidiaries through which it operates its assets. Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services, its subsidiaries, and Torrent Services’ business and consolidates the financial results of Ranger Services, its subsidiaries, and Torrent Services.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and the SEC instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures have been condensed or omitted. The Condensed Consolidated Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results of operations for the interim periods. These interim financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in the Annual Report. Interim results for the periods presented may not be indicative of results that will be realized for future periods.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report.

Use of Estimates

The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Management uses historical and other pertinent information to determine these estimates. Actual results could differ from such estimates.

Areas where critical accounting estimates are made by management include:

•Depreciation and amortization of property and equipment and intangible assets;

•Impairment of property and equipment and intangible assets;

•Collectability of accounts receivable and estimates of allowance for credit losses;

•Income taxes; and

•Equity-based compensation.

New Accounting Pronouncements

Recently adopted accounting standards

In November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption was permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted this standard on December 31, 2024 within “Part II, Item 8. Financial Statements and Supplementary Data—Note 16 — Segment Reporting” of the Annual Report.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company adopted this standard on a prospective basis on December 31, 2024 within “Part II, Item 8. Financial Statements and Supplementary Data—Note 12 — Income Taxes” of the Annual Report.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. In January 2025, the FASB issued Accounting Standards Update 2025-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the effective date, which only impacts public business entities with non-calendar year-end reporting periods. As such, the original effective date pronounced in ASU 2024-03 remains applicable for Ranger. Based on both the ASU 2024-03 and subsequent clarification in ASU 2025-01, early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In July 2025, the FASB issued Accounting Standards Update No. 2025-05, “Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers.

Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Note 3 — Correction of an Immaterial Error

During the three months ended September 30, 2025, the Company completed a full physical inventory count and obsolescence review for the Wireline Services segment. As a result of this review, the Company recorded the cumulative impacts of inventory adjustments totaling $1.6 million. In accordance with Financial Accounting Standards Board ASC 250, Accounting Changes and Error Corrections, the Company evaluated the materiality of the errors from quantitative and qualitative perspectives and concluded that the errors were immaterial to the Company’s prior period interim and annual consolidated financial statements. Because these errors were not material to any prior period interim or annual financial statements, no amendments to previously filed interim or annual periodic reports are required. The Company recognized the cumulative effect of the error on prior periods by recording during the three months ended and as of, September 30, 2025, (i) $1.6 million of cost of services in the Condensed Consolidated Statement of Operations to reflect the cumulative adjustments primarily related to obsolescence and write-off of inventory determined to have no net realizable value, and (ii) $1.6 million reduction of inventory in the Condensed Consolidated Balance Sheet. Management has implemented procedures to strengthen internal controls over inventory disposal tracking and reconciliation.

Note 4 — Assets Held for Sale

Assets held for sale include the net book value of assets the Company plans to sell within the next 12 months and are primarily related to excess non-working assets. Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value less estimated costs to sell.

As of September 30, 2025, the Company classified $0.4 million of idle high specification rigs within our broader rig portfolio as held for sale as they are being actively marketed, as compared to $0.6 million of land and buildings held for sale as of September 30, 2024.

For the nine months ended September 30, 2025 and 2024, the Company recognized a net gain on assets previously held in Property and equipment of $0.6 million and a net gain on assets previously held for sale of $1.7 million, respectively, which is shown on the Condensed Consolidated Statements of Operations.

During the nine months ended September 30, 2025, the Company reclassified certain well service rigs with a carrying value of $0.3 million from Assets Held for Sale back to Property and Equipment, net, as the criteria for classification as held for sale under ASC 360-10-45-9 were no longer met. The Company believes these assets may have use in future operations and are no longer actively marketing them. Depreciation on the reclassified rigs resumed prospectively beginning in July 2025.

Note 5 — Property and Equipment, Net

Property and equipment, net include the following (in millions):

Depreciation expense was $10.8 million and $10.9 million for the three months ended September 30, 2025 and 2024, respectively, and $31.9 million and $32.7 million for the nine months ended September 30, 2025 and 2024.

Note 6 — Intangible Assets, Net

Definite lived intangible assets are comprised of the following (in millions):

Amortization expense was $0.2 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively and $0.6 million and $0.6 million for the nine months ended September 30, 2025 and 2024. Amortization expense for the future periods is expected to be as follows (in millions):

Note 7 — Accrued Expenses

Accrued expenses include the following (in millions):

Note 8 — Leases

Operating Leases

The Company has operating leases, primarily for real estate and equipment, with terms that vary fromone tonine years, included in operating lease costs in the table below. The operating leases are included in Short-term lease liability and Long-term lease liability in the Condensed Consolidated Balance Sheets.

Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations. Lease costs and other information related to operating leases for the three and nine months ended September 30, 2025 and 2024, are as follows (in millions):

As of September 30, 2025, aggregate future minimum lease payments under operating leases are as follows (in millions):

On February 1, 2025 the Company entered into an agreement to sublease a 38,033 square foot property located in Midland, Texas. The sublease will cover the remaining term of the head lease for the property with no renewal options, ending September 30, 2027. Sublease income will be reported separately from the operating lease expense as part of other income. The Company recognized an impairment to the right of use asset associated with this operating lease of $0.4 million, in accordance with ASC 360-10 on February 1, 2025. The fair value of the right of use asset was measured as the present value of the future sublease cash flows using the Company’s incremental borrowing rate.

Certain of the Company’s customer agreements to construct and operate hybrid rigs (“ECHO Rigs”), contain an operating lease component under ASC 842, Leases. A contract is considered to contain a lease when (i) it specifies identified assets, (ii) the customer obtains substantially all of the economic benefits from those assets during the period of use, and (iii) the customer directs the use of the assets during the period of use. The Company has elected the lessor practical expedient to combine lease and non-lease components when (a) the revenue recognition pattern is the same and (b) the lease component, if accounted for separately, would be classified as an operating lease. When non-lease component is the predominant element, the combined component is accounted for under ASC 606, Revenue from Contracts with Customers.

Finance Leases

The Company leases certain assets, primarily automobiles, under finance leases with terms that are generally three tofive years. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. The finance leases are included in Property and equipment, net, Short-term lease liability and Long-term lease liability in the Condensed Consolidated Balance Sheets.

Lease costs and other information related to finance leases for the three and nine months ended September 30, 2025 and 2024, are as follows (in millions):

As of September 30, 2025, aggregate future minimum lease payments under finance leases are as follows (in millions):

Note 9 — Other Financing Liabilities

The Company has sale, lease-back agreements for land and certain other fixed assets with terms that vary from 18 months to 13 years. The sales did not qualify for sale accounting, therefore these leases were classified as finance leases and no gain or loss was recorded. The net book value of the assets remained in Property and equipment, net and are depreciating over their original useful lives.

As of September 30, 2025, aggregate future lease payments of the financing liabilities are as follows (in millions):

Note 10 — Debt

Wells Fargo Bank, N.A. Credit Agreement

On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo Bank, N.A., providing the Company with a secured credit facility (the “Wells Fargo Revolving Credit Facility”) in an aggregate principal amount of $75 million. Debt under the Credit Agreement is secured by a lien on substantially all of the Company’s assets. The Company was in compliance with the Credit Agreement covenant of maintaining a Fixed Charge Coverage Ratio (“FCCR”) of greater than 1.0 as of September 30, 2025, which is applicable only under certain borrowing levels.

The Company has up to $5 million available under the Wells Fargo Revolving Credit Facility for letters of credit, subject to assignment. At loan origination, the Company had a Letter of Credit in the amount of $1.6 million, to be utilized for working capital and general corporate purposes, as needed. On September 2, 2025, the Letter of Credit established at loan origination was amended to increase the amount to $2.8 million. On September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A. which designated an additional Letter of Credit in the amount of $1.6 million as part of incremental collateral requirements for the Company’s 2024 insurance renewal, which was subsequently adjusted in line with annual renewals. On September 19, 2025, the amount of the Letter of Credit was decreased to $0.7 million as part of incremental collateral requirements for the Company’s 2026 insurance renewal, with a new maturity date of September 19, 2026. The interest rate for this Letter of Credit was approximately 1.8% for the month ended September 30, 2025.

The Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments, such as dividends and share repurchases. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable and eligible unbilled revenue less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions under certain circumstances that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Wells Fargo Revolving Credit Facility. The borrowings of the Wells Fargo Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheets.

Under the Wells Fargo Revolving Credit Facility, the total loan capacity was $75.0 million, which was based on a borrowing base certificate in effect as of September 30, 2025. On June 17, 2024, the Company entered into the First Amendment to the Wells Fargo Revolving Credit Facility, which allows for a percentage of unbilled revenue to be included in the calculation of the borrowing base. The Company didnot have any borrowings under the Wells Fargo Revolving Credit Facility as of September 30, 2025. The Company does have $3.5 million in Letters of Credit open under the facility, leaving a residual $71.5 million available for borrowings as of September 30, 2025. Borrowings under the Wells Fargo Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 6.2% for the nine months ended September 30, 2025.

