Part I, Item 1A
Item 1A.
Risk Factors.
The following discussion of risk factors contains “forward-looking statements,” which are discussed immediately
following Item 7A. of this Form 10-K. These risk factors may be important to understanding any statement in this
Form 10-K or elsewhere. The following information should be read in conjunction with Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations, and the consolidated financial statements and related
notes included in this Form 10-K.
We urge you to consider carefully the risks described below, as well as in other reports and materials that we file
with the SEC and the other information included or incorporated by reference in Form 10-K. If any of the risks
described below or elsewhere in this Form 10-K were to materialize, our business, financial condition, results of
operations, cash flows or prospects could be materially adversely affected. In such case, the trading price of our
common stock could decline and you could lose part or all of your investment. Additional risks and uncertainties not
currently known to us or that we currently deem immaterial may also materially adversely affect our financial
condition, results of operations and cash flows.
Demand for the majority of our services is substantially dependent on the levels of expenditures by the oil and
gas industry. A substantial or an extended decline in oil and gas prices could result in lower expenditures by
the oil and gas industry, which could have a material adverse effect on our financial condition, results of oper-
ations and cash flows.
Demand for the majority of our services depends substantially on the level of expenditures by the oil and gas industry
for the exploration, development and production of oil and natural gas reserves. These expenditures are generally
dependent on the industry’s view of future oil and natural gas prices and are sensitive to the industry’s view of future
economic growth and the resulting impact on demand for oil and natural gas. Declines, as well as anticipated declines,
in oil and gas prices could also result in project modifications, delays or cancellations, general business disruptions, and
delays in, or nonpayment of, amounts that are owed to us. These effects could have a material adverse effect on our
results of operations and cash flows.
The prices for oil and natural gas have historically been volatile and may be affected by a variety of factors, including:
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demand for hydrocarbons, which is affected by worldwide population growth, economic growth rates and
general economic and business conditions;
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the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production
levels for oil;
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oil and gas production by non-OPEC countries;
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the level of excess production capacity;
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political and economic uncertainty and sociopolitical unrest;
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the level of worldwide oil and gas exploration and production activity;
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the cost of exploring for, producing and delivering oil and gas;
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technological advances affecting energy consumption; and
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weather conditions.
The oil and gas industry has historically experienced periodic downturns, which have been characterized by
diminished demand for oilfield services and downward pressure on the prices we charge. A significant downturn in the
oil and gas industry could result in a reduction in demand for oilfield services and could adversely affect our financial
condition, results of operations and cash flows.
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