Other Installment Purchases

During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral. For the nine months ended September 30, 2024, the Company paid down the Installment Agreements by $0.1 million. As of the year ended December 31, 2024, the Company had fully paid the Installment Agreements.

Note 11 — Equity

Equity-Based Compensation

In 2017, the Company adopted the Ranger Energy Services, Inc. 2017 Long Term Incentive Plan (the “2017 Plan”). The Company has granted shares of restricted stock (“restricted shares” or “RSAs”), restricted stock units (“restricted units” or “RSUs”), and performance-based restricted stock units (“performance stock units” or “PSUs”) under the 2017 Plan.

Restricted Stock Awards

While the Company has historically granted RSAs, which generally vest inthree equal annual installments following the year in which they were granted, during the nine months ended September 30, 2025, the Company did not grant any RSAs. As of September 30, 2025, there was an aggregate of $2.2 million of unrecognized expense related to RSAs issued, which is expected to be recognized over a weighted average period of 1.3 years.

Restricted Stock Units

Beginning in 2025, the Company stopped issuing RSAs and began issuing RSUs to certain employees in lieu of RSAs. These employee RSUs generally vest inthree equal annual installments, with the first installment occurring on March 14, 2026. In addition, the Company began granting RSUs in 2024 to certain non-employee directors, which vest on the first anniversary of the date of the grant. During the nine months ended September 30, 2025, the Company granted approximately 238,300 RSUs to employees with an approximated aggregate value of $4.1 million and 40,700 RSUs to non-employee directors with an aggregate value of $0.5 million. As of September 30, 2025, there was an aggregate of $3.7 million of unrecognized expense related to RSUs issued to employees and non-employee directors, which is expected to be recognized over a weighted average period of 2.2 years.

Certain non-employee directors may elect for a portion of their RSUs to settle in the form of restricted cash units (“RCUs”), which vest on the same schedule as the originally granted RSUs.

RCUs are cash-settled with the value of each vested RCU equal to the closing price per share of our Class A Common Stock on the vesting date. The Company determined that RCUs are in-substance liabilities accounted for as liability instruments in accordance with ASC 718, Compensation—Stock Compensation, due to this cash settlement feature. RCUs are remeasured based on the closing price per share of the Company’s Class A Common Stock at the end of each reporting period. During the nine months ended September 30, 2025, the Company granted approximately 12,900 RCUs to non-employee directors. As of September 30, 2025, the liability associated with unvested RCUs was $0.1 million, which is included in Accrued expenses in the Condensed Consolidated Balance Sheets.

Performance Stock Units

The performance criteria applicable to performance stock units that have been granted by the Company are based on relative total shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of a designated peer group, and absolute total shareholder return. Generally, the performance stock units are subject to athree-year performance period.

During the nine months ended September 30, 2025, the Company granted approximately 136,000 target shares of market-based performance stock units, of which 68,000 were granted at a relative grant date fair value of approximately $22.46 per share and 68,000 were granted at an absolute grant date fair value of approximately $18.24 per share.

Shares granted during the nine months ended September 30, 2025 are expected to vest (if at all) following the completion of the applicable performance period on December 31, 2027. As of September 30, 2025, there was an aggregate of $3.4 million of unrecognized compensation cost related to performance stock units, which is expected to be recognized over a weighted average period of 1.3 years.

Effective March 3, 2025, the Company modified the absolute total shareholder return calculation for grants made to three grantees in 2023 and 2024 to include dividends in the calculation of absolute shareholder return. The total incremental compensation cost resulting from this modification was $0.1 million.

Share Repurchases

In March 2023, the Company announced a share repurchase program allowing the Company to purchase Class A Common Stock held by non-affiliates, not to exceed $35.0 million in aggregate value. On March 4, 2024, the Company announced that its Board of Directors approved an additional share repurchase program authorization of $50.0 million, bringing the total share repurchase program authorization to $85.0 million in aggregate value. Share repurchases may take place in any transaction form as allowable by the SEC. Approval of the program by the Board of Directors of the Company is specific for the next 36 months allowing the Company to utilize the expanded $50 million of approved capacity through March 4, 2027.

During the nine months ended September 30, 2025, the Company repurchased 945,600 shares of the Company’s Class A Common Stock for a total of $11.6 million, net of tax on the open market. As of September 30, 2025, an aggregate of 4,271,400 shares of Class A Common Stock were purchased for a total of $46.4 million, net of tax since the inception of the repurchase plan announced on March 7, 2023 and $38.9 million remained available under the share repurchase program.

Dividends

In 2023, the Board of Directors approved the initiation of a quarterly dividend of $0.05 per share. The Company increased the quarterly dividend to $0.06 per share in 2025. The Company paid dividend distributions totaling $4.1 million for the nine months ended September 30, 2025.

The amount and timing of all future dividend payments, if any, are subject to the discretion of the Board of Directors and will depend upon business conditions, results of operations, financial condition, terms of our debt agreements and other factors. There can be no assurance that we will pay a dividend in the future.

Note 12 — Risk Concentrations

Customer Concentrations

During the three months ended September 30, 2025, three customers accounted for approximately 27%,24%, and 12%, respectively, of the Company’s consolidated revenues. These customers contributed 45% of the revenue for high specification rigs,3% for wireline services, and 15% for processing solutions and ancillary services. During the nine months ended September 30, 2025, three customers accounted for approximately 28%,21%, and 11%, respectively, of the Company’s consolidated revenues. These customers contributed 45% of the revenue for high specification rigs,3% for wireline services, and 15% for processing solutions and ancillary services. As of September 30, 2025, approximately 60% of the net accounts receivable balance, in aggregate, was due from these customers.

During the three and nine months ended September 30, 2024, three customers accounted for approximately 18%,11% and 10%, respectively, of the Company’s consolidated revenues. For the three months ended September 30, 2024, these customers contributed 54% of the revenue for high specification rigs,18% for wireline services, and 22% for processing solutions and ancillary services. During the nine months ended September 30, 2024, these customers contributed 51% of the revenue for high specification rigs,13% for wireline services, and 24% for processing solutions and ancillary services. As of September 30, 2024, approximately 41% of the net accounts receivable balance, in aggregate, was due from these customers.

Note 13 — Income Taxes

Effective Tax Rate

The Company is a corporation and is subject to U.S. federal income tax. The Company uses an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating the estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and other income tax related estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates. The effective U.S. federal income tax rate applicable to the Company for the nine months ended September 30, 2025 and 2024 was 30.5% and 29.0%, respectively. The Company is subject to the Texas Margin Tax, which requires tax payments at a maximum statutory effective rate of 0.75% on the taxable margin of each taxable entity that does business in Texas.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus deprecation, domestic research cost expensing, and the business interest expense limitation. ASC 740, "Income Taxes", requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. As a result, the Company is evaluating the legislation and will identify any changes required to its financial statements although we do not anticipate these changes will materially impact the provision for income taxes.

Tax Attributes

Historically, utilization of a portion of the Company's net operating loss carryforwards has been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986 (“Section 382”), as amended. The Company incurred an ownership change, triggering another Section 382 loss limitation, during the three months ended June 30, 2023.

As the Company continues to experience increasing profits and no longer has a trailing 3-year cumulative taxable loss, we currently believe that it is more likely than not to fully utilize all deferred tax assets including those associated with the net operating loss carry-forward. Accordingly, the Company released all valuation allowances previously recorded resulting in a discrete tax benefit for the period ended September 30, 2023.

Other Tax Matters

Total income tax expense for the nine months ended September 30, 2025 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income or loss primarily due to the impact of state income taxes as well as certain non-deductible expenses.

The Company qualified for federal government assistance through employee retention credit ("ERC") provisions of the Consolidated Appropriations Act of 2021. As previously reported, the Company filed amended tax returns with the Internal Revenue Service ("IRS") claiming a refund of certain payroll taxes from 2020 and 2021. As of September 30, 2025, the Company has received a portion of the total claim in cash payments and recognized this amount in Other income within the Consolidated Statement of Operations. The Company has not recognized any receivable for the remaining claimed amount and plans to record the impact of such claims in the period refunds are received.

The Company is subject to the following material taxing jurisdictions: the United States and Texas. As of September 30, 2025, the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2021 through 2024.

The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination. Therefore, as of September 30, 2025, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

Note 14 — Earnings per Share

Earnings per share is based on the amount of earnings allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock. The numerator and denominator used to compute earnings per share were as follows (in millions, except share and per share data):

Note 15 — Commitments and Contingencies

Legal Matters

From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its condensed consolidated financial position or results of operations. We maintain insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisers and brokers, believe are reasonable and prudent. We cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that these levels of insurance will be available in the future at economical prices.

Note 16 — Segment Reporting

The Company’s operations are located in the United States and organized into three reportable segments: High Specification Rigs, Wireline Services, and Processing Solutions and Ancillary Services. The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services, or Processing Solutions and Ancillary Services. The reportable segments comprise the structure used by the Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance during the years presented in the accompanying Consolidated Financial Statements. The Chief Executive Officer is regarded as the Company’s CODM. The primary profitability measurement used by the CODM to review segment operating results is Adjusted EBITDA. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, depreciation and amortization, equity-based compensation, gain or loss on sale of assets, acquisition related costs, severance and reorganization costs, significant and unusual legal fees and settlements, impairment of assets, employee retention credit, inventory adjustment, and certain other non-cash and certain other items that we do not view as indicative of our ongoing performance. The CODM utilizes Adjusted EBITDA to allocate resources for each segment predominantly in the annual planning process and to monitor segment results compared to prior period, forecasted results, and the annual plan.

The reportable segments have been categorized based on services provided in each line of business. The tables below present the operating income (loss) measurement and Adjusted EBITDA, as the Company believes this is most consistent with the principles used in measuring the financial statements.

During the fourth quarter of 2022, the Company determined assets are routinely utilized across multiple segments and Management does not utilize the net property and equipment value as a metric to evaluate the profitability of the respective segments. Therefore, the net property and equipment values have been removed from the segment data presented below.

The following is a description of each operating segment:

High Specification Rigs. Provides high specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our completion, production and pump down service lines.

Processing Solutions and Ancillary Services. Provides complementary services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services primarily include equipment rentals, plug and abandonment, and processing solutions.

Other. Other represents costs not allocable to the reporting segments and includes corporate general and administrative expense and depreciation of corporate furniture and fixtures, amortization, impairments and other items similar in nature.

Certain segment information for the three and nine months ended September 30, 2025 and 2024 is as follows (in millions):

• Other Segment Items include Direct Materials, Subcontractor Expense, Reimbursable Expenses, Equipment Rentals, Fuel, Per Diem, Travel & Entertainment, Vehicles and Miscellaneous. These items, including Employee Expenses and Repair and Maintenance, are included in Cost of Services and General and Administrative expense in the Consolidated Statements of Operations.

• Other Segment Items include Direct Materials, Subcontractor Expense, Reimbursable Expenses, Equipment Rentals, Fuel, Per Diem, Travel & Entertainment, Vehicles and Miscellaneous. These items, including Employee Expenses and Repair and Maintenance, are included in Cost of Services and General and Administrative expense in the Consolidated Statements of Operations.

Note 17 — Subsequent Events

On November 7, 2025 (the “Acquisition Date”), the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with American Well Holdings, LLC to acquire 100% of the ownership interests of American Well Intermediate Holdings, LLC, the sole owner of 100% of the ownership interests of American Well Services, LLC (the “AWS Acquisition”), which operates a fleet of high specification rigs and complimentary supporting equipment primarily within the Permian Basin. The estimated purchase price was approximately $90.5 million, subject to certain adjustments set forth in the Purchase Agreement, and includes $60.5 million in cash and 1,998,401 shares of Class A Common Stock. Pursuant to the Purchase Agreement, American Well Holdings, LLC will also be eligible to receive a $5 million contingent earnout payment based on the performance of the AWS Acquisition during the twelve months following the Acquisition Date. The cash portion was funded through borrowings under the Company’s Wells Fargo Revolving Credit Facility and available cash on hand. The results of operations for the acquisition will be included in the Company’s Condensed Consolidated Financial Statements from the Acquisition Date. The AWS Acquisition is expected to be accounted for as a business combination under the acquisition method in accordance with ASC 805. The initial accounting for the AWS Acquisition has not yet been completed.

On November 10, 2025, the Board of Directors declared a quarterly cash dividend of $0.06 per share payable December 5, 2025 to common stockholders of record at the close of business on November 21, 2025. The amount and timing of all future dividend payments, if any, are subject to the discretion of the Board of Directors and will depend upon business conditions, results of operations, financial condition, terms of our debt agreements and other factors. There can be no assurance that we will pay a dividend in the future.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date the financial statements are issued. Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